James v Commonwealth [1939] HCA 9

James v Commonwealth [1939] HCA 9 - HCA 1939 case summary — Zoe

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as an independent source of liability. It was contended that the plaintiff enjoyed under this provision a right to conduct his inter-State trade without obstruction or impediment on the part of the Federal Government, and that this right had been invaded. The claim is that sec. 92 confers on every citizen a private right correlative with a duty placed upon the governments of the States and of the Commonwealth for breach of which an action of damages lies. In James v. Cowan (1) Lord Atkin, speaking for the Privy Council, remarked that the " Constitution is not to be mocked by substituting executive for legislative interference with freedom." This has been taken as meaning that the view cannot be sustained that sec. 92 is no more than an inhibition addressed to the parliaments of the States (and of the Commonwealth) preventing them from legislating so as to interfere with the freedom prescribed by the section, a proposition adopted by the majority of this court (Gavan Duffy, Rich and Starke JJ.) in James v. South Australia (2). It is not, however, necessarily inconsistent with the proposition of the same majority that the plaintiff must have failed if he had relied upon the acts of the defendants as giving him a right of action, not in trespass, but for damages for breach by the defendants of the provisions of sec. 92 of the Constitution. In the judgment of Isaacs and Powers JJ., who dissented from so much of the decision as favoured the State, the following statement appears : - '' No doubt sec. 92 does not direct itself to individuals who, on their own authority, obstruct other individuals in inter-State commercial operations, and therefore it cannot be said to establish a universal tight of protection. But it does operate to shut off all forms of State obstruction and to confer upon the individual a right to be protected against all form of State action amounting to, or authorizing anyone to commit, such obstruction" (3). In his judgment in James v. Cowan (4), a judgment which Lord Atkin described as "convincing," Isaacs J., in expressing his dissent from the view that sec. 92 did not prevent expropriation, described the right protected by sec. 92 as a personal right attaching to the individual (1) (1932) 47 C.LR., at p. 396; (2) (1927) 40 C.L.R. 1, at p. 41.

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opinion in Allen vy. Flood (1): '" The wilful invader, without lawful cause or justification, of a man's right freely to carry on his calling commits a legal wrong; and that wrong, if followed by ' injury' caused thereby to him whose right is invaded, affords a legal ground of action." But, although the view that a principle to this effect existed was maintained by Cave J., North J., Grantham J. and Lawrance J. in opinions based upon a citation and discussion of cases the names of which have grown familiar to students, the opinion to the contrary given by Wright J. was, I think, accepted by the majority of the House, an opinion included by Scrutton L.J. among the four upon the subject of interference with a man's trade or vocation by combination, coercion or the like which he found personally most enlightening and accurate (Ware and De Freville Ltd. v. Motor Trade Association (2)). Wright J. (3) began by giving a negative answer to the question, " Does a plaintiff, by proving that a defendant has wilfully procured persons to refuse to make or renew contracts with the plaintiff in the way of his trade or employment, and that damage has directly resulted, prove any wrong or injuria?" In doing so he relied upon Rogers v. Rajendro Dutt (4), a case in which, as in the present, the interference complained of was the work of a government. Because during the Indian Mutiny the plaintiff, a tug-master, had demanded excessive charges for towing one of Her Majesty's ships up the Hooghli, pilots were instructed not to allow any ship under their charge to use the plain- tiffs tug. The Privy Council held that no invasion of legal right was involved. Wright J. then went on to inquire whether it would make any difference if the defendant was actuated by a desire to harm the plaintiff. Having shown that generally an act which may be lawfully done does not become unlawful because it is done with such a motive or purpose, he goes on to dispose of the more particular question in a passage which at once refers to and briefly distinguishes or explains almost all the earlier decisions the citation of which might be looked for in such a judgment as the present. His Lordship said : - " Then, if there is no such general doctrine as that which

