Home Benefits Pty Ltd v Crafter [1939] HCA 12

'or were intended to be sold and distributed in South Australia, tatien oa5 a i Starke, Dixon,

Held that an offence within the terms of this provision had been committed - Evatt and Motiernan JJ.

where the defendant, a company incorporated in New South Wales, caused to be delivered to householders in South Australia a circular informing them that _ they might obtain from the defendant in Sydney any of certain articles at

ices stated (which were less than the value of the articles) if they sent postage stamps to cover the price and a specified number of labels forming part of the kages in which a particular brand of tea was sold, and that the provision id not contravene sec. 92 of the Constitution.

_ James v. The Commonwealth (1936) A.C. 578 ; 55 C.L.R. 1, referred to.

H.C. or A. Appgats from a Court of Summary Jurisdiction of South Aus ais Home Benefits Pty. Ltd. v. Crafter - Percy Greyham Crafter Home a complaint against Home Benefits Pty. Ltd. under sec. 5a (2) (6)

pti the Trading Stamp Act 1924-1935 (S.A.). The offence charged wa

Hovesnorn that the defendant on or about 3rd May 1938 at Hyde Park in th

po State of South Australia by means of a printed circular dated Ist

March 1938 encouraged one Thomas Packman to dispatch in So oe Australia, in exchange for goods, numbers of portions of pac delivered about goods, namely, Bushell's tea, which on 3rd Mi

1938 had been, were being, and were intended to be sold and dis-

It was proved that Packman, a constable of police, found

a letter-box at his residence a circular headed by the name a

address in Sydney of the defendant and that the same name a

address were at the foot of the circular. This circular referred photographs which were printed upon paper packages in wh Bushell's tea was sold in South Australia. The circular, which w s

buy from the defendant company in Sydney certain articles. persons who wished to make such an offer were directed to s their name and postal address to the defendant to identify article which they wanted and to send postage stamps of spe amount in each case. The relevant list of articles described illustrated butter-knives, towels and many other articles which offered at prices (in postage stamps) which were much less than the real value of the goods. The list also stated the number of p which would be required in order to procure consideration of offer to purchase the butter-knives &c. The circular did not the photos to be sent to Sydney, but stated that it would be suffici for the person who wished to buy the butter-knives &c. to 8 the company "by enclosing photos or otherwise, that they h used a sufficient quantity of Bushell's tea, coffee or cocoa, to h the number of photos stated under the article they select." circular then stated that "if this is done it will be an offer to from us in Sydney the article named at the stated price, which

'the post office at Sydney for them, and for the post office to take delivery on their behalf at Sydney as their agent." The circular ded that the photos would remain the property of the sender, d that, if forwarded, they would be returned, if desired, if an extra . in stamps for postage were enclosed with the photos, and that,

if an offer were not accepted, the postage stamps and photos would be returned to the sender.

From that decision the defendant appealed to the High Court.

Household Helps Pty. Ltd. v. Crafter. - Household Helps Pty. itd. was charged under the same section that it by means of an advertisement published in the Advertiser newspaper encouraged other persons to dispatch in South Australia, in exchange for goods, numbers of wrappers delivered about goods which had been, were being, and were intended to be, sold and distributed in South Australia, namely, Velvet soap. This case depended upon the same msiderations as those which arose in Home Benefits Pty. Ltd. v. after.

_ Ligertwood K.C. (with him Kevin Ward), for the appellants. Sec. 5a 'of the Trading Stamp Act 1924-1935 is in conflict with sec. 92 of the Constitution, On the evidence, what was contemplated in the circular was not an exchange of packages for goods, but a straight- out sale and purchase of goods. The circular did not contemplate the dispatch of goods in exchange for packages in South Australia, but at most the dispatch of packages in South Australia in the hope that some transaction would result in New South Wales. Moreover, there was no sufficient evidence to connect the circular vith the defendant. The circular was issued in New South Wales ind not in South Australia. There is no evidence that it had been vered in South Australia. The only evidence is that it was in

"man's letter-box, and it is not explained how it got there.

sold in South Australia, so that the commodity and the package me the property of the purchaser, and that there is a company

may accept or refuse, and a request to us to deliver the article at H.C. or A.

Ww Home BENEFITS Pry. Lrp. AND HovsEHoL Hews Pry. Lrp. Y CRarTEr.

in New South Wales which is ready and willing to give good exchange for packages. Sec. 5a, which is aimed at that trans applies to all trade, including inter-State trade, as it forbids exchange of packages for goods. It prohibits the resale of containers of any goods delivered in South Australia, including bottles, barrels, bags, &c. Sub-secs. 1 (b), 2 (b) and 3 are at people in New South Wales making offers to people in Australia, and in express terms refer to inter-State trade. imposition of a penalty for something done in South Australia is only way a sanction could be imposed, if it was desired to prohibit inter-State trade. The trading-stamp company is entitled to carry on its business throughout Australia, and this provision interferes its carrying on such business. Here is a clear case of the passage of goods backwards and forwards that is prohibited. What is con templated in the circular is not an exchange but a sale of good: The circular was put in by the prosecution, and they are bound by it. The price is given for every article, and the purchaser is inv ' to make an offer for the goods; he may prove that he is qualified to make the offer by other means than by sending the photos. fact that money is paid shows that the transaction is a sale and not an exchange. The wrappers still remain the property of t purchaser of the commodity, and so there cannot be an excha of the specified articles. The vendor invites the public to pr the goods from it at an undervalue. There was no encouragem proved in this case.

Hannan K.C. (with him Gillespie), for the respondent. maxim noscitur a sociis should be applied to the construction 0 sec. 5a (4). The genus into which that provision falls is that every word in it refers to a token or symbol intrinsically worthless a nd extrinsically worthless except as a medium of exchange. Th legislature intended to deal, not with the redemption of articles ir bags, but with the trading-stamp evil, which is concern with giving discount in cash or goods on the evidence of tra stamps. There are two classes of articles, one which entitles holder to get articles for them and one which does not. The categ in sub-sec. 4 comprises those which have no intrinsic value but

h are stamped to show that they have some exchange value. The purpose of this legislation should be considered (Mazwell on The rpretation of Statutes, 7th ed. (1929), p. 19 ; 8th ed. (1937), p. 19 ; & Sons v. Priester (1)). Assuming that the section does bear the meaning contended for, the Act does not restrict inter-State trade inany form. In any event this Act is severable. The Act does not erfere with the passage of goods at the frontier (James v. The onwealth (2)). The real object of the Act is to suppress infair trade dealing, and it is incorrect to suggest that the passage of the articles offered by the circular is impeded by this Act. The ticles are procured by consuming so much of the commodity. It isa discount on purchases. The wrappers are the only evidence on th the company can safely act in rewarding the customer. It is not for the Parliament of South Australia to say what ounts to an interference with inter-State trade: it is for this urt to look at the particular Act and ascertain its true purpose. Unless the court infers that the true purpose of the legislature to prevent entry of the goods into South Australia, the Act is valid, because the articles mentioned are valueless. If the court s that the real object of the Act is directed against freedom of trade at the boundaries, then the Act would be invalid ; but the Act isnot directed to impairing the freedom of trade in any way. Trade vs just as freely after as before the passing of the Act (Hartley v. Walsh (3) ). Those passages, mutatis mutandis, are an accurate tiption of the South-Australian Act. If the Act is directed to the body of citizens within the State and to their conduct in trade, it does not contravene sec. 92. The court should look at the robabilities which would aid in determining the validity of the Act. This Act is directed to the general conduct of people in South lustralia and only indirectly affects transactions in other States. 1s to the second point, these packages were made for purposes of

nge. They had no intrinsic value but encouraged Packman to eve they were a medium of exchange. On the third point, the encouraged Packman to believe that some person would end articles from Sydney in exchange for the photos. There is

(1) (1887) 19 Q.B.D. 629, at p. 638. (2) (1936) A.C. 578, at p. 626; 55 C.LR. 1, at p. 55. (3) (1937) 57 C.L.R. 372, at pp. 381-384, 386, 394, 395.

