Arthur Yates and Company Pty Ltd v Vegetable Seeds Committee [1945] HCA 55

Arthur Yates and Company Pty Ltd v Vegetable Seeds Committee [1945] HCA 55 | Case summary | Zoe

answer to par. 19 the defendant said that it claimed that the docu- ments mentioned in pars. 7 and 8 were orders validly made by it pursuant to the powers conferred by reg. 144 of the National Security (Vegetable Seeds) Regulations made under the National Security Act 1939-1943. Except in so far (if at all) as what was stated by the defendant might amount to a claim to prevent or a preventing or an attempting to prevent within the meaning of par. 19 the defendant denied the allegations in par. 19 other than the allegations stated above to be not admitted. In answer to par. 23 the defendant, while admitting that prior to and up to 1943 the plaintiff had imported pea seed from the Dominion of New Zealand, did not admit that for many years prior to and up to 1943 or at all the plaintiff had imported from that Dominion or at all " large quantities of pea seed " within the meaning of par. 23 or large or any quantities of pea seed of which a large or any part had been expressly or at all grown in that Dominion for delivery to the plaintiff or that in order to supply the Australian market with such seed the plaintiff depended upon such importation. In answer to par. 25 the defendant did not admit that acting upon or in pursuance of " such permission " within the meaning of par. 25 or at all the plaintiff purchased from merchants in the Dominion of New Zealand large or any quantities of the "said pea seed " within the meaning of par. 25 or any pea Seed. Tn further answer to par. 25 the defendant said that the plaintiff purported to ask of the defendant permission to arrange contracts in New Zealand for certain quantities of certain varieties of pea seed and the defendant informed the plaintiff that it saw no objection to the import of the said quantities and varieties from New Zealand and that except in so far as (if at all) the said facts might amount to a giving of " permission to the plaintiff to import specified pea seed from the Dominion of New Zealand" within the meaning of the statement of claim the defendant denied that prior to August 1943 it gave its permission to the plaintiff to import certain speci- fied or any pea seed from that Dominion. In answer to par. 30 the defendant did not admit that the plaintiff was or at any material time or times had been desirous of importing into Australia either from the Dominion of New Zealand or at all new season or any crop of carrot seed known as the St. Valery variety or any variety for the purposes of its business or that the plaintiff at such time or times had had under offer a considerable quantity of the said or any variety for importation. The defendant denied each of the other allegations in par. 30. The defendant admitted the facts and matters alleged in par. 32 save and except that it denied that it had directed the plaintiff to adhere to the said form except for the words "in VoL. EXXII. 4

Barwick K.C. (with him McKillop), for the appellant. The orders now under consideration purporting to have been made under the National Security (Vegetable Seeds) Regulations are invalid. They are not legislative orders but are administrative orders and are not bona fide. The power under reg. 14a is clearly an executive power. The Regulations, particularly reg. 4, contain a sufficient indication of the policy or scheme which is to be broadly followed. Whether or not the power is legislative must depend upon the particular regulations or regulations viewed in substance. Regula- tion 144 must be fitted into the scheme. It is a scheme for stated purposes, to achieve stated objects, a scheme of registration and an administrative body to carry out what the legislature, or the executive in this case, has considered to be a policy sufficiently defined by the Regulations. The powers conferred by the Regulations must be exercised bona fide (Municipal Council of Sydney v. Campbell (bys Sharp v. Wakefield (2); Stenhouse v. Coleman (3) ). The power is a power to regulate the method by which vegetable seeds are to be controlled. Executive and administrative powers as exercised and applied in the United States of America were con- sidered in J. W. Hampton Jnr. & Co. y. United States (4) ; Bowles v. Willingham (5); Yakus v. United States (6) and United States v. Rock Royal Co-operative Inc. (7). In applying the American definition regard must be had to the way in which it is viewed in America, namely, that where the Act sufficiently indicates the policy and the limits within which the administrator is to prescribe the rules of conduct ; although he prescribes them in a very real sense none the less what he does is executive. The Regulations define the purpose. All action in pursuance of the Regulations, including the making of orders under reg. 14a, must, in order to be valid, relate to that purpose. If action is related to some other purpose it is not authorized by the Regulations. Where there has been a sufficient indication of policy by the legislature, the acts are executive acts and they are control lable for, amongst other grounds, want of bona fides (Victorian Chamber of Manufactures v. The Commonwealth (Women's Employ- ment Regulations) (8); The Commonwealth v. Grunseit (9); Reid v. Sinderberry (10); Adelaide Company of Jehovah's Witnesses Inc. v.

