Buck v Bavone

The appellant, an inspector employed by the South Australian Potato Board ("the Board") which is set up by s. 4 of the Act, complained that such selling by the respondent was contrary to s. 18 of the Act. Sub-section (1) of that section provides that "a person shall not grow potatoes for sale, or sell potatoes grown by him unless he is registered by the board as a grower".

The learned magistrate who heard the complaint held that there was no case for the respondent to answer since s. 18, properly construed, did not prohibit the interstate sale of potatoes by the respondent to a New South Wales buyer, though the respondent was not a registered grower under the Act. The basis of the construction placed upon s. 18 of the Act by the magistrate was that a prohibition of the grower unless registered under the Act would infringe s. 92 of the Australian Constitution. Thus, s. 18 was construed to avoid invalidity and held to have no application to the transaction in question.

To be registered as a grower, a person must apply on a prescribed form, furnishing the information which it seeks and satisfy the Board that in the period for which registration is required he is growing or will grow potatoes for sale, either on land owned by or occupied by him, or under a share-farming agreement. A certificate when granted remains in operation for the period it specifies, not being more than eighteen months (s. 18(2), (3) and (4)).

The form of application to be registered as a grower is not determined by the Act but is left to be prescribed by regulations. Thus the Act does not itself determine the information the form may require.

The power to make regulations is contained in s. 24. They may be made on the recommendation of the Board and may prescribe matters permitted by the Act to be prescribed. Pursuant to this power, regulations were made in March 1949 and amended from time to time and ultimately, so far as is presently relevant, in August 1964. An application under s. 18 for registration as a grower is required by the regulations to be in writing in the form in the 1st Schedule thereto (reg. 2(c)). This form calls for, amongst other things, a description of the land on which "potatoes are or will be planted", a statement as to the period for which registration is required, and it contains the following undertaking to be signed by the applicant:

I undertake that if granted a certificate of registration as a potato grower, I will, during the period for which registration is required, grow potatoes for sale on the above described land and will plant the above described acreages and varieties.

A person dissatisfied with a decision of the Board may request the Minister to reverse the decision. The Minister may give that person an opportunity to submit information and argument and may give the Board a direction relating to the request. The Minister's decision is binding on the Board (s. 23).

Section 20 gives the Board authority, amongst other things, by order, to fix the quantity of potatoes "a grower may sell or deliver at any time or place specified in the order and prohibit the sale or delivery of potatoes in contravention" of the order (s. 20 (1)(a)). The other provisions of s. 20 give to the Board complete control of the marketing of potatoes.

The first matter to be observed is that in terms the Act embraces sales and deliveries in the course of interstate trade. To use the expression used by the Privy Council about the statutory provisions the subject of decision in Peanut Board v. Rockhampton Harbour Board [14] , the Board is given power to enforce a "compulsory marketing scheme, entirely restrictive of any freedom of action on the part of the producers". It involves "a compulsory regulation and control of all trade, domestic, inter-State and foreign", see James v. The Commonwealth [1] . It needs no reference to authority now to establish the proposition that a State may not so control interstate trade. Quite apart from what the Act purports to empower the Board to do, the Act itself purports to prohibit the sale, including the interstate sale, of potatoes except by persons chosen by or on behalf of the State by means of a system of registration of growers. Only a registered grower may sell. Section 18(1) clearly embraces an interstate sale within the terms of its prohibition.

1. (1933) 48 C.L.R. 266. 2. (1936) 55 C.L.R. 1, at p. 52; [1936] A.C. 578, at p. 623.

Further, a consequence of being registered as a grower is that a person becomes subject to the power of the Board to require him to pay to the Board contributions towards the costs of the administration of the Act and of carrying out the powers and duties of the Board (see s. 12). Included in the powers of the Board is a power to buy and sell, amongst other things, potatoes (s. 16(d)). Thus recoupment of trading losses by means of the levy would seem to be within the scope of s. 12.

There is no limit to the amount of the levy, nor is there any prescription of the manner in which its amount is to be calculated. There is no requirement of the levy being ratable to any fact or circumstance: nor is it necessarily to be non-discriminatory as between growers. The amount of the levy when fixed and notified by the Board becomes a debt recoverable by the Board.

It was submitted on behalf of the appellant that registration as a grower is really as of right, so that the State through the Act and regulations in so far as registration is concerned, is merely recording those who are growing or will grow potatoes in order to amplify the Board's statistical information as an aid to marketing control. It is claimed that there is a sufficient specification in s. 18 of what is required for registration as a grower to fulfill the requirements mentioned in Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [2] . But, if registration places the registered grower at the risk of a financial impost, the fact, if it be the fact that registration is as of right, may not save the relevant sections of the Act from invalidity unless restrained by construction to exclude interstate trade from its operation.

It is clear, in my opinion, that the effect of ss. 12 and 18 is that, unless the grower of potatoes for sales has become registered, he may not sell his potatoes at all. If he registers as a grower, and thus enables himself so far as s. 18 is concerned to sell his potatoes, he may become liable to pay such sum as the Board determines: that is to say, the grower is told "You may only sell if you submit yourself to the possibility of being liable to the Board for an unspecified amount of money".

It was submitted that, by reason of s. 22a of the Acts Interpretation Act 1915 S.A., as amended, s. 12 should be construed so as not to authorize a levy upon a grower in respect of his interstate trade. But, in my opinion, by no process of construction could the language of s. 12 be so confined. The levy is not in respect of any transaction but is in respect of a person registered as a grower. Further, the levy may be required to be paid before the grower has decided whether or not he will sell interstate: and he may be both a seller intrastate and interstate.

It was also submitted that the operation of ss. 12 and 18 could be severed so that their provisions did not cumulate. It was then said that, if s. 12 were read as inseverably authorizing a levy on interstate trade, it would as a whole be void, leaving s. 18 standing.

