Australian Woollen Mills Pty Ltd v The Commonwealth

Australian Woollen Mills Pty Ltd v The Commonwealth - [1954] HCA 20 - HCA 1954 case summary — Zoe

[7]

The Wool Purchase Arrangement between the United Kingdom Government and the Commonwealth Government, whereby the former acquired from the latter the entire Australian wool clips for the duration of the war and one year thereafter, has very recently been fully examined and discussed by this Court in Ritchie v. Trustees Executors & Agency Co. Ltd. [1] and in Squatting Investment Co. Ltd. v. Federal Commissioner of Taxation [2] . The steps taken by the Commonwealth to implement that Arrangement within Australia have also been considered in some detail in those cases. The point to be noted for present purposes is that the sale by the Commonwealth Government to the United Kingdom Government expressly excluded "wool required for purposes of local manufacture" (i.e. manufacture in Australia). On the other hand, the Commonwealth under the National Security (Wool) Regulations (which came into force on 28th September 1939) acquired the whole of the wool produced in Australia in each of the war years. For their supplies of wool, therefore, in those years local manufacturers had to look to the Commonwealth, which owned all the wool. This really meant that they had to look to the Central Wool Committee, which was constituted under those regulations. Regulation 23 dealt with wool for local manufacture. It provided that any person desirous of obtaining wool for the purpose of manufacture within Australia might apply to the Central Wool Committee for authority to purchase wool, and that the Central Wool Committee might authorize a purchase of wool subject to such conditions as it might think fit to impose. A person so authorized was entitled within a reasonable time after appraisement to examine wool appraised and, subject to any conditions imposed upon his authorization, to purchase wool at the "appraised price". The provision as to price was twice amended. As from 2nd May 1940 the words "such prices as are from time to time determined by the Central Wool Committee" were substituted for the words "appraised price", and after 13th November 1942 the price to be paid was the price "fixed by the Central Wool Committee in accordance with any determination notified to it by the Commonwealth Prices Commissioner". The matter was also dealt with by the National Security (Price of Wool for Manufacture for Export) Regulations, which came into force on 17th February 1941. Regulation 7 provided that the Central Wool Committee might, either as a condition of authorizing the purchase of wool under reg. 23 of the Wool Regulations, or by resolution or by direction or in any other manner it might think expedient, provide for postponing the payment of any part of the price payable for the purchase of wool under that regulation and for treating it as a deferred or contingent liability, which the Central Wool Committee might remit upon proof to its satisfaction that the wool had been used in the manufacture of goods for consumption within Australia and which otherwise it might call up and enforce. A new reg. 7A was added as from 17th September 1941. It required a manufacturer, where there was a deferred or contingent liability under reg. 7, to include in any contract for the sale of wool by the manufacturer a provision which would have the effect of imposing an obligation on the purchaser to pay the amount of the contingent or deferred liability.

[10]

During the appraisement years the plaintiff company, in pursuance of the regulations mentioned above, applied for and was granted a number of authorizations to purchase appraised wool. Three purchases, totalling 201 bales, made under these authorizations become ultimately material in this case. These are a purchase of three bales of the wool year 1942-1943, a purchase of 48 bales of the wool year 1943-1944 and a purchase of 150 bales of the wool year 1945-1946. The conditions of the authorizations to purchase imposed by the Central Wool Committee varied in detail from time to time. But those granted for the season 1941-1942 and for all subsequent seasons contained material provisions which were identical in substance. The authorization granted to the plaintiff company on 2nd August 1945 may be taken as an example. This contained the following conditions: - "For all wool purchased under this Authorization the said The Australian Woollen Mills Pty. Ltd. shall be liable to pay the Central Wool Committee a price consisting of an amount representing the basic price fixed by the Central Wool Committee increased by 27½% of the appraised price. The basic price fixed by the Central Wool Committee for shorn wool for the Season 1945-1946 is appraised price plus 10%. The basic price fixed by the Central Wool Committee for skin wool for the season 1945-1946 is the appraised price plus 5%. The amount representing the basic price shall be paid together with delivery charges within fourteen days after purchase of the wool. Payment of the remaining part of the price shall be deferred, but shall be made if and when demanded by the Central Wool Committee, which may remit such part upon proof to its satisfaction that the wool has been used in the manufacture of goods distributed for consumption within Australia." One would imagine that the intention, or at least the primary intention, behind both the regulations and the authorizations was that the percentage addition to the basic price should be exacted only if wool bought did not actually reach local consumption but was exported either in its raw state or in the form of a manufactured product. It would seem, however, that, legally speaking, the deferred or "contingent" part of the price was exigible at the discretion of the Central Wool Committee.