Ww Home BENEFITS Pry. Lr. AND Houseuoip HELPs Pry. Lrp. v CRAPTER.

no need to prove that Packman was encouraged. As to the point, the prosecution has only to show a prima-facie case o balance of probabilities, and it is sufficient to prove that the ei was put into the letter-box by the defendant or by some other p There is more evidence here than in Houston v. Wittner's Pty. G (1). The statement in the circular that the property did not | is only camouflage. It was not in the contemplation of either party that the property in the coupons should pass. The only inter of the company was to cancel them and so prevent their being again. The photos were only used as a device.

appeal from a conviction of the appellant under the Trading 8 Act 1924-1935 (S.A.), sec. 5a (2) (6). The offence charged 1

State of South Australia by means of a printed circular dat March 1938 encouraged one Thomas Packman to dispatch in

delivered about goods, namely, Bushell's tea, which on the said 3rd May 1938 had been, were being, and were intended to be sol and distributed in South Australia. '

It was proved that Packman, a constable of police, found in 4

in Sydney of the defendant and that the same name and a were at the foot of the circular. This circular referred to photo; which were printed upon paper packages in which Bushell's tea wa sold in South Australia. The circular, which was introduced by words " Dear Madam," but which was not addressed to any sp person, invited the recipient to tell her friends who regularly u Bushell's tea that they could offer to buy from the de! company in Sydney certain articles. The persons who wished make such an offer were directed to send their name and posté address to the defendant, to identify the article which they want

levant list of articles described and illustrated butter-knives, owels and many other articles which were offered at prices (in postage stamps) which were much less than the value of the goods.

in order to procure consideration of the offer to purchase the butter- ives &c. The circular did not require the photos to be sent to ydney, but stated that it would be sufficient for the person who ed to buy the butter-knives &c. to satisfy the company, " by enclosing photos or otherwise, that they have used a sufficient quantity of Bushell's tea, coffee or cocoa to have the number of photos stated under the article they select." The circular then

or refuse, and a request to us to deliver the article to the post office it Sydney for them, and for the post office to take delivery on their be half at Sydney as their agent."

'The circular added that the photos would remain the property of the sender, that, if forwarded, they would be returned, if desired, if an extra 2d. in stamps for postage were enclosed with the photos, and that, if an offer were not accepted, the postage stamps and photos would be returned to the sender. The questions which arise are whether the evidence establishes encouragement by any person; whether it establishes encourage- 'ment of Packman; whether the defendant was a person who so encouraged ; whether the encouragement, if any, was an encourage- it to dispatch the photographs in exchange for the butter-knives and whether the Act is not invalid by reason of sec. 92 of the stitution. It is by reason of this last contention that the matter comes before this court upon appeal.

The Trading Stamp Act 1924 prohibited the issue and delivery

e stamps by delivering money or goods. The contest between

'The list also stated the number of photos which would be required j,,,

to send postage stamps of specified amount in each case. The H. C. or A.

ed Home BENEFITS Pry. Lrp. AND USEHOLD Hers TY. Lip. v Crarrer.

the legislature and the coupon-trading system was evidently not decided in favour of the legislature by the Act of 1924, and acco ingly the Act of 1935 was passed. This Act is plainly intend meet devices which had been lawfully used for the purpo evading the Act of 1924. The circular which was put in evid in this case was equally plainly devised for the purpose of lay evading the application of the later Act.

The Act of 1935 inserts sec. 5a in the principal Act. This sect creates a number of offences. Its operation depends upon sub-s 4, which defines the "articles or things" referred to in o sub-sections. These articles or things are any of the following o any portion of the following, namely, "any stamp, coupon, ticket, cover, wrapper, package, paper, photograph, document, means or device, which has been, is, or is intended to be, issued or deli with, about, concerning, relating to, or in connection with any good which have been, are being, or are intended to be, sold or distribu in South Australia" by any person. Sub-sec. 1 provides that person shall in South Australia directly or indirectly give or de or promise any money, goods or advantage whatsoever in exch for any of the articles or things mentioned. Sub-sec. 2 prohib any person from inviting or encouraging any other person to commit a breach of sub-sec. 1 or to tender or dispatch or offer to tender of dispatch any of the articles or things mentioned in exchange aforesaid. Sec. 5a (2) (b) is the provision under which the defendai was prosecuted. It is as follows : - " No person shall, directly or indirectly, either in writing or otherwise howsoever invite | encourage any other person to, or suggest that any other pe should . . . (b) tender, or dispatch, or offer to tender, 01 dispatch in or from South Australia any article or thing described in sub-section (4) of this section or any number or combination of any such articles or things in exchange for any money, goods, rev benefit, valuable consideration, or advantage whatsoever, whe the actual exchange shall be effected, or become effective, in Sou Australia or elsewhere." Sub-sec. 5 provides that no trader shall or distribute any goods, if any of the said articles or things are is or delivered with, about, concerning, or relating to such goods. sub-section also contains a rather remarkable provision that no

things any of the offences mentioned in other sub-sections are committed, but also if such offences " will or may be com-

ed." It is, perhaps fortunately, not necessary for the court to

'The evidence plainly establishes encouragement to despatch photos to the defendant. The readers of the circular are told that, if they send a sufficient number of photos with postage stamps, they will be regarded as making an offer to purchase butter-knives . for the amount of the postage stamps. This is an encouragement to people to dispatch the photos - that is, "the articles or things" mentioned in the section - to the defendant.

It is urged that, as Packman did not send for any butter-knives &e. or even think of sending for them, he was not encouraged. But there can be encouragement which fails as well as encouragement which succeeds. It is true that the circular was not addressed to ckman, but it is quite obvious that it was intended to influence nd might influence the mind of any person into whose hands it should fall.

'The next question is whether the defendant can properly be held ) be responsible for any encouragement constituted by the circular. In my opinion the defendant's contention upon this point is met by e provisions of sec. 5a (8). Under that sub-section any circular ich appears to the court to be relevant to the charge, and to have issued or delivered by the person whose name appears thereon, be given in evidence without formal proof of the issue or delivery thereof or of the authentication by the person whose name it bears. The sub-section also provides that the circular shall be facie evidence that any encouragement therein contained actually made, was in force at the date of the alleged offence, d that it was made by the person whose name appears thereon as ng or authenticating the document. In this case, therefore, e production of the circular (which is plainly relevant to the charge) prima-facie evidence that the encouragement contained in it was and that it was made by the defendant.

