Deacon v Mitchell

Deacon v Mitchell - [1965] HCA 28 - HCA 1965 case summary — Zoe

[27]

But it is said that that movement was arrested and terminated at the Devonport yards or that, because of the time it would rest in Haines' yards in the drying process, its inter-State movement did not begin at Deloraine but only when it was sent ex rack to ship for conveyance to Melbourne. I cannot accept that analysis of the facts of the matter. The proper conclusion from the facts, in my opinion, is that Kauri Timber was engaged in inter-State trade in timber, not merely in seasoned timber. It contracted to purchase green timber to bring that timber to Melbourne. The commercial realities made it economical and convenient that it should lose its moisture before shipment. The time occupied in this was itself part of the entire inter-State operation of bringing the timber from mill to Melbourne. We are here dealing with broad business concepts. One of the functions of s. 92 is to ensure that impediments of the kind here in question are not placed in the way of what is in commercial substance a continuous inter-State movement of goods or commodities. The force of the expression "continuous journey" in this connexion in the decided cases is that though the journey be segmented in stages, with different carriers and different means of carriage, and though pauses in the movement take place, none the less the ultimate destination is the intended purpose of setting the goods on their initial movement, so that there is in fact one journey, though in stages, and not two or more journeys each having terminal points which conclude that journey as distinct from merely concluding a stage in a journey of more widely placed termini. Of course, an inter-State movement of goods may be preceded by an intra-State movement of the same goods, in which case the goods take, as it were, two journeys. And it may be that because of intended interruptions of the journey initially commenced, the intention ultimately to bring them to an inter-State destination becomes too tenuous or remote to sustain the conclusion that the journey is either inter-State or continuous. Whether a case falls into one category or another depends on the facts. But in this case the matter is, in my opinion, quite clear - there was but one journey, and that an inter-State journey, on which this timber had embarked on the days in question.

[44]

I do not think that, upon the facts as I have stated them, the carrying of the timber from Deloraine to Devonport by the respondent ought to be regarded as part of an inter-State movement of the timber from Deloraine to Melbourne. The timber was being carried for Haines in order that that company could supply it to Kauri at Devonport. It was, of course, in contemplation that when the timber was dried (which would take from fifteen months to two years after racking) it was then, not as a whole but in lots, to be carried from Devonport to Melbourne; but when the timber eventually reached Melbourne it would, so it seems to me, have done so as the result of separate journeys; the ones with which we are concerned ending in Devonport, and others starting there in response to orders for particular lots of timber. In the authorities referred to, reference is to be found to "a continuous journey of an inter-State character": for example, see Bell Bros. Pty. Ltd. v. Rathbone [2] per Dixon C.J. [3] . Such references emphasize that there must be but one journey if the movement of the goods from one place in a State through another place in that State and thence to another State is, as a whole, to be regarded as inter-State movement. They indicate further that a break in the continuity of the movement could result in there being two journeys rather than one. In Russell v. Walters [4] the Court emphasized the importance of characterizing the journey from premises in Melbourne to premises in Launceston as a single journey, notwithstanding the use of three instruments of transport. Here, there was not a single journey from Deloraine to Melbourne. It is not necessary to attempt to define that kind of break which would bring about the result of there being one journey before the break, and another journey after it. However loosely the requirement of continuity may be regarded, a break, involving (a) the unloading of timber, (b) its being put into racks, (c) its retention in the racks for a period of from fifteen months to two years to convert it from green to dry timber, and (d) its packing in lots for shipment upon the receipt of instructions, must be regarded as demonstrating that any journey from Deloraine finished at Devonport. It could be expected that the timber so carried would, in different lots, be carried from Devonport to Melbourne by new journeys commencing not less than fifteen months after the completion of the carriage of the timber from Deloraine to Devonport.

[46]

There remains for consideration the question whether, while the timber was being carried from Deloraine to Devonport, that carriage was protected by s. 92 because of the inter-State trade of Kauri and Haines. There is, of course, no question but that Kauri is, and has been, engaged in inter-State trade with Haines in carrying on the business of bringing timber from Tasmania to Victoria but my analysis of the relationship between Haines and Kauri is that the obligation of Haines was to supply Kauri with timber on racks in Devonport. Inter-State trade in particular lots of timber did not begin before its racking in Devonport and, assuming it began then, the respondent's carriage of the timber from Deloraine to Devonport for Haines occurred before inter-State trade in that particular timber began. The learned magistrate did say: "Mr. Harris, the Devonport production manager of F. H. Haines Pty. Ltd. whose evidence I accept, said "The timber in the Haines' racks belongs to Kauri Timber as from its leaving Deloraine" " but, if this was intended to mean that the property in the timber passed from Haines to Kauri at Deloraine I am satisfied that this was mistaken for, upon the evidence, I have no doubt that, as both counsel contended, it was only when the timber was racked in Devonport that the property in it passed from Haines to Kauri. In these circumstances it was not, I think, shown that the burden which the Traffic Act placed upon the respondent was a burden upon the inter-State trade of Kauri and Haines. Any burden was upon the trade of the respondent, and, perhaps, that of Haines before that company committed the timber to its inter-State trade with Kauri. The intention that goods, when produced, should go into the flow of inter-State trade does not, of itself, give to the various steps in their production freedom from prohibition, restriction or burden: Grannall v. Marrickville Margarine Pty. Ltd. [1] ; O'Sullivan v. Noarlunga Meat Ltd. [No. 2] [2] . Furthermore, any merely consequential economic effect that the burden the Act imposed upon the respondent might have upon the inter-State trade of Haines and Kauri - for example, by bringing about an increase in cost reflected in price - would not involve the invalidity of the Act: Wragg v. State of New South Wales [3] . In Webb v. Stagg [4] I have dealt more fully with these matters.

