This document summarizes key cases that have helped define the scope of the Commonwealth's trade and commerce power under section 51(i) of the Australian Constitution. It discusses early 20th century cases like W & A McArthur Ltd v Queensland that established that trade between states is included in section 51(i). It also summarizes landmark aviation cases like the ANA Case that confirmed laws regulating interstate air transport are valid. The document analyzes the narrow interpretation of incidental powers under the trade and commerce head of power established by cases like Wragg v NSW. It concludes with a discussion of more recent cases like Pape v Commissioner of Taxation that explored support for fiscal stimulus laws from executive and incidental powers.

1. Constitutional Law
Topic 7 Trade and Commerce Power
& Incidental Power
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2. Trade and Commerce Power
• S 51(i) gives power to make laws “with respect
to” trade with other countries and between
states.
• Note that section 92 also requires trade
between states to be free.
• Incidental scope of power has historically
been interpreted narrowly.
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3. Trade and Commerce
• W & A McArthur Ltd v Queensland (1920) 28 CLR 530
• Australian National Airways Pty Ltd v Commonwealth
(ANA Case) (1945) 71 CLR 29
• R v Burgess; Ex parte Henry (1936) 55 CLR 608
• Airlines of NSW Pty Ltd v New South Wales (No 2)
(Second Airlines Case) (1965) 113 CLR 54
• Wraggv NSW (1953) 88 CLR 353
• O’Sullivan v Noarlunga Meat Ltd (1954) 92 CLR 565
• Attorney-General (WA) v Australian National Airlines
Commission (WA Airlines) (1976) 138 CLR 492
• Papev Commissioner of Taxation (2009) 238 CLR 1
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4. W & A McArthur Ltd v Qld (1920)
• The plaintiff was softgoods business trading in
calico, sheeting and sheets.
• Agents would travel with goods from NSW to
QLD to act on the Plaintiff’s behalf.
• QLD Commissioner of Prices wished to
prosecute agents for breaching fixed prices.
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5. W & A McArthur Ltd (cont.)
• The plaintiff brought action against on the
grounds that the state could not impose
restrictions on inter-state trade.
• The invalidity was based on s 92 allowing for
inter-state trade.
• Obiter from majority: s 51(i) and s 92, both
embrace all that is ordinarily comprised within
the term "trade and commerce" when taking
place "among the States."
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6. Australian National Airways Pty Ltd
vCth (ANA Case) (1945)
• The Australian National Airlines Act 1945 gave
the power to establish, maintain and operate
airline services for the transport for reward of
passengers and goods between States,
between Territories and other places in
Australia.
• The key issue was whether the provision
allowing interstate airlines was valid.
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7. ANA Case
• The law authorising the transport service for
inter-state trade was found to be a law with
respect to trade and commerce amongst the
States.
• The Constitution is capable of flexible
application.
• If any limitation existed, it needed to imported
into the power (p 780 for limitations).
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8. R v Burgess; Ex parte Henry (1936)
• Vernon William Burgess, officer at Civil
Aviation Department in Sydney, charged
Henry Goya Henry, pilot for flying over
Mascot.
• The Cth had passed the Air Navigation
Regulations under the Air Navigation Act 1920
• An application was made in Henry’s absence
challenging the validity of sections of the Air
Navigation Act on the basis that it could not
rely on the trade and commerce power.
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9. Burgess (cont.)
• Dixon J: Air Navigation requires that interstate flying be controlled as a whole (p 782)
• Evatt and McTiernan JJ: Cth has the power to
legislate with respect to trade and commerce,
allowing inter-state trade through air
transport, due to the “sufficiently proximate
relationship with such trade.” (p 783)
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10. Second Airlines Case
• The Plaintiff (Airlines NSW) sought an
injunction against NSW from enforcing state
laws preventing or endeavouring to prevent
the plaintiff from carrying passengers for
reward by aircraft from Sydney to Dubbo.
• The issue was whether the Cth Air Navigation
Laws applied to the intra-state transport of
passengers.
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11. Second Airlines Case (cont.)
• The trade and commerce power and the
external affairs power of the Commonwealth
as authorising legislation on the subject of air
navigation, and the extent to which the
Commonwealth may validly legislate on that
subject considered.