The next question is whether the encouragement constituted by e circular was an encouragement to do what is prohibited by

trader shall sell any goods, not only if in respect of such articles H. ©. or A.

pt to construe or to apply the latter portion of this provision. youszuoup

Ww Home Benerits Pry. Lr. AND HovsrHoip HeELrs Pry. Lrp. . Crarrer.

sec. 5a (2) (6), namely, in this case, to dispatch the articles or thir in exchange for goods, namely, butter-knives &c. '

The circular has plainly been drafted in order, if possible, to the application of this provision. The circular, it is argued, not contemplate or suggest any exchange of articles for goods. the transaction contemplated by the circular is carried out, happens is that an offer is made to the company to give p stamps in return for goods, that is, in substance, to buy the for the price represented by the postage stamps. The photos o coupons, if forwarded, do not become the property of the compa: The possession of them is merely required as a qualification for m an offer which the company will consider, but which it may or reject as it thinks proper. It is not even necessary to send

the articles. Thus, it is said, there is no encouragement to exch ny "articles " for goods.

This argument depends upon the proposition that the phrase exchange for " necessarily means that the property in the " arti

manner. One of the transactions into which persons are inv and encouraged to enter involves the sending to the company 0

the coupons. The invitation is: "Send the coupons and we ¥ if we so decide, send you goods." Such an invitation may prop be described as an encouragement to dispatch coupons in ex¢ for goods.

it infringes sec. 92 of the Constitution. Sec. 92 provides as follows "On the imposition of uniform duties of customs, trade, comm and intercourse among the States, whether by means of in carriage or ocean navigation, shall be absolutely free."

The objection which is raised on behalf of the company is wishes to conduct trade in butter-knives &c. with South Aus by the method described in the circular, that is, by acce| New South Wales an offer to purchase the butter-knives,

er is forwarded from South Australia, and by sending them to South Australia. The dispatch from South Australia of the par- icular form of offer contemplated is prevented by the Act. Another objection to the Act is that it limits the methods in which, for example, Bushell's tea, may be sold in South Australia, because sec. 5 its the selling of any goods if coupons are sold with them, s provision applies to all sales, whether they are sales to persons in South Australia or to persons in other States, and it is contended

In my opinion the answer to these objections is to be found in he fact that the Act does not prevent trade in any goods. It is sible to comply with the Act and to trade in tea and in butter- knives &c. in the ordinary way. What is prohibited is trading in goods by a particular method. If the Act is applied to the particular acts of this case, trading in butter-knives &c. as accessory to trading (in this case) in tea is prohibited, and trading in tea under a coupon em is also prohibited. But these provisions constitute a regula- tion of trade applying generally and applying equally to intra-State

According to James v. The Commonwealth (1) such regulation of nter-State trade, not amounting to a mere prohibition of trade, is not excluded by sec. 92. In my opinion there are many difficulties n stating and applying the principle of the decision in James v. he Commonwealth (1). But it is clear that, according to that decision, sec. 92, applying (as it was held to apply) equally to the Commonwealth and the State Parliaments, does not exclude inter- e trade from the sphere of legislative action. Any other view vould result in legal incoherence. The judgment in James v. The mmmonrwealth (1) provides many examples of regulation of trade ich were regarded by their Lordships of the Privy Council as not neonsistent with sec. 92. Among such examples are to be found, Commonwealth legislation, the Post and Telegraph Act 1901-1923, less Telegraphy Act 1905, Secret Commissions Act 1905, Commerce

Ww Home BENEFITS Pry. Lrp. AND HovsrHoi> HELPS Pry. Lrp. v. Carrer.

(Trade Descriptions) Act 1905-1933, Australian Industries Presero Act 1906-1930, Sea-Carriage of Goods Act 1924, Transport Wor Act 1928-1929 : See James v. The Commonwealth (1). State k lation which is not prevented by sec. 92 includes the Sale of Act, transport co-ordination statutes (2), marketing regulations | sanitary and health provisions (4), and apparently price-fixing | (5). q One of these Acts is said to be justified as being legislation whiel "forbids irrespective of any State boundary objectionable trad practices in inter-State trade " (6). Similarly another Act is j because it is "aimed at preventing illegitimate methods of tradin (7). The Acts to which reference was made - Secret Commi Act 1905, Australian Industries Preservation Act 1906-1930 - we Federal Acts. A State "has the same power as the Commo to legislate for the peace, order and good government of the with respect to inter-State trade, commerce and intercourse" subject to territorial limitations and to sec. 109 of the Constitution Thus, if the Commonwealth Parliament can forbid objectional practices in trade, so also (subject to the conditions can a State parliament.

Tf, however, the Federal and State Parliaments are at lil simply to determine that a particular trade is objectionable | then to pass a statute to prohibit it, sec. 92 will have no practical effect. Accordingly, what has been said in James v. The Co wealth (9) should not be construed as entitling any parliamen select any trade of which it disapproves and then to prohibit it

inter-State trade cannot be supported as against sec. 92. legislation involves a " burden hindrance or restriction based merel

(1) (1936) A.C., at pp. 626, 627; 55 (5) (1936) A.C., at p. 620; 55 C.LR., at pp. 54, 55. at p. 49.

(2) (1936) A.C., at pp. 621, 622; 55 (6) (1936) A.C., at p. 626; 55 C.LR., at pp. 50, 51. at p. 54, :

(3) (1936) A.C., at p. 622; 55 C.LR., (7) (1936) A.C., at p. 626 ; 55 C.L41 at p. 51 at p. 55.

(4) (1936) A.C., at p. 624; 55 C.LR., (8) (1936) A.C. at p. 611; 55

at p. 53. at 2. 41. (9) (1936) A.C. 578 ; 55 C.L.R. 1.

on the fact" that people come from another State, such legislation would be an infringement of the provision of sec. 92 that intercourse mong the States should be free (James v. The Commonwealth (1) ). so also, if a special burden is placed on goods in the State to which they have come "simply because they have come from" another State, the legislation would be invalid (2). But it is consistent ith James v. The Commonwealth (3) to hold that the prohibition of a particular practice in trading in articles which does not prevent trade in those articles if the prohibited practice is not adopted does not constitute an infringement of sec. 92. Such a provision may airly be regarded as a regulation of trade and not a prohibition of it. k T appreciate the difficulties of basing decisions as to the constitu- tional validity of statutes upon the distinction between regulation and prohibition. Any regulation which creates offences necessarily involves some degree of prohibition. It is difficult to state the inction logically, but the distinction has been recognized on innumerable occasions in the courts of the United Kingdom, of Australia and of the United States of America. The result in a

the universe of discourse. A law penalizing trading in meat which as not been inspected is a regulation when it is viewed in relation

staining from declaring a statute to be invalid where the matter isleft in doubt. Whatever the difficulties may be, it appears to me, as at present advised, that James v. The Commonwealth (3) involves e Tea alan that the distinction Hetkazaa Tegulation and Bae

televant in considering the application of sec. 92. In this case I do not think it necessary to examine other aspects

ent to which problems arising under sec. 92 may properly be (1) (1936) A.C., at p. 630; 55 C.LR., (2) (1936) AC., at p. 631; 550.LB., 59.

