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§ 432. “Due Regard Being Had.”

The object of this provision, which was first introduced by Mr. Reid (Conv. Deb., Melb., pp. 1510–2) was to safeguard New South Wales against any possibility of such federal interference with the long-distance rates of that colony as would make it impossible to work the lines at a profit. In each colony the railways had been constructed with the provincial object of drawing all trade to the ports of that colony. New South Wales had sunk a large amount of capital on long-distance lines reaching out into the competitive areas which are geographically nearer to Melbourne than to Sydney, or which are within reach of the river route to Victoria and South Australia. The fear that the powers of the Constitution might possibly be exercised in such a way as to make some of these railways “waste iron” led to the insertion of this provision.

It is here declared explicitly that one of the things to be taken into consideration, in deciding whether a preference or discrimination is undue or unreasonable, or unjust to any State, is the financial responsibility incurred by a State in connection with the construction and maintenance of its railways. It does not say that any rate which helps the railways is reasonable and just, but requires “due regard” to be had to the financial interests of the States.

Who is to pay this due regard is not stated. The provision was accepted by Sir George Turner on the distinct understanding that it was to be appended to the words


  ― 918 ―
empowering the Parliament to forbid preferences; he wished the words to mean “due consideration by the Parliament,” but he did not insist on the insertion of the words “by the Parliament,” as that “might appear to be invidious.” (Conv. Deb., Melb., p. 1510.) His desire was to prevent the High Court being appealed to on this question. It would seem that the words may involve a direction to the Parliament, in legislating upon the subject, to have due regard to the financial responsibilities of the States; but it would be clearly impossible for the High Court to declare a law invalid on the ground that the Parliament had not had this due regard.

It seems clear that the real importance of the words is in connection with the duty of the Inter-State Commission to adjudge whether a discrimination is undue or unreasonable, or unjust to any State. The question of “due regard” is an element in the decision whether a preference or discrimination is undue, &c., and must be considered by the tribunal which decides that question. What regard is “due” is obviously a question of fact on which the decision of the Commission is final; but if the Commission declined to take the question into consideration at all, it seems that there would be an appeal on the ground of an error in law. If the Commission takes into consideration something which the law excludes it from taking into consideration, or declines to take into consideration something which the law requires it to take into consideration, that is clearly a mistake in law. (See Phipps v. London and N.W.R. Co. [1892] 2 Q.B. 229.)

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