Shanahan v Scott

Shanahan v Scott - [1957] HCA 4 - HCA 1957 case summary — Zoe

[9]

The Marketing of Primary Products Acts provide machinery for what is commonly called collective marketing. The products to which the process may be applied are those of agriculture, grazing, farming or kindred rural pursuits and if they are not all primary products the preparation they have undergone for consumption falls short of manufacture. Fishing is added but that is not presently material. Poultry farming is mentioned specifically. The plan of the Acts is to enable producers of any such product to cause the establishment of a marketing board by which the collective marketing of the product is to be conducted and the proceeds distributed among them. If a specified percentage of the producers of any such product desire that a board should be set up to market it they may petition the Governor in Council praying that by proclamation he should declare the product to be a commodity under and for the purposes of the Acts. The petition must name the product, state the number, being not less than three nor more than five, of members of the proposed board, and give enough information as to the board's powers to acquaint producers with their nature. These particulars must be published both in the Government Gazette and elsewhere. If the petition is granted a poll must then be taken of the producers, the question submitted being whether a marketing board should be constituted in relation to the commodity. If this question is decided affirmatively in the prescribed way a proclamation may then declare that a board shall be constituted in relation to the "commodity", the description which the "product" must now assume (see s. 6). A marketing board is then appointed in relation to the commodity composed of members one of whom is appointed by the Governor in Council and the others of whom are elected by the producers: ss. 7, 9 and 10. It may be dissolved as it was established, namely by petition followed by a poll and a proclamation: s. 12. When a product has been declared a commodity and a board has been appointed in relation thereto the Governor in Council may provide by proclamation that the commodity shall be divested from the producers and be vested in the board and that upon any of the commodity coming into existence it shall become vested in and be the absolute property of the board: s. 16. Although the Acts contain no territorial restriction it is evident that this provision must be confined to things coming into existence in Victoria and it is equally evident that the producers who vote and share in the proceeds of distribution are producers in Victoria.

[10]

Among the marketing powers of a board, however, is a power to arrange with any person (whether in or outside Victoria) for the sale and delivery of any of the commodity (whether produced in Victoria or elsewhere) to the board on such terms and conditions as are agreed on: s. 18 (1) (e). The provision for the distribution of the proceeds is expressed somewhat indefinitely, a not uncommon feature of clauses dealing with the division of proceeds found in statutory instruments for collective marketing and pooling. Out of the proceeds of any commodity disposed of by a board and other moneys received, the board is to make payments to each producer in respect of the commodity delivered to the board by him on the basis of (1) the net proceeds of the sale of all the commodity of the same quality or standard delivered to the board during or covering such periods of time as are prescribed, and (2) the proportion of the commodity delivered by the producer during such respective periods, regard being had to the circumstances (if any) that affect the amount of the payments: s. 23 (1). There are provisions excluding or exempting, or giving a board power to exempt, parcels of a commodity in particular cases. The vesting section, for example, is not to affect such portion of a commodity as is the subject of trade commerce or intercourse among the States or as is required by the producers thereof for, or is intended then to be used for, trade commerce or intercourse among the States: s. 16 (3). If a board refuses to accept a tender of part of the commodity vested in it that works a revesting in the producer: s. 19 (g). A board may exempt sales of the commodity direct to local consumers or retail vendors: it may exempt "small producers" and other sales and purchasers in its discretion. It will be seen, therefore, that in addition to parcels of a commodity entering Victoria from other States there may be quantities, no doubt relatively small, which have never formed the property of the board. A board is given a long list of powers covering all the operations, commercial, financial or otherwise, upon which it might find reason to engage in marketing its commodity. This list is preceded by general words as follows: - "Subject to this Act and for the purposes thereof, a board, after ensuring the supply and distribution of any commodity at reasonable prices to consumers thereof in Victoria, may sell or arrange for the sale of any commodity in relation to which it is constituted which is vested in or delivered or to be delivered to it and do all acts matters and things necessary or expedient in that behalf accordingly." No doubt it was thought that a board substantially elected by producers and charged with the duty of the collective marketing of their product should be placed under the check expressed by the words "after ensuring the supply and distribution of any commodity at reasonable prices to consumers thereof in Victoria". One of the specific powers conferred by the section says that a board may, so far as practicable, provide the commodity for consumption in Victoria and for its supply during any period of shortage to those places within Victoria wherein a shortage is experienced: s. 18 (1) (c).

[14]