at p. 58, tp. (3) (1936) A.C. 578; 55 CLLR, 1. VOL. LXI. 47

ed Home Benerits Pry. Lr. AND HovsenoLp Heirs Pry. Lr.

solved by referring a challenged statute to some particular categ of legislative power other than a power to legislate with respect t trade, commerce or intercourse. ; In the present case the prohibition of what I may call coupo trading is not a prohibition of trading in any goods. Itisa regu of the trade in all goods. The South-Australian Parliament ev regards the coupon system as being parasitical upon legitimat trade. " For our purposes we must assume that, if a state of f could exist that would justify such legislation, it actually did exist when the statute now under consideration was passed. For us th question is one of power, not of expediency. If no state of circu stances could exist to justify such a statute, then we may deel this one void, because in excess of the legislative power of the But if it could, we must presume it did. Of the propriety of lative interference within the scope of legislative power, the k lature is the exclusive judge " (Munn v. Iihinois (1) ). If either

monopolies and penalize the taking of secret commissions (See James v. The Commonwealth (2) ), it is, I think, impossible to d to a State parliament the power of prohibiting the offering discounts upon prices of goods by a method which it is reasonably open to any parliament to regard as a disturbance of legitimate trade, In my opinion the objections to the Act based upon constitutional grounds have failed. :

For the reasons stated the appeal should be dismissed.

Household Helps Ply. Ltd. v. Crafter - The determination of thi appeal depends upon the same considerations as those which arise in Home Benefits Pty. Ltd. v. Crafter. 4

This appeal should be dismissed for the same reasons.

Ricu J. These cases were heard together, and the second stands or falls with the decision of the first. The main question | concerned with the constitutional validity of sec. 5a of the Tradin Stamp Act 1924-1935 (S.A.). Other questions, which standing a would not be the subject of an appeal to this court, are so invo

(1) (1876) 94 U.S. 113, at p. 132; (2) (1936) A.C., at pp. 626, 627 24 Law. Ed. 77, at p. 86, C.LR., at pp. 54, 55.

in the Federal matter as to require decision (Duncan and Green Star Trading Co. Pty. Ltd. v. Vizzard (1) ). The first of these questions 'relied upon as a defence to the offence alleged under sec. 5a (2) (b) of the South-Australian Act relates to the delivery of the circular ie subject of the complaint. In my opinion the presumptive proof provided by sub-sec. 8 of sec. 5a combined with the fact that the copy of the circular was found in the complainant's letter-box is sufficient proof of delivery. It was next contended that the circular did not amount to an encouragement within the meaning of sec, Ba (2). The offence is not concerned with the subjective effects but 'is founded on what the particular defendant says or does. Judged by this standard I think that the circular did encourage the complainant to dispatch certain parts of tea-packages to the defen- dant in exchange for goods. And I am of opinion that the proposal contained in the circular when carried to completion is not a sale of goods but is concluded within the words of sec. 5a (2) (b) and the charge laid in the complaint is duly laid. On the question of the constitutional validity of the legislation, I incline to the view that the particular transaction evidenced in this case is not forbidden by sec. 92 of the Constitution.

Srarke J. Appeals from the decision of a special magistrate sitting as a court of summary jurisdiction in Adelaide convicting _ the appellants of offences under the Trading Stamp Act Amendment Act 1935, 26 Geo. V. No. 2255. The Act, by sec. 5, inserts in the Trading Stamp Act 1924-1935 a section (5a) which provides that no person shall directly or indirectly 'either in writing or otherwise howsoever invite or encourage any other person to, or suggest that any other person should, tender, or dispatch, or offer to tender, or dispatch in or from South Australia any article or thing described in sub-sec. 4 of the section or any number or combination of any such articles or things in exchange any money, goods, reward, benefit, valuable consideration, 0 advantage whatsoever, whether the actual exchange shall be ected or become effective in South Australia or elsewhere. The

articles mentioned in sub-sec. 4 are any of the following, nam ely

Household Helps Pty. Ltd. was charged under the same sei that it by means of an advertisement encouraged other persons dispatch in South Australia in exchange for goods, numbers wrappers delivered about goods which had been, were being, and were intended to be sold and distributed in South Australia, Velvet soap.

photographs or wrappers on Bushell's tea or Velvet soap respecti in exchange for various articles. If this were done the appellant intimated that it would be regarded as an offer to buy from in Sydney, New South Wales, the article named at the stated mentioned in the lists of the appellants. The facts disclosed ar but a variation of the coupon system of trading.

It is now contended that the South-Australian Act con
the provisions of sec. 92 of the Constitution. The device or adopted by the appellants for trading among the States is restri and hindered and, indeed, prevented in South Australia. v. The Commonwealth (1) has now established that the prescribed by sec. 92 is " freedom as at the frontier or, to use words of sec. 112, in respect of ' goods passing into or out of

te'" (1). "The actual restraint or burden may operate while the goods are still in the State of origin . . . or it may operate after they have arrived in the other State " (2). "In every case it must be a question of Ae whether there is an interference with his freedom of passage " (2).

a i is, however, no contravention of the freedom so prescribed to legislate for the repression of destructive monopolies or illegitimate ms of trading: See James v. The Commonwealth (3). And is no contravention, so it appears, of the freedom so prescribed legislate for the licensing of transport within a State, although msport is an essential element of trade and commerce (R. v. Vizzard ; Ex parte Hill (4) ; O. Gilpin Ltd. v. Commissioner for Road Transport and Tramways (N.S.W.) (5); Bessell v. Dayman (6) ; can and Green Star Trading Co. Pty. Ltd. v. Vizzard (7) ; Riverina Transport Pty. Ltd. v. Victoria (8) ). And, according to the decision Hartley v. Walsh (9), it is no contravention of sec. 92 to legislate ainst persons selling commodities unless packed in a registered or unless prepared or treated in a certain way. It was said that a law directed towards procuring standards of quality, condition d grade of articles of commerce is not in contravention of sec. 92 (10); and cf. Ex parte Nelson [No.1] (11); Tasmania v. Victoria (12). Ishould have thought with my brother Dizon that the Act discussed Hartley v. Walsh (9) was a plain contravention of the Constitution. the critical question now is: By what method or by what test it be ascertained whether an Act contravenes the provisions of 92? In the case of Peanut Board v. Rockhampton Harbour ard (13) I said that the legislation the subject of attack must be itinized in its entirety and its true character and effect ascertained ; the facts and circumstances such as the nature of the Act, its ation, the character of the business involved and its actual on the flow of commerce must be examined : Cf. Di Santo v. sylvania (14). This, as it appears to me, is the result of the

_ (6) (1935) 52 CLR. 189. (13) (1933) 48 CLLR. 266, at p. 283. (14) (1927) 273 U.S. 34, at p. 44; 71 Law. Ed. 524, at p. 530.