But this submission misconceives the relevant operation of s. 92. It is the prohibition on sale without being registered which brings s. 92 into consideration in this case. If registration is not as of right, the prohibition on sale will itself offend s. 92. But a consequence of registration is a compulsory levy. This will afford a separate reason for concluding that the constitutional provision has been breached, even if registration is as of right. These are the two bases on which ss. 12 and 18 may deny the freedom of interstate trade protected by s. 92: first, unless registration as a grower is of right, s. 18 itself will offend. Secondly, if the grower has a right to be registered, the combination of the prohibition on sale without registration and the subjection by s. 12 of the registrant to the risk of a levy will also offend. If it be right, as I think it is, to read the Act as forbidding an interstate sale by a grower who is not registered but who, if registered, will be exposed to the possibility of a levy of uncertain and, perhaps, unlimited amount, s. 18 of the Act, in my opinion, infringes s. 92. A State cannot make the liability to such a levy a condition of its permission to engage in interstate trade. That, in my opinion, is precisely what the Act, properly understood, effects to do. For this reason, I am of opinion that s. 18 must be construed so as to be inapplicable to the interstate selling of potatoes. A grower may sell his potatoes by an interstate sale without being registered under the Act.

There is another ground on which I would reach the same conclusion. A grower has no right to a licence until he satisfies the Board that he is growing or will grow potatoes, presumably of stated varieties and at stated times on specific areas of land. That satisfaction of the Board is subjective. The grower has no right to the Board's satisfaction. Further, the fact about which the Board is to be satisfied may, in some circumstances, be irrelevant to the sale of the potatoes the grower wishes to sell. The Board's satisfaction is as to a period, which is not necessarily the period in which the potatoes to be sold have been grown. Thus, a grower with a stock on hand may not sell those potatoes unless he is registered in respect of a period in which they were not, nor would be, grown. For example, a grower with potatoes on hand after the expiry date of an earlier registration could not sell them until he was registered again. In such a case, the Act and regulations (including the scheduled form) provide that the grower, in order to be able to sell his stock of potatoes, must undertake to grow further potatoes as described in the form of application for registration.

Further, the satisfaction of the Board as to whether the applicant is growing or will grow potatoes for sale depends, at least in part, upon the intention of the grower. This involves questions of credit: as I have said, the applicant has no certainty that he will be believed. It is quite inappropriate, in my opinion, to describe the applicant in such a case as entitled to be registered. It can only be said that he must be registered if he can convince a State board of what he is relevantly doing or will do.

In my opinion, the provisions of the Act do not satisfy the requirement that the registration should be obtainable as of right or subject only to the performance of ascertained and defined conditions which do not in themselves constitute a violation of the guaranteed freedom.

In my opinion, the Act does endeavour, on the one hand, inadmissibly to subject interstate trade to the burden of a financial levy: and, on the other hand, in substance, to select who shall be permitted to engage in interstate trade according to the discretion of the Board or of the Minister.

In either case s. 92 is infringed. The magistrate's decision to dismiss the complaint was correct. This appeal should be dismissed.

The respondent was charged that, being a person who was not registered as a grower of potatoes, he sold a quantity of potatoes grown by him contrary to s. 18(1) of the Potato Marketing Act, 1948-1973 S.A. ("the Act"). It was proved that the respondent, who was not registered as a grower, sold some potatoes, which he had grown at Salisbury Downs in South Australia, to a buyer at Broken Hill in New South Wales and agreed to deliver them in Broken Hill. The magistrate who heard the complaint held that s. 18(1) must be construed in such a way that it would not infringe s. 92 of the Constitution and that so construed it did not extend to interstate trade. Since it was not disputed that the sale the subject of the charge was an act of interstate trade the magistrate accordingly dismissed the complaint.

The provisions of s. 18(1) of the Act can only validly apply to an interstate sale if they are "regulatory" within the principles laid down in The Commonwealth v. Bank of New South Wales [3] and later authorities. The sub-section prohibits all sales except by registered growers, and such a provision could not validly apply to interstate trade unless it was sufficiently certain that any grower who wished to make interstate sales and who sought registration could obtain it. It was submitted on behalf of the respondent that the provisions of s. 18(2) of the Act did not bring about that result, first, because the entitlement to registration depends on the Board being satisfied of the matters mentioned in s. 18(2)(b) rather than on the existence in fact of such matters and, secondly, because that sub-section does not entitle a person to registration unless in the period for which registration is required he is growing or intends to grow potatoes for sale and there may be cases in which a person who has grown potatoes and wishes to sell them interstate cannot obtain registration. It was further submitted that the requirement of registration is itself an impermissible burden on interstate trade and that the fact of registration exposes the grower to a levy under s. 12 of the Act which could not be exacted consistently with s. 92.

The first question that arises is whether s. 18(2) of the Act gives the Board an arbitrary or very wide discretion to decide whether a grower who applies for registration should be granted it. If so, the authority of such cases as Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [4] establishes that the provision will be invalid. It is not uncommon for statutes to provide that a board or other authority shall or may take certain action if it is satisfied of the existence of certain matters specified in the statute. Whether the decision of the authority under such a statute can be effectively reviewed by the courts will often largely depend on the nature of the matters of which the authority is required to be satisfied. In all such cases the authority must act in good faith; it cannot act merely arbitrarily or capriciously. Moreover, a person affected will obtain relief from the courts if he can show that the authority has misdirected itself in law or that it has failed to consider matters that it was required to consider or has taken irrelevant matters into account. Even if none of these things can be established, the courts will interfere if the decision reached by the authority appears so unreasonable that no reasonable authority could properly have arrived at it. However, where the matter of which the authority is required to be satisfied is a matter of opinion or policy or taste it may be very difficult to show that it has erred in one of these ways, or that its decision could not reasonably have been reached. In such cases the authority will be left with a very wide discretion which cannot be effectively reviewed by the courts. Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] itself was a case of that kind. Where the authority is required to be satisfied of the existence of particular matters of objective fact, the position may be very different. It may then be possible to show clearly not only that the material facts existed but that an authority acting in accordance with its duty could have reached no other conclusion than that they existed. Under s. 18(2) of the Act the matters of which the Board must be satisfied before an applicant will be entitled to registration are clearly defined, and they do not permit the Board to exercise any judgment as to the fitness of the applicant or to apply its own notions of policy in reaching its decision. The Board has to be satisfied that "in the period for which registration is required he" (the applicant) "is growing or will grow potatoes for sale, either on land owned or occupied by him, or under a share-farming agreement". It is impossible to suppose that the Board acting in good faith could fail to be satisfied that a person was growing potatoes if that were the fact. No doubt the questions whether the applicant will grow potatoes, and whether they are being grown or will be grown for sale, make it necessary for the Board to decide whether it accepts an applicant's statements as to his intent, but having regard to the nature of the issue the possibility that the Board acting honestly might wrongly fail to be satisfied of those matters seems to me theoretical rather than practical. In the nature of things an erroneous decision by the Board on such a question could be readily reviewed by the courts. The requirement that a grower who effects an interstate sale shall be registered does not burden the grower's interstate trade, because the grower will be entitled to be registered, and for reasons which I shall give registration does not entail any burdensome consequences. The possibility that the Board may wrongly refuse to grant registration, thus putting the grower to the trouble and expense of resorting to the courts, does not mean that s. 18 would be invalid if it applied to interstate trade: Wilcox Mofflin Ltd. v. New South Wales [5] ; Kerr v. Pelly [6] .

