Carriers and transport operators cannot avoid State transport regulation by devising sham detours across State borders or sham corporate arrangements at border towns; s 92 protects genuine inter-State trade but not artificial schemes designed to give intra-State transactions an inter-State appearance.
Later decisions that cite Western Interstate Pty Ltd v Madsen
Decisions cited by Western Interstate Pty Ltd v Madsen
WESTERN INTERSTATE PTY. LTD. v. MADSEN [1961] HCA 63; (1961) 107 CLR 102
Constitutional Law (Cth)
High Court of Australia
Dixon C.J.(1), McTiernan(2), Kitto(3), Taylor(4) and Windeyer(5) JJ.
CATCHWORDS
Constitutional Law (Cth) - Freedom of inter-State trade, commerce and intercourse - Carriage of goods by motor vehicle from one town in a State for delivery to other towns in same State - Detour to cross State border into adjoining State - Sole purpose of detour to give inter-State character to transaction by chartering the vehicle in the adjoining State to another carrier - Journey back to original consigness immediately resumed with same driver and the loading unaltered but with fresh consignment documents from new carrier to original consignees prepared by original carrier - Vehicle intercepted prior to detour - Prosecution for offence at place of interception - Whether constitutional freedom attracted so as to absolve the vehicle on the whole of that journey from transport law of original State - The Constitution (63 & 64 Vict. c. 12), s. 92 - The State Transport Facilities Acts, 1946 to 1959 (Q.), S. 23.
HEARING
Brisbane, 1961, September 5, 6;DECISION
October 23.2. The course pursued under the above arrangement was simple enough depending as it did on two factors, a detour into New South Wales and certain documentation. A vehicle carrying no licence or permit and serving no purpose within s. 24 of The State Transport Facilities Acts, 1946 to 1959 (Q.) would be loaded by the defendant company in Brisbane or in some other place in Southern Queensland with goods for ultimate delivery at some place in Queensland. To the driver, an employee of the defendant company, there would be entrusted two sets of consignment notes in respect of each parcel of goods, or perhaps two sets of way-bills or "manifests" showing all the separate items of his freight. One such manifest or set of notes would consign the goods from the defendant company, Western Interstate Pty. Ltd., to Westraders Pty. Ltd. at Legume. The other would consign the goods from Westraders Pty. Ltd., Legume, to the ultimate consignees in Queensland. From the ultimate consignees the freight would be collected (or it would be paid by them) and lodged at the office in Toowoomba. It is said that at first on the arrival of a vehicle at Legume, even if, as often occurred, it was during the night, Thaw would greet it and take the consignment notes or manifest and recommission the driver with the other set of consignment notes or manifest. It seems unlikely, having regard to the number of vehicles sometimes arriving, that he did so, but at the time that concerns this case, the driver simply placed the papers addressed to Westraders Pty. Ltd. in the deal box, turned his vehicle round and drove back into Queensland. (at p107)
3. The learned magistrate who heard the charge, in very full and careful reasons concluded that the two companies Western Interstate Pty. Ltd. and Westraders Pty. Ltd., although separate entities in law, are in the business sense identical, that the arrangements between them were merely those of convenience brought into being only for the purposes of Western Interstate Pty. Ltd., that if there did exist the formality of contract, it was not bona fide because it was not intended by the parties to have legal consequences, and that Westraders Pty. Ltd. at all material times was in reality only the moving shadow of the operating company, the defendant. (at p108)
4. The particular journey made the subject of the specific charge in this case was conducted by a driver named Huddleston. He set out from Brisbane on 12th January 1960 with a heavy load of goods ultimately to be delivered in the South Burnett District to consignees at Kingaroy, Tingoora, Wondai and Murgon. His immediate manifest, however, was to Westraders Pty. Ltd., Legume, New South Wales. Apparently he carried with him a manifest or consignment notes showing consignments from Westraders Pty. Ltd., Legume, to the four respective ultimate consignees in the South Burnett District of Queensland. He drove to Ipswich and then turned south-west and drove upon the New England Highway to Warwick and thence through Killarney over the border to Legume. Huddleston was back in Killarney within two hours of having passed through it, but no doubt he deposited his manifest in the deal box affixed to Thaw's cafe and store. By the route taken in fact by the vehicle the distance to the South Burnett area, or at all events to the point where the two routes junction south of Kingaroy, is 283 miles while the direct and natural route is only 110 miles. (at p108)