[14]

In March 1946 a conference was held which was attended by representatives of the commission, of the Prices Commissioner, and of woollen manufacturers. What took place at this conference could have no legal effect, but it has some explanatory value, and two points which were made clear at the meeting should be mentioned. It was made clear, firstly, not only that price control was likely to continue for some considerable time, but that the Prices Commissioner proposed to continue, for the time being at any rate, the policy of fixing prices on a basis in which cost of raw materials to the manufacturer figured as a factor. On the other hand, he did not propose for the present to allow any substantial rise in the price of the finished product. It was made clear, secondly, that the Government realized that, on the resumption of auction sales, the price of raw wool was almost certain to rise, and that it had come to the conclusion that the only practical solution was that it should grant a bounty or subsidy to the manufacturer. There were, however, two things against which the Commonwealth desired to guard, though only one of these seems to have been actually stressed at the conference. The second was perhaps too obvious to need stressing. In the first place, the difference between the new price and the old price - and this was the basis of the subsidy - might be unduly enhanced by extravagant bidding in a market in which demand for a particular type of wool exceeded supply. In the second place, a particular manufacturer might ultimately place himself in what would have been regarded as an unduly favourable position by building up large stocks of subsidized wool - what is nowadays called "stock-piling". The obtaining of an advantage in this way would depend, of course, on a number of factors, including rising prices of raw wool. But by this time, although the contrary had been anticipated when the Disposals Plan was adopted, the general expectation was that wool prices would continue to rise for some time. Mr. Windeyer expressed the position succinctly when he said that the Commonwealth was concerned throughout to prevent two things - undue bidding and undue buying. In the last resort the Prices Commissioner was in control of the situation, but it seems to have been at no material time envisaged that the current basis of price regulation should be fundamentally altered.

[21]

Early in June 1948 it was announced in the press that the Commonwealth Government intended to discontinue the subsidy system as from 30th June 1948. The announcement seems to have been made with some suddenness, but it may well be that it had been expected for some time. The decision to discontinue paying subsidies was a more or less necessary incident or corollary of a decision that the Commonwealth should, after September 1948, vacate the field of price control in favour of the States. This decision in its turn was doubtless occasioned by a growing doubt as to the constitutional validity of Commonwealth legislation controlling prices: this Court had already had occasion to observe that the defence power, greatly enlarged in practical application in war-time, had begun to contract. The subsidy scheme had been an incident of Commonwealth price control, and, when the Commonwealth ceased to control prices, it would naturally cease to pay subsidies. It was, however, not a simple matter of declaring that subsidy would not be paid after a specified date. The Government was concerned about a number of matters incidental to the cessation of the payment of subsidies. It was concerned, in the first place, to see that the transition from Commonwealth control with subsidies to State control without subsidies should be made in such a way that manufacturers should enter the new period so far as possible on equal terms. One thing which this conception was regarded as involving was the transfer of wool by manufacturers with comparatively large stocks to manufacturers with comparatively small stocks, and towards the end of 1948 the plaintiff company, at the instance of the Commission, sold 200 bales of wool to another manufacturer. In the ultimate computation of stocks, which was later made, this wool was, of course, excluded. But the Government was concerned with much more than that. It was concerned to ensure that wool, on which subsidy had been paid by the Commonwealth, should not be used - or at any rate should not be used after a certain date - in the manufacture of goods which would not be subject to Commonwealth price control. This concern would be the more pressing because it must have been anticipated that the State Prices Commissioners would allow an increase in the prices of manufactured woollen goods; the States would be precluded by s. 90 of the Constitution from granting subsidies, even if they were willing and able to do so. The situation obviously necessitated some sort of compromise by way of solution. It was in fact met, as will be seen, by a decision that the subsidy scheme should be finalized on the basis that each manufacturer would have in stock at 30th June 1948 so much subsidized wool as would suffice for his manufacturing requirements for five and one-half months from that date. The period of five and a half months would end at the "Christmas close-down" of the factories about the middle of December.

