De Wiehe: McCauley v ion Pa Appl :

De Wiehe: McCauley v ion Pa Appl : - [1942] HCA 30 - HCA 1942 case summary — Zoe

[16]

possession of the commodity as such owner and to deal with the same; and thereafter the commodity should become the absolute property of the board freed from (inter alia) all interests and contracts affecting the same and the rights and interests of every person in the commodity should be converted into a claim for payment in accordance with the said Act. (d) By sec. 18, that subject to the Act a board appointed under the said Act might sell or arrange for the sale of any commodity in relation to which the board was con- stituted and which is vested in or delivered to it or to be delivered to it and might make such arrangements as it deemed necessary with regard to sales of the commodity for export or for consignment to other States or countries and with respect to the transport treat- ment grading processing branding labelling storage packing or preparing for marketing and the marketing of the commodity. (e) By sec. 19 (c), that where a product had been declared a com- modity and a board constituted in relation thereto every producer who except in the course of trade commerce or intercourse between the States and save as prescribed should sell or deliver any of the commodity to any person other than the board and every person (other than the board) who save as prescribed should buy or receive any of the commodity from a producer should be liable to a penalty. (f) By sec. 43 (1), that the Governor in Council might make regula- tions providing for all or any purposes necessary or expedient for the administration of the Act or for carrying out the objects of the Act and in particular (inter alia) for prescribmg a quality for any commodity under the Act and for an increase or decrease in the amount otherwise payable to any producer according to the quality of the commodity and regulating the transport treatment manufac- ture grading processing branding labelling packing storage market- ing selling exporting and delivery of the commodity or the packages containing such commodity and also for prescribing periods of time in respect of which the computation of or accounting for the net proceeds of the sale of any of the commodity might be made.

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By sec. 23 of the Marketing of Primary Products Act 1935 (No. 4337) it was further provided : - '(1) Subject to this Act every board shall, out of the proceeds of any commodity disposed of by the board under this Act and out of any other moneys (excepting the proceeds of a levy under this Act) received by the board under this Act, make payments to each producer of the commodity delivered to the board or (as the case may be) to the other person by or for whom the commodity was delivered to the board under this Act, in respect of the commodity so delivered by him, on the basis of the net proceeds of the sale of all the commodity of the same quality or standard delivered to the board during or covering such periods of time as are prescribed and the proportion of the commodity so delivered by such producer or other person aforesaid during each such period and regard being had to the other circumstances (if any) that affect the amount of the payments. (2) The board may deduct from the proceeds of sale of the commodity the expenditure incurred in and about the marketing treatment or (in the case of a board constituted in relation to potatoes) manufacture of the commodity, the costs charges and expenses of the administration by the board of this Act and any sums necessary to repay any advances made to the board and interest thereon. (3) The board may deduct from the payment to be made to a producer or other person aforesaid the freight charges incurred in the conveyance of the commodity from the station or other place of delivery to such other place or places in Victoria as is or are prescribed. (4) For the purposes of ascertaining the amount of the payment to be paid to a producer of any of the commodity delivered to the board or to any person interested therein, and generally for the purposes of this Act, the decision of the board as to - (a) quality standard or grade of any of the commodity delivered to the Board (whether quality standard or grade is prescribed or not) ; (b) the method of determin- ing the dockages and deductions to be made and the amounts thereof respectively ; (c) cost of freight insurance and other charges; and

[83]

It is urged, however, that the Court should follow and apply certain statements that the defence power is exclusive to the Com- monwealth which are to be found in decisions of this Court. In Commissioners of Taxation (N.S.W.) v. Baater (2) there is a sugges- tion that the defence power is exclusive, but, upon examination, it will be seen that this statement relates only to what I have called the exclusive power, in a modified sense, to raise and maintain forces. Further, the statement is obiter, as, indeed, are all the state- ments which were relied upon in this connection. In Farey vy. Bur- vett (3) Isaacs J. said that "' to make defence adequate and successful full power must be within the grasp of one hand." But " full power" is not the same thing as " exclusive power," and the learned judge explicitly stated that " the States may, in directions not contraven- ing express prohibitions, most advantageously act by means of their own constitutional powers in aid of the common object " - i.e., the defence of the Commonwealth. (Sec. 114 is an example of the "express prohibitions " to which reference is made.) In Joseph v. Colonial Treasurer (N.S.W.) (4), there is a statement that the defence power is exclusive to the Commonwealth. But this state- ment in its full generality was not necessary to the decision of the case, and should be limited to the aspect of the defence power which was in question, namely, the exercise by the Executive Government of the royal war prerogative. The statement in the (dissenting) judgment of Higgins J. in Australian Workers' Union v. Adelaide Milling Co. Ltd. (5) that "the State of Victoria has not the war power" in its strict sense means no more than that the power to declare or make war does not belong to the States. It was not, I think, intended to mean that a State Parliament cannot pass any Act to assist in the defence of the Commonwealth. For reasons which I have already stated I find myself unable to agree with the statements of Knox C.J. and Isaacs J. in Pirrie v. McFarlane (6) that the defence power is exclusive. These statements were