1. (1955) 93 C.L.R. 127. 2. (1952) 85 C.L.R. 488, at p. 522 3. (1957) 97 CL.R. 310, at p. 318.

However, as I have already indicated, a person will not be entitled to registration unless he satisfies the Board that in the period for which registration is required he is growing or will grow potatoes. According to the submission of the respondent the section defines too narrowly the class of persons entitled to registration and does not allow the registration of every grower who may wish to sell his potatoes interstate. Clearly enough a person who had grown potatoes for a purpose other than sale - for example, for his own consumption or for use as seed potatoes on his own land - and then, after he had taken the whole crop off the land, had changed his mind and wished to sell the potatoes interstate, could not obtain registration if he did not intend to grow potatoes for sale in the future. He would not be a person who "is growing or will grow potatoes for sale". Also a person who had grown potatoes for sale and who had been registered, but whose registration had expired after he had harvested his entire crop but before he had sold it, and who did not intend again to grow potatoes for sale, could not obtain futher registration, and the section if valid would render a sale by him unlawful. Perhaps a case could also arise in which the land on which potatoes were grown was neither owned nor occupied by the grower, and there was no share-farming agreement. These however are exceptional cases, unlikely to arise in the normal course of trading. To establish a breach of s. 92 it is not enough to suggest the possibility of theoretical infringements of freedom that are remote from reality: cf. Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [7] . Moreover, it is unnecessary to consider hypothetical cases that may never arise. It has not been shown that the respondent would not have been entitled to registration if he had sought it before he sold the potatoes to the buyer in Broken Hill. All that appears in the evidence is that the respondent had been growing potatoes only for the one year during which the alleged offence occurred; there is not the least suggestion that he was growing them otherwise than for sale and it does not appear whether or not he had harvested his whole crop. He has not shown that in the circumstances he was not entitled to registration as of right; he has therefore not shown that his freedom to sell interstate has been affected.

The form on which an application for registration must be made is prescribed by regulations made under the Act. The applicant for registration is required to supply the following particulars:

(1) Description of the land on which the potatoes are or are to be planted;

(2) The name and address of the owner or occupier of the land;

(3) If potatoes are grown in partnership, the full names and addresses of the partners;

(4) If potatoes are grown pursuant to a share-farming agreement, the full names and addresses of other parties to the agreement;

(5) The total acreage planted or to be planted, showing the varieties to be planted and whether the planting is to be effected in the early season, the mid-season or the late season;

(6) The period for which registration is required (not exceeding eighteen months); and

(7) Whether the applicant was previously registered as a grower, and if so his registration number.

The information required to be supplied is not such as to be either difficult to obtain or to amount to unwarranted invasion of the privacy of the grower supplying it. Its purpose would appear to be to inform the Board as to the likely size of the potato crop, the times when and the places at which potatoes are likely to be available and the varieties likely to be available - information of value to the Board in carrying out its marketing functions. The grower on the application form is required to give an undertaking that if granted a certificate of registration he will during the period for which registration is required grow potatoes for sale on the land described in the application and will plant the acreages and varieties there described. This is not burdensome; it is left entirely to the grower to say when, where and what he will plant; he need undertake nothing that he does not wish to perform. No means is provided for enforcing the undertaking; the continuance of the registration is not dependent on its observance - indeed, there is no provision for cancelling a registration once granted. The necessity to sign the form and give information and an undertaking does not of itself constitute a burden on the respondent's interstate trade. In this respect the case is not unlike Rogers v. Jordan [8] . 1. (1965) 112 C.L.R. 580.

The respondent's final contention is that upon registration a grower is liable to pay a levy which itself would constitute an impermissible burden if applied to interstate trade. Section 12 of the Act provides, inter alia, as follows:

(1) The board may, by notice in the Gazette from time to time require all or any of the persons who are registered or licensed under this Act to pay to the board contributions towards the costs of the administration of this Act and towards carrying out the powers and duties of the board under this Act.

(2) The notice shall specify the persons or classes of persons who are required to pay contributions, the amount of the contributions or the manner in which they are computed and the time on or before which they must be paid.

No limit is placed by the statute on the amount of levy and since the Board is empowered to buy and sell potatoes s. 16(d)) the power to levy might be used to help make up trading losses incurred by the Board in dealing in potatoes other than those of the grower levied. The levy is not simply a tax on production of potatoes, justifiable within the principle of such cases as Damjanovic & Son Pty. Ltd. v. The Commonwealth [9] . Nor is it a fee paid towards the cost of registration, or as recompense for services or facilities provided by the Board, within the principles discussed in Freightlines and Construction Holdings Ltd. v. New South Wales [10] . It was not contested that a grower could not be compelled to pay the levy as the price of engaging in interstate trade or as a tax on that trade. If s. 12 were given its full effect, so that it applied to growers making interstate sales, its provisions could not stand consistently with s. 92 of the Constitution. However, the Act is to be construed so as not to exceed the legislative power of the State of South Australia, and is to be treated as valid to the extent to which it does not exceed that power: s. 22a of the Acts Interpretation Act, 1915 S.A., as amended. That section reverses the presumption that the Act is to operate as a whole, and reveals the legislative intention that any parts of the enactment found constitutionally unobjectionable should be carried into effect independently of those which fail: Bank of New South Wales v. The Commonwealth [11] . It is unnecessary to consider whether s. 12 is wholly invalid, and I express no opinion on that question. However, I can find no indication of any intention that ss. 12 and 18 should be interdependent, or that the rules of interpretation contained in s. 22a should not apply to the Act. If s. 12 is pro tanto invalid, it does not apply to a grower engaged in interstate trade. If it is wholly invalid, its invalidity does not infect s. 18. The two sections are distinct and severable. Liability to pay the levy is not a condition of registration. There is no other reason why s. 18 cannot be given effect independently of s. 12. Section 12 purports to enact that a consequence of registration may be liability to pay the levy; that consequence cannot validly be made to follow registration of an interstate trader; however, the intention of the legislature is that if s. 18 is valid in itself it should be given effect notwithstanding that the provisions of s. 12 fail wholly or in part; therefore, since s. 18 is not otherwise objectionable, it takes effect although registration under it does not expose an interstate trader to the consequences provided by s. 12. The result is that a grower who sells his crop interstate is obliged to register, but does not by reason of his registration become liable to the levy. 1. (1968) 117 C.L.R. 390. 2. (1967) 116 C.L.R. 1; [1968] A.C. 625. 3. (1948) 76 C.L.R. 1, at p. 371.