[24]

On 14th September 1948 the Commission wrote to the company a letter in which, after referring to what had been said in the letter of 30th August, it said: "From an analysis of your statutory declaration of 7th July 1948 in respect of stocks of raw material at 30th June 1948 and movements of raw wool in the preceding twelve months, it would appear that, after taking into consideration all unpaid claims for subsidy, your company was holding the equivalent of 273,564 lbs. of greasy wool in excess of 5½ months' requirements at that date. Scoured wool has been converted to a greasy basis on an estimated yield of 69%". The Commission's calculation was made in the following manner. The "excess stocks" of subsidized wool are first computed by deducting from the stock held at 30th June 1948, as returned by the company, the five and one-half months' requirements, which are calculated on the basis of the actual "usage" by the company in the year ended 30th June 1948. The quantity so ascertained is 838,457 lbs. The calculation then, so to speak, credits the company with the quantity of wool purchased on which subsidy has been claimed but not paid, which is stated as 564,893 lbs. The difference between these two figures is 273,564 lbs. and the letter concludes: "quantity over-subsidized on which a refund of subsidy will be required - 273,564 lbs.". The basis of this calculation and of later calculations set out in later letters seems to be this. The Commission is reviewing the whole period of two years during which the subsidy system has been in operation and is saying: "We are discontinuing subsidies after 30th June 1948. The total amount of subsidy, to which we are going to treat you, the manufacturer, as entitled in respect of your purchases during the last two years, is such as will leave you at 30th June 1948 with 5½ months' requirements of subsidized wool in stock. We will pay your outstanding claims for subsidy to an extent which will give you at 30th June 1948 5½ months' requirements in the shape of subsidized stock. But, if payments of subsidy already made have been of such a total amount as to leave you at that date with more than your 5½ months' requirements of subsidised wool, then you must repay to us the equivalent of the excess".

[26]

It may be observed at this stage that it was clearly possible either that a manufacturer's stocks on hand at Christmas 1948 might include wool purchased before 1st July 1946 (which would almost certainly be appraisement wool), or that "usage" during the five and one-half months after 30th June 1948 might include wool purchased after that date. It follows that it was possible that wool on hand at the Christmas close-down in 1948 might include either appraisement wool or directly subsidized wool or both. (It has already been pointed out that appraisement wool had in effect been "subsidized", though not by direct payment to the manufacturer). It is not difficult to infer from the minutes of the conference of 24th June that each of these possibilities was realized by the Prices Commissioner and by the Commission, and that what was contemplated throughout was that each manufacturer should at the end of the five and one-half months be in the position of having turned his stocks of subsidized wool into manufactured goods. Mr. Walsh, a representative of the Commission at the conference of 24th June, said: "The conditions under which this subsidy on wool is being made available are, in the words of the Prime Minister, that it should be used in the manufacture of goods under controlled prices". "Controlled prices" meant, of course, "prices controlled by the Commonwealth". To this Mr. Stanley, a representative of top-makers, replied: "That is only natural". The Commonwealth was about to vacate the field of price control, and, if subsidized wool were retained thereafter, it could be used in the manufacture of goods the sale of which might not be subject to price control at all and in any case would not be subject to price control by the Commonwealth. It would thus seem that the period of five and one-half months was fixed as a more or less arbitrary period for which sufficient subsidized stocks would be allowed, and at the end of which subsidized stocks were expected to have been turned into manufactured goods.

[27]

On 15th December 1948 the Commission addressed to manufacturers a letter which indicated that stocks of subsidized wool on hand at the end of 1948 would be taken into account in the final adjustment and that for this purpose appraisement wool was to be treated as subsidized wool. This letter, after referring to previous announcements as providing an "interim basis for finalisation", announced that the Prices Commissioner had now authorized the basis on which final adjustments under the wool subsidy scheme would be effected. Regard was to be had to stocks held by manufacturers "in subsidized form" at the Christmas 1948 close-down. "Subsidized form" was said to mean that subsidy had been claimed or paid on the wool or the wool content of manufactured or semi-manufactured goods in stock, or that the wool or the wool content was appraisement wool on which part of the purchase price was deferred and contingently payable under the National Security (Price of Wool for Manufacture for Export) Regulations. The letter contained the following passage: "On receipt of these returns, which should be rendered not later than 7th January, 1949, the Commission will take the following action: - "(a) Original bale stocks and greasy wool not in original bales (Annexures A & B). After appraisement of greasy wool not in original bales, a calculation will be made of the amount of subsidy paid or payable on such types of wool according to the following scale: - (i) Wool Purchased in the 1947-48 Season: - The average subsidy computed on individual types over the whole of the 1947-48 Season auction sales. This is the difference between the basic cost and the average price for the Season on such type. (ii) Wool Purchased in the 1946-47 Season: The subsidy actually paid on the wool. (iii) Wool Purchased by manufacturers ex appraisement: - The subsidy which would have been payable on the same types of wool in the first half of the 1946-47 Season, or the deferred portion of the purchase price whichever is the higher" ". The letter proceeded: "The manufacturer will be presented with statements showing the nett cost of the wool after subsidy has been adjusted; for the purposes of costing for State Price Control, and the amount of subsidy calculated on this basis on the wool. The amount so calculated will be either offset against amounts of subsidy outstanding on account of the manufacturer or are to be refunded by the manufacturer". Returns were requested of wool held at the Christmas 1948 close-down "which has been the subject of a claim for subsidy or which is wool appraised during the seasons 1939-1940 to 1945-1946", and forms to be used for the purpose of making these returns were enclosed. The mention of "State Price Control" is, of course, a reference to the fact that the control of prices is now a subject of State legislation and not of Commonwealth legislation. It was actually in September 1948 that Commonwealth control of prices ceased and State control took its place.