H.C. or A. decisions in James v. Cowan (1) and James v. The Commonw Hise (2) and of the recent decisions of this court in the Transport Cas Hoe (3) and in Hartley v. Walsh (4). : Pry. Lr. _ In my opinion it is not possible in view of these decisions to adopt ae the test stated in McArthur v. Queensland (5) or that stated by

plizws brother Dizon in O. Gilpin Ltd. v. Commissioner for Road Trans

ea port and Tramways (6), which, as appears to me, is in line wit]

• • " if not so extensive as, the test stated in McArthur's Case (7). rag Tt cannot be pretended that the test propounded as the result of the decisions mentioned is very enlightening: it seems a rule of expediency rather than of law, and its application will imperil th

freedom of inter-State trade and commerce. It also threatens in application a wilderness of single instances. :

But it is quite plain that the South-Australian Act is aimed at

preventing what is sometimes regarded as an illegitimate or unde:

able method of trade. Such a law does not impede the freedom

Some minor points were taken in argument in support of

of coupons to another in order that he will forward goods at an

agreed price. Another referred to a matter of evidence; that

was sufficiently answered on the argument. The appeals should be dismissed.

Dixon J. Home Benefits Pty. Ltd. v. Crafter - This appeal i

The conviction of which the appellant complains is for an offence against sec. 5a (2) (b) of the South-Australian Trading Stamp 1924-1935. The matter is said to have become one of Fede jurisdiction because, upon the hearing of the complaint, the questi

(1) (1932) A.C. 542; 47 C.LR. 386. (4) (1937) 57 C.L.R. 372. ; (2) (1936) A.C. 578; 55 C.L.R. 1. (5) (1920) 28 C.L.R. 530, at pp. 55 (3) (1933) 50 C.L.R. 30; (1935) 52 555.

C.LR. 189, 215 ; 53.C.L.R. 493 ; (6) (1935) 52 C.L.R., at p. 206.

arose whether sec. 92 of the Constitution provided an answer to the harge, whereupon the complaint became a matter arising under e Constitution or involving its interpretation. ~The appellant is a company incorporated in New South Wales here, so far as appears, it carries on business. The case which the espondent, the complainant, seeks to make against it is that, in order to further the sale in South Australia of a particular brand of tea, coffee and cocoa, the company caused a circular to be delivered to seholders in that State informing them that they might obtain from the company in Sydney any of a list of articles at prices stated n the list, prices much below their real selling value, if they sent postage stamps to cover the price and a specified number of labels to be found on, or forming part of, the outside packages in which coffee and cocoa of that brand are sold by retail. The general purpose of the Trading Stamp Act is to suppress the practice of offering or giving to buyers or consumers of vendible ticles some reward or rebate in money, goods, or other advantages, upon their producing evidence that a fixed number or quantity of articles has been bought or consumed. The provisions of 5a are expressed in very wide, not to say indefinite, terms with e evident object of covering not only the many varying forms in ich the practice may be manifested, but also of meeting in advance ingenuity of traders desiring to defeat the policy, while obeying e letter, of the law, an ingenuity which seems to have proved too much for the earlier provisions contained in the Act of 1924. In support of his case the complainant respondent relied upon one mce only of a delivery of the circular complained of. A detective Police deposed that he found a copy in his own letter-box. To

f the circular and presumptions which, he says, arise therefrom an evidentiary provision, namely, sec. 5a (8). The appellant ites the sufficiency of the presumptions arising, either from the 'tion, or from the circumstances, to fix it with responsibility, nd it also denies that the circular, which is cleverly worded, contains lough to support the charge. These are all points which have no element in them. The appellant, however, says that,

because one ground upon which it defended itself in the court involves Federal jurisdiction, it may rely in support of a appeal to this court upon any ground, whether arising under or Federal law. In the circumstances of the present case, this

is probably correct. For in the court of summary jurisdiction reason why the Federal question arose as one which must be de

defendant's liability to conviction appeared to that court to b complete. The "matter," that is, the defendant's liability penalty, therefore necessarily involved the interpretation of sec. | for it necessarily involved the question whether sec. 92 applied so to protect the defendant from conviction. : As the considerations governing the correctness under State la of the conviction form the groundwork upon which the need for invoking sec. 92 rests, they must be dealt with by this court in it turn. The point that proof was not given of the delivery to the com plainant of the copy of the circular should, in my opinion, fi Sub-sec. 8 of sec. 5a is, it is true, limited in its relevant oper to providing presumptive evidence that the defendant whose appears upon the document is responsible for whatever encou ment the document contains and that the encouragement actually made, in the sense that the statement amounting to encouragement was expressed or " published," as that word is u in the law of libel. It does not of itself provide proof that the com plainant was the person "encouraged," as is alleged in the com plaint. But, when the fact that the circular was found in the box is added to the facts presumptively proved by means of sub 8, that conclusion may be legitimately drawn from the whole. y the circumstances then in evidence, so to speak, are that a co

brand of tea, coffee and cocoa is put forth by the defendant a found in the letter-box of a householder. Conceding the logical possibility of its having been put there by a complete stranger to the defendant, the improbability of this having happened is suffici

o dispatch portions of the packages containing the tea to the fendant in exchange for goods. A point taken on this form of harge is that the detective of police did not undergo or experience ny encouragement of the kind alleged when he read the circular. Blation at such evidence falling into his hands he may have felt, mt the circular could not but fail to arouse in him any interest in tea or the goods. Indeed, the circular was addressed " Dear " It is clear, however, that the offence consists in the act r words of the defendant, independently altogether of the effect duced upon the person to whom they are addressed. Another point taken was that, in describing the course recom- nded by the circular as being to dispatch the bits of package 'in exchange for goods" the complaint was badly framed. It aid that the transaction suggested by the circular would, if leted, amount to a true sale of the goods. Possibly the fact they were sold at a low price, if the stamps sent in payment or isfaction of the price were accompanied by portions of tea-packages, ght support another form of charge under the same sub-section, namely, encouraging the dispatch of the portions of packages in we for an advantage, the advantage of a very low price. it that charge was not laid. To amend would be difficult, because consent of the Attorney-General, given under sub-sec. 7, was xpressed in the form of the complaint: Cf. Ellis v. Wing Lee (1) ; Thomas v. McEather (2). The point really depends on the meaning of the words " in exchange fo any goods " as used in sub-sec. 2. I do not think that the various 'ions accumulated in that provision are meant to be mutually The words "in exchange for" are intended to be wide their application, and are equivalent to "in return for." Not ithout a little hesitation, I conclude that a transaction by which yoods were obtained in return for a number of wrappers or packages ind a low money price satisfied by stamps would fall within the words the sub-section which have been chosen by the complainant. fact that the circular makes it clear that the portions of the sent remain the property of the sender and will be returned,

) (1899) 24 V.L.R. 785; 21 ALT. 4, (2) (1920) Q.S.R. 166.

The offence charged in the complaint is encouraging the witness H- C. or A.

Ww Home BENEFITS Pry. Lav. AND HovsEHoLp Hers Pry, Lr. v. Crarrer.