The Commonwealth (1); Stenhouse v. Coleman (2); Crowe v. The Commonwealth (3) ). Those cases show that the Court has always regarded orders made under the regulations as being rather of an executive than a legislative character. When considering whether the act of a subordinate rule maker, to whom a power has been given for a purpose, is valid, it is irrelevant to consider whether the act is in its nature legislative or executive. In the case of subordinate legislation, that is, orders made by such delegates as the vegetable seeds committee, the distinction between the legislative and the executive character of their function, where their power is conditioned by a purpose, is unimportant on the question of whether or not the validity of their orders can be attacked on the ground of want of bona fides. The principle in Salomon vy. Salomon (4) that the intention of the legislature can only be legitimately ascertained from that which it has chosen to enact is not involved here. Nor has the principle in Co-operative Brick Co. Pty. Ltd. v. Mayor de. of the City of Hawthorn (5) any bearing on the principle now being debated because it presupposes the very inquiry now raised as having been answered favourably to the legislation. The question of whether or not inquiry may be made into a piece of legislation, where the power to enact is conditioned by a purpose, is closely related to the question of whether evidence is admissible in order to establish what the real purpose was. It has never yet been held that where a power is conditioned by a purpose evidence cannot be received to determine what was the actual purpose of the legislation (Stenhouse v. Coleman (6); W. R. Moran Pty. Lid. v. Deputy Commissioner of Taxation (N.S.W.) (7); Attorney-General for Alberta v. Attorney- General for Canada (8) ). The reference in Abitibi Power & Paper Co. Ltd. y. Montreal Trust Co. (9) to the real substance of the legis- lation is to the possibility of there being before the Privy Council other than what appeared on the face of the legislation. The possi- bility of the admissibility of evidence on the question of want of bona fides on the part of the legislature was referred to in South Australia v. The Commonwealth (10) and Joseph v. Colonial Treasurer (N.S.W.) (11). The English doctrine on this point, which differs somewhat from the doctrine which prevails in the United States of America, is shown in South Australia v. The Commonwealth (12) and the cases there

Sugerman K.C. (with him Dignam), for the respondents. The rea distinction which is relevant in relation to the problem before the Court is not, perhaps, a distinction between that which is legislative and that which is executive, as much as a distinction between the general rule of law enforceable by penal sanctions and some act of a government instrumentality which affects only an individual and is self-executive and operative directly against a person or his property. The respondents are not concerned with the prohibition against the importing and selling referred to in the second part of the statement of claim, but they are concerned with the orders set forth in pars. 5 to 8 inclusive of the statement of claim, and, in particular, with those set forth in pars. 7 and 8, because no serious dispute arises concerning the orders set forth in pars. 5 and 6. A power may be exercised even with intention of injuring another person. In law the intent is irrelevant. Everything which has been done by the respondent committee is within one or other of the very wide powers _ conferred upon it by reg. 23 of the National Security (Vegetable Seeds) Regulations. The policy of the committee was that of endeavouring to prevent loss to itself and loss to the Commonwealth in dealing with seeds. The question of whether the order or ord was or were arrived at mala fide is one of fact upon which diff tribunals might come to different conclusions. Considerable con- fusion is caused by the use of terms " legislative " and " executive," but, where an order operates generally and is only operative by proceedings in the Court, the Court, in determining the validity of the order, must restrict itself to matters appearing on the face of the instrument itself and to matters of which the Court may take judicial notice. It has been said it is a question of fact whether the lawful purpose was being pursued, but the cases where t] principle has been actually applied, where there has been more th: a general reference to it, are all cases of resumption or acquisition of Jand and are all cases where the matter has been capable of determination by objective standards. Also, they are all cases