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that on a date or dates to be proclaimed by the Governor-General after the establishment of the Commonwealth certain departments of the public service in each State, including naval and military defence, "shall become transferred to the Commonwealth." The result of secs. 52 (ii.) and 69 is that the Parliament of the Common- wealth has exclusive power to make laws with respect to matters relating to the department of naval and military defence. It is contended that this exclusive power extends to all matters which are within the ambit of the defence power in time of peace or war. This contention concentrates on secs. 52 (ii.) and 69 as the source of the legislative power with respect to defence. If these sections were the source of that power, sec. 51 (vi.) would appear to be otiose, and this could be said of this placitum if the power conferred by sec. 52 (i1.) to make laws with respect to matters relating to the department of naval and military defence were as wide as that conferred by sec. 51 (vi.). But a comparison of the language of sec. 51 (vi.) and sec. 52 (ii.) makes it impossible to say that each covers the same ground. The former is clearly not otiose, and these considerations are sufficient to destroy the contention that sec. 52 (i1.) combined with sec. 69 defines the defence power of the Parlia- ment of the Commonwealth. Its power to make laws covering the field to which the Marketing of Primary Products Acts extend could not, in my opinion, be rested on sec. 52 (ii.). That power is derived from sec. 51 (vi.). There is not any identity between the things to which those Acts apply and things which could be properly described as matters relating to the department of naval and military defence. " The powers conferred by sec. 51 (vi.) are not, as has been observed, declared by the Constitution to be exclusive powers of the Parliament of the Commonwealth. The words of sec. 51 (vi.) do not imply any prohibition against a State making laws with respect to defence within its own territorial jurisdiction. Indeed, its power to maintain a naval or military force would be saved by sec. 107 if sec. 114 did not impose a prohibition against the raising or main- taining such a force without the consent of the Parliament of the Commonwealth. Sec. 119 imposes a duty on the Commonwealth to protect every State against invasion and, on the application of the Executive Government of the State, against domestic violence. The core of the power conferred by sec. 51 (vi.) is the defence of the Commonwealth and the States by force and the control of the forces. But this does not exhaust the content of the power conferred by sec. 51 (vi.). Subject to sec. 114 every State has power to make laws for its own peace, welfare and good government operating within the field to which sec. 51 (vi.) extends. Any such State law would VOL, LXVI. 38

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be regarded by everyone as a reasonable and proper by-law to make in a city or in a large country town might in the case of a small country township or sparsely-settled district (to all of which the Act in question applied) be regarded by some persons as unreason- able. But it is obvious that the question whether the circumstances of the locality warrant the exercise of a power is one of expediency and not of competency. Otherwise the validity of a by-law would have to be determined upon extrinsic evidence as to the circumstances of the particular locality. I do not know of any instance in which such a doctrine has ever been suggested. In my opinion, the legis- lature has deliberately and intentionally made the local authority, subject to the approval of the Governor in Council, the sole judge of such matters, subject only to this qualification, that, if a by-law is such that no reasonable man, exercising in good faith the powers conferred by the statute, could under any circumstances pass such a by-law, it might be held invalid on that ground as being an abuse of the power, and therefore not within it. This view is in accord with the accepted rule that the exercise of discretion by local author- ities will not be reviewed by a court of law in cases where they are authorized to execute such works as may be necessary." In Williams y. Melbourne Corporation (1), it was decided that in the High Court the unreasonableness of a by-law made under statutory power is not treated as a separate ground of invalidity: See the report (2). The Court, however, decided that although a by-law on its face relates to the subject matter of the power of which it professes to be an exercise yet it might be declared to be unauthorized by the grant of power because of its unreasonableness. "To determine whether a by-law is an exercise of a power, it is not always enough to ascertain the subject matter of the power and consider whether the by-law appears on its face to relate to that subject. The true nature and purpose of the power must be determined, and it must often be necessary to examine the operation of the by-law in the local circumstances to which it is intended to apply. Notwithstand- ing that ex facie there seemed a sufficient connection between the subject of the power and that of the by-law, the true character of the by-law may then appear to be such that it could not reasonably have been adopted as a means of attaining the ends of the power. In such a case the by-law will be invalid, not because it is inexpedient or misguided, but because it is not a real exercise of the power " (per Dion J. (3)). The attack on the regulation is based on the