5. An amendment of the complaint was made at the hearing of the charge which, as amended, was that, on 12th January 1960 on the Lockyer-Darling Downs Highway near Riverview the defendant company did contravene s. 23 of The State Transport Facilities Acts, 1946 to 1959 (Q.) in that the defendant company did use on a road namely the Lockyer-Darling Downs Highway aforesaid a vehicle (specifying it) for the carriage of goods, not being goods carried in accordance with Pt III of the Act. It was upon this charge that the defendant company was convicted. (at p108)
6. Now Riverview is a place situated on the Brisbane side of Ipswich and if the journey from Brisbane by way of Legume to the towns in the South Burnett District is regarded as continuous, the case is exactly within the decision in Harris v. Wagner [1959] HCA 60; (1959) 103 CLR 452 . For at Riverview the deviation to reach New South Wales had not commenced and the vehicle was engaged in a necessary part of the intra-State transportation. But the design of the whole plan was to treat the carriage of the goods as not continuous but as divided into two distinct and independent journeys - an inter-State journey to Legume by the defendant Western Interstate Pty. Ltd. and another inter-State journey from Legume to the towns in the South Burnett District by Westraders Pty. Ltd. Perhaps the attempt to treat the carriage of the goods as so divided is sufficiently disposed of by the finding of the learned magistrate which was expressed in these terms: "The going across the border and the formulation of an arrangement there by the arrival of the motor vehicle which has been called a 'charter' was, as I see it, only a ruse or a pretence including the use of another name - 'Westraders'; for no other reason than an attempt to secure immunity under s. 92 from the laws of Queensland relating to the use of the vehicle." There is no reason to disagree with this conclusion: for certainly there was no charge in the possession of the vehicle, no actual bailment, no real change of employment by Huddleston, no actual termination of the journey at Legume. But there are other grounds for deciding that s. 23 of The State Transport Facilities Acts, 1946 to 1959 (Q.) applies to the journey and is not excluded by s. 92 of the Constitution. Putting passenger traffic aside, s. 23 is part of a system adopted by the State of controlling the carriage of goods by road within Queensland. It cannot make penal the carriage of goods from Queensland into New South Wales or from New South Wales into Queensland, and if the purpose of extending a journey from New South Wales far into Queensland is simply to complete a transaction consisting of carrying goods or persons from a point or points in one State to a point or points in another State, the part of the journey which follows the crossing of the border is within the freedom conferred by s. 92 simply because it forms part of the trade, the commerce or the intercourse which is "inter-State". So e converso if a journey is begun far from the border in one State for the purpose of crossing into another State for the carriage of goods, persons or communications. Further all that is necessarily or properly incidental to the main purpose of so crossing the border is protected from any interference if it would detract from the freedom of the principal transaction bearing the inter-State character. But in this case there was but one commercial object, namely to transmit the goods from Brisbane to the places in the South Burnett District: the journey of the motor vehicle and its driver had no other purpose and was indivisible whatever efforts may have been made artificially to divide it. If the map is studied it will be seen that, some eight or ten miles north of Warwick, Huddleston made his final departure from the road he had ultimately to rejoin to get to the South Burnett District. From that point he travelled through Killarney some twenty or thirty miles to get to Legume in New South Wales. All the rest of his journey was a roundabout way of travelling through Queensland to the consignees at Kingaroy, Tingoora, Wondai, and Murgon. The motive for making it roundabout was in order to reach a point of final deviation enabling the vehicle to drive into New South Wales and back. But is it right to treat anything but this final descent upon New South Wales in pursuit of the protection of s. 92 and the return to the point where it began as a necessary or proper incident of the inter-State journey which Huddleston was entitled to make under the freedom assured by s. 92? Has not the rest a predominantly intra-State purpose? The route of the vehicle may move ever nearer to the border and the motive for taking