[51]

When impediments or restrictions upon the carriage of goods within a State are alleged to be in contravention of s. 92, the question is often said to depend upon whether the movement within the State is properly to be considered as a separate journey or as a stage in the movement of the goods from a place in one State to a destination in another State. The word "destination" itself expresses the idea. But it and other terms such as "continuous journey", "integral part" and so forth are, as I have said elsewhere, more useful as descriptions, or justifications, of a conclusion than helpful in arriving at it. This Court has said that "the question of when and where inter-State transit begins and ends is a question to be decided not upon the terms of a contract but as a matter of practical reality depending on the facts of each particular case": Russell v. Walters [1] . The way in which Kitto J. described the facts in Britton Bros. Pty. Ltd. v. Atkins [1] seems to me to fit the present facts, substituting Melbourne for Sydney: "The movement of the timber within Tasmania is put in train by the miller as a means of fulfilling a contract which necessitates his selecting timber for the purposes of the contract somewhere in Tasmania, whether close to the side of a suitable ship or remote from it, and to set the timber in motion with Sydney as its fixed, though not necessarily irrevocably fixed, destination" [2] . His Honour thought that in that case the whole journey from the mill to Sydney had "the character of a single coherent piece of inter-State transportation" [2] . Menzies J. said that to hold otherwise "would be to draw artificial lines not in accord with the realities of trade" [3] . That, I consider, states the way in which the question before us is to be approached. I repeat what I said in I.X.L. Timbers Pty. Ltd. v. Attorney-General (Tas.) [4] : "Section 92 is concerned with the practical realities of trade and commerce, not with philosophical divisions of a whole into its parts" [5] .

[55]

