Carter v Potato Marketing Board

Carter v Potato Marketing Board - [1951] HCA 60 - HCA 1951 case summary — Zoe

[10]

The appellants are a firm carrying on business at Roma Street, Brisbane, as wholesale fruit and produce merchants. On the New South Wales and Queensland border at the town called Wallangarra on the Queensland side and Jennings on the New South Wales side, a firm named J. E. Long & Co. carry on business as wholesale fruit, vegetable and produce merchants. The place of business of the firm is in Jennings on the New South Wales side of the border and so is the place of residence of the partner concerned in this transaction, H. G. Butt. The post office, however, is on the Queensland side and the firm's letters are delivered there in a post office box. The border is marked by a fence open at the railway station. The firm had an agent named Profke, who bought produce for them in Queensland. In a telephone conversation, apparently conducted from Jennings in New South Wales to Lowood in Queensland, Butt instructed Profke to buy potatoes for the firm from local growers. Profke accordingly bought seven bags of potatoes from a grower named Heise and fifty-four bags from a grower named Sippel. They were paid for by J. E. Long & Co.'s cheque. Under the terms of purchase the potatoes were to be delivered at the Lowood railway station, whence Profke consigned them in the name of J. E. Long & Co. to Roma Street railway station, Brisbane, naming J. E. Long & Co. as consignees. Lowood lies east of Brisbane and is connected with Brisbane by rail through Ipswich. The potatoes reached Roma Street on 17th May 1950. On that day Butt telephoned to the appellants' firm at Roma Street, Brisbane, and informed them that potatoes were coming from Lowood consigned to J. E. Long & Co., Roma Street, and instructed them to take delivery of the consignment and to sell the potatoes on commission. The firm accordingly took delivery of the sixty-one bags of potatoes at the Roma Street railway sheds and obtained an advice note showing the number of bags, the place of consignment, the freight and the consignor and consignee. They took the potatoes to their stand in the market. There they sold them. On 16th May 1950 J. E. Long & Co. had instructed the Roma Street station master to deliver the potatoes to the appellants' firm and on 19th May Butt wrote to the firm that he trusted they had received from Lowood the sixty-one bags of potatoes which he had asked them to dispose of on account of J. E. Long & Co., and that he looked forward to the account sales in due course. The appellants' firm sent J. E. Long & Co. the account sales accompanied by a cheque for the proceeds of the potatoes less freight cartage and commission.

[14]

The Primary Producers' Organisation and Marketing Acts 1926 to 1930 Q. were the subject of the decision of this Court in Peanut Board v. Rockhampton Harbour Board [1] . Peanuts as a commodity had been vested in the Peanut Board by an Order in Council pursuant to a provision of the Acts, s. 9 (2). A consignment of peanuts was found in the possession of the Rockhampton Harbour Board whilst in the course of inter-State transit. They had never been delivered to the Peanut Board and had been consigned without its authority. The Harbour Board refused to deliver them up to the Peanut Board and the latter brought an action to vindicate its title to the peanuts and to compel the Harbour Board to deliver them up. The claim failed because in the language of Rich J. [2] the "Act of 1926-1930 and the Order in Council thereunder are ineffectual to prevent the grower of peanuts from disposing of them in inter-State trade and commerce and the (Peanut) Board had no title to the peanuts the subject of the action". Starke J. closed his judgment by saying [3] : "I think the Act operates in contravention of s. 92 of the Constitution, and so far as it does so is necessarily void". McTiernan J., however, in stating his conclusion said [4] that he was clearly of opinion that the Peanut Board was not validly constituted and that it could not assert any rights as an owner to the consignment of peanuts, which, his Honour added, in fact had been placed on the Harbour Board's wharf for shipment to Sydney. The conclusion Dixon J. expressed [5] was that the Order in Council could not operate to deprive the grower of peanuts of his liberty to dispose of them in inter-State commerce, and, accordingly, that the Peanut Board was not entitled to claim them from the Harbour Board. It was not necessary for the Court to consider whether the Acts were wholly invalid and, apart from what is implied by the language employed in the foregoing passages, the Court did not consider whether, as a consequence of its decision, the material provisions of the Act and the Order in Council must, in relation to the control of peanuts as a commodity, be entirely ineffectual or, on the contrary, might be capable of an operation governing peanuts which remained the subject of the domestic trade of Queensland.