the route may be simply in order that at the predetermined point of proximity there may be a deviation for no other purpose than to cross the border and recross it. But when that has been done, that is to say when the border has been recrossed and the point rejoined, any inter-State element which it may be thought to give to the carriage of the goods is exhausted. Is there any reason why the real and substantial purpose of the journey should not, in the view of the law, give it an intra-State character reaching and receiving none of the protection with which the freedom of inter-State trade, commerce and intercourse covers anything which is in truth a necessary or natural incident of any transaction carried out over a border between States? The true view appears to be that s. 92 enabled Huddleston to cross and recross the border with his load but did not entitle him to use his freedom to do so for the purpose of making a prolonged journey from Brisbane to the South Burnett towns as if that was incidental to the journey across the border and the return. That was an intra-State transaction and by making it the occasion of an inter-State deviation it could not assume an exclusively inter-State character, notwithstanding that the making of the inter-State deviation formed the motive for the great increase in the length of the intra-State journey. (at p110)
7. In a transaction where inter-State and intra-State, trade, commerce and intercourse are mixed up, it is often very difficult to see where the line is drawn between the effective freedom which must be conceded to the one and the subjection to the will of the legislature which is a necessary incident of the other. A simple example is an inter-State journey for the delivery of goods at various points, some in the one State and some in the neighbouring State. There a State law like ss. 23 and 24 may be infringed notwithstanding that the journey extends into the neighbouring State. The analogy doubtless is imperfect but it serves to illustrate the difficulty of the present case, which lies in the attempt to confuse an intra-State transaction with an inter-State transaction. The answer to the difficulty lies in a disentanglement and, to change the metaphor, it is enough to say that the only part of the journey which seems to be clothed with an exclusively inter-State character is that from the final turnoff to Legume and back to the same junction where the main journey is resumed. In other words, no doctrine can treat all the rest as necessarily or properly incidental to effecting a transaction of trade, commerce or intercourse between the States. The appeal should be dismissed. (at p111)
McTIERNAN J. The appellant was prosecuted in the Court of Petty Sessions at Ipswich by the respondent, on behalf of the Queensland Government, for contravening s. 23 of the Act entitled The State Transport Facilities Acts, 1946 to 1959 (Q.) The material words of the section are: "A person shall not use . . . on any road at any time a vehicle for the carriage of . . . goods . . . unless those . . . goods . . . are being carried upon that vehicle under and in accordance with a provision of this Part (III) of this Act". Section 3 of the Act has the effect of excepting inter-State carriage from the scope of s. 23. The complaint alleged that the appellant used a motor vehicle on the Lockyer-Darling Downs Highway for the carriage of goods otherwise than as provided in Pt III. The appellant did not dispute the allegation. Its defence was that at the time of the alleged offence the motor vehicle was being driven to Legume in New South Wales. The motor vehicle had been loaded at Brisbane with goods which the appellant had contracted to carry to places in Queensland north-west of the city. There were no goods on the motor vehicle consigned to any other destination. The appellant's case was that it had entered into an arrangement with Westraders Pty. Limited under which that company would charter the motor vehicle at Legume and undertake to complete the carriage of the goods to the places in Queensland which have been mentioned. Westraders Pty. Limited would employ the appellant's driver for the purpose of completing the carriage of the goods. The magistrate found that the arrangement was devoid of any reality and that the carriage of the goods would take place under it in precisely the same way as if the arrangement had not been made. The charter of the vehicle was to be effected by a curious procedure in which the driver only would take part. Neither company conducted any activity at Legume and it was a town close to the border. The "office" where the charter was to be made was a box fastened to premises in the town. It was a receptacle for the documents connected with the transaction. The appellant maintains that notwithstanding the criticism to which the arrangement is exposed it had legal