For these reasons the provisions of s. 18 of the Act were merely regulatory, and validly applicable to sales made in the course of interstate trade. The magistrate was wrong in dismissing the complaint. I would allow the appeal.

The respondent, a South Australian potato grower, faced a charge that, not being registered as a grower of potatoes, he had, contrary to s. 18(1) of the Potato Marketing Act, 1948-1973 S.A., sold potatoes grown by him. By way of defence he relied upon s. 92 of the Constitution; the charge was dismissed. The sale the subject of the charge was one to an interstate buyer in Broken Hill for delivery to the buyer in that city and in dismissing the charge the magistrate construed s. 18(1) as not applying to sales of potatoes in interstate trade. From the dismissal of the charge the appellant, a Potato Board inspector who was the complainant below, now appeals.

The respondent seeks to impugn the validity of s. 18(1) upon two grounds, each concerned with the impact upon interstate trade of the section's prohibition upon the sale of potatoes by an unregistered grower. First it is said that the requirement of registration is no mere regulation of trade and that the prohibition of sale by unregistered growers does, in relation to interstate trade, offend against s. 92; additionally it is contended that because registration carries with it a liability to pay levies imposed by the Board, this is in itself enough to make even an otherwise innocuous requirement of registration a burden obnoxious to s. 92.

To obtain registration as a grower a form must be filled in giving information as to production of potatoes and containing an undertaking to grow potatoes for sale. An applicant must then satisfy the Board that he is growing or will grow potatoes for sale; he thereupon becomes entitled, without fee, to registration.

The respondent points out that a grower of potatoes for sale who defers his application for registration until all his crop has been garnered and who does not intend to grow another crop will be unable to establish any entitlement to registration. However the apparent injustice involved in this seeming anomaly may be more apparent than real; because the prohibition in s. 18(1) extends not only to the selling but also to the growing of potatoes while unregistered, such a grower's inability to obtain registration will be a consequence of his earlier failure to comply with the law and obtain, while his crop was still in the ground, the registration to which he would then not only be entitled to but also bound by law to seek.

The respondent also draws attention to the situation of a grower who does not grow for sale, instead intending his potatoes exclusively for use as seed potatoes or for home consumption; he will neither be entitled to, nor required to obtain, registration so long as his intention not to sell his crop remains unchanged. However, should he change his mind after all his potatoes have been garnered, while at the same time having no intention of growing further potatoes for sale in the immediate future, he will not be entitled to be registered and his want of registration will mean that any sale of his crop, albeit interstate, will constitute an offence under s. 18(1).

There is nothing to suggest that the respondent falls within any such category. He was growing potatoes on about one and a half acres, sufficient on the evidence to yield about fifteen tons of potatoes, certainly a large quantity for consumption by family or friends or for his own use as seed potatoes; he had, in fact, sold some of his crop to his Broken Hill buyer. There is no evidence whatever that he had grown his crop without any intention of selling it and that, after digging all his crop, he changed his mind and formed the intent to sell some or all of it to the Broken Hill buyer, at the same time intending not to grow a further crop.

The respondent seeks, nevertheless, to rely upon this feature of the registration requirements of s. 18(1), that in certain conceivable circumstances a grower will be unable to qualify for registration, to counter the view that registration is no more than a permissible regulation of trade not inconsistent with s. 92. He relies also upon the requirement that an applicant for registration must "satisfy" the Board of certain matters before being entitled to registration.

Before dealing with these contentions I should state what I understood to be the position at law so far as concerns the impact upon interstate trade of a requirement of registration. Such a requirement, applicable alike to intra- and interstate sellers, will not offend s. 92 if merely regulatory of trade. If registration is readily available without onerous prerequisites and without payment of any fee, and is a reasonable and relevant requirement in the circumstances of the trade it will, being non-discriminatory, be a valid regulatory law, so that although framed in terms of a prohibition upon sale without prior registration it will not relevantly burden interstate trade (Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [12] ). The requirement of registration as a grower for sale, involving the furnishing of the information and the giving of the undertaking called for in the present case is, in the context of the present legislation, in my view both relevant and reasonable.

This being so, can the respondent none the less rely upon instances, not shown to be applicable to his case, in which a particularly situated grower might not be able to satisfy the requirements of registration, using those instances to deny to the requirement of registration what is, in the respondent's own circumstances, its character of mere innocuous regulation? I think not. The relevance of the distinction between mere regulation on the one hand and burden or prohibition on the other lies in the different effect each produces upon the trade of he who invokes s. 92. One who relies upon s. 92 "cannot roam at large over the regulations and attack them generally. He must be confined to those which affect his rights " (Real Estate Institute of New South Wales v. Blair, per Starke J. [13] ); this is as true of an attack based upon s. 92 as it was in the facts of that case. The burden or obstruction complained of must be real and not merely "some theoretical or speculative transgression" of freedom - Hughes and Vale [No. 2] [14] ; there must be "an actual burden upon interstate trade - a real impediment in its way" (Williams v. Metropolitan and Export Abattoirs Board [15] ). Otherwise "the argument is left to general reasoning and hypothetical cases" (Wilcox Mofflin Ltd. v. New South Wales [16] ), whereas there is "much to be said for the view that s. 92 should be applied only for the protection of transactions actually existing which come within it and not to imaginary cases" [17] . The requirement of registration is not shown to have involved any burden or prohibition upon the respondent's interstate trade and the fact that it is possible to conceive of others who might be so circumstanced that the requirement would impose a prohibition upon their interstate trade affords him no standing to assert invalidity.