• Air Navigation was accepted as being within
the federal power to make laws.
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12. Wraggv NSW
• Dixon CJ: The Constitution can include s 51(i)
power, certain incidental or ancillary powers
provided they are incidental to s 51(i) being
trade between states or other countries.
• However, if the law purports to create an
ancillary power that effects trade and
commerce within a state, then it will not
operate.
• See page 786 for excerpt.
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13. Noarlunga Meat Ltd (p 786)
• Section 52a of the Metropolitan and Export
Abattoirs Act 1936-1952 (SA) and regulations
required licenses for slaughtering and
processing of meat.
• Fullagar J: The Cth possesses no specific
power for slaughterhouses, but the trade and
commerce power allows for the regulation of
the quality of meat for export (p 787).
• Laws were within incidental power (p 788).
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14. WA Airlines Case (p 789)
• Australian National Airlines Act 1945 (Cth) s
19 constituted the Australian National Airlines
Commission.
• Commission’s functions were to regulate the
transporting of passengers and goods
between states, states and territories, and
within territories.
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15. WA Airlines Case (p 789)
• The Act also provided for transport between
places in the one State to the extent that the
purpose was for the efficient, competitive and
profitable conduct of the business;
• “Or otherwise as incidental to the carrying on
of that business”.
• This raised the issue of the incidental scope of
the trade and commerce power.
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16. WA Airlines Case (p 789)
• Stephen J [508] quoting Dixon CJ in Victoria v
Commonwealth (Cth) (at 614): “The nature
and subject of the particular head of power in
question will be critical in determining what is
incidental to that particular power…”
• The constitutional division of power in the
case of trade and commerce (i.e. s 51(i) and s
92) requires that s 51(i) incidental scope is
narrow [509].
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17. WA Airlines Case (p 790)
• The validity of the law was founded on the
plenary power of s 122 (power to make laws
for the territories) not s 51(i).
• The basis for validity was argued by a 3-2
majority (Barwick and Gibbs CJ) dissenting.
• Murphy J found validity on s 122 and s 51(i),
arguing a broad interpretation to remove any
distinction between intra/inter state trade.
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18. WA Airlines Case (p 789)
• Stephen J: s 19B sought to exercise an
incidental scope of the section 51(i) power,
which is regarded as narrow in scope.
• More appropriately relied on s 122 to confer
power on transport within territories and
between territories and other parts of
Australia (p 789).
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19. WA Airlines Case (cont.)
• In so far as it applied to the provision of air
services between a place in a State and a
place in another State s. 19B was not validly
made under s. 51 (i.) or any other provision of
the Constitution, and was pro tanto invalid.
• Stephen J: Commonwealth may establish an
airline service to carry passengers and goods
on interstate routes and on routes to, from
and within territories: cited ANA case.
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20. Papev Commission of Taxation
• (p 791) BryanPapesued the Commissioner of
Taxation alleging that he was entitled to a tax
bonus of $250 from the defendant under s 7 of
the Tax Bonus for Working Australians Act (No 2)
2009 (Cth).
• The payment of the tax bonus was characterised
as a gift and was not authorised on the grounds
that the Tax Bonus Act was not a law with respect
to taxation as provided by para (ii) or any other
paragraph of s 51 of the Constitution and "as
such" was invalid.
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21. Pape(cont.)
• Gummow, Crennan Bell JJ [213],[232]: Bonus
Act may be supported by ss 61 and 51(xxxix)
of the Constitution, however, question is
whether there is a need for an immediate
fiscal stimulus to the national economy; and
• Whether this falls within executive power and
within the incidental exercise of executive
power under s 51(xxxix).
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22. Pape (cont.)
• Section 51 (xxxix) relates to the incidental
power regarding matters incidental to the
execution of any power vested by this
Constitution in the Parliament or in either
House thereof, or in the Government of the
Commonwealth, or in the Federal Judicature,
or in any department or officer of the
Commonwealth.
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23. Pape (cont.)
• French CJ, Gummow, Crennan and Bell JJ,
(Hayne, Heydon and Kiefel JJ dissenting), that
Executive Government having need for an
immediate fiscal stimulus to the national
economy enlivened legislative power under s
51(xxxix) to enact the Tax Bonus Act as a law
which was incidental to that exercise of the
executive power.
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