Shrimpton v Commonwealth [1945] HCA 4

Shrimpton v Commonwealth [1945] HCA 4 - HCA 1945 case summary — Zoe

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Dean KC. (with him P. D, Phillips), for the plaintiff. The Regulations give the Treasurer a discretion which is not limited in iy way. He can refuse his consent for any reason he thinks fit, or without giving any reason at all. His reason may have no relation whatever to defence; thus, the Regulations, in conferring such a discretion, go beyond any purpose of defence. There is nothing in the Regulations showing a purpose related to defence which would enable the phrase " absolute discretion " to be read down so as to confine it to defence purposes. Regulations conferring a discretion should disclose the conditions upon which the discretion is to operate : See Melbourne Corporation v. Barry (1); Country Roads Board v. Neale Ads Pty. Ltd. (2); Swan Hill Corporation v. Bradbury (3). If the Regulations are capable of being read in some limited sense, so that they are restricted in some manner to defence purposes, the condition relating to Commonwealth bonds is, nevertheless, invalid. It has no relation to defence ; it is not even related to dealings in Jand, which, on any limited construction, must be supposed to be the subject matter of the Regulations. Therefore, on any conceiv- able construction of the Regulations which would bring them within the defence power, the condition is beyond their scope and is unauthorized by the Regulations themselves. As to the construc- tion of the Regulations, if they are to be read down to bring them in some way within the defence power, the discretion given to the _ Treasurer might be limited to the control of prices, or limited only by the defence power, so that anything could be done which the 'Treasurer considered would advance defence purposes. Of these two views, it is submitted that the former is the correct one; that, looking at the Regulations as a whole and endeavouring to ascertain their scope and object, the true conclusion to be drawn is that they _ concern themselves with fixing prices or values - the amount to be _ paid by way of purchase money for the purchase of land. So con- -strued, it is not contended that the Regulations would be beyond the defence power. In the other view, it is submitted that the condition as to the bonds would still be invalid. There can be no defence purpose in relation to the purchase of land which would title the Treasurer to impose this condition. It might be possible

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on which is erected a dwelling-house has informed the Treasurer that he intends to live in the dwelling-house, the applicant shall not, without the consent in writing of the Treasurer, let the land." _ This regulation suggests, though it does not actually provide, that _ the Treasurer may inquire whether a house is intended to be used for the purposes of a residence for the purchaser, and that he may take the reply to his inquiry into consideration when he is deciding whether or not to give his consent to a proposed purchase. When _ the Treasurer has before him particulars as to the matters mentioned, _ heis then in a position to determine whether, having regard to these matters, consent should be given. It is in relation to these considera- _ tions that the Treasurer has an absolute discretion - to say "' Yes" or "No," or to impose conditions. There is no indication in the Regulations that, in a case to which the Regulations apply, the _ Treasurer is to take into account any matter other than the proposed terms of purchase, the estimated value of the land and, possibly, in the case of a dwelling-house, the proposed use of the land. In _ McCartney's Case (1) it was held that a discretion of one govern- mental agency (a transport board) should not be exercised for the purpose of giving effect to the administrative policy of another _ governmental agency (the Victorian Railways Commissioners). So, e, it should be held that the Treasurer should not, in determining hether or not he should consent to a particular land purchase, exercise his discretion in accordance with matters which are com- _ pletely irrelevant from the point of view of the Regulations, e.g., the desirability of either encouraging or preventing transactions in Commonwealth securities. The Regulations give the Treasurer no 'power to ascertain or to investigate the capacity of the proposing _ purchaser to make or to maintain an investment in Commonwealth ies. The relevant regulations deal only with purchases of land. It is an improper use of the discretion entrusted to the _ Treasurer by the Regulations to use them for the purpose of control- ling dealings by land purchasers in other property. _ Thus, in my opinion, the condition which the Treasurer has sought to impose in the present case with respect to the deposit for a period of Commonwealth bonds is not authorized by the Regula- tions. For this reason, the plaintiff is, in my opinion, entitled to _ adeclaration that, upon the true construction of the Regulations, the _ Treasurer is not empowered to require compliance with the condition stated in his letter relating to the deposit of Commonwealth securities. (1) (1935) 52 C.L.R. 383. VOL, LXIX. 41