where the important matter was something quite objective, that is, the use to which the resuming authority was going to put the land. The more important cases of this type are Galloway v. Mayor and Commonalty of London (1), Stockton and Darlington Railway Co. v. Brown (2), Marquess of Clanricarde v. Congested Districts Board tor Treland (3), Vatcher v. Paull (4), Narma v. Bombay Municipal Com- missioner (5), Municipal Council of Sydney v. Campbell (6), Criterion Theatres Ltd v. Sydney Municipal Council (7) and Werribee Council vy. Kerr (8). All those cases are cases of a power given for a particular purpose, namely, the power to resume land. Another case of that type is James v. Cowan (9). There is a very important distinction in principle between that type of case and the case now before this Court, because in that type of case there merely arises an issue between two individuals which the court can determine as it would determine any other issue between two individuals, while in the type of case now before the Court in the absence of ordinary objective standards different results might be arrived at by different tribunals (Kruse v. Johnson (10) ). The orders now under consideration are general rules of law laying down rules of conduct in a general sense and enforceable by penal sanctions which depend upon s. 10 of the National Security Act. On their face they are directed to a limited class of persons, that is, persons registered under the Regulations as yegetable seed merchants. The prohibitions contained in the orders are laid upon that class of persons, but the prohibitions and orders are capable of affecting anyone in the community. Under s. 5 of the Commonwealth Crimes Act 1914 any person who aids or abets is directly or indirectly concerned in the commission of an offence against the orders and is himself guilty of the like offence. If there are trading interests and orders are made for some ulterior purpose beyond the Regulations, they are bad but the question is: How far can a court of law inquire into that matter? In testing par. 15 of the statement of claim, the assumption has to be made that on its face the order was perfectly good and directed to a purpose allowed by the Regulations. No court has ever upset a piece of delegated legislation on the ground of ulterior purpose or mala fides: See Co-operative Brick Co. Pty. Ltd. v. Mayor &c. of the City of Hawthorn (11). The subject orders are legislative acts. The orders themselves for the first time lay down the rule of conduct.

purpose cannot be justified, When a legislative power is defined by reference to purpose, legislation not directed to that purpose will be invalid (Attorney-General for Alberta v. Attorney-General for Canada (1), and see Deputy Federal Commissioner of Tawation (N.S.W.) v. W. R. Moran Pty. Ltd. (2)). But the purpose of legis- lation is to be ascertained by considering the true nature and opera- - tion of the law and the facts with which it deals, and (as already stated) not by examining the motives of the legislative authority - _ 'Stenhouse v. Coleman (3): Cf. per Isaacs J. in James v. Cowan (4), No such limitation applies in the case of administrative acts, Tt - is true that if a power to perform an administrative act is conferred - with no reference to purpose, no inquiry into purpose (in the sense of result or consequence desired and intended to be achieved) is rele- vant. But if such a power is given only for a particular purpose, the - power can be validly exercised only for that purpose. The general principle is stated by Lord Lindley in General Assembly of Free Church of Scotland v. Overtoun (5) - * I take it to be clear that there - is a condition implied in this as well as in other instruments which - create powers, namely, that the powers shall be used bona fide for the - purposes for which they are conferred." In Reid v. Sinderberry (6), Rich J., referring to powers to give directions vested in a person by - National Security Regulations, the exercise of which powers by the Commonwealth was justifiable only if they were used for defence - purposes, said: - . . . the powers conferred by the regulation are capable of being used for necessary purposes incidental to the defence of the Commonwealth, If at any time an attempt should be made to use them for what may be suggested to be some other and unjustifiable purpose the validity of the suggestion can be determined in proceedings to frustrate the attempt. In other words, the power may be ' exercised for a purpose, or with an intention, beyond the: scope of or not justified by the instrument creating the power' (Vatcher v. Paull (7)). Tt is a question of fact whether the donee of the power, though professing to exercise his powers for the statutory purpose, is not in fact employing them in furtherance of such purpose but for some ulterior object (Sydney Municipal Council v. Campbell 6)" (9).

functions of a legislative nature delegated to them by legislative bodies. In a sense they are subordinate legislative bodies, but in truth, they are what Lord Maugham described in Rowell v. Pratt (1) as domestic executive bodies which the legislature has thought fit in the public interest to entrust with important statutory powers. Such, for instance, are governmental and local authorities with powers to make by-laws and regulations on various subjects or to prescribe rules of conduct for the purpose of carrying out statutory powers. And mingled with these functions are frequently powers that are not of a legislative or judicial nature at all but mere powers to carry out the particular law or regulation and which may be described as administrative or executive functions. In this class of case it is settled law, I think, that it is the duty of competent courts of law to examine the powers of such bodies and to determine whether they have acted within those powers and exercised them and the dis- cretions confided to them bona fide and in good faith. If a regulation commits to a domestic or executive administrative body the decision of what is necessary or expedient and that authority makes a decision it is not competent for the courts to investigate the grounds or the reasonableness of the decision "in the absence of an allegation of bad faith." All that the courts can do is to see that the power which it is claimed to exercise is one which falls within the four corners of the powers given by the legislature and that those powers are exer- cised in good faith. Apart from that the courts have no power at all to inquire into the reasonableness, the policy, the sense or any other aspect of the case (Carltona Ltd. v. Commissioners of Works (2) ; Point of Ayr Collieries Ltd. v. Lloyd George (3); Liversidge v. Sir John Anderson (4); Sharp v. Wakefield (5); R. v. Board of Educa- tion (6); Board of Education v. Rice (7); R. v. Broad (8); R. v. Halliday (9) ; Chester v. Bateson (10) ; Hudson's Bay Co. v. Maclay (11); Widgee Shire Council v. Bonney (12) ). This requirement of good faith resolves itself, I think, into an inquiry whether the act of the authority is within or without power. If a regulation or order is not made bona fide, if it is arbitrary or capricious and not in good faith, the court holds that the power to make the regulation or order is non-existent (Kruse v. Johnson (13); R. v. Broad (8); Adelaide Company of Jehovah's Witnesses Inc. v. The Commonwealth (14) ;