Ww Home BENEFITS Pry. Lro. AND HovusEHoLp Hewes Pry. Lrp. a CRAFTER.

if desired, seem to me to be of no importance. " In exchange fo are words not used in any technical sense, and the production of th wrappers or other tokens as evidence of a number of purchases i the point of the transactions at which the section hits. Nor do think it matters that the circular professes willingness on the of the defendant to accept other evidence, or that it ascribes to sending of the portions of package the character of an offer to buy which the defendant may or may not accept. The wide words " exchange for" cover the mutual provision of wrappers or other tokens, on the one side, and of goods or other advantages, on the I am, therefore, of opinion that under State law, cot independently of the Federal Constitution, the conviction warranted. But I am prepared to concur in the view that sec. 92 ought not

5a of the State statute upon the transaction described in the ci The matter was argued as if we ought to consider whether at

sec. 92 to protection from so much of the provisions as ac' y strike at it. The transaction consists in a Sydney company, acting doubtless under an arrangement with the suppliers of the parti

&c. and postage stamps of a specified amount, being much less the value of the goods.

Of the inter-State character of the transaction there can be ni doubt. But its most striking feature is that it forms only a secondary consequence or incident in the sale or distribution of the tea, coflee or cocoa. It is not an independent commercial dealing. It is no part of an independent trade or trafficking in goods. Its esse characteristic is that it is the raising and fulfilment of some expet

tion to principal transactions which otherwise are left entirely The statute makes no difference between inter-State and intra-

wate steps by which that is, or may be expected to be, done. thus a State regulation of an incident of retail selling. It is

ent, I think I should hold that no forbidden interference with State trade or commerce is involved in suppressing uniformly promising or the giving of rebates in kind on the retail sale of ities as a means of competition.

Household Helps Pty. Ltd. v. Crafter. - The fate of this appeal is

'Eyarr J. Home Benefits Pty. Ltd. v. Crafter. - The appellant pany was convicted before a magistrate in South Australia of an created by sec. 5a (2) of the Trading Stamp Act 1924-1935 he State of South Australia for having in writing (by means of inted circular dated 1st March 1938) encouraged a person (one s Packman) to dispatch in South Australia in exchange for portions of packages delivered about goods (Bushell's tea)

An appeal has been brought to this court. 'The appellant has raised questions involving not only the inter- etation of sec. 5a of the Act, but also its constitutional validity.

Trading Stamp Act as originally passed in the year 1924 based on a general principle which has been adopted in five of he six States of Australia (Goods Act (1928) (Vict.), secs. 82-85 ; I ading Stamps Abolition Act 1900 (Tas.) ; Trading-stamps Abolition

Ww Home Benerits Pry. Lrp. AND Hovsrnou Heirs Pry. Lrp. v CRAFTER.

Act 1902 (W.A.); Trade Coupons Act of 1933 (Q.)). The object of the South Australian Act was to prohibit, in conn with the sale of goods, the use of trading stamps, coupons or other tokens, the production of which would entitle the purchaser to receit either money or goods at a reduced price. It was also forbidd issue or deliver in connection with goods any writing which sented that the purchaser of the goods would receive any ben advantage other than a discount payable in cash. 3 The method of suppressing what the South-Australian legislatu regarded as an undesirable trade practice or system was no' against avoidance or evasion. Although under the terms of Act of 1924 a trading stamp included any " stamp, coupon, cover, wrapper, package, paper, document, means or device, device was prohibited only in cases where possession of the s tokens entitled the person producing them to receive actu supposed benefit. In cases where a manufacturer marketed g ina package or form which could be adapted to furnish the ul purchaser with the equivalent of a token or counter but no pron or representation was made to the purchaser that production of such a token or counter would procure him any benefit, the terms of the Act were successfully avoided. To take an example from 1 facts of the present case, no liability was incurred under the / of 1924 where all that the trading-stamp company did was to rep! that, if the consumer produced a large number of photograph one of which was printed upon the wrapper of every packet of t it would consider, and might accept, an offer from such cons to buy certain articles at a very reduced price, but would not itself to accept such offer. For in such a case photographs, though faithfully collected by such a consumer during a conside period of time, entitled him to nothing.

a reasonable expectation of getting the reward or advantage H. ©. or A. ted but never promised. 12 Accordingly, in 1935, sec. 5a was inserted in the statute, and it irectly attacked, not the issue or delivery of trading stamps, but outstanding feature of the coupon or stamp system, viz., the yorsmnoup of money, goods or some other advantage in exchange for or ,, Heurs

Pry. Lrp. in redemption of any coupons or stamps, &c., which had previously ae 5 és ORAFTER. issued in connection with the purchase of goods by consumers Evatt J.

5a (1) ). As a part of the legislature's direct attack upon the em, consumers were prohibited from dispatching, or offering to itch, coupons or tokens in exchange for any benefit (sec. 5a (3) ). ders were prevented from distributing goods with stamps or pons on them or attached to them if such trader had reason to sve that such coupons or tokens were being used in connection ith any scheme for their exchange or redemption (sec. 5a (5) ). i only did the legislature attack the system by this direct method, but, in order to prevent any publicity from being given to any coupon scheme, it penalized those who invited or encouraged persons to or offer to send coupons &c. in exchange for any advantage . 5a (2) (b) ). It was under the last-named provision of sec. 5a the present appellant was convicted.

'The general purpose of the new section is thus apparent. Whereas J was prohibited previously was merely the issue of trading Ips or coupons or writings containing promises or representations to benefits &c., the new section aimed at the suppression of the chief attraction of the coupon system, viz., the exchange transaction by which counters were handed over or produced in return for some pecuniary advantage, and the legislature thought it advisable to Suppress all encouragement to the consumer to commence saving up Ips or counters with the object of exchanging or redeeming them d obtaining his reward. I now deal in order with the objections to the conviction. I. It was argued that the document containing the encouragement not shown to have been delivered to Packman by the appellant. kman gave evidence that the document was in his letter-box athis address. Tt had the get-up of a circular intended for extensive

stribution. It purported to be a business advertisement issued by

Ww Home Benerits Pry. Lip. AND Hovsenou> Hautes Pry, Lr. v \Crarrer.

the appellant. It was printed and elaborately illustrated Wi coloured representations of the articles which those interested saving coupons &c. might ultimately hope to acquire. It headed " Keep this new circular for reference." I am of opinio that there was prima-facie evidence that the circular reached Pack in the ordinary course of the appellant's trade. Any other hypo even though possible, is extremely unlikely. :

But sec. 5a (8) removes any doubt as to this point. Plainly #l circular was "relevant to the charge" because it corresponded date and other respects with the document referred to in the and indeed was identical with such document. Further, the n trate was of opinion that the circular had been issued or de by some person, for he was quite entitled to reject the hypothe: that it had found its way into Packman's letter-box other than bj delivery as a business circular. In these circumstances sec. 5a expressly provides that the circular may be given in evidence constitutes prima-facie evidence that the encouragement cont therein was made on the date charged and by the person wh name appeared on the document as its maker. The name so appeared was that of the defendant.

II. It was suggested that there was no evidence that the appellant " encouraged " Packman by means of the circular. It is true that so far as appears, Packman's mind was not influenced either favout ably or at all by the glowing solicitations of the appellant. None less, the circular was intended to encourage every person into whos hands it might come to set about the task of qualifying himself t obtain the "home benefits" illustrated and described. It worded " Dear Madam," but this feminine reference was serious qualified by the inclusion in the list of "home benefits" of su articles as "one gent's military hair brush," "one Sheffield s stock knife, two blades, pricker and tweezer," and " one leat crocodile grained tobacco pouch." I think it is fair to say that point was not really pressed.