[34]

With regard to what we have called the "general" question and its "subsidiary" question, there is clearly much to be said for the view that both questions should be answered against the plaintiff. The case bears no resemblance to New South Wales v. Bardolph [1] , in which an officer of the Premier's Department, with the authority of the Premier, signed a contract in the ordinary course of the carrying on of an activity of a more or less commercial character under governmental control. The position, however, is the subject of two "admissions" in writing made by the Commonwealth in these proceedings. These are (1) that "the Australian Wool Realization Commission and the Commonwealth Prices Commissioner were the agents of the Government of the Commonwealth in dealings with the plaintiff relating in any way to the subsidy on wool", and (2) that "if, as a result of the communications and dealings between the parties and/or their agents a contract was made which would be enforceable subject only to the provision of funds by Parliament, the defendant does not dispute liability on the ground that such statutory provision was not made (if that be the fact)". With regard to the first of these admissions, we take it as meaning neither more nor less than that the commissioner and the Commission had the authority of the Executive Government of the Commonwealth to write and do the things that were written and done by them respectively in and about the matter of the payment of subsidies to the plaintiff. The second admission does not appear in terms to mean very much, because any contract by the Crown to pay money would, of necessity, be subject to the provision of funds by Act of Parliament, and it is well settled that judgment may be given against the Crown on a contract although that judgment cannot be enforced in the absence of such a statutory provision: see Bardolph's Case [1] . The admission, however, was probably intended to go further, and it was, we think, treated as going further. The intention seems to have been that the Crown would not rely on the absence of statutory authority if otherwise the proper inference from the facts would be that a contract binding the Crown was made. At the same time, Mr. Windeyer very properly insisted that he was entitled to rely on the absence of statutory authority as an element tending against the inference that a contract binding the Crown was intended by anybody. The fact that one of the parties to the dealings in question was the Crown is, of course, a relevant, and indeed a fundamental, consideration. The whole case may be said to illustrate the difficulties which ensue if one puts aside a vital element in an entire legal problem and seeks to obtain the decision of a court on an artificial basis. However, we have endeavoured to give effect to what the advisers of the Crown seem to have intended.

[36]

The contracts alleged by the plaintiff are pleaded in pars. 3 and 4a of the statement of claim. Paragraph 3 alleges that "At or prior to the commencement of the wool season 1946-1947 the defendant promised the plaintiff that in consideration that the plaintiff would during that season purchase wool at auction and otherwise than at auction for domestic consumption in Australia the defendant would pay to the plaintiff a subsidy". The alleged mode of determining the amount of the subsidy is then set out, but this may be put on one side for the moment. Paragraph 4a contains an identical allegation in respect of the wool season 1947-1948. In each case there follows an allegation that the plaintiff made purchases of wool from time to time "in pursuance of the said agreement". The contract put forward by the plaintiff is thus seen to be of that type which is commonly said to be constituted by an offer of a promise for an act, the offer being accepted by the doing of the act. Such contracts are sometimes described as "unilateral" contracts, but the term is open to criticism on the ground that it is unscientific and misleading. There must of necessity be two parties to a contractual obligation. The position in such cases is simply that the consideration on the part of the offeree is completely executed by the doing of the very thing which constitutes acceptance of the offer. A well-known example in which a contract was held to have been made is to be found in Carlill v. Carbolic Smokeball Co. [1] , which has been recently referred to as "that immortal case on unilateral contract" ( J. C. Smith, Law Quarterly Review, vol. 69, p. 107). Other well-known examples are the cases in which a reward is offered for the giving of information or for the finding and returning of lost property (e.g. Williams v. Carwardine [2] and England v. Davidson [3] ), and the cases in which there is forbearance by a creditor in return for the debtor's promise to give security (e.g. Alliance Bank (Ltd.) v. Broom [4] ).