I forbear from quoting from judgments in other cases, not because quotation would be irrelevant, but because it must necessarily be indecisive when the question is to be seen "as a matter of practical reality depending on the facts of each particular case" [1] . Not only is the question one of fact and degree, and not only do the facts of cases vary, but the measure is itself uncertain. The economic ideas embodied in such phrases as "the practical realities of trade", "the practical conception of trade, commerce, or intercourse" are not susceptible of precise analysis or more exact statement. Business methods and the pattern of trade change as new means of communication and of carriage are developed. Aided by s. 92, commerce itself has for its purposes obliterated the boundaries of States from the map of Australia except for those who would use s. 92 spuriously by "border hopping". It seems to me therefore that only in the simplest case can a court, required to bear in mind the practical realities of commerce, say dogmatically that a particular view of the facts of a case in this field is obviously right or wrong. Judgment is unavoidably much a matter of opinion, because based on concepts that are imprecise and not the ordinary concepts of law. Of course, in some cases the transport of goods can readily be said to be essentially of an intra-State character although the goods being transported may have earlier come from or will later go to another State. An example is movement within a State in the performance of a contract of sale between persons in that State. It is then immaterial that the goods may be destined by the buyer to go ultimately to another State, or may have earlier been brought from another State by the seller. But in the present case the movement of the timber from Deloraine to Melbourne was throughout the result of the course of dealing between Haines and the Kauri Company. That fact gave unity to the movement. The argument that there was at Devonport a significant discontinuity in that movement is based partly upon the interval of time, up to two years, in which the timber was there stacked for drying before being sent forward to Melbourne as it was called for. To me, however, this interval does not mean that before it reached Devonport the timber was not, as a matter of the practical realities of trade, on its way to Melbourne pursuant to the arrangement by which Haines in Tasmania supplied its customer, the Kauri Company, in Victoria with timber. But it was urged that not only the lengthy delay but what occurred at Devonport broke the movement in two - a movement from the mill to Devonport, later a movement from Devonport to Melbourne. The matters that, as I understood the argument, were principally relied upon in support of this were: that the timber had to be dried in racks in Haines' yard at Devonport before it was sent to Melbourne; that when put in the racks it became the property of the Kauri Company, Haines holding it thereafter as a bailee with a duty to forward it by ship in lots as called for; that a small part of the timber that left the mill was discarded at Devonport as defective and never became the property of the Kauri Company. The consequence of these matters combined must, it was urged, be considered. I agree that that is so. But that a small quantity of the timber that left Deloraine might never reach Melbourne can I think be disregarded. The question whether the timber that was being carried on the way to Devonport could be said to be on its way to Melbourne is not answered by saying that some of it might fall by the wayside for one reason or another. The character of a march is not altered because some of the marchers may fall out before the destination is reached. The question is not whether each stick of timber on the lorry would reach Melbourne. Nor do I think that it is of much significance that the lots which went to Melbourne by ship did not correspond to the loads that went to Devonport by vehicle. It would, I think, be a mistake to take as a criterion some idea savouring of the "original package" doctrine that at one time dominated the interpretation of the commerce clause in the Constitution of the United States. It was said, however, that the fact that the timber had to be dried before it was shipped was a critical circumstance; that what Haines was to supply was dried timber not green timber; that the movement to the yard at Devonport was thus antecedent to the commencement of the inter-State movement of the thing to be supplied. The decision in Grannall v. Marrickville Margarine Pty. Ltd. [1] was referred to. The Court there said: "It is of course obvious that without goods there can be no inter-State or any other trade in goods. In that sense manufacture or production within, or importation into, the Commonwealth is an essential preliminary condition to trade and commerce between the States in merchandise. But that does not make manufacture production or importation trade and commerce among the States. It is no reason for extending the freedom which s. 92 confers upon trade and commerce among the States to something which precedes it and is outside the freedom conferred" [2] . There is a passage in the judgment in O'Sullivan v. Noarlunga Meat Ltd. [No. 2] [3] that points to a similar limitation upon the power of the Parliament to make laws under s. 51 (i.) with respect to trade and commerce. But this ought not to be understood in the same absolute sense: and it is not so stated. The two provisions of the Constitution are not to be measured one against the other. That was emphatically asserted in the judgment in the Margarine Case [1] . But one argument for the appellant seemed to me to overlook this. We were invited to interpret s. 92 by a forecast of what would be the effect of doing so upon the interpretation of s. 51 (i.). We were asked to take counsel of fears. But there need be no fears. The constitutional power of the Commonwealth Parliament under s. 51 is not to be narrowly confined. If it be necessary to decide whether under it activities occurring within a State could in a given case be controlled and regulated by the Parliament, the question involves considering whether, in the circumstances of the assumed case, a law with respect to inter-State trade would, to be effective, have to extend to intra-State activities also. The recent decision in the Airlines Case [2] is an example of this approach and the matter is adverted to incidentally in the judgment in the Margarine Case [3] where there is a reference to the Mandeville Island Farms Case [4] , in the United States, one of many cases in which the power of Congress over commerce has been extended and expanded by the aid of what has come to be called the Shreveport doctrine: see Houston, East and West Texas Railway Co. v. United States [5]

[59]

The facts were to the following effect. F. H. Haines Pty. Ltd. (the vendor) is a sawmiller and timber merchant in Tasmania owning a sawmill at Deloraine and a timber yard at Devonport. For a long time it has had a contract with Kauri Timber Ltd. (the purchaser), a Melbourne company, to supply the latter with 35,000 super feet of 1½″ sawn timber and 25,000 super feet of 2″ sawn timber per month. The timber is cut at the vendor's Deloraine mill and carried thence by the respondent, a cartage contractor under contract with the vendor, to the latter's yard at Devonport where it is placed in drying racks in a portion of the yard known as the "Melbourne Yard". On arrival of the timber at the yard a "rack completion docket" containing particulars of the timber delivered and the number of the rack in which it is placed is prepared and sent to the purchaser and at the end of each month an account for the price of the timber "racked" during that month is rendered by the vendor. The learned magistrate appears to have found that the property in the timber passed to the purchaser "as from its leaving" the mill, basing that finding on an inadmissible piece of evidence given by the manager of F. H. Haines Pty. Ltd. that "the timber in the Haines' racks belongs to Kauri as from its leaving Deloraine." But the true position, so far as it can be ascertained from the scanty evidence, appears to me to be that the property in the timber passed when it was "racked" at the yard and that thereafter it was held by the vendor as agent for the purchaser to be dealt with in accordance with the latter's instructions. The evidence shows also that after delivery at the yard the 1½″ timber remains in the racks for 15 to 18 months and the 2″ timber for periods up to 24 months and from time to time the purchaser directs its agent, the vendor, to despatch to Melbourne quantities of timber from specified racks. When this occurs the latter delivers the timber required to a ship at Devonport for carriage to Melbourne, charging the purchaser a handling fee for this service.

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