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view that it purports to give the person authorized by the Board power to require the person, to whom he may give notice, to furnish information which he could not reasonably be expected to supply and for that reason it exceeds the powers which it is to be presumed that the legislature entrusted to the Executive. Upon the face of the regulation there is a connection between it and the power con- ferred by sec. 43 (1) (a) (iv.). The subject matter of the power includes returns and statistics. The question whether it would be unreasonable to require a person to whom a notice might be addressed to supply the information mentioned in the regulation depends upon the circumstances. It may well be that the keeping of twenty-five fowls or more is a fair criterion of whether the keeper is engaged in such business and that a person who was conducting poultry keeping as a business would put his fowls in pens or other enclosures and have records of their produce which would enable him to furnish the particulars to be supplied in conformity with the regulation. There is no evidence of the circumstances to which the regulation applies, but every intendment should be made in favour of the reasonableness of the regulation. It was made by the Governor in Council and Parliament has not seen fit to disallow it : See Marketing of Primary Products Act 1935, sec. 43. Speaking of a by-law made even by a local authority, Channell J. in Salt v. Scott Hall (1) said: '" The Court does not readily interfere to set aside as unreasonable and void by-laws which a local authority has deliberately adopted, for it recognizes that the local authority is itself the best judge as to whether" (it) "is required . . . or not." 'There is, in my opinion, nothing before the Court which would warrant it in deciding that the operation of the regulation is such that parliament never intended to give authority to the Governor in Council to make it. Another and diverse claim is made in the action. It does not involve any question arising under the Constitution or involving its interpretation or any other question attracting the original jurisdiction of this Court. The claim is for an account. It is hased on the allegation that the defendant was bound by sec. 23 of the Marketing of Primary Products Act 1935 to account to the plain- tiffs, but did not fulfil its obligation under that section. Sec. 5 of the Marketing of Primary Products Act 1940 provides that notwith- standing anything contained in sec. 23 the Board may discharge its obligation to the producer in accordance with the provisions of sec. 5. One ground on which the defendant Board demurs to this claim is that the obligation is not pleaded according to the provisions

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and military defence, just like the department of customs and excise, are to be transferred to the Commonwealth. Sec. 52 pro- vides that the Commonwealth shall have exclusive power to make laws for the peace, order and good government of the Commonwealth with respect to (ii.) matters relating to any department of the public service the control of which is by the Constitution transferred to the Executive Government of the Commonwealth, and (iii.) other matters declared by the Constitution to be within the exclusive power of the Parliament. The matters included in (ii.) would not be confined to laws relating to the internal organization of the trans- ferred departments but would extend to any subject matters which such departments would ordinarily administer. Matters in (iii.) would, for the reasons already given, include legislation with respect to raising and maintaining naval and military forces in the Com- monwealth. Sec. 61 vests the exercise of the executive power of the Commonwealth in the Governor-General and this power extends to the execution and maintenance of the laws of the Commonwealth. Sec. 70 provides that in respect to matters which under the Con- stitution pass to the Executive Government of the Commonwealth, all powers and functions which at the establishment of the Com- monwealth are vested in the Government of a Colony shall vest in the Governor-General. The Constitution provides therefore for the transfer of the departments of naval and military defence to the Commonwealth, for the withdrawal from the States of any power to legislate with respect to raising and maintaining naval or military forces without the consent of the Commonwealth, for the conferring of exclusive power to legislate on these matters upon the Commonwealth Parliament, and for the transfer to the Executive Government of the Commonwealth of the sole executive power relating to naval and military defence. The power contained in sec. 51 (vi.) is not expressly made exclusive by sec. 51. But the section does not expressly make any of the powers it contains exclusive, although from the content alone of some of the powers it is plain that they are exclusive. For instance, placita (iv.), (xxx.), and the first limb of placitum (xxxi.) are exclusive powers, while other powers derive their exclusiveness from other parts of the Constitu- tion. The content of the defence power is probably sufficient by itself to show that it was intended to be an exclusive power. It includes in one comprehensive phrase power to make laws for the naval and military defence of the Commonwealth (a matter beyond the legislative powers of any State), for the defence of the several States (so that if the States could also make such laws there would be two Parliaments with power to make laws for each individual State) and with respect to the control of the forces to execute and maintain