[28]

By sub-s. (3) a power is given to the board to regulate deliveries of the commodity by growers to the board according to a method elaborately prescribed. In effect the board is empowered to fix production zones, determine according to the acreage planted the proportionate quantity of potatoes each grower may deliver and refuse to accept the excess or, if the board accepts such excess, deal with it in a special manner. Sub-section (4), for the purpose of ascertaining the net amount payable to the grower, makes final the board's decision on quality, dockages, charges and deductions. Sub-section (5) relieves the board of liability to the grower for damage to the commodity before delivery to the board. Sub-section (6) authorizes a deduction from the net proceeds of sales of two per cent for working expenses. Sub-section (7) empowers the board to issue licences to persons to trade in the commodity as wholesale dealers and prescribes the form of licence, which is expressed to be subject to the Acts and Regulations and to any exemption therefrom granted under s. 15A. Presumably the licensee is exempted under s. 15A. Section 19 of the Act provides for the issue to the grower delivering the commodity of a certificate in a prescribed form. The only other provision that it is necessary to mention is s. 20, which enables the board to invalidate contracts relating to the sale of the commodity. The contract may be made in or outside Queensland and before or after the extension of the Act to the commodity. Dependent or collateral contracts with respect to the commodity are invalidated with the principal contract. Sub-section (3) of s. 20 provides that nothing in the section shall apply to a commodity the subject of an inter-State contract. The purpose of invalidating the contracts probably is to make certain that there shall be no liability in damages and the inclusion of contracts made in Queensland after an extension of the Act to the commodity notwithstanding s. 15 may be due to a doubt whether the illegality arising from that section would afford an answer to actions for damages covering every case. The form of sub-s. (3) of s. 20 excludes, not inter-State contracts, but a commodity subject to an inter-State contract. It is a provision of the Act of 1926 and is apparently based on the assumption that what puts a commodity into inter-State trade is "an inter-State contract" and that thereupon all transactions in reference to it are protected by s. 92 from invalidation by State law.

[29]

In dealing with the questions that have been raised upon the foregoing provisions in their application to the circumstances that have been stated it is logical to begin with sub-s. (3) and its operation. For it is upon sub-s. (3) that the charge rests and it needs no argument to show that independently of the invalidating effect of s. 92 the facts fall exactly within its words. The appellants' firm did receive potatoes, being a commodity within the meaning of the Act, from a person other than the board, namely, from the Queensland Government Railways at Roma Street. The transaction in the course of which the commodity was so received involved no actual inter-State trade. Why should it not be within the application of sub-s. (3)? Certainly the language in which sub-s. (3) is expressed, interpreted naturally, and without the imposition of any artificial restriction by reference to constitutional limitations, extends to inter-State transactions upon which it cannot validly operate. To that extent it would be invalid. But it is a provision applying distributively, that is to say, it applies to each and every receipt of a commodity or purchase or sale or delivery within its terms separately and independently of every other receipt purchase sale or delivery. The very purpose of such provisions as s. 1A as understood in this Court and repeatedly applied is to establish a presumption that to the extent that its operation is within the power of the legislature a law is to be valid notwithstanding that as expressed it is in excess of power: see Bank of N.S.W. v. The Commonwealth [1] . Two answers were given, each depending upon a conception of the extent of the protection conferred by s. 92. The first arises upon the facts. It is as follows. When the appellants received the sixty-one bags of potatoes the offence, if offence there be, was complete and it mattered not that afterward they were sold in an intra-State transaction. The receipt of the goods was for and on behalf of a principal in New South Wales. Section 92, so it is argued, protects him, and his agent, from interference by State law in obtaining or accumulating goods for importation or sale into New South Wales. He cannot trade into New South Wales without goods and he is protected in the essential steps towards that end, not only with respect to goods devoted to sale for delivery into New South Wales, but in respect of goods which may or may not be disposed of in an inter-State transaction, pending a decision between inter-State and intra-State sale or delivery. There is no basis in fact for this contention. For when, before the arrival of the potatoes in Brisbane, Butt telephoned to the appellants' firm at Roma Street, Brisbane, and instructed them to take delivery of the consignment of potatoes and sell them on commission, that amounted to an instruction to sell them in the ordinary domestic trade of Queensland. Thus, before the actual receipt of the potatoes constituting the offence, the owner had decided upon intra-State sale of the potatoes. This is what the magistrate meant when he said that he was of opinion that when the owner of the potatoes decided to let them remain in Brisbane and be sold there, s. 15 had full application.