consequences and the fact that the motor vehicle was being driven to Legume for the purpose of carrying out the arrangement for both companies had the practical result that the motor vehicle was travelling on an inter-State journey at the time the alleged contravention of s. 23 occurred. But the material fact is that the motor vehicle was being used for the carriage of goods all of which were intra-State merchandise. If the appellant had contracted to carry goods to a consignee resident on the Lockyer-Darling Downs Highway in the course of the journey to Legume, the fact that the vehicle was bound for the latter place would not have made the carriage of the goods an inter-State operation. In the instant case the goods were to be carried to Legume by the motor vehicle and, as has already been explained, it was planned by the appellant that the vehicle would return to Queensland with them. The appellant had committed the goods to intra-State trade when it contracted to carry them from Brisbane to places in Queensland. The fact that the motor vehicle was carrying them on its excursion to Legume did not make them inter-State goods. The itinerary on which the motor vehicle set out from Brisbane was substantially continuous. Its terminus was in Queensland not at Legume. If the arrangement to charter the motor vehicle at Legume was real, that is one having some practical significance, it was subsidiary to the contract of carriage. This could only be performed by carrying the goods to the places in Queensland for which the vehicle was bound when it set out from the appellant's depot in Brisbane. The appellant was using the motor vehicle on the Lockyer-Darling Downs Highway for that purpose. The fact that it was calling at Legume to be chartered under the arrangement with Westraders Pty. Limited did not obliterate or suspend that purpose. It follows, therefore, that the appellant was using the motor vehicle for the carriage of goods in the course of and for the purpose of intra-State trade, although Legume was its immediate destination. The result is that s. 23 applied to the appellant on the occasion alleged in the complaint and he was rightly convicted of a contravention of the section. The appeal should be dismissed. (at p112)
KITTO J. I am of the same opinion as the Chief Justice, and for the reasons his Honour has stated. (at p112)
2. In order to make clear my position in regard to questions of this description, I add that I adhere generally to the line of reasoning which I attempted to work out in Golden v. Hotchkiss (1959) 101 CLR 568 . I accept the decision in Golden v. Hotchkiss (2) as showing that the special circumstance of the unavailability of any route save that which took the appellant in that case across the State boundary was sufficient to give an inter-State character to the whole journey. But where there is no corresponding special circumstance I should be disposed to apply the ideas and make the kind of analysis by which I endeavoured to solve the problem in that case. (at p113)
3. I agree that the appeal should be dismissed. (at p113)
TAYLOR J. In this appeal the appellant complains that it was wrongfully convicted by a magistrate of using a motor vehicle on a road, namely the Lockyer-Darling Downs Highway near Riverview, for the carriage of goods in breach of s. 23 (1) of The State Transport Facilities Acts, 1946 to 1951 (Q.). The evidence established that in January 1960 the appellant accepted goods in Brisbane for carriage by road to individual consignees in the Queensland towns of Kingaroy, Tingoora and Wondai. These three towns are in the same district of Queensland to the north-west of Brisbane and they are something over one hundred miles from that city by the most direct road route. If the appellant's vehicle which departed from Brisbane with the goods in question had followed that route it would have travelled westward to Riverview, by-passed Ipswich, and proceeded north-west to its destinations. The vehicle did not, however, proceed by this route. It went westward on the Lockyer-Darling Downs Highway as far as Riverview, then through Ipswich south-west by the New England Highway to Warwick, and south to Legume, which is in New South Wales a little south of the border between that State and Queensland. The vehicle remained in Legume for a matter of minutes only and then retracted its course as far as Warwick. From that town it then proceeded in a northerly direction to its ultimate destination. Altogether the vehicle covered something over two hundred and sixty miles in the course of its journey. (at p113)