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the respondents maintain, is there a limited doctrine of the same kind in relation to interference with a man's trade or employment ? Beyond the important dicta of Lord Holt in Keeble v. Hickeringill (1), the authorities cited do not appear to be adequate to sustain the weight of such a proposition. If such were the law, it would be reasonable to suppose that it would long since have been established by recognized precedents of pleading, and by numerous cases dealing with a question of such frequent occur- rence and affecting such varied and important interests, and by at least some cases affirming it after discussion of the grounds and limits of so anomalous and important an exception to the general tule. In fact, however, the authorities cited in support of it are, until Temperton v. Russell (2), no more than dicta, and, with the exception of Lord Holt's dicta in Keeble v. Hickeringill (1), they are indistinct and referable to other grounds, as was pointed out by Bowen L.J. in the Mogul Case (3), either violence or threat of violence, as in Garret v. Taylor (4) and Tarleton v. M'Gawley (5); or conspiracy and actual disturbance of trade, as in Gregory v. Duke of Brunswick (6); or obstruction in the use of the highway, or physical interference with trade, as in Green v. London General Omnibus Co. Ltd. (7); or slander of title, or nuisance, or other similar grounds. Keeble v. Hickeringill (1) itself cannot be said to have obtained recognition as establishing any general doctrine of law. Decided in the time of Queen Anne, and reported then, and more at. large in 1809 (in the note to Carrington v. Taylor (8) ), it must have been known to lawyers for nearly two centuries. Yet no reference to it is to be found in Smith's Leading Cases or in Bullen and Leake's Precedents of Pleadings. In Buller's Nisi Prius it is barely mentioned, and there, and in Selwyn's Nisi Prius, the dicta for which it is now cited are not mentioned at all" (9). It may be added that when, in The Tubantia (10), Lord Merrivale relied upon the same line of

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- There are, in my opinion, two grounds only upon which a person who procures the act of another can be made legally responsible for its consequences. In the first place, he will incur liability if he knowingly and for his own ends induces that other person to commit an actionable wrong. In the second place, when the act induced is within the right of the immediate actor, and is therefore not wrongful in so far as he is concerned, it may yet be to the detriment of a third party; and in that case . . . the inducer may be held liable if he can be shown to have procured his object by the use of illegal means directed against that third party"? (1). This passage was relied upon by Lawrence J. in Davies v. Thomas (2) and by Peterson J. in Hodges v. Webb (3) and by Eve J. in Wolstenholme vy. Ariss (4). I think it represents the law as it is to be deduced from Allen v. Flood (5), Ware and De Freville Ltd. v. Motor Trade Association (6) and Sorrell v. Smith (7), considered in combination. In Ware and De Freville Ltd. v. Motor Trade Association (8) Atkin L.J. pronounces firmly against the view that an interference must be justified as prima facie a legal wrong and insists that a plaintiff must succeed, if at all, by showing that the acts done or threatened to be done by the defendants are unlawful. Lord Dunedin expressed the same view in Sorrell v. Smith (9). It is true that in the opinions delivered in Sorrell v. Smith (7) there cannot be found a clear majority expressly excluding the possibility that a tort is committed when one person acting alone wilfully injures a man in his trade by means which, but for the fact that he is impelled by a desire so to injure the other, would not be unlawful. In the course of his judgment in McKernan v. Fraser (10) Evatt J. says : - " But the judgments of their Lordships did not set all controversy at rest. For instance, Sir Frederick Pollock commented that ' the vexed question whether there is any magic in " plurality " will never be settled until some powerful corporation (being, of course, only one person in law) does some of the things which (it is