IIL. Next, the appellant contended that the circular referred to in the complaint did not encourage other persons to do any

In my opinion, the circular encouraged the recipient thereof to _ Home ,. : 3 , i Be qualify himself according to its terms so that he might ultimately eet

ome the recipient of the advertised article or articles. The yosnorp ification required by the appellant was proof by the recipient, a that he had purchased sufficient tea &c. to become possessed of pe the stated number of photographs supplied with each package. As ; Evatt J.

e recipient was empowered to furnish such proof " by enclosing photos or otherwise," the first alternative and the obvious and easy ilternative (dispatching the tokens) was certainly encouraged by the circular. Upon the recipient's dispatch of such tokens and of postage stamps, the appellant might, and usually would, accept the

ipient's offer and forward the selected article. It is true that the recipient's offer might not be accepted, but the circular encouraged the recipient to suppose that it probably would be accepted, in which case the article would be forwarded by the appellant.

Why was the circular not an encouragement to dispatch photo- graphs &c. "in exchange for" goods? If the proposed transaction was carried through to its normal business completion (on the assump- tion of the appellant's bona fides) the recipient of the circular would

tokens to the appellant, and the appellant would subsequently send goods to the recipient. The circular offered to return the tokens

sing of the property in the tokens, the appellant indicated that

ir production (no doubt for the purpose of cancellation) was the only thing which mattered. But in my opinion the legislature was ally indifferent to the question of the passing of property in the and the words in sec. 5a (2) (b) "in exchange for" are not intended to describe a mutual passing of the legal title to the tokens and goods. The sub-section is directed to the transaction of dispatch- ing the tokens in exchange for money, goods or any other advantage. t is satisfied if, for instance, the consumer procures any advantage tom the dispatch of the tokens or if the consumer dispatches such tokens so as to obtain any advantage. I do not see how the language

1939, Ww Home BrEnerits Pry. Lr. AND Hovseuotp Hewes Pry. Lr. v. Crarrer.

of sec. 5a (2) (b) could be improved if it was intended to dese1 all transactions of the general character foreshadowed by the ay lant's circular. The facts that, in the terms of the appei circular, postage stamps would accompany the token photog and that the property in the photographs would not pass

the main transaction by which the trading tokens were to be s to the appellant and in return the appellant was to hand back to the recipient of its circular. To assert that the transaction may also be regarded as a straight-out sale and purchase of the selected by the recipient at the very small or nominal price ind in the circular is not entirely inaccurate. But, if a recipient mer sent to the appellant the postage stamps mentioned in the circula it is obvious that he would never receive the article he desired. short, the transaction included as an essential part of it the s of the tokens in exchange for the article selected, and that is eno to attract the statutory prohibition. To say that there was mere

tokens is to forget the chief part of the transaction, the very which the legislature was endeavouring to suppress. a IV. It was also contended that, as, according to the circular, binding contract would be entered into until after the appella receipt of the token photographs, the dispatch of such photog could not be "in exchange for" the article to be forwarded after the making of the contract. This contention has in prit been dealt with under UI. In my opinion, sec. 5a (2) (b) is 1 concerned with the time at which the contract between the coll of tokens and the trading-stamp company comes into existence | indeed, whether such a contract ever comes into existence. enough that money or goods are being given in exchange for o1 redemption of tokens irrespective of any binding agreement bet those concerned in such transactions. Indeed the tokens maj compared to a spurious currency which is accorded recognition some persons only and which the legislature, for reasons deemed good, wishes to suppress. It may be said to have penalized ¢ attempts to give value in return for the spurious currency. It to be very difficult to suppose that in legislation of such a cha

'a contract between the person handing over the tokens and the person giving value for them, is of the slightest importance or televance.

oY. Finally it was contended that sec. 5a of the South-Australian Act is invalidated because such section is inconsistent with the freedom of inter-State marketing of goods guaranteed by sec. 92 of the Federal Constitution.

In this connection one further point of statutory construction should be referred to. Mr. Ligertwood argued that the list of tokens in sec. 5a (4) included articles which might in themselves be of con- siderable value so that, for instance, sec. 5a made it unlawful even to sell in the course of trade any articles which had been used as containers of commodities previously sold. Sec. 5a (5), as has already been noticed, prevents a trader from selling any of the tokens mentioned in sec. 5a (4) wherever such tokens are or may be used for the purpose of committing any of the offences penalized elsewhere insec. 5a. It is important to observe that in no other respect is the sale of any of the tokens &c. prohibited. It seems to follow that the sale of containers is permitted provided that they are not associated with any coupon scheme. It was argued, however, that as sec. 5a (1) prohibits the giving of money or goods " in exchange for or in redemption of " the tokens specified in sec. 5a (4) all sales ofcontainers are prohibited. Iamunabletoagree. Ifthe legislature had desired to prohibit the ordinary commercial sale in the course of _ trade of containers not associated with coupon or stamp schemes, it would undoubtedly have expressed such prohibition in direct language and in another statute. But nothing of the kind is intended, and the general scheme of the Act shows clearly, in my view, that the legislature is endeavouring to suppress the handing over of money or goods, not as the bona-fide purchase price of the stamps, coupons, tokens, packages, &c., but as a collateral reward or advantage for having purchased the commodities in relation to which purchases the stamps, coupons, packages, tokens, &c., have been " issued or delivered " for the purpose of evidencing the fact of such purchases. If this is right, there is nothing whatever in sec. 5a which prohibits

the bona-fide sale of containers of commodities considered merely . VOL. LXI. 48

the mere making of a contract, still less the times of the making of 1. ©: or A.

Home Beyerirs Pry. Lrp. AND HovuseHoLD Heirs Pry. Lrp. v. CRraFTER.

as containers. Indeed, to sell a barrel or a bottle for a p price would never be described as dispatching the barrel or the bottl "in exchange for" money. i

The question of constitutional validity must, therefore, be o sidered upon the footing that the legislature of South Australia suppressing within its borders the trading-stamp or coupon systei whether in connection with local or inter-State transactions. statute is to be regarded as regulating the marketing in s Australia of commodities whether such commodities have come be sold in the course of inter-State trade or purely local trade. legislature has considered it is against the best interests of trad and trade to allow the sale of commodities to be pushed and pi by collateral schemes and devices which may induce retail purch but on grounds quite unrelated to the price or quality of the go Sec. 5a in particular attempts to prevent the establishment of token scheme by which purchasers may be induced to collect wrapp ers

money or goods. Such a token scheme can never operate as a : system of discount or rebate even assuming that a discount or rebate. is regarded as applicable between manufacturer and ultimate con- sumer. For it is notorious that in relation to coupon schemes many retail consumers will never collect at all, many will commence to collect. but will subsequently discontinue, and some, faint but pursuing, will collect until they can satisfy the condition requi for redemption even although they purchase more commodi than they really need. The element of inequality or chance is qu

itself be regarded by the legislature as a very undesirable feature of the coupon system. And, if, as usually happens, the manufact of the commodities does not exchange or redeem the coupons, a a third party intervenes between manufacturer and consumer perform the function of a trading-stamp company, the addition

retailer and consumer alike - or so the legislature might think. far as the system of trading stamps is concerned, the objections t it have been stated as follows : -

"1, That the customer of a stamp-trading shop is misled by the induce- ments held out into believing that he is getting something for nothing, whereas in fact he may be paying very heavily for his purchase.

