35.
"Taking then sub-sec. (xx.) to authorize the dealing with both classes of corporations on the same footing – that is, the footing that neither class is a creature of federal legislation – does the sub-section, so read, constitute an exception to the otherwise exclusive reservation to the States of the power to deal by legislation with matters within the field of their internal or domestic trade?"
Barton J concluded[1] that there being no express exception to be found in s 51(xx), from the reservation to the States of power over internal trade and commerce, ss 5 and 8, in so far as they dealt with the domestic trade of the States, were[2] "in no wise incidental or ancillary to the execution of sec. 51 (xx.) of the Constitution, and that the invasion of that sphere is prohibited by the Constitution".
81 Higgins J held[3] that the federal Parliament "can regulate corporations as to status, capacity, and the conditions on which business is permitted. But it is for the State Parliament to regulate what contracts or combinations a corporation may make in the course of the permitted business." Thus, just as a distinction was to be drawn between legislation determining the status of a person (for example, as alien or subject) and legislation determining the rights and liabilities attached to the status thus ascertained[4], the power in s 51(xx) was understood by Higgins J[5] "as a power to legislate with respect to corporations as corporations". But this understanding of s 51(xx) did not confine that power to legislating with respect to matters of status or questions of corporate powers. Higgins J considered[6] that it extended to "the conditions under which they [constitutional corporations] shall be permitted to carry on business" including, for example[7], matters of capital requirements, filing of returns, auditing, and deposit of