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This conclusion makes it unnecessary for me to deal with other arguments submitted for the plaintiff upon this aspect of the case. It is necessary, however, to deal with the other condition preseribed - by the Treasurer's letters, namely, that the whole of the purchase price should be paid in cash without borrowing in any form. The plaintiff claims a declaration "that, upon the true construction of the said Regulations, the Defendant Joseph Benedict Chifley as Treasurer of the Commonwealth is not empowered to require com- pliance with the conditions stated in his letter of the 18th September 1944 as a condition of granting his consent to a purchase of land." In my opinion, the condition as to the payment of the purchase money in cash, without borrowing, is a condition which relates to the terms of the proposed transaction of purchase, and is a condition which the Treasurer may properly impose under the Regulations. It was argued, however, for the plaintiffs that the Regulations themselves were invalid because not authorized by the National Security Act. This Court has already held that the National Security Act authorizes the making of regulations fixing the prices of goods and services: See Victorian Chamber of Manufactures v. The Com- monwealth (Prices Regulations) (1). The reasoning which justifies the control and fixation of prices of goods and charges for services under the defence power with the object of preventing or limiting speculation and preventing dangerous inflation also, in my opinion, justifies the fixation and control of the price of land for the same purposes. In the case of goods and services, prices and charges can be fixed in respect of classes. In the case of land, any sensible system of controlling prices must deal with individual transactions. Prices for individual pieces of land cannot be controlled in the same way as prices for classes of identical goods or charges for services. A consideration of the particular piece of land concerned is essential if an endeavour is to be made, upon any practicable system, to deter- mine what should be regarded as a proper price for the land. Thus a licence system is almost inevitable if prices of land are to be con- trolled - and there is, as I have already said, the same reason in time of war for controlling the price of land as for controlling prices of goods and charges for services. It was argued, and I agree, that reg. 6 (9) cannot be supported by these particular arguments. Other considerations based upon the war shortage of houses may possibly support such a provision. But reg. 6 (9) is, I think, severable from the other regulations, and, even if it were held to be invalid, it would not follow that the other regulations relating to the purchase

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of the particular regulation and the subject of defence. In the case now before us, I can find no real nexus between the defence of the Commonwealth and an absolute prohibition of the purchase of land ; nor do I think that the qualification of such a prohibition by a provision that the Treasurer may in his absolute discretion consent to such a purchase, unconditionally or subject to such conditions as he thinks fit, has the effect of bringing the condition within power, - This is merely saying that no-one in Australia may buy land unless the Treasurer thinks fit, and he may impose any conditions he likes, It has been sought to water down the plain language of the Regula- - tions in the hope of bringing them into some semblance of association with defence. It has, for instance, been pointed out that reg. 6 (4) _ enables the Treasurer to call for particulars of the proposed transac- tion, and reg. 6 (6) to call for a valuation ; and it has been contended that, because he is expressly authorized to obtain this information, he is impliedly prohibited from paying attention to anything else. From this somewhat remarkable non sequitur, the inference is invited that reg. 9 (2) does not mean what it says. " Absolute discretion" does not mean absolute discretion, it means limited discretion, and "such conditions as he thinks fit " means such conditions of a par- ticular kind as are elsewhere impliedly prescribed for him. Various authorities have been cited in an attempt to justify this method of construction, but none which is in point. I decline to spend time - on verbal gymnastics. If ever there was a case in which it was sought to confer an absolute and unfettered administrative discretion on a Minister, this is the case: Cf. Metropolitan Meat Industry Board v. Finlayson (1); Liversidge vy. Anderson (2); R. vy. Arch- bishop of Canterbury ; Ex parte Morant (3). 'The provisions as they stand are, in my opinion, clearly bad; and, having regard to what was said by the Chief Justice in Pidoto v. Victoria (4), they are clearly incapable of being read down to partial validity by any process of judicial interpretation. Whether they are capable of being remoulded into something supportable is a matter upon which it would not be proper for me to express an opinion, and I therefore express none. I would add, however, that, if an absolute prohibition against land purchase, qualified only by a provision authorizing the Treasurer to - consent to particular purchases subject to such conditions as he might think fit to impose, could be regarded as valid, the condition sought to be imposed in the present case could not be supported:

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in land is a matter which is related to the defence of the Common- wealth, and that the control must be wider than a mere control of prices. He submitted that the public in war-time fear inflation, that this creates a desire to invest in land; and that, owing to the tendency of the Australian population to congregate in towns, land, _ especially in towns and their suburbs, is likely to become in short _ supply, so that, if dealings are controlled merely in respect of price, there is a risk of larger and larger areas of this land being owned by a small rentier class, some of whom are purchasing for investment and others speculating on the probability of the rise in the value of land after the war. It may be that such a class exists, and that it is desirable that excessive areas of town and suburban lands should not be owned by such a class. That is a political question, on which it would be improper for me to express an opinion, but legislation of that nature is legislation upon a social subject which falls within the domain of State legislation. It has been said in this Court on several occasions that there must be a specific and not some vague general connection between the particular legislation and the prosecution of the war. This was well expressed by the Chief Justice in Victorian Chamber of Manufactures v. The Commonwealth (Industrial Lighting Regulations) (1) when he said of the Industrial Lighting Regulations (2) that : - " They do not deal with a subject which has any specific relation to the subject of defence, except in so far as all matters affecting the well-being of the community have such a relation, and that is a general and not a specific relation." In Farey v. Burvett (3) Isaacs J. pointed out that the defence power is a power to command, control, organize and regulate for the purpose of guarding against the peril to Australia the whole resources of the continent, living and inert, and the activity of every inhabitant of the territory. (The italics are mine.) But the question must arise, in every case, to what extent the resources of the continent, living and inert, are valuable for that particular purpose. The connection, for instance, between the necessity to promote industrial peace in industry, and, for that purpose, of controlling the wages

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Judgment (133 paragraphs)