Footscray Corporation v. Maize Products Pty. Ltd. (1)). Thi want of bona fides or capriciousness may appeaT on the face of the regulation or order itself, but there are cases which suggest thi extrinsic evidence may be admitted to establish the fact (See Depu Federal Commissioner of Taxation (N.S.W.) v. W. R. Moran Ltd. (2); James vy. Cowan (3)). It would be idle to discuss t] relevancy of evidence to the charge made in this case until the n of that evidence is known, but so far as extrinsic evidence is a sible it is plain, I think, that acts or statements of individual mem. bers of the domestic body cannot be proved ; only relevant acts or statements of the authority itself or of its authorized representati would be admissible (Cf. James v. Cowan (4); W. R. Moran Pty, Ltd. vy. Deputy Commissioner of Taxation (N.S.W.) (5); In Mayor &c. of the City of Hawthorn ; Ex parte Co-operative Brick (Co, Pty. Ltd. (6) ). The National Security (Vegetable Seeds) Regulations set up a com: mittee which it incorporates. The objects of the Regulations are to ensure for the purposes of the defence of the Commonwealth and the effectual prosecution of the war an adequate supply of vegetable seeds in Australia, that those seeds are true to type, and of a satii factory standard of purity and germination and are effectiv distributed (reg. 4). On behalf of the Commonwealth and subj to any direction of the Minister the Committee may purchase, sell exchange, dispose of or otherwise deal in vegetable seeds and do ma other things (reg. 23). And by an amending regulation (1944 No. reg. 144) the Committee may, by order, control and regulate th processing, treatment, distribution and disposal of vegetable 'An order under this regulation may, inter alia, be made to appl any person or persons specified in the order, to the person includ in any class of persons, or to persons generally, and to contain incidental and supplementary provisions as are necessary or e ent for the purposes of the order. In pursuance of this regulation orders challenged in this action were made. To take that of February 1945 as an illustration the Committee ordered that, e with the approval of the Committee, a registered vegetable seed n chant should not sell by retail or otherwise or pack for retail sale bi himself or any other person any vegetable seeds of the kind specified in the schedule to the order harvested during the period whi commenced on Ist July 1944 and ended on 30th June 1945. Thi Committee is not a legislative body but a domestic, executive 0

for the legislature to correct it by repealing it; but, so long as it exists as law, the courts are bound to obey it" (Lee v. Bude a Torrington Junction Railway Co. (1)). Then, too, legislative executive acts formally done in the name of the Crown stand in a special position: see Duncan v. Theodore (2). But with respect to acts or determinations of subordinate authorities other questions arise. To begin with their powers are limited and the form of the limitation upon a power of subordinate legislation may itself involve purpo If there is an exercise of such powers for a different purpose, it is outside the Act which confers them (Narma v. Bombay Municipal Commissioner (3) ). " There are forms of legislative authority, such as in Clanricarde's Case (4) and in Municipal Council of Sydney Campbell (5) where a given ' purpose ' is made an express condition of exercising the power. If that ' purpose ' is not pursued, the poy is not exercisable, and therefore the facts are examinable in order to ascertain what purpose was in view," per Isaacs J. in Jones v. Metro- politan Meat Industry Board (6): Cp. Werribee Council v. Kerr (7) (which, however, like Clanricarde's Case (8) and Campbell's Case (5) did not involve a by-law). But where purpose is not made expressly, or by necessary intendment, a condition of the exercise of the power, then it is necessary to consider the composition of the body, and, ifit is a deliberative assembly, to distinguish between the motives actuating individual members and the purpose disclosed by th character and operation of the measure in relation to the actual facts and circumstances. In In re the Mayor cc. of the City of Hawthorn Ex parte Co-operative Brick Co. Ltd. (9), speaking of a by-law of an elective municipal council, Cussen J. said: "So far as the question of bad faith is concerned, if it is meant by this that individual coun- cillors were actuated by improper motives in giving their votes, find no evidence of the fact, and even if there was, I find great

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