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the defendant, while inviting all and sundry to employ him, reserve to himself the right of accepting or rejecting their offers of goods for carriage whether his lorries were full or empty, being guided in his decision by the attractiveness or otherwise of the particular offer and not by his ability or inability to carry having regard to his other engagements?" In Leslie on Transport by Railway, 2nd ed. (1928), pp. 13-14, there is an interesting note on the manner in which the right to discriminate may be reserved. In the present case no evidence was tendered to prove whether the owners of any and what ships trading between Adelaide and other Australian ports filled the character of common carriers. The regulations cover all carriers, and, in so far as the regulations themselves were relied upon as constituting an inducement or persuasion on the part of the Common- wealth to shipowners to refuse to carry the plaintiff's goods, they may be considered as addressed to the inter-State carrying trade at large, among whom it may be supposed that there must be some ships reserving no right of discriminating amongst cargo owners. But when the plaintiff places reliance upon specific instances of refusals to accept his dried fruit as freight, it appears to me to be more difficult to assume without evidence that any one of the ships so refusing professed to be a common carrier. Judicial notice may be taken of many matters of notorious fact in relation to the course of inter-State commerce, but it cannot be assumed that any particular shipowner or, indeed, shipowners generally, have not, by reserving the right to discriminate sought to avoid the assumption of the character of common carriers. It might be sufficient, therefore, to say, upon this head of alleged liability, that the plaintiff's proofs fail, that is, unless the regulations in themselves, including the form of carrier's licence amount to an inducement to the carrying trade at large, sufficient for the principle of Lumley v. Gye (1). As to this last qualification or exception it is, I think, enough to say that I am not prepared to hold that any exercise by the Governor in Council of a supposed power to make regulations which the Parliament has purported to confer upon the Executive can amount to a commis- sion of a tort on the part of the Crown within the meaning of Part (1) (1853) 2 BE. & B, 216 [118 E.R. 749).

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IX. of the Judiciary Act. In a case involving so many other ques- _ tions I shall forbear from entering into a discussion of the grounds for this statement. For even supposing that some of the ships to which, but for the regulations, the plaintiff might have delivered his fruit for carriage or to which he, in fact, did deliver his goods for carriage, were engaged in the business of common carriers, I still think that the plaintiff is not entitled to succeed under this head of the cause of action which he bases on interference with him in his trade. The principle to which Lumley v. Gye (1) is now referred is no doubt wide enough to include within its protection civil rights which exist independently of contract. It may be at once conceded that for a third party, without justification or excuse, knowingly to procure a common carrier to refuse in breach of his duty goods tendered to him for carriage would amount to an actionable wrong. In Lumley v. Gye (1) itself Erle J. adopted the view that, just as the procurement of a tort was itself a tort, so it was wrongful to procure the breach of a contractual duty, and that the liability involved a principle of which liability for procuring a breach of contract of hiring was only an example or illustration ; a class of cases which he said "rests upon the principle that the procurement of the violation of the right is a cause of action " (2). In Mogul Steamship Co. v. MacGregor Gow & Co. (3) Bowen J. included among the things forbidden " the intentional procurement of a violation of individual rights, contractual or other, assuming always that there is no just cause for it." Lord Macnaghten in Quinn v. Leathem (4) placed Lumley v. Gye (1) upon " the ground that a violation of legal right com- mitted knowingly is a cause of action." In more than one respect, however, the elements of the cause of action are ill defined. Sometimes malice is said to be an ingredient ; but this seems to mean no more than that the defendant must have knowledge of the existence of the civil right or of the facts from which it arises and must act without lawful justification. What constitutes a lawful justification is a matter of some difficulty: See Glamorgan Coal Oo. v. South Wales Miners' Federation (5); Brimelow v. Casson (6); Winfield, Law of

(1853) 2 E. & B, 216 [118 E.R. 749]. (4) (1901) A.C. 495, at p. 510.

