Crowe v Commonwealth [1935] HCA 63

Crowe v Commonwealth [1935] HCA 63 - HCA 1935 case summary — Zoe

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to make which will ensure what the board claims to be an equitable distribution of dried fruits amongst the various exporters of dried fruits from Australia and the board has intimated that if and when such arrangement is made or brought into force the issue of export licences will be along lines which will involve the despatch of a certain proportion of the dried fruits held by the individual exporters to the United Kingdom, thus limiting the licences for the proportion of dried fruits of each individual exporter which may be shipped to the Canadian market. (4) The board refuses to allow the plaintiffs or any of them to reserve shipping space for the export of any dried fruits to Canada unless and until the contracts in respect thereof have been approved by the board and then only by such shipping companies as the board approves. (5) The board from time to time limits and restricts the quantity of dried fruits which the plaintiffs can export in any month from Australia. (6) The board from time to time fixes the prices at which the plaintifis are permitted to sell their dried fruits in Canada, and will not permit the export of dried fruits to Canada, where sales have been made at less than the prices so fixed. The last notification of prices so fixed received by the plaintiffs was dated 9th March 1935 and an intimation was therein given that the prices so fixed could be varied by the board without notice. (7) The board by circular dated 9th March 1935 notified the plaintiffs that the general conditions under which export licences would be issued as from the said date as regards dried fruits to be exported to Canada would include the following : - (a) The minimum shipment permitted to any one buyer (in Canada) would be 10 tons of sultanas and/or currants and/or lexias. (6) Licences would only be issued in respect of dried fruits sold to buyers (in Canada) who had provided an irrevocable letter of credit on any bank providing for the payment of the fruit to be made to shippers by draft under such letter of credit and that any such draft should have a currency of not more than 90 days sight on London. (c) All quotations for the sale of dried fruits in Canada must be made "fob. Australian ports" and freight must be payable by the buyers (in Canada) at destination. (d) The contract should be subject to the Canadian buyer paying insurance and it should

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be the buyer's responsibility (as regards exchange) to provide the money in London. (e) No licence would be issued unless a letter of credit provided by the Canadian purchaser or the Common- wealth Bank of Australia or other bank approved by the board had been produced to the board. (f) All orders for dried fruits from purchasers in Canada must be submitted for approval of the board immediately on receipt thereof by the plaintifis or their agents. (g) No licence would be issued in respect of dried fruits shipped to Canada directly or indirectly on consignment - and the plaintiffs and other exporters must be prepared to furnish - a certificate in writing as to the bona fide nature of any sale - reported to the board. (8) The board fixes the maximum - brokerage which exporters are allowed to pay in respect of any : dried fruits exported by them, whether the same is payable to brokers in Australia or elsewhere or partly in Australia and partly elsewhere, - and no dried fruits can be exported by the plaintiffs if the total - brokerage payable by them whether in Australia or elsewhere exceeds the said amount so fixed as aforesaid ; and the plaintiffs and other exporters are required to certify to the board from time to time the total brokerage allowed on the sale of any parcel of dried fruits ; so exported and that no rebate, commission or allowance has been - granted to the purchaser or to any person connected with the sale - of such dried fruit, other than the brokerage so permitted by the board. (9) The board has exercised against the plaintiffs (whilst they were the holders of export licences) all the powers pur- ported to be or have been conferred on it by the Act and/or by the regulations in operation up to 8th April 1935; and the board intends and threatens to exercise against the plaintiffs (if they hold export licences) all the powers purported to be conferred on the board by the Act and the regulations and to refuse to permit them or any of them to export any dried fruits unless and until they hold export licences under the Act and regulations.