1. (1946) 73 C.L.R. 213, at p. 227. 2. (1955) 93 C.L.R., at p. 160; cf. at p. 205. 3. (1953) 89 C.L.R. 66, at p. 74. 4. (1952) 85 C.L.R. 488, at p. 518. 5. (1952) 85 C.L.R., at p. 520.

The objection to reliance upon such hypothetical instances of the burdening of trade is based upon no mere technicality. It may very well be that there neither is nor ever will be a grower of potatoes in South Australia whose circumstances are such as to preclude him from registration in a manner offensive to s. 92. Such a grower would have to have grown potatoes for a purpose other than sale, to have changed his mind and decided to sell them after they had all been dug, to have engaged in a transaction involving the interstate sale of his potatoes and, additionally, to have possessed the intention to refrain from again growing potatoes for sale. Without the coincidence of all these circumstances the requirements of registration can readily be satisfied and will prove no relevant impediment to interstate trade. A law should not, in my view, be declared invalid when no interested party's interstate trade is shown to have been burdened by it and when there may never exist any trade so circumstanced as to be liable to be so burdened.

The requirement that the Board must be "satisfied" in certain respects before registration can be attained means, says the respondent, that registration, far from being a matter of right, lies very much in the discretion of the Board and may quite arbitrarily be denied to an applicant. Were this so the law would clearly enough offend against s. 92 but I cannot regard s. 18 as having this effect. The satisfaction of the Board is made to turn upon a quite precise question of fact, whether the applicant "is growing potatoes for sale, either on land owned or occupied by him, or under a share-farming agreement" or, alternatively, whether the applicant "will grow potatoes for sale" on such land or under such an agreement. Having regard to the remedies available should the Board fail to perform the duty cast upon it to determine according to law a grower's application, there appears to me to be nothing so arbitrary in the Board's function of determining applications for registration as to deprive the requirement of registration of its character as permissible regulation of trade.

I turn therefore to the quite distinct ground of attack, based upon the exposure to the levy-making power of the Board which is involved in becoming a registered grower. This arises because of the terms in which s. 12 of the Act imposes liability to levies made by the Board; it is those who are registered under the Act who alone may be required to contribute, by way of levies, towards costs of the administration and execution of the Act. Hence, so the argument goes, to require registration as a pre-requisite to sale, including interstate sale, is to burden interstate trade by imposing upon it a potential liability to levies. The argument concludes by drawing attention to the nature of the Board's power to make levies. Levies may be confined to particular persons or classes of persons registered under the Act, no limits are placed upon their amount or their frequency and the moneys raised by levies may be used for a wide variety of purposes, including the making good of any losses incurred by the Board in the course of its own trading in potatoes. The respondent accordingly points to the fact that the Board's power to make levies could be used to impose real and perhaps discriminatory burdens upon the trade of growers trading interstate.

Assuming for the moment that s. 12, if made applicable to a grower engaged in interstate trade, would offend against s. 92, this does not, in my view, bear upon the application of s. 18 to such a grower. The two sections are quite distinct provisions, in no way interdependent and linked only by the fact that those growers who may be made liable to a levy under s. 12 are identified by reference to their registration under s. 18. Any immunity from exactions under s. 12 which a grower's engagement in interstate trade may confer upon him will leave s. 18 unaffected; s. 22a of the Acts Interpretation Act, 1915 S.A. permits s. 18 to operate whether or not s. 12 is capable of valid application and in doing so ensures that, in accordance with s. 22a, the legislation is accorded effect to the full extent to which it does not exceed State legislative power.

I would not, therefore, regard the existence of s. 12 as affording to the respondent any defence to a charge founded upon his breach of s. 18. I have earlier assumed, in considering the effect of s. 22a, that s. 12 is offensive to s. 92 of the Constitution in its purported application to a grower engaged in interstate trade. I am not, however, to be taken as necessarily accepting the correctness of this assumption, and this for two reasons. First, had the respondent been registered as a grower under the Act there is nothing to suggest that he would in fact have become liable to pay a levy at all, let alone a levy capable of being regarded as burdening his interstate trade; the evidence does not establish that the Board has ever made use of or threatens to use its power to impose a levy, still less that a levy burdening interstate trade would be imposed. If a levy were imposed it might be imposed only upon that class of grower whose trade is confined to sales intrastate; again, if it did extend to those engaged in interstate trade, it might be confined to the recovery from all growers of a fair proportion of the Board's costs of providing services to them - Freightlines and Construction Holding Ltd. v. New South Wales [18] and Harper v. Victoria, per Taylor J. [19] and per Menzies J. [20] - at which passages the imposition of fees for services was considered in the context of s. 92 as well as that of s. 90. Reliance upon the levying power in s. 12 as tainting with invalidity the requirement of registration imposed by s. 18 may thus be thought to be a further instance of the use of a hypothetical case with which to seek to establish the burdening of interstate trade in circumstances in which the particular interstate trader can show no real burden whatever which either affects or is likely to affect him.

1. (1967) 116 C.L.R. 1; [1968] A.C. 625. 2. (1966) 114 C.L.R. 361, at p. 378. 3. (1966) 114 C.L.R., at p. 379.

Secondly the view is at least open that s. 12 does not itself impose any burden upon any trade. It does no more than authorize the Board to strike levies payable by registered growers, the Board having a very wide discretion both as to the incidence and amount of any levy and as to the application of the proceeds. Whereas a levy struck by the Board might or might not burden interstate trade the power to impose a levy may not itself do so. A statute which itself imposes a burden upon interstate trade, whether or not its operation is subject to a discretionary power to alleviate, is one thing; a statute which confers a power of delegated legislation or some executive power, either of which may be used in a manner burdensome of interstate trade, is quite another. If such powers be used so as to burden interstate trade s. 92 will strike them down but the source of those powers, the statute itself, may stand in a different position.