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I am quite unable to believe that an attempted enactment of the legislative organ of government can form any part of a wrongful act for which the Executive Government is liable under Part IX. of the Judiciary Act. The existence of the invalid statute may be regarded as a fact preliminary to and explanatory of the commission by the Executive of a tort, but it cannot, in my opinion, enter into the actual grounds of legal responsibility in tort. It must further be remembered that to constitute a cause of action procurement of a breach of duty must result in some actual breach of duty owing by the third party to the plaintiff. It is not enough that the defen- dant did all that would have been necessary to induce or procure the third party to break his duty, if he had been called upon to perform it. The duty to perform must have arisen and have been broken. This might be not without importance in the present case because, although not a few instances were proved of actual refusals to accept goods offered for sea-carriage, the greater part of the plaintiffs claim rested on his failure to accept or seek inter-State orders because he foresaw that he could not ship the goods. No evidence of the actual loss flowing from these specific refusals was adduced. It is true, however, that the measure of damages for procurement is not identical with the measure of damages appropriate to the breach of duty procured, and it appears that general damages may be awarded. In every instance where goods offered for inter- State carriage were refused by the carrier, the inducement consisted in a reminder that the plaintiff was not licensed and that under the Act and regulations, including the conditions prescribed for a carrier's licence, the carriage of his dried fruit was inhibited. Sometimes less was expressed or implied, but I do not think that any greater persuasion or inducement took place. There was, in other words, an appeal to the law as it was conceived to exist. The threat or inducement consisted in a tacit or implied intimation that the claims of the Government might be enforced by resort to legal process. I think it would be an extension of the principle upon which the procurement of breach of duty is made a tort to hold that it covers a mistaken assertion on the part of the Executive Government or its officers that under the law, as they understood it, it is the third party's duty to refrain from compliance with the

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I decide this part of the case against the plaintiff is that the Common- wealth incurs no liability for tort merely because A is induced to tefuse performance of what turns out to be in fact a civil duty to B by an intimation made to A by the officers of the Commonwealth that, under the law of the Commonwealth, A is not merely absolved from the performance of the duty but is forbidden under penalties to do what would amount to performance and, by doing it, would expose himself to prosecution; provided that the officers act honestly in the purported execution of their duty to maintain and enforce the laws of the Commonwealth and, perhaps reasonably, as, for instance, on the faith of a statute not yet held to be invalid. Even if the plaintiff overcame the other difficulties I have mentioned, this ground would be fatal to his claim for wrongful procurement of breaches of duty by common carriers. I do not think that a bona- fide assertion as to the state of the law and an intention to resort to the courts made known to the third party can be considered a wrongful inducement or procurement. The situation is simply that the Executive, charged with the execution of the law, under a bona- fide mistake as to the state of the law, proposes to proceed by judicial process. The courts are established by and under the Constitution for the purpose, among others, of determining whether the Executive is or is not mistaken in its view of the law which it seeks to enforce against the individual, and judicial process is the appointed means for bringing the question up for decision. To treat a proposal or threat to institute proceedings as a wrongful procurement of a breach -of duty is to ignore the fact that, assuming bona fides, the law always countenances resort to the courts, whether by criminal or civil process, as the proper means of determining any assertion of tight. In all other cases of procurement to be found there has been an element of impropriety, or of reliance upon some power or influence independent of lawful authority. An intention to put the law in motion cannot be considered a wrongful procurement or inducement, simply because it turns out that the legal position maintained was ill founded.

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separately as conversions, viz., two seizures in October 1932, one in December 1935 and two in April 1936. He particularized instances of threats to take proceedings of a judicial nature against him, but he placed no reliance in the particulars upon any specific act or communication by or on behalf of the Commonwealth, outside the regulations, as a threat to seize dried fruits which he might ship. The fact of the matter is that the supposed power of seizure was exercised sparingly and with hesitation, as well as spasmodically. At two periods, and two only, did the Commonwealth department actually resort to it, viz., October 1932 and in the period at the end of 1935 and the beginning of 1936. The plaintiff was by no means appalled by the possibility or the prospect of the exercise of the supposed power of seizure. That did not compel him to refuse business or abstain from shipment. His difficulty lay in the refusal and unwillingness of the shipping companies to carry his goods. It is true that, in a letter written on learning of the seizure made on 9th December 1935, the plaintiff is found expressing himself as unable to fulfil further orders from the buyer concerned because the goods would be exposed to seizure. In dealing with the causes of action in conversion, it will be necessary to give the details of the transaction. It is enough for present purposes to say that the buyer was a firm called J. L. Irwin & Co. of Brisbane and that 200 boxes of sultanas were seized while on their way to Brisbane. Further orders which the firm had given, or was prepared to give, covered about 1,085 boxes of sultanas. On 18th December 1935 the plaintiff wrote to the firm thanking them for their orders, but stating that, owing, in effect, to the seizure of goods, he was unable to execute them. This might look as if in respect of the 1,085 boxes, a quantity which comprised his full stock for the time being of sultanas of that grade, the plaintiff might bring himself within the statement of Sir John Salmond. But the correspondence which ensued between the plaintiff and Irwin & Co. shows that, notwithstanding his gloom on 18th December, the plaintiff was able to sell the sultanas, a sub- stantial portion going to Irwin & Co. themselves. In this portion the 268 boxes seized on 6th April 1936 were included. They were

