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Friday, 21 May 1915


Senator KEATING (Tasmania) . - With regard to the urgency of this legislation I would point out that it is about a fortnight since copies of the Bill were circulated. The measure was under discussion elsewhere, and was subjected to a very critical investigation, but even that discussion was not continuous. We all know that from time to time the Bill was put aside to enable other matters of urgency to receive attention. In the earlier part of his remarks the Minister stated that the object of the Government was to remove existing doubt and uncertainty on the part of persons who were parties to contracts existing now, or in existence at the commencement of the war. It is very desirable that that object should be achieved, but we should be careful that in any endeavour to achieve it we do not go beyond our objective. I am inclined to think that this Bill does go beyond the needs of the occasion. In the first place it is not a Bill relating to enemy contracts purely and simply. It is styled a "Bill for an Act relating to contracts." I am aware that the style or title of the Bill need not necessarily have very much bearing on the subject-matter of the Bill itself, but still we have to regard what is the general scope and purport of the measure, and it is not as a matter of fact confined to enemy contracts. I am not using the words "enemy contracts" in the comparatively narrow and restrictive sense of the Bill itself. Clause 3 defines an enemy contract, and the Bill ia not restricted to that. At first blush we might imagine that this Parliament has no jurisdiction whatever to legislate with regard to contracts. There is nothing in the Constitution which expressly vests in this Parliament the power to legislate in that direction, but there are, of course, implied powers which arise from the exercise of our expressed powers. I do not think that section 51, which sums up the powers of this Parliament, makes reference to any jurisdiction reposed in this Parliament to legislate in regard to contracts, directly and expressly so stated in that section. Whatever power we have in that direction is, as I have said, the power implied in exercise of our expressed powers. Now we have powers with regard to the defence of the Commonwealth, and if in the exercise of those powers to maintain an effective defence of this country, we find it necessary to deal with certain classes of contracts, it may be true - it very likely is - that we have the power to do so.


Senator Senior - Inferentially only.


Senator KEATING - They are the implied powers, and if I remember rightly, in the exercise of our power in regard to trade and commerce between the States and with outside countries, we have, I think, at times, made certain contracts null and void. Allowing that we have certain undoubted powers to legislate in regard to contracts between our people and alien enemies, to secure the effective defence of the Commonwealth, I still wish to point out that this Bill goes further than that. It deals with contracts which may he contracts between two Australian persons. Clause 4 of the Bill is very comprehensive, and it may be very far-reaching in its effects, for it is provided that " either party to the contract" - not an enemy contract - " to which this section applies may, by notice in writing to the other party, terminate the contract." The contracts to which the clause applies are referred to in paragraph as a contract which " is by operation of law, or by the terms of the contract, suspended." The Minister was right when he said that there were certain contracts in existence which should be suspended during the war, but there may be contracts entered into by Australians with persons in other parts of Australia for the delivery of certain commodities subject to termination dur ing the war. There may be contracts on the part of exporters and merchants to Hong Kong in the East, or elsewhere, also subject to termination during the war, and they may not be enemy contracts at all. A man might find it convenient on account of the high prices of commodities in Australia to cancel his contract. Ordinarily it would be immoral for him to repudiate his responsibility, but here in clause 4 we are affording him the opportunity statutorily of evading his obligations which otherwise he would be expected to fulfil. Another class of contract to which this power applies is one, the performance of which -

(b)   is, or may be, by act of a party suspended; or

(c)   is claimed by the party against whom the notice is given to be suspended.

I can quite understand that notice to a party who may claim suspension though the contract need not necessarily be an enemy contract at all, and, therefore, the question arises, " howfar have we jurisdiction to deal with such contracts?" Suppose one party in theexercise of the power conferred by this clause turned to the other, and said, " The contract with you is by its terms suspended during the war. Now I terminate it absolutely." Litigation would follow, and the question that would at once come before the Court would be - " Was the Commonwealth exercising a. power given to it by the Constitution? "' Therefore, while we may be removing doubt and uncertainty in regard to enemy contracts, it is quite possible that this measure will, by clause 4, breed a. greater crop of doubts and. difficulties amongst those who are not our enemies at all, but amongst our own citizens and those with whom they have contractual relations. That is a danger I see in this measure. We are going beyond the needs of the occasion. I shall do anything I can personally to help to establish here industries now existing abroad in relation to our primary products, and which, if established here, should furnish employment for our own people. I refer to the baser metals, and particularly to low-grade ores. We produce them from the soil, and ship practically all the raw product abroad. I. have always stood for the legislative doctrine that all the operations associated with these products should be carried out within the Commonwealth, and so far as this legislation will achieve that end, it has my most cordial support. But when we go beyond enemy contracts, and attempt to legislate, as we do in clause 4, in regard to contracts which need not be with an alien enemy at all, we are going beyond the needs of the occasion. Paragraph b of clause 3 defines an enemy contract as a contract - first, to which an enemy subject is a party; and, secondly, "in which an enemy subject has, in the opinion of the Attorney-General, a material interest." The Bill, as introduced in another place, defined an enemy contract as, secondly, a contract " in which an enemy subject has an interest." The amendment made in another place was to insert the words " in the opinion of the Attorney-General a material ". I doubt if we are doing the correct thing in throwing this judicial responsibility on the Attorney-General. I quite recognise that if every case of an enemy contract had to be determined judicially, the decision might, in many instances, be long delayed, owing to the pressure of other business on some of the Judges, and no doubt one of the main reasons for investing the AttorneyGeneral with this jurisdiction is to insure expedition; but the Attorney-General himself has a great number of functions, and that expedition in this matter may be secured at the expense of efficiency in some of his other duties. These remarks apply, not to the present AttorneyGeneral, but to the officer as an officer, whoever he may be. I fear we are crowding too many functions on him. It is only from that point of view that I criticise this provision. Under the original Bill, the interest might be large or small, important or unimportant, and nobody was named whose duty it was to determine whether an enemy subject had it. We ought to be very careful to ascertain whether we are not doing a hardship to the Attorney-General himself in imposing this extra responsibility on him. It is quite possible that we can get a decision on these matters from somebody who has judicial authority for the purpose. We might have somebody in the particular State in which the party or parties live endowed with jurisdiction to determine the matter. The position of some parties who have contracted with alien enemies, and are still parties to con tracts that might be suspended during the war, will be doubtful after the war without some legislation of this character. I can quite understand that in their present state of uncertainty and doubt as to the future they are very hesitant about the investment of capital. So far as we can remove those doubts, or relieve their apprehensions, we shall be doing excellent work, but clause 4 goes outside that region altogether, and will probably sow a crop of doubts, difficulties, and uncertainties for our own citizens in the future. Generally speaking, clause 4, as a whole, and more particularly paragraphs a and i of sub-clause 1 of clause 3, should receive the very closest investigation in Committee. This legislation as it stands is likely to generate difficulties for our own people, and to put parties to contracts with our own people in a position which they are not morally entitled to occupy. Further, we are venturing in this matter upon an uncharted sea, and it is quite possible that our legislation, so far as the clause is concerned, may - in relation to some of the contracts to which it applies - be assailed as being beyond the powers conferred upon this Parliament. I merely mention these matters now so that hereafter, if the Bill is passed, it will be seen that the Senate gave consideration to the limitation of its own powers, and did not legislate in a mistaken belief by us all that it was not going beyond those limits.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clauses 1 and 2 agreed to.