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the laws of the Commonwealth. But any doubt on the point is removed when it is read in conjunction with the other sections of the Constitution to which I have referred and compared with the analogous provisions relating to customs, excise and bounties. It is the duty of the Commonwealth to be ready at all times to protect every State against invasion, and, on the application of the Execu- tive Government of the State, against domestic violence. The defence power is, therefore, unlike many of the powers in sec. 51 which lie dormant until the Commonwealth Parliament legislates on a particular subject matter, a power which the Commonwealth Hxecu- tive and Parliament must actively exercise at all times, whether the Commonwealth is at peace, or war, if the Commonwealth is to be always ready to discharge its obligations. Even if the power is concurrent there would probably be a continuing implication that the defence legislation passed by the Commonwealth Parliament was intended fully to occupy the field of any measures required for defence having regard to the danger of invasion or domestic violence existing from time to time, so that under sec. 109 any State legis- lation on the subject of defence would be invalidated at birth. But the sounder view is that the defence power is an exclusive power. It would not be conducive to the security of the Commonwealth for seven legislatures in the time of war to be able to legislate on the subject of defence and for this Court to have to determine in each case to what extent the Acts of the States were invalid under seo. 109. This is the view which has previously been taken by most of the Justices of this Court. It was held in Joseph v. Colonial Treasurer (N.S.W.) (1) that, because the Commonwealth is the sole defence authority, only the Executive Government of the Common- wealth can exercise the Royal war prerogative. It was said in the joint judgment of Isaacs, Powers and Rich JJ. (2) that "in the allocation and distribution of powers effected by the Constitution of the Commonwealth the defence power is exclusively assigned to the Commonwealth." In Pirrie v. McFarlane (3) Knox C.J. said: " The Commonwealth has exclusive power to make laws with respect to matters relating to naval and military defence." Isaacs J. (4) reiterated in eatenso the view already succinctly expressed in the joint judgment in Joseph's Case (1). Rich J. (5) also expressed views in accordance with this judgment.

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mentioned, which include the acquisition on behalf of the Common- wealth of any property other than land. The Wheat Acquisition Regulations have nothing to do with the acquisition of eggs. The Egg Control Regulations, apart from regs. 11 to 13*which relate to the export of eggs (including egg pulp), merely create the necessary machinery to enable the Minister to acquire certain eggs. Nothing in sec. 5 of the Act or in the Regulations can be construed as an entry by the Commonwealth into the field occupied by the Victorian Acts. This entry will only take place, and it will only be possible to judge the extent of the intrusion, if and when an order is made under reg. 14 acquiring the eggs therein specified. If these eggs are eggs subject to the Victorian legislation a condition of inconsistency may arise between the two laws. But it is possible that any inconsistency may be avoided even when an order is made, because the order may provide for the acquisition of the eggs from the Board after the Board has acquired them from the producer under State legislation, or it may not apply to eggs in Victoria at all. The law of the Commonwealth applicable under sec. 109 is sec. 5 of the Act and the Egg Control Regulations made thereunder, and not the order. But it is the order which will identify the eggs which are to become subject to the law of the Commonwealth embodied in the Act and the Regulations (Clyde Engineering Co. Ltd. v. Cowburn (1); Ex parte McLean (2); Tasmanian Steamers Pty. Lid. v. Lang (3)). If there is any inconsistency between the rights of the Com- monwealth and of the Board with respect to these eggs, the two laws will then come into collision and the Commonwealth law will prevail. This will not effect a repeal of the Victorian Acts. They could only be repealed by the Victorian Parliament. But so long as the inconsistency exists the Victorian Acts will be imoperative. The action therefore fails so far as it seeks declarations that the Acts Nos. 4337 and 4658 became invalid on any of the three dates or that Acts Nos. 4658 and 4750 were invalid ab initio.

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under the Act No. 4337, sec. 23. It is a claim for compensation made by residents of Victoria against a Victorian corporation arising out of transactions wholly occurring in Victoria. Sec. 23 prescribes periods for determining the amount payable to producers (the statement of claim refers to two pools, 1938 to 1940 and 1940 'to 1941), defines the deductions the Board is entitled to make, and provides that the decision of the Board upon certain matters shall be final and conclusive. The third cause of action relates to two distinct periods. Neither of these periods is conterminous with the period subsequent to any date upon which the Victorian Acts could have been invalidated. Indeed, the first period commences approxi- mately fifteen months before the earliest of the three dates. The facts required to prove damage (if the plaintiffs amend their state- ment of claim and allege that if the Victorian Acts are invalid they are entitled to recover damages in tort) would be essentially different from those required to prove the amount of compensation to which the plaintiffs would be entitled under sec. 23. If the plaintiffs waive the tort and sue for moneys had and received, the position would be the same because they would be seeking to recover the amount received from the sale of their own eggs less such deductions as the Court thought proper, whereas under sec. 23 their claim would be for their share of the proceeds of sale of the two pools for particular periods less certain statutory deductions and subject to the decision of the Board on certain matters being final and con- clusive. So that, to borrow the words of Sargant J. in Goldrei, Foucard & Son v. Sinclair & Russian Chamber of Commerce in London (1), " this alternative claim constitutes, in my judgment, a separate and distinct cause of action resting on a different founda- tion and involving very different remedies." As Lord Moulton, in delivering the judgment of the Privy Council, said in Payana Reena Saminathan v. Pana Lana Palaniappa (2), the first and third causes of action "are in truth inconsistent and mutually exclusive causes of action."

At a glance

Court

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Judgment (216 paragraphs)

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