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Clarton met the draft as afterwards. The burden of proving his title to the goods seized is placed by the law upon the plaintiff. It lies upon him from the beginning of the case to the end. By proving that he was entitled to the goods a short time before the seizure he gave evidence sufficient to support the issue but he did not throw the legal burden of proof over on to the other side. In the absence of further evidence or other circumstances, the conclusion that he was entitled to the goods at the moment of seizure would necessarily follow from the evidence, but as a conclusion of fact, not as a pre- sumption of law. It is at best a presumption of fact by which as a matter of reasoning it is made unnecessary to prove from minute to minute the continuance of an existing state of things : Cf. Thayer, Preliminary Treatise on Evidence (1898), at p. 348. But, once it appears that the goods had been placed in the hands of a carrier for delivery to Clarton in fulfilment of a contract for sale, that they had arrived at their destination four days before and that in the ordinary course of dealing it might be expected that Clarton would have obtained the title to the goods, a conclusion based on the presumption of continuity becomes unreal. When it further appears that on the morning of the day of seizure the property had passed, want of proof exactly when the seizure took place seems to me to make it impossible to say affirmatively that the plaintiff was entitled to the goods at the time of seizure ; the consequence being that the plaintiff fails to sustain finally the burden of proof laid upon him. In any case there is some ground for regarding the probability of the seizure having taken place after the payment as preponderating. Payment of the draft was made in the morning. A telephone con- versation between the secretary of the department at Canberra and the secretary of the board at Sydney took place on 5th October before the seizure was finally resolved upon. Notice of the seizure was served upon Clarton as owner, whose address and connection with the goods were known some days before. Clarton's clerk at once said that the draft had been taken up already. A telegram from Clarton informing the plaintiff of the seizure was lodged at five minutes past four in the afternoon. An attempt was made on the part of Clarton to stop the cheque, and, on the ground that the

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appropriated to the contract, but I do not think that the ship- - ment was itself an unconditional appropriation. The difficulties experienced in transhipping goods had led the plaintiff, in effect, to place the entire control of the goods in the hands of Youngs - Ltd., Sydney, and to authorize them to act upon instructions from the buyer. It may be said that for payment by the buyer the plaintiff was content to rely on J. L. Irwin & Co.'s personal credit. He made the draft payable seven days after sight to allow for the arrival of the goods in Brisbane. But, on the other hand, this course was taken as a matter of convenience because of the transhipment and the necessity of using a Sydney shipping agent for that purpose. It was a substitute for the practice under which ownership was transferred when the bill of lading was delivered up in exchange for acceptance of a draft or payment. It seems quite clear that neither party supposed that, if the goods were seized before they reached Brisbane, the loss would fall on the buyer, and this appears to me to be a material consideration. Sec. 18, rule 5 (2), of the Sale of Goods Act 1893 (Eng.) says that, where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee for the purpose of transmis- sion to the buyer and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract. If these conditions are fulfilled, then, according to sub-rule 1 of the same rule, the result is that the property passes to the buyer. But, in common with other rules of the section, rule 5 is only a rule for ascertaining the intention of the parties unless a different intention appears. The real question is whether, looking at the manner in which the course of the particular transaction arose, prior practice, the expectation of the buyer that another course might have been followed and the manifest belief of both parties that seizure meant that the loss would fall on the plaintiff and the price would not be payable, an intention to the contrary should not be imputed. A difficulty is to fix on another point at which the property should pass. Did they intend it to pass on payment? That might take place before arrival and the goods might be seized on the wharf, though, no doubt, they hardly thought there would be much danger once they reached Brisbane. Receipt of the bill of lading would be