Clause 3 - 3. ( 1 ) In this section, " enemy contract " means any contract -

(a)   to which an enemy subject is a party, or

(b)   in which an enemy subject has, in the opinion of the AttorneyGeneral, a material interest, or

(c)   which is or is likely to be for the benefit of enemy subjects or of enemy trade.

(2)   Any party to a contract may file with the Attorney-General of the Commonwealth a copy of the contract, and apply to the AttorneyGeneral of the Commonwealth for a declaration that the contract is or is not an enemy contract within the meaning of this section.

(3)   If the Attorney -General declares that the contract is an enemy . contract, then, upon the publication of his declaration in the Gazette, the contract shall be deemed to be an enemy contract.

(4)   If the Attorney -General declares that the contract is not an enemy contract, then, upon the publication of his declaration in the Gazette, the contract shall be deemed not to. be an enemy contract.

(5)   Every enemy contract made before the commencement of the present war is hereby declared to be and to have been null and void, us from the commencement of the present war, as regards all rights and obligations thereunder except such rights and obligations as relate to goods which had already been delivered or acts which had already been performed at that time or such as arise out of or in consideration for such delivery or performance.

(6)   Every enemy contract made before or after the commencement of this Act, during the continuance of the present war, is hereby declared to be null and void and of no effect whatever.

Senior SENIOR (South Australia) [11.55]. - I take exception to the clause on the grounds stated by Senator Keating. It makes the Attorney-General judge and jury in the matter of enemy contracts. It goes much further than was really intended, because the contract might be a civil one to which one of the parties was a person allowed to live in Australia, and still permitted the privileges due to human beings. Thus a contract might be made with a person who was not interned or under surveillance, and the clause would give the AttorneyGeneral power to violate it. The Bill was really intended to deal with contracts overseas, but that intention is no longer expressed. Where is the line of demarcation between a material and an immaterial interest? It might be material to one party, but not to the other. In passing legislation of this sort our aim should be to frame so clear a definition as . to preclude the possibility of mistake. I expected to hear from the Minister in introducing the Bill stronger arguments than he put forward to justify me in assenting to it in its present form. We had not the slightest hint from him to guide us in judging how far an enemy has or has not a material interest in a contract. An enemy subject may possibly be a shareholder in a company of which the other members are not enemy subjects, but the mere fact of his presence in the company will give the Attorney-General power to say that material interests are at stake, and annul a contract accordingly. We know that that state of affairs does exist in the case of several companies concerned. There is nothing to show where the action of the Bill is to begin or where it will stop. As Senator Keating says, " We are simply sailing on an uncharted sea." I grant that that remark applies to very much of the legislation that we have to pass in times of war, but even in these times we ought to examine the compass or consult some chart that will guide us, at least as to the outlines of the sea over which we have to sail. The Committee should have some guidance as to what contracts may be terminated, so that we may gather to what extent the Bill will affect our commerce with enemy subjects overseas. I think I am right' in saying that under this Bill a contract, which from the German side will be absolutely voided by the war, will be merely suspended from the Australian side. If that be so, we have more justification for agreeing to the clause than we should otherwise have. We might reasonably have expected the Vice-President of the Executive Council, in moving the second reading of this Bill, to furnish us with information on this point. Then I would like to know what is meant by " material " interest. We have nothing before us in the nature of a guide at the present time. We do not know whether, under this clause, contracts will be affected merely on one side or on both sides. Tho Bill requires careful consideration at our hands, and as it has only been put before us this morning, I think that we should be afforded an opportunity of closely studying its provisions.







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