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and without limiting the foregoing that it is not a valid exercise of the power of prescribing the said conditions and restrictions (pur- ported to be conferred by sec. 13 of the said Act) to require (as the said regulations in effect purport to require) that in all things relating to the export or the sale or distribution after export of dried fruits the holders of export licences shall be subject entirely to the directions of the said board, or its London agency or other its officers or representatives, or that they shall be required to comply with all regulations and such other conditions as are from time to time prescribed ; (f) that all the forms in the schedule to the said regula- tions, all licences and certificates of authority to export dried fruits issued by the defendant board, or by it required to be obtained by the plaintiffs and each of them before they are allowed to export any dried fruit from the Commonwealth, all the conditions and restrictions to which such licences are made subject by the said regulations, and by the form of licence appearing in the schedule to the said regulations, and issued by the defendant board, or required by it to be taken out by the plaintiffs, and each of them, before exporting or being allowed to export dried fruits from the Commonwealth, and all acts, matters or things done, or purporting to be done, or threatened or intended to be done by the defendant board, under or pursuant to the said Act and/or regulations, and/or in and about the export, or the sale or distribution after export, or the refusal to permit the export, of dried fruits from Australia, or, alternatively, some one or more, or part or parts of the said forms, licences, conditions and restrictions, acts, matters or things and/or each of them are, or is, not authorized by the said Act or regulations and/or are inconsistent with the said Act or regulations and/or are invalid; (g) that the proclamation dated 25th February 1925 and published in the Commonwealth Gazette of 26th February 1925 whereby the Governor-General purported to prohibit the export from the Commonwealth of any dried fruits except in accordance with a licence issued by the Minister of State for Commerce should not be effective, unless and until lawful provision has been made for the issue of licences to export dried fruits from the Commonwealth and/or valid and lawful conditions

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as trade arrangements and treaties with other countries. The words are '' with other countries," not " in other countries " (Toronto Electric Commissioners v. Snider (1) ). The legislation must be general regulation, not particular regulation of particular transactions of particular individuals (Attorney-General for Canada v. Attorney- General for Alberta (2) ). Whatever the meaning of sec. 51 (1.), international commerce begins with the first act of export and ends with the conclusion of the export voyage. The legislative control of the Commonwealth ceases as soon as the goods are in the other country. Extra-territorial legislation is not justified unless neces- sarily implied by powers conferred (Merchant Service Guild of Australasia v. Commonwealth Steamship Owners' Association (3) ; Delaney v. Great Western Milling Co. Ltd. (4); Merchant Service Guild of Australasia v. Commonwealth Steamship Owners' Associa- tion [No. 3] (5)). Sec. 13 of the Dried Fruits Export Control Act 1924-1935 at least is invalid to the extent that it authorizes regulations to control sale and distribution after export. As soon as the act of export ceases, the international character of the transaction is lost, and it becomes subject to the laws of the other country, not of the Commonwealth. [Counsel also referred to Robtelmes v. Brenan (6); Hughes v. Munro (7); British Coal Corporation v. The King (8).] Assuming the Act not to be invalid on the ground of extra-territoriality, sec. 13 contains an improper delegation of the legislative power of the Commonwealth. Parlia- ment cannot pass a short general Act conferring any power on any person, and transfer of one power only does not better the matter (Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes y. Dignan (9); Roche v. Kronheimer (10) ). The limit to the power is that Parliament can transfer only such of its powers as are in respect of matters incidental to the execution of its own formulated legislative action - powers that are administrative and not legislative

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opinion the basis adopted for selecting the members of the board does not amount to a preference within the meaning of sec. 99. It is neither easy nor safe to attempt a definition of preference. Commercial preference may be accomplished by means which are indirect and ingenious, and it is much easier to say whether a particular thing is or is not a preference than to define the characteristics which a preference must possess. In this case it appears to me that the constitution of the board does not give to the growers of the States who are entitled to elect members any tangible advantage of a commercial character or any legal means of securing it. The adoption of State boundaries appears to be merely a convenient method of defining the territorial limits of the electorates where interested persons exist. The fact that Victorian growers elect two members is only evidence that the framers of the Act considered that a greater number of growers of dried fruits exist in that State. It does not give to that State a commercial preference. The contention that the powers given to the Governor- General amount to a transference of legislative power forbidden by the Constitution is completely answered by Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan (1). The other points taken depend upon principles which are well settled and, if applicable, might support the plaintiffs' argument ; but their application is, in my opinion, negatived by the very terms of the statute itself. Sec. 13 states the purpose of the power to be the control by the board of the export, sale and distribution of dried fruits. The purpose is effected by forbidding exportation except upon conditions and enforcing compliance with the conditions. The subject is plainly trade and commerce with other countries. The act or transaction fastened upon as a central point of the legis- lative control occurs within the jurisdiction, and it appears to me to be absurd to suggest that, because the conditions relate to things done or omitted out of the jurisdiction, it is beyond the power of Parliament to command their performance. The legislation deals with a matter of Australian concern on the basis of an exportation which it is within the power of the Commonwealth Parliament to