A ready illustration lies in the field of road transport. It is common legislative practice to enact that speed limits and other rules of conduct on the road may be declared by regulation; s. 4 of Victoria's Road Traffic Act is such a provision. It was to such regulations that the joint judgment of Dixon C.J. and McTiernan and Webb JJ. in Hughes and Vale [No. 2] referred [21] ; prima facie they were but regulation of the interstate transportation of goods by motor vehicle and were unlikely to be inconsistent with the freedom of that traffic. However their nature would necessarily depend upon their content, "for a law which under the guise of regulating an incident of interstate transport by road creates a real obstruction or impediment to carrying it on does impair the freedom which s. 92 guarantees. For example, a regulation of the hours during which certain goods may be carried upon the Hume Highway or be brought into Sydney or Melbourne may fix times and periods that make the use of motor vehicles for the purpose practically impossible". In similar vein Dixon C.J., in Greutner v. Everard [22] , quoted at length from the judgment of Fullagar J. in McCarter v. Brodie [23] , a passage also cited in extenso in the judgment delivered by Lord Morton of Henryton in the Hughes and Vale Case [No. 1] [24] . Fullagar J. there emphasized the essentially regulatory character of the prescription of rules of conduct on the road, while at the same time pointing out that they might become a means of burdening of interstate trade if, as in the example given by his Honour, a speed limit of one mile per hour were fixed for traffic on the Hume Highway. If such were to occur the statute under which regulations of such a character were made would, I think, remain valid, only the regulation made under it being void as offensive to s. 92. In Wilcox Mofflin v. New South Wales, in the joint judgment of Dixon C.J. and McTiernan and Fullagar JJ., their Honours said [25] :

In our opinion in the case of wide executive and administrative authorities depending upon statute, s. 92 does not operate to invalidate the whole statutory authority because, in the purported exercise of the authority, administrative measures may be taken which conflict with s. 92. Unless upon the face of the statute some purpose appears of authorizing some impairment of the freedom of interstate commerce, the wide terms of the authority should not be read as attempting to do so. 1. (1955) 93 C.L.R., at p. 163. 2. (1960) 103 C.L.R. 177, at pp. 183-184. 3. (1950) 80 C.L.R. 432. 4. (1954) 93 C.L.R. 1, at pp. 23-28; [1955] A.C. 241, at pp. 297-301. 5. (1952) 85 C.L.R., at p. 522.

In Kerr v. Pelly [26] it was sought to invalidate part of an Ordinance empowering transport inspectors to stop vehicles and order that they be weighed. In the joint judgment of Dixon C.J. and Fullagar, Kitto and Taylor JJ., their Honours referred to the argument that the possibility of misuse of this power involved invalidity and said [27] :

To this particular argument it is enough to say that if such a use of the power were made in any given case it would amount to an interference with trade commerce and intercourse which would be void; but the possibility of an attempt being made to use the authority conferred by cl. 11 for such a purpose does not itself invalidate the authority .In the earlier case of Tasmania v. Victoria [28] Starke J. made the same point succinctly when he said: It was said, however, than an Act in these terms might be abused. But the possibility of abuse cannot affect the validity of the Act. And an allegation that an Act is in fact abused is referable to the validity of the proclamation purporting to have been made under it, and not to the validity of the Act itself. 1. (1957) 97 C.L.R. 310. 2. (1957) 97 C.L.R., at p. 318. 3. (1934) 52 C.L.R. 157, at p. 177.

The present legislation, and in particular s. 12, is of course rather different from the type of legislation which was under consideration in the foregoing cases; it could not be said of a non-discriminatory levy imposed by the Board which in fact involved casting of a burden upon interstate trade that, in the words of Starke J., it involved any abuse of the Board's powers. On the contrary such a levy might be directly within the contemplation of the legislation. However the fact that an exercise by the Board of its power to strike levies will, as I have said, not necessarily result in a levy offensive to s. 92 does in my view raise real doubts whether in the present circumstances s. 12 can be said to at all burden interstate trade. In view of my conclusion as to the effect of s. 22a of the Acts Interpretation Act it is unnecessary for the decision of this case that the point should be finally decided.

The respondent, a potato grower and seller in South Australia, was acquitted on a charge of selling potatoes grown by him, not being registered by the South Australian Potato Board. He was charged with an offence against s. 18(1) of the Potato Marketing Act, 1948-1974 S.A. which provides that "a person shall not grow potatoes for sale, or sell potatoes grown by him unless he is registered by the board as a grower". The magistrate held that the section had no application to an interstate sale as it would infringe s. 92 if otherwise construed. The sale on which the charge was based was an interstate sale.

(1) A person shall not grow potatoes for sale, or sell potatoes grown by him unless he is registered by the board as a grower.

(a) applies for registration in the prescribed form and furnishes the board with the information indicated on the form; and

(b) satisfies the board that in the period for which registration is required he is growing or will grow potatoes for sale, either on land owned or occupied by him, or under a share-farming agreement;

To obtain registration an applicant must satisfy the Board that in the period for which registration is required he is growing or will grow potatoes for sale - that and no more. Only if it is not so satisfied can the Board refuse an application; it cannot refuse an application capriciously. In the event that it refuses to hear and determine an application according to law it is compellable by mandamus to perform its statutory duty. Its power to refuse an application is so limited that the provisions of s. 18 do not constitute an obstacle to a person intending to engage in interstate trade in potatoes: cf. the wide administrative discretions which were held to contravene s. 92 in Hughes and Vale Pty. Ltd. v. New South Wales [No. 1] [29] and Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [30] . The information which an applicant is required to furnish in his application includes particulars of the acreage planted or to be planted, thereby providing the Board with material from which it may be able to estimate the volume of future production, which in turn may assist it in the exercise of powers conferred upon it by s. 20. This section enables the Board to control the sale, delivery and price of potatoes. The system of registration consequently ensures that on application growers or intending growers will provide information necessary or valuable to it in the performance of its statutory functions. In this context s. 18 is regulatory and does not contravene s. 92.

1. (1954) 93 C.L.R. 1; [1955] A.C. 241. 2. (1955) 93 C.L.R. 127.