2. The reason why the vehicle followed this devious course was associated with the fact that the appellant had made an arrangement with a New South Wales company called Westraders Pty. Limited whereby the latter company was said to have become entitled to "charter" vehicles of the former from time to time. This arrangement appears from the terms of a letter, dated 14th December 1959, and addressed by the appellant to Westraders Pty. Limited at Legume. It was in the following terms: "We are willing to charter vehicles to you from time to time. Upon your chartering any vehicle the driver-drivers will be subject to your direction and control until the completion of the journey/s for which the vehicles are under charter. You will during such time be the bailee of such vehicle and the contract will in each case terminate upon the completion of the journey. The 'journey' will be the journey involved in the carriage of the goods for which the vehicle shall be under charter and shall be deemed to cease when the carriage of the goods is completed. The charges shall be at the rate as agreed upon, or such other charge as shall be mutually agreed upon writing from time to time. For the purpose of any such journey under charter, but not otherwise, you are authorized to purchase any necessary oil or fuel and to have necessary repairs effected at our expense. The arrival of any of our vehicles at Legume may at your option be treated as an offer to charter the same to you if the circumstances so permit. You must arrange for each vehicle which you elect to charter to display a sign not less than twelve inches by eighteen inches that the vehicle is under charter to you. It will be our responsibility to cause the sign to be removed when the journey is completed and to return the sign to you." (at p114)
3. It was, it is said, pursuant to this general arrangement that the vehicle proceeded to Legume, the driver being armed with a so-called manifest indicating that his vehicle was carrying some eleven tons of freight to Westraders Pty. Limited at Legume. This freight was, of course, the goods which the appellant had undertaken to carry to the several consignees in Kingaroy, Tingoora and Wondai. Legume is a small settlement and a store is conducted there by one Thaw. On the outside of this store there was attached a small box labelled "Westraders", and the driver of the vehicle hesitated there only long enough to deposit his manifest in the box and to take from it a number of consignment notes. Each of these purported to describe goods which the vehicle had brought from Brisbane on the journey in question as being consigned from Westraders Pty. Limited at Legume to the various consignees at Kingaroy, Tingoora and Wondai. These invoices had been prepared by the appellant in Brisbane and had been placed in the box by one of its drivers on an earlier trip. (at p114)
4. In these circumstances, it is said that on the arrival of the vehicle at Legume it came under "charter" to Westraders, that the driver became pro tempore the servant of that company and that the journey from that place to the specified destinations was distinct and separate from the journey between Brisbane and Legume. That being so, it is urged, the vehicle made two separate journeys, each of which was in the course of inter-State trade and commerce, so that its use for the carriage of goods in the vicinity of Riverview could not be an offence under s. 23 (1). But the interpretation thus sought to be placed upon the facts disclosed by the evidence ignores not only the fact that the defendant had undertaken to carry the goods in question from Brisbane to the respective consignees, but also the fact that at every moment during the whole of the journey the vehicle was employed in the course of discharging the obligations of the appellant under its various contracts of carriage. It was, of course, of no consequence to the consignees whether in the performance of these contracts the driver remained the servant of the appellant or became the servant of Westraders Pty. Limited, for there can be no doubt that whatever rights, if any, Westraders Pty. Limited might have acquired under the so-called charter with respect to the vehicle, that company had no option but to continue to operate the vehicle for the sole purpose of discharging the appellant's obligations. At the most it was, in so doing, acting as the agent of the appellant and the conclusion is inevitable that, at all material times, the vehicle was engaged in the carriage of goods by the appellant from Brisbane to Kingaroy, Tingoora and Wondai. This being so the only question in the case is whether the diversion to Legume invested the whole or any material part of the journey with the character of inter-State carriage. To my mind it is clear that it did not. No doubt the appellant's vehicle was free to cross the border on the way to Legume and subsequently to re-cross it when retracing its course; but the decision in Harris v. Wagner [1959] HCA 60; (1959) 103 CLR 452 is clear authority for the proposition that the diversion across the border did not operate to characterize the journey as a whole, or any part of it relevant to the charge, as one involving the carriage of goods in the course of trade commerce and intercourse among the States. That being so the appeal should, in my opinion, be dismissed. (at p115)