2, That many trading-stamp companies offer poor value in the gifts which they themselves provide.

3. That the retailer is frequently unable to escape from the trading-stamp system even though he may wish to do so.

4. That trading-stamp companies are essentially parasitic, providing on useful service to the community in return for the profit which they make.

5. That the system offers special temptations to fraud by ephemeral trading- stamp companies." (Report of Committee of Board of Trade (England) on Gift Coupons and Trading Stamps, (1933) Cmd. 4385.)

Tn fairness it should be added that in the report from which I have quoted such objections were not accepted as valid by a committee of the Board of Trade in England. But the legislature of South Australia is not bound to accept the reasoning which appealed to such committee or to determine that in South Australia the coupon system must inevitably operate for the best in the best

• ofall possible worlds. Indeed, the great majority of the State legis-
• atures of Australia have accepted the view that the system of trading stamps should be suppressed as being opposed to the best interests of trade.

It follows that it is erroneous to approach the question of constitu- tional validity by regarding the exchange for value of trading coupons

• issued with each package of (say) tea as constituting a separate and _ independent integer of trade. The legislature of South Australia is prohibiting the adoption of the coupon system in relation to the marketing of the tea itself and it is only in the course of regulating such marketing that it has decided to eliminate an excresence upon such marketing, viz., the exchange of coupons for value.

Sec. 92 certainly does not embody the economic or political policy of laissez-faire as distinct from the policy of inter-State free trade. As a general rule both the States and the Commonwealth may sup- "press trade practices and methods deemed improper,- unfair or immoral. It is true that the judgment of this court in McArthur's Case (1), holding that the Commonwealth is immune from the guarantee of sec. 92, was based in part upon the theory that under a contrary holding certain Commonwealth statutes which regulated inter-State trade by suppressing improper practices in relation to

oe Home BeENerFits Pry. Lr. AND HovseHoLy HeELPs Pry. Lrp. v Craver.

such trade would have to be adjudged invalid. In James v. Commonwealth (1), in this court, the theory was expressly rejec' in the judgment of my brother McT%ernan and myself (2). examined each of the Commonwealth statutes and pointed out that they should be deemed valid although the Commonwealth bound by sec. 92. On appeal to the Privy Council, Lord Wri, adopted a similar method of approach and decided that the statu in question merely forbade " objectionable trade practices in int State trade" (3), or "illegitimate methods of trading" (4). Gavan Duffy C.J. had pointed out in a passage cited by McTiernan and myself, " no civilized nation has ever tolerated a trade or com merce, whether foreign or domestic, which was not subject to re; tion and control both with respect to the method of carrying it on, - and the general conduct of those who carried it on " (5). The result of James's Case (6) is that, while the Commonwealt and the States are equally bound by sec. 92, none the less the Com- - monwealth in relation to inter-State trade and each of the Sta in relation to all its trade, including its inter-State trade, may law regulate the methods of marketing and may lawfully control th conduct of traders in order to suppress unfair and improper trading. In other words, sec. 92, although it declares border freedom for the - purpose of inter-State marketing, has nothing whatsoever to say in prohibition of Commonwealth or State regulations which are directed - against unfair trading. ' The application of these principles to the present case causes n difficulty. The marketing in South Australia of New South Wal commodities is completely unaffected by the fact that to the e of its jurisdiction the State of South Australia has forbidden a special and, in its opinion, a very undesirable method of promo the sales of such commodities by coupon or token systems.

In my opinion all grounds of appeal fail, and the appeal shoul be dismissed. The appeal in the case of Household Helps Pty. Ltd. v. Crafter also governed by this decision. That appeal should also be dismis

|, at pp. 598-600, at p. 55, (3) (1936) A.C., at p. 626; 55C.L.R., (5) (1935) 52 C.LR., at p. 599. at p. 54, (6) (1936) A.C. 578; 55 C.L.R. 1.

important question is whether sec. 92 of the Constitution is infringed by sec. 5a (2) of the Trading Stamp Act 1924-1935 of South Australia. 'The provisions of this sub-section plainly interfere with the freedom of a trader to promote his trade within the State or with other "States by resorting to the practices forbidden by the sub-section.

• But not any practice to which a trader may wish to resort in order to maintain or increase the volume of his trade, even if that trade extends beyond' the limits of a State, is shielded by sec. 92 from Commonwealth or State interference. The interference of the ~ Commonwealth or a State with the freedom of inter-State trade is not a violation of sec. 92 unless there is opposition between the action "constituting the interference and the idea of freedom to which sec. 92 compels obedience. The relevant idea of freedom to which the section commands obedience is "freedom as at the frontier." That is
• explained in James v. The Commonwealth (1). The regulation by a State in that State of the trade flowing into it from, or out of it to, another State is not necessarily inconsistent with this freedom. In the present case the legislation which is impugned as a violation of sec. 92 regulates in South Australia both its internal trade and the trade flowing into it from, or out of it to, the other States by suppressing the practice of attaching to the distribution of goods collateral
• benefits in the form of prizes which are given to persons who collect coupons issued on the purchase of the goods or the containers or "wrappers used in their distribution. Sec. 5a (2) prohibits traders from encouraging collectors of the coupons or the wrappers or con- _ tainers to tender or dispatch them in exchange for money or goods. _ What is aimed at is the suppression of the practice of exchanging prizes for coupons or wrappers or containers where these are treated as mere counters but not as articles of commerce having any value "which is taken into consideration in accepting them in exchange for the prizes, the transaction being merely the giving of a prize. It is clear that the Act does not overtly or by any device or subterfuge

interfere with the free passage "'as at the frontier" of the goods which a trader would seek to popularize by resorting to the practice

forbidden by the legislation. It is not the trade in the goods itself (1) (1936) A.C. at p. 630; 55 C.LR., at p. 58.

McTiernan J. Home Benefits Pty. Ltd. v. Crafter - The more 4: ©: oF A.

but things made incident to the trade that are within the scop and operation of the Act. I agree that sec. 5a (2) does not violate sec. 92. The provisions of the legislation of which the sub-section now in question forms part are fully explained in the judgment of my brother Evatt, with which I agree.

The remaining question is whether the evidence assisted by th evidentiary sections of the Act is sufficient to support the conviction I agree that it is sufficient.

Household Helps Pty. Ltd. v. Crafter. - The dismissal of this ap} should follow from the dismissal of the appeal in Home Benefits P Ltd. v. Crafter. The same questions of law are involved in the two

Home Benefits Pty. Ltd. v. Crafter - Appe dismissed with costs. :

Household Helps Pty. Ltd. v. Crafter. - Appe dismissed with costs.

house. Solicitor for the respondent, 4. J. Hannan K.C., Crown Solicitor - for South Australia.