Having read the judgments of Gibbs and Stephen JJ. I agree for the reasons stated by their Honours that s. 12 is a distinct provision independent of s. 18. Whether s. 12 is obnoxious to s. 92 is not a question which I find it necessary to decide, although I recognize the force of the reasons for judgment of Stephen J. which would suggest that the question should be answered in the negative. It is enough for me to say that, if s. 12 involves a contravention of s. 92, then, as Gibbs J. has said, there is no reason why the rules of interpretation contained in s. 22a of the Acts Interpretation Act, 1915 S.A. should not apply.

In the absence of material to show or even to suggest that the respondent would not have been able to obtain registration without impediment or that registration would in fact have imposed or have been likely to impose substantial burdens on the respondent I am of the opinion that the requirement of registration did not operate to impose an impermissible burden on the trade of the respondent in selling his potatoes interstate. I agree with the reasons given by Stephen J. and with his conclusion that the appeal should be allowed.

This case raises the question of the meaning and application of the first sentence of s. 92 of the Constitution. Section 92 is in Ch. IV of the Constitution, which is headed "Finance and Trade". This chapter deals with financial matters and the leit-motif of the sections surrounding s. 92 (ss. 88-90 and 93-95) is duties of customs.

On the imposition of uniform duties of customs, trade, commerce, and intercourse among the States, whether by means of internal carriage or ocean navigation, shall be absolutely free.

But notwithstanding anything in this Constitution, goods imported before the imposition of uniform duties of customs into any State, or into any Colony which, whilst the goods remain therein, becomes a State, shall, on thence passing into another State within two years after the imposition of such duties, be liable to any duty chargeable on the importation of such goods into the Commonwealth, less any duty paid in respect of the goods on their importation.

Section 92 is generally taken out of context and abbreviated, eliminating the reference to duties of customs and facilitating its misinterpretation. When s. 92 is read in whole and in context, the command in the first sentence clearly concerns freedom from customs duties or similar taxes (often referred to as fiscal imposts) on trade, commerce and intercourse among the States. Section 92 does not guarantee economic anarchy. It is not a laissez-faire provision freeing trade, commerce and intercourse among the States from regulation.

The judicial approach of injecting into s. 92 the philosophy of laissez-faire has caused a substantial and serious inroad into the spheres of State and Federal legislatures. Many laws (mainly State) have been declared invalid and parliaments have consequently been inhibited from passing laws which might affect interstate trade and commerce. In this area, the Court has adopted a legislative role. It acts as an additional House but its role is necessarily negative. It can veto but not initiate.

One of the architects of this approach, Lord Wright (who delivered the judgment of the Privy Council in James v. The Commonwealth [31] ) made a dramatic recantation. In "Section 92 - A Problem Piece" (Sydney Law Review, vol. 1 (1954), p. 146), he wrote:

the question should be asked what words or context there are to justify so unfortunate and obscure a reading of the section. (p. 147)

surely all this difficulty follows from not taking the words in their obvious sense. No doubt to do so will mean a great and concerted effort on the part of the judges. But it may come in time. (p. 147)

that s. 92 deals with fiscal matters alone gives sense and efficacy to s. 92. (p. 155)

The idea of s. 92 as a power in the air brooding and ready in the name of freedom to crush and destroy social and industrial or political experiments in Australian life ought, I think, to be exploded. In truth, as I said, s. 92 is both pedestrian and humble, though very essential from the point of view of the founders of the Constitution who wished to establish interstate free trade in fiscal matters for all time. (p. 157)

The misreading admitted by Lord Wright would have been avoided if the Privy Council had applied what it recognized was the ordinary meaning of free trade: "Free trade means in ordinary parlance freedom from tariffs" (James' Case [32] ).

1. (1936) 55 C.L.R., at p. 56; [1936] A.C., at p. 627.

There has also been wide academic criticism. Professor Colin Howard observed in 1968 that s. 92 (on the prevailing interpretation):

is little, if anything, more than an impediment to the effective ordering of the economy on a nationwide basis. This result approaches the antithesis of what the section was originally intended to do. ("Freedom of Interstate Trade" Melbourne University Law Review, vol. 6 (1968), p. 258.) Professor Geoffrey Sawer said: The handling of this section by the Courts has been their one great constitutional failure The failure may be partly due to the bad drafting of s. 92, but it is also due partly to limitations of our legal technique, which make it difficult for our Courts to handle complex political and economic conceptions. (Commonwealth of Australia (British Commonwealth Series), vol. 2 (1952), p. 76.)

This section has caused more differences of judicial opinion and greater conflict between decisions than any other provision of the Constitution. There has never been any doubt as to the primary intention of the Founders. They wished to do away between States with the border tariffs the abolition of which was one of the main reasons for federating at all, and they wished to embody this objective in a specific provision, instead of leaving it to implication as in the U.S. Constitution. There is also no doubt that the Founders anticipated the possibility of "indirect" fiscal protection by methods other than border tariffs and differential excises, and accordingly desired their guarantee of fiscal free trade between the States to be stated with some generality and to be capable of some flexibility of application. (p. 71)

See also Professor P. E. Nygh, An Analysis of Judicial Approaches to the Interpretation of the Commerce Clause in Australia and the United States (Sydney Law Review, vol. 5 (1967), p. 353) and The Concept of Freedom in Interstate Trade (University of Queensland Law Journal, vol. 5 (1967), p. 317); Professor Howard, Australian Federal Constitutional Law, 2nd ed. (1972), Ch. 5 ; Professor P. H. Lane, Australian Federal System with United States Analogues (1972), pp. 595-675.

An even more severe criticism of the judicial approach has been made by Professor Julius Stone in "A Government of Laws and Yet of Men being a Survey of Half a Century of the Australian Commerce Power" (New York University Law Review, vol. 25 (1950), p. 451).

Latham C.J. said on his retirement from this Court "When I die, s. 92 will be found written on my heart A new approach is required to s. 92, and no approach has been made towards reconsideration of that provision" (85 C.L.R. ix).

Meaning of " Trade and Commerce Among the States ". There has been a tendency to narrow the meaning of the phrase, "trade and commerce" in order to lessen the destructive effects of interpreting s. 92 so that it applies to other than fiscal charges. " Among the States" has been treated as simply meaning "interstate". The phrase should not be given a narrow meaning. It is obviously comprehensive.