[38]

In cases of this class it is necessary, in order that a contract may be established, that it should be made to appear that the statement or announcement which is relied on as a promise was really offered as consideration for the doing of the act, and that the act was really done in consideration of a potential promise inherent in the statement or announcement. Between the statement or announcement, which is put forward as an offer capable of acceptance by the doing of an act, and the act which is put forward as the executed consideration for the alleged promise, there must subsist, so to speak, the relation of a quid pro quo. One simple example will suffice to illustrate this. A, in Sydney, says to B in Melbourne: "I will pay you £1,000 on your arrival in Sydney". The next day B goes to Sydney. If these facts alone are proved, it is perfectly clear that no contract binding A to pay £1,000 to B is established. For all that appears there may be no relation whatever between A.'s statement and B's act. It is quite consistent with the facts proved that B intended to go to Sydney anyhow, and that A is merely announcing that, if and when B arrives in Sydney, he will make a gift to him. The necessary relation is not shown to exist between the announcement and the act. Proof of further facts, however, might suffice to establish a contract. For example, it might be proved that A, on the day before the £1,000 was mentioned, had told B that it was a matter of vital importance to him (A) that B should come to Sydney forthwith, and that B objected that to go to Sydney at the moment might involve him in financial loss. These further facts throw a different light on the statement on which B relies as an offer accepted by his going to Sydney. They are not necessarily conclusive but it is now possible to infer (a) that the statement that £1,000 would be paid to B on arrival in Sydney was intended as an offer of a promise, (b) that the promise was offered as the consideration for the doing of an act by B, and (c) that the doing of the act was at once the acceptance of an offer and the providing of an executed consideration for a promise. The necessary connection or relation between the announcement and the act is provided if the inference is drawn that A has requested B to go to Sydney.

[41]

A test which has not seldom been applied in such cases in order to determine whether a contract has been made or not is to ask whether there has been a request by the alleged promisor that the promisee shall do the act on which the latter relies. Such a request may, of course, be expressed or implied. In an interesting article in the Law Quarterly Review, (vol. 69, p. 99) to which Mr. Windeyer referred us and which has already been incidentally mentioned, Mr. J. C. Smith maintains that the presence of a request, express or implied, is an essential element in every true offer. Sir A. Goodhart (Law Quarterly Review, vol. 67, p. 456 and Law Quarterly Review, vol. 69, p. 106) contests this general proposition, maintaining in effect that the essential thing, in a case such as the present, is that the "offeror" should state a price which the "offeree" must pay if he wishes to purchase a promise. This way of putting the position does not seem to differ materially from the way in which we have put it above. At the same time, it can hardly be denied that the presence or absence of an implied request to do the act may often provide a useful test for determining whether there has been a true offer and a true acceptance such as to bring a contract into existence: (cf. Salmond & Williams on Contracts, 2nd ed. (1945), pp. 104, 105). We are really applying the same test if we ask whether the "offer" was made in order to induce the doing of the act. It seems to have been thought at one time that it was necessary for a plaintiff, in any action at law in which he relied on an executed consideration, to allege in his declaration a request by the defendant that he should do the act which is relied on as providing the consideration. See however, Victors v. Davies [1] where Parke B. cites at length a note by Serjeant Manning to the case of Fisher v. Pyne [2] , and distinguishes between the action for money lent and the action for money paid. These cases are referred to by Bowen L.J. in Carlill's Case [3] . Serjeant Manning refers to the possibility that the act which is said to provide the consideration may be a mere "gratuitous kindness". The position will, of course, be the same if the act, while not accurately described as a "gratuitous kindness", is not shown to have been done in return for, and in consideration of, the alleged promise.