[35]

It is argued that sub-s. (3) was intended to be ancillary to or consequential upon the obligation thus imposed by sub-s. (1). In other words the sub-section imposed a prohibition to take effect only because sub-s. (1) required the delivery of the entire commodity (save for the statutory exceptions allowed) to the marketing board. To this there is more than one answer. In the first place, the argument has no support in the actual text of the two sub-sections and is but a speculative explanation of the supposed policy of the provisions. In the second place, a more probable explanation of the provisions is that sub-s. (3) was intended to drive the producers of the commodity to deliver to the marketing board by heavily penalizing any other disposition by them or by any other person who might obtain the commodity from a producer. Thus it may be regarded as a parallel provision designed to induce deliveries to the board. Thirdly, the operation of sub-s. (1) is dependent on the Governor in Council prescribing, or the marketing board fixing, times, places and a manner for delivery, whilst the operation of sub-s. (3) awaits the fulfilment of no condition precedent. The prohibition contained in sub-s. (3) therefore applies before the duty under sub-s. (1) arises and even though, because of inaction on the part of the authorities, it never arises. This is a strong indication that sub-s. (3) does not so depend upon sub-s. (1) that notwithstanding s. 1A it could not survive the invalidation of the latter sub-section. On the other side there exists in the form of s. 15 a consideration to which attention was directed by McTiernan J. during the argument. It was pointed out that in sub-s. (2) the commodity which is to be deemed to be delivered to the board for sale on behalf of the growers is the commodity "so delivered", that is to say, delivered in conformity with the directions contained in or given pursuant to sub-s. (1). From this, it was suggested, it might follow that if the deliveries were made independently of sub-s. (1) on the footing that the sub-section had no compulsive force there would be nothing to require the board to sell the commodity on behalf of the growers. But a scrutiny of the legislation, including s. 18 as replaced by the orders in council, shows that even were there no other sub-section in s. 15 than sub-s. (3) the scheme of the Act for marketing potatoes would work in the same way. Section 18 (1) prevents the board from refusing to accept the potatoes, if they are of the required quality and standard and are accompanied by a certificate of merchantable quality, unless the refusal is in pursuance of the zoning provision contained in sub-s. (3). The reference in the proviso to s. 18 (1) to delivery in accordance with the Act cannot deprive s. 18 of operation simply because a compulsive provision requiring delivery is found to be without force. The delivery cannot for that reason be any the less in accordance with the Act. Nor does the reference to times fixed by the board have such an effect. It allows of the board fixing times, that is all, whether they do so in purported pursuance of s. 15 (1) or they leave it, under that sub-section, to be prescribed by regulation. Sub-section (2) deals with the distribution of the proceeds of sale of the commodity and so makes it impossible to assign to sub-s. (2) of s. 15 the role of a provision indispensable to the scheme.

[37]

But is it possible to regard sub-s. (1) as wholly invalid? Let it be supposed that s. 92 necessitates a drastic restriction of sub-s. (1) to ensure the freedom of inter-State trade in commodities. Yet sub-s. (1), as has already been pointed out, has a distributive application. It applies to each and every grower in respect of so much of the commodity as he has produced. Moreover, it is a general provision applying not only to potatoes but to all commodities for which a marketing board may be established. However drastic may be the restriction imposed upon sub-s. (1), such a provision having such a distributive application must under s. 1A remain capable of applying to any failure to deliver unprotected by s. 92. It is argued in effect that a failure to deliver can never be unprotected by s. 92, because a law which imposes upon the producer or for that matter any other owner of a commodity an obligation to deliver it to a marketing authority can have no operation which is not opposed to s. 92. For non constat that the owner may not sell it inter-State or otherwise put it into inter-State trade, and he must not be hindered or prevented from exercising his choice so to dispose of it on the one hand or on the other to sell it in the course of the domestic trade of the State. It is not the occasion to examine this view of s. 92. For a simple illustration will show that there must be room for the valid operation of s. 15 (1). The reason is that there may be cases where the failure to deliver is the result of the disposal of the commodity by an intra-State sale. Suppose a grower of potatoes in Queensland as soon as he plants his acreage contracts with a merchant whose trade is confined to the domestic market to sell the potatoes to him and that the grower delivers the potatoes on his farm to the buyer as he digs them. The supposition means that the time fixed by the board has not elapsed. How could he by invoking s. 92 avoid the application to him of sub-s. (1), after the time has elapsed? What inter-State trade in those potatoes could there be for which he could claim the protection of s. 92? Plainly s. 92 can have nothing to say to such a case. But, once it is seen that some operation must be conceded to s. 15 (1) as the result of s. 1A, then all foundation disappears for the argument that sub-s. (3) fails because of the invalidity of sub-s. (1).

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Judgment (38 paragraphs)

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