"Trade and commerce Among the States" extends into areas of intrastate commerce. The supposed line between interstate and intrastate the "straight, undeviating, Euclidian line" as Isaacs J. called it (Ex parte Nelson [No. 1] [33] ), does not exist.

Meaning of " intercourse ". In the United States Constitution, "intercourse" has been implied into the concept of "commerce". Marshall C.J. said in Gibbons v. Ogden [34] "Commerce, undoubtedly, is traffic, but it is something more, it is "intercourse"." As Corwin pointed out, "Marshall qualified the word "intercourse" with the word "commercial", thus retaining the element of monetary transactions" (see Constitution of United States of America (Annotated) (1973) Senate Document No. 92-82, p. 143). However, the word was included expressly in our s. 92. The absence of the word from s. 51(i) suggests that intercourse in s. 92 is not restricted to commercial intercourse.

1. (1824) 9 Wheat. 1, at p. 189 [6 Law. Ed. 23, at p. 68].

Meaning of " Absolutely Free ". The inclusion of this phrase means that s. 92 contains a command subject to no exceptions. It frees absolutely trade, commerce and intercourse among the States from customs duties or similar taxes, direct or indirect. A toll on passage of persons is an example of a fiscal charge on intercourse among the States. A good example of an indirect imposition is found in Fox v. Robbins [35] . Absolute freedom can be applied to fiscal charges without difficulty, but it would produce chaos if applied to laws generally on interstate trade, commerce and intercourse.

The consequences of giving full expression to the words "absolutely free" used in a wide sense not restricted to fiscal imposts are so intolerable that a doctrine has arisen by which the words "absolutely free" have been converted to "relatively free", that is, "subject to permissible regulation" on grounds such as health and safety. Such a meaning can not be given to "absolutely free". Under the doctrine of permissible "regulatory laws", laws on interstate trade and commerce may be regarded as regulatory. and therefore permissible, if they conform to certain tests. The tests are so obscure that (like the prophecies of the Oracle at Delphi) they can generally be shown to agree with any outcome. As the Privy Council said in the Bank Nationalization Case, this means that "the problem to be solved will often be not so much legal as political, social or economic. Yet it must be solved by a court of law" (The Commonwealth v. Bank of New South Wales [36] ).

1. (1949) C.L.R. 497, at p. 639; [1950] A.C. 235, at p. 310.

Section 92 has been described as guaranteeing freedom to the individual (James v. The Commonwealth [37] ) and the party claiming protection in this case is an individual. Departure from the fiscal interpretation of s. 92 leads to difficulties when a corporation claims exemption from the laws of the legislature which created it. These difficulties have not been explored in cases on the section. The James Case concerned an individual. In the Bank Nationalization Case, the claim was for protection from the legislature which did not create the banking companies. With suitable drafting, legislatures could end the laissez-faire exemption from their laws claimed by companies created under their laws.

Relationship ofs. 92 to the Commerce Power (s. 51(i.)) and Freedom of Movement.

I will refer briefly to the relationship of s. 92 and s. 51(i.) and to how the free movement of persons fits into the constitutional framework.

Power of States over Trade and Commerce. Subject to s. 92 (and other constitutional limitations), the States have plenary power to pass laws even if they impose a non-fiscal burden (direct or indirect) on interstate trade or commerce. Cases which have declared marketing and other State laws (not imposing fiscal burdens) invalid for contravention of s. 92 were wrongly decided.

The States are entitled (subject only to the prohibition against fiscal imposts in s. 92, any other constitutional limitations (for example, s. 117), and any overriding legislation of the Australian Parliament (see s. 109)) to deal with the general law of trade, commerce and intercourse. Section 92 does not prevent them from exercising the powers of regulating such trade and commerce by marketing acts or otherwise. The mere existence of the commerce power (s. 51(i.)) does not operate as a restraint upon State legislative power (as it does in the United States of America).

Powers of Commonwealth over Trade and Commerce. The Parliament of the Commonwealth has (subject to the command in s. 92 against fiscal charges and to other constitutional limitations, such as s. 99) full power to legislate for interstate trade and commerce (s. 51(i.)), and this "extends to navigation and shipping, and to railways the property of any State" (s. 98). The Parliament has ample power to regulate the national economy by appropriate exercise of its powers under s. 51(i.) (supplemented if necessary by other powers). If a State marketing law hinders interstate trade, then it is in the discretion of the parliament of the Commonwealth to legislate so that (by the operation of s. 109) the offending provisions of State law become invalid.

Section 92 and Freedom of Movement. The right of persons to move freely across or within State borders is a fundamental right arising from the union of the people in an indissoluble Commonwealth. This right is so fundamental that it is not likely it would be hidden away in s. 92, restricted to interstate intercourse in a clause dealing with uniform duties of customs, in a chapter headed "Finance and Trade". The right is not an absolute right, but is almost absolute and could not be impaired, except on extremely strong grounds such as the administration of criminal justice in serious cases (see R. v. Smithers; Ex parte Benson [38] , particularly the judgments of Griffith C.J. and Barton J.). (See also Crandall v. Nevada [39] ; Slaughter-House Cases [40] .) I think that freedom to move across State borders arises from this fundamental implication of the Constitution and not, as held in Gratwick v. Johnson [41] , from s. 92.

1. (1912) 16 C.L.R. 99. 2. (1867) 6 Wall. 35 [18 Law. Ed. 744]. 3. (1872) 16 Wall. 36 [21 Law. Ed. 394]. 4. (1945) 70 C.L.R. 1.

The doctrine of stare decisis should not be applied to continue the effect of reasoning which has made the State and federal Parliaments almost impotent in fields of social and economic importance. The task is to apply the Constitution, not the judicial decisions.

The Potato Marketing Act, 1948-1974 S.A. extends to trade and commerce among the States. It does not impose fiscal charges. Even if there were a latent possibility of such imposition, there is no actual or threatened imposition and certainly nothing in the nature of a discriminatory imposition against interstate trade or commerce.

The Act has not contravened s. 92. It was not submitted that an appeal does not lie against dismissal of the charges against the respondent. I would allow the appeal.