Can this be supported as a regulation for or with respect to regulating storage within the meaning of s. 43 (1) (b) (iv)? One short answer is that a prohibition of cold storage and preservation subject to a power of consent is not "regulating" storage. It is a form of prohibition which operates as a complete prohibition unless consent happens to be obtained. But in any case the context of s. 43 (1) (b) (iv) suggests that it relates to the conditions, manner and occasion in which the various things the provision mentions are done rather than to the possibility of doing them at all. The question of the validity of reg. 44 therefore must, it seems, depend upon the opening words of s. 43 (1). Can reg. 44 be upheld as a regulation necessary or expedient for the administration of the Acts or for carrying out the objects of the Acts within s. 43 (1)? An attempt has been made in this judgment to state what appears to be the scope and purpose of the Acts. It is impossible to reduce the indefinite test supplied by the words quoted from s. 43 (1) to precision but they are not unlimited in their operation and in their actual application the decisions of this Court that have already been mentioned and the considerations they supply afford some guidance. If the regulation were concerned only with eggs vested in the board and with them while they were so vested, there could be no objection to it. For the purpose of the legislation is to give the board control of such eggs in all respects so that they can be marketed when, how and where the board decides conformably with the provisions of the Acts. To provide by regulation against chilling or preserving the board's eggs would be nothing but filling in a detail of the plan which the Acts describe. But the regulation extends to eggs with which the board has and can have nothing to do and it extends to those which the board has sold unconditionally. The complaint against this provision is that it means much more than an elaboration, a filling in or a fulfilment of the plan or purpose which the main provisions of the Act have laid down or, if the expressions be preferred, have "outlined" or "sketched". It means that an attempt has been made to add to the general plan or conception of the legislation and to extend it into a further field of regulation, namely that of the use, handling or disposition of eggs independently of the board's marketing of the eggs vested in or otherwise acquired by the board. Expressed in the phrase of Isaacs J. repeated by him in Carbines v. Powell [1] , the objection is that the regulation is an attempt not to complement but to supplement the plan of the legislation or, in another phrase used by that learned judge in the same case, that it is not confined to the same field of operation as the provisions of the Acts.

[21]

The scheme of the Act is, broadly, to set up for each declared product a board specially qualified to cope with the peculiar marketing problems of that product, and to confide to it, as far as practicable, the responsibility of regulating the marketing thereof. This is only to be done when the product has been declared by proclamation to be a commodity under and for the purposes of the Act, in response to a petition by a specified proportion of the producers, and when a poll of the producers has favoured, by a specified majority, the constituting of a board in relation to the commodity. After a similar process of petition and pool a board may be wound up and dissolved. A board is a body corporate, having the corporate name of "The (name of commodity) Marketing Board", and of its members one is appointed by the Governor in Council and the others are elected by the producers. The Minister is empowered by s. 15 from time to time to appoint a "Consumers' Committee" to represent the interests of the consumers of all the commodities "the marketing of which is for the time being regulated by marketing boards under this Act", with the duty of considering and reporting upon "(a) the effect of the operations of any marketing board upon the supply and distribution of any commodity; (b) the price or prices at which any commodity is sold to consumers; and (c) any bona fide complaints as to the effect of the operations of any marketing board on consumers of any commodity the marketing of which is for the time being regulated by such board." Such a board is referred to in s. 15 (3) as "the board regulating the marketing of the commodity". Section 18 (1), which will be mentioned again in a moment, prefaces a provision that a board may exercise a variety of powers by the phrase "after ensuring the supply and distribution of any commodity at reasonable prices to consumers thereof in Victoria" - thus creating a curious problem of construction which need not be investigated here, but underlining what the foregoing references show to be clear on the face of the Act, namely that its scheme is for the regulation by each board of the marketing generally in Victoria of the commodity in relation to which the board has been set up.

[26]

The commodity concerned in this case is one the marketing of which is notoriously affected by special considerations. Its principal commercial value is as an article of food or as an ingredient in the manufacture of articles of food. Eggs, because of their proneness to fairly rapid deterioration, must be consumed within a short period after production, unless in the meantime they are chilled, subjected to preservative treatment or pulped. If chilled or preserved, they are not as much in demand for many culinary purposes as if fresh, but are suitable for other such purposes as well as for some purposes of manufacture. (Egg pulp, of course, serves its own separate purposes.) Possibly the greatest single complicating factor in the task of regulating the marketing of eggs is that the volume of production fluctuates considerably. Times of glut occur, and fresh eggs (as I shall call eggs not chilled or preserved) which are in excess of the demand may then be stored by chilling or preserving. Times of scarcity are also recurrent, and then the unsatisfied demand for fresh eggs may be met, to some extent at least, by chilled or preserved eggs. It must be a constant problem in the marketing of eggs to decide how much of the supply of fresh eggs which is available for the time being it is expedient to put on the market for immediate consumption, and how much ought to be chilled or preserved to meet future demand. The Act provides (in ss. 33 and 34) for the collection and dissemination of information, much of which is relevant to this problem. When there is a glut in the State generally or in particular parts of it, the Board, if its regulation of the marketing of the commodity is to be efficient, will have to decide from time to time what portion of the fresh eggs vested in it should be withheld from the market, and in doing so it must be able to make reasonably reliable forecasts, in the light of statistics and experience in the trade, of the extent to which fresh eggs outside its control will continue to supply the market or will be put into cold storage or preserved. What is perhaps more important, the board in making its decisions must be able to depend upon the fresh eggs which it releases to the market being applied in meeting the demand for fresh eggs; for its efforts will be stultified if eggs which it elects not to chill or preserve are going to be chilled or preserved by other persons, and so diverted from satisfying the demand for fresh eggs. Likewise when there is a scarcity, the board must decide how far to supplement the available supply of fresh eggs by releasing chilled or preserved eggs from its stores; and here again it must be able to depend upon its expectations being fulfilled as to the extent to which fresh eggs which it either has never acquired or has released for consumption will satisfy the demand. At all times the purpose of efficiently regulating the marketing of eggs, fresh, chilled or preserved, in varying conditions of supply and demand, requires that the board shall be in a position to prevent or allow, in the exercise of a discretionary judgment, the diversion of fresh eggs away from immediate consumption.

At a glance

Court

Decision date

Before

Source

Judgment (28 paragraphs)

Parties