WINDEYER J. I agree that this appeal should be dismissed. That to travel on the King's highway a subject must first obtain a permit is an idea that, to earlier generations, would have seemed obnoxious to deeply-rooted principles of the common law. However, in Queensland, and other States, such a permit may now be necessary; but the requirements for obtaining a permit cannot be such that inter-State trade, commerce or intercourse are unlawfully impeded. In this case the magistrate, after carefully setting out the facts, stated his conclusion, which, as he summarized it, was that "Western Interstate's operations across the border were merely a sham". And this description was justified. The journey across the border was undertaken only to give a colourable inter-State appearance to an intra-State transaction. That being so, s. 92 has no bearing on the matter. The appellant was simply engaged in the carriage of goods from one place in Queensland to another place in Queensland. The character of this undertaking was not altered because the vehicles went out of their way and made a detour into New South Wales. That the appellant made an arrangement with Westraders Pty. Ltd. that involved its vehicles going into New South Wales could make no difference. Whether that arrangement was itself a sham transaction, or had any legal effect, matters not in this case. The appellant, by enlisting the aid of its own creature and ready agent, Westraders Pty. Ltd., and by making use of that company's convenient box on the wall of Thaw's store at Legume, did no more than give a spurious complexion to the whole transaction. The case is concluded by the decision in Harris v. Wagner [1959] HCA 60; (1959) 103 CLR 452 . The appellant was not penalized for sending its vehicles into New South Wales. It was not impeded in doing so. It was charged with using a vehicle for the carriage of goods on a Queensland road contrary to the law of Queensland. And, as it was not doing so in the course of or for the purpose of inter-State trade or commerce, it was guilty of an offence. Whether or not at a particular time a vehicle is engaged in inter-State trade, commerce or intercourse - and whether or not the passengers or goods in it are there in the course of inter-State trade, commerce or intercourse - does not depend simply on the vehicle's immediate destination or the direction in which it was going at the time. Mr. McCawley suggested that the international law doctrine of "continuous voyage" or "continuous transportation" as it is now often called, provided an analogy with the conceptions involved in cases of the application of s. 92 to inter-State transport. The suggestion is interesting especially because of what in Lawrence on International Law s. 257 is spoken of as the change that almost imperceptibly came over the doctrine of continuous voyage transferring attention from the ship to the cargo. Early English nineteenth century law concerning contraband of war, and Australian constitutional law of inter-State trade today, may seem to be topics far remote from one another. Nevertheless, the judgments of Lord Stowell in The Maria [1805] EngR 319; (1805) 5 C Rob 365 (165 ER 806) and of Sir William Grant in The William [1806] EngR 124; (1806) 5 C Rob 385 (165 ER 817) to which reference was made by the writer "Historicus", whose Additional Letters on International Law (1863) Mr McCawley quoted, are well worth consideration by those who suppose that questions such as arise in this case depend upon purely geographical facts or upon a mere going across a State border and performing some ceremonies there. I shall quote one passage only: "The truth may not always be discernible, but when it is discovered, it is according to the truth and not according to the fiction that we are to give to the transaction its character and denomination. If the voyage from the place of lading be not really ended, it matters not by what acts the party may have evinced his desire of making it appear to have ended. That those acts have been attended with trouble and expense cannot alter their quality or their effect. The trouble and expense may weigh as circumstances of evidence, to show the purpose for which the acts were done; but if the evasive purpose be admitted or proved we can never be bound to accept as a substitute for the observance of the law, the means, however operose, which have been employed to cover a breach of it". People may, of course, choose to engage in inter-State trade because they will in it have the protection of s. 92: but they do not get the protection of s. 92 by pretending to be engaged in inter-State trade. (at p117)
ORDER
Appeal dismissed with costs.