[43]

The presence or absence of an implied request that the act be done has been regarded as material in a number of cases. In Carlill's Case [4] itself it is regarded as material by both Bowen L.J. and A. L. Smith L.J. Bowen L.J. says: "A further argument for the defendants was that this was a nudum pactum that there was no consideration at all; in fact, that there was no request, express or implied, to use the smoke ball" [1] . His Lordship then refers to Victors v. Davies [2] and Fisher v. Pyne [3] , and proceeds: - "The short answer, to abstain from academical discussion, is, it seems to me, that there is here a request to use involved in the offer" [4] . A. L. Smith L.J. says: - "Now, is there not a request there? It comes to this: "In consideration of your buying my smoke ball, and then using it as I prescribe, I promise that if you catch the influenza within a certain time I will pay you £100" " [5] . Several other illustrative cases are cited in Mr. Smith's article. It will suffice here to mention two cases, the one nearly a hundred years old and the other very recent. The correctness of the actual decision in Shadwell v. Shadwell [6] is likely to be forever debated. Erle C.J. and Keating J. took, in the light of all the circumstances, one view of the letter on which the plaintiff relied: Byles J. took another view. But the approach of all the learned judges to the problem of fact was exactly the same. Erle C.J. and Keating J. said: - "First, do these facts shew a loss sustained by the plaintiff at his uncle's request? If the promise was made in order to induce the parties to marry, the promise so made would be in legal effect a request to marry. Secondly, do these facts shew a benefit derived from the plaintiff to the uncle, at his request? If the promise of the annuity was intended as an inducement to the marriage this is the consideration averred in the declaration" [7] . Byles J. said: - "The inquiry therefore narrows itself to this question, - Does the letter itself disclose any consideration for the promise? the consideration relied on by the plaintiff's counsel being the subsequent marriage of the plaintiff" [8] . Then, after discussing the contents of the letter he says: - "The question, therefore, is still further narrowed to this point, - Was the marriage at the testator's request? Express request there was none. Can any request be implied?" [9] His Lordship concludes that no such request can be implied, and that the marriage could not be said "to have taken place at the testator's request or, in other words, in consequence of that request" [9] . The very recent case is Combe v. Combe [10] . This is one of the "forbearance" cases. Denning L.J. said: - "Unilateral promises of this kind have long been enforced, so long as the act or forbearance is done on the faith of the promise and at the request of the promisor, express or implied. The act done is then in itself sufficient consideration for the promise, even though it arises ex post facto " [1] . And Asquith L.J. (as he then was) said: - "I do not think an actual forbearance, as opposed to an agreement to forbear to approach the court, is a good consideration unless it proceeds from a request, express or implied, on the part of the promisor. If not moved by such a request, the forbearance is not in respect of the promise" [2] .

[46]

The position may be considered first as at the outset, and with reference to the original official announcement - the general announcement of 20th June 1946, and the particular announcements to the plaintiff company of 6th and 20th August 1946. It is to be observed, in the first place, that these announcements come not from a party having a commercial interest in the subject matter but from instrumentalities of a Government, which has been dealing for years, and is still dealing, with a problem created by a great war. That problem is the maintenance of a price structure, and in particular its maintenance in relation to manufactured woollen goods. That is no new problem. It has been dealt with in the past by what was in substance and effect payment of a subsidy. For, as has been seen, the Commonwealth during the appraisement period had paid to growers more than it charged to manufacturers for wool sold to them. The price to the manufacturer was after November 1942 fixed by the Prices Commissioner, and the difference between what the Commonwealth paid and what it received was the equivalent of a subsidy paid by the Commonwealth. It could make no practical difference to the manufacturer whether the Commonwealth's money was paid to him or was paid to the grower. In either case he benefited - in the one case by a reduction in the price he had to pay, and in the other by a reimbursement of part of the price he paid. It is impossible to suggest that the Government ever contracted with manufacturers to sell them appraisement wool at less than cost. The Government simply acquired wool and sold it to manufacturers at a price lower than it paid for it. The problem has not changed in character since June 1946. The object to be attained is still to keep down the price of woollen goods to the consumer. And it is to be solved in the same way - that is to say, by a subvention. The only difference is that, because the Government will no longer be acquiring and selling wool, the old method is impracticable, and the subvention is to be paid direct to the manufacturer. No reason is suggested why the Government, which has not hitherto entered into any contract, should now propose to bind itself by contract. Again, the position is not that of a person proposing to expend moneys of his own. It is public moneys that are involved. Questions of general constitutional law have, as has been mentioned, been excluded from consideration, but, if there was an intention on the part of the Government to assume a legal obligation, one would certainly have expected statutory authority to be sought: the case, as has been pointed out is entirely unlike Bardolph's Case [1] . And one would not have expected the vital announcement to be made by persons who, in the ordinary course of things, could have no power to commit the Crown to the expenditure of a single penny.

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Judgment (61 paragraphs)

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