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the sale and distribution after export of Australian dried fruits, the Governor-General may by proclamation prohibit the export from the Commonwealth of any dried fruits except in accordance with a licence issued by the Minister subject to such conditions and restrictions as are prescribed after recommendation to the Minister by the board." The power or authority here given to the Governor-General and to the board was contrary, so it was contended, to the provisions of the Constitution. But the validity of legislation in this form is concluded in this Court by the decisions in Roche v. Kronheimer (1), and the cases there cited, and Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan (2). Secondly, that the Act and regulations controlled acts of exporters and the disposition of dried fruits beyond the territorial jurisdiction of Australia, and were consequently beyond the legislative power reposed in the Parliament of the Commonwealth. The Act and regulations do undoubtedly control the disposition overseas of dried fruits exported from Australia, and do penalize acts done outside Australia. (See Act, secs. 13, 15, and regulation, No. 30 of 1935, clause 7 (2) (b), (c), (d) and (g).) The Statute of Westminster (22 Geo. V. c. 4), sec. 3, has not yet been adopted in Australia. But the power of self-governing Dominions to make laws having extra- territorial operation was considered by the Judicial Committee in Croft v. Dunphy (3). Once it is found, as I gather from that case, that the particular topic of legislation is with respect to one of its powers enumerated in sec. 51 of the Constitution upon which the Commonwealth Parliament may competently legislate for the peace, order and good government of the Commonwealth, then no reason exists for restricting the permitted scope of such legislation by any other consideration than is applicable to the legislation of a fully sovereign State. Export, transport and sale, are all parts of that class of relation which constitutes trade and commerce. The subjects of legislation in the present case are the control of the export of Australian dried fruits, and the sale and disposition of such fruits after export. But those subjects are part of the concept of trade and commerce with other countries. The restrictions imposed

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Act and the conditions of the licence would amount to an attempt to regulate acts, matters and things outside the territorial boundaries of the Commonwealth, which it was beyond the powers of the Parlia-_ ment to affect. It is said, too, that the limits of the commerce power are exceeded because an attempt is made to control transac- d tions occurring after the goods have ceased to be in the course trade and commerce with other countries, after the internationa commerce in dried fruits has ended. It is true that sec. 13 profes the purpose of controlling the sale and distribution of dried fruit after export. But it assumes to control it by means which go to the central point of the power over trade and commerce with other - countries, the exportation of commodities. The enactment operates - upon that fact occurring, as it does, in Australian territory, and it~ closely concerns " the peace, order, and good government of the Commonwealth." It is for the Parliament to declare what expo tion shall be allowed or forbidden. Its authority over exportation - is complete, and what it may forbid unconditionally, it may allow _ conditionally. If the conditions which it imposes or authorizes are of such a nature that the law appears only ostensibly and not actually to be a law with respect to trade and commerce with other countries, it will fall outside the power. But no such question arises in the present case. The conditions actually prescribed are all relevant to trade and commerce. Although the conditions do impose requirements to be fulfilled abroad and the Act penalizes" breach of the conditions, it does not follow that the legislation is beyond the power of the Parliament. It all relates to a matter of © immediate interest to the Commonwealth. Considered widely, it is concerned with the marketing overseas of part of the annual produc- - tion of Australian soil. Probably that alone constitutes a sufficient connection with Australia to answer the objection that the statutory _ provisions are bad for extra-territoriality. The provisions do not go beyond that connection. But, considered more closely, the legislation takes as the criterion of its application a transaction - occurring within the Commonwealth, namely, exportation of dried - fruit, and bases all the obligations it imposes upon that fact. No - support can be found for the contention that the effect of the Act

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Judgment (141 paragraphs)