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the condition contemplated. It is, I think, necessary to recognize that both parties regarded the transaction as necessarily outside the course of ordinary commercial dealing. But, up to the point when the goods would arrive in Sydney, the plaintiff proceeded in accord- ance with practice. At that point he looked to Youngs Ltd. to do what they should think proper for the purpose of getting the goods into the hands of the buyer. It is hardly conceivable that Youngs Ltd., a company forming part of an organization employed by James, were unaware that they had been invoked in the course of avoiding the dried-fruits boards. They were, no doubt, at liberty to act on the buyer's instructions. But they might not receive any instruc- tions from him. I think that, on the whole, the proper inference is that there was no intention that the property in the goods should pass, at all events up to the time when Youngs Ltd. should, either by the manner in which they reshipped the goods and dealt with the bill of lading on reshipment, or by shipping the goods in accord- ance with special instructions from the buyer or otherwise, place the goods at the disposal or under the control of the buyer. So far as the parties adverted to the relation between payment of the price and ownership of the goods, they were actually concerned only with the fact that the price would not be payable if the goods were seized. There was, therefore, no intention to pass the property immediately on shipment, or at any earlier time than was usual or than the exigencies of the transaction might require. I think that the truth was that Youngs Ltd. were put in the place of the seller to carry out the work of reshipment, acting, just as the seller would, under the buyer's instructions, if he gave any. When the bill of lading was sent to them by the plaintiff's representative it was the plaintiff's bill of lading. The goods were conceived as still at the plaintiff's tisk, the chief risk being that of seizure.

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sultanas were sold to J. L. Irwin & Co. made payment of the price dependent on the course taken by or on behalf of the Commonwealth and the officers of the dried-fruits boards. The 268 boxes seized formed part of the 1,085 boxes still in the hands of the plaintiff when he wrote to J. L. Irwin & Co. on 18th December 1935 expressing his inability to deliver them because of the seizures. The rest he sold nevertheless and succeeded in delivering it to the buyers. But, as the 268 boxes were seized and, under the implied term I have mentioned, the seizure would mean that the price became irrecover- able, the sale of the 268 boxes left the plaintiff in the same position as if, in deference to the seizure of 9th December 1935, he had altogether given up the idea of marketing the parcel. In other words, even assuming the property in the 268 boxes did pass to J. L. Irwin & Co., the sale did not give the plaintiff a clear right to a money sum which would preclude him from complaining that in the previous December he had lost the sale of the fruit owing to his fear of seizure. It would follow that, in respect of this parcel, by reason of its subsequent seizure and the plaintiff's loss of the price, it would be necessary to return to the question whether the plaintiff could recover on the ground of the threat of seizure of further consignments implied in the seizure of 9th December 1935. I think that such a threat was implied by the seizure of that date. The letter of 18th December 1935 is perhaps enough to support a finding that, for the moment, the plaintiff did defer to the threat. I do not think that it was long before he again began to look for means of transport. But, as a mere logical possibility, it might have been long enough to miss an opportunity which, if taken, would have resulted in the goods reaching the hands of J. L. Irwin & Co. It appears that James himself did not become aware of the seizure until on, or shortly before, 18th December and that, by 27th December 1935, he was once more looking for an opportunity of dispatching dried fruit to J. L. Irwin & Co. On that day he advises them of a boat, in fact the James Cook, leaving Adelaide on 3rd January 1936. In the event, as I have already stated, he sent 200 cases by this boat and another 150 by the Abel Tasman, which sailed on Ist February 1936, shipments which escaped seizure.

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Judgment (256 paragraphs)