Title Lid v Boge Management y Saeko) 'Chen

Title Lid v Boge Management y Saeko) 'Chen - [1945] HCA 49 - HCA 1945 case summary — Zoe

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of this argument, was the managing director of the appellant com- pany. Without that admission, there would not have been estab- lished any case whatever as to what was the price for substantially identical goods at the relevant date under Prices Regulation Order No. 1015. A managing director, or any agent, unless specially authorized so to do, has no authority to make an admission binding his principal, except in relation to a transaction that he had authority to carry out. Crowther had no such authority. The mere fact that he was the managing director of the company did not authorize him, in respect of a transaction long since passed, to make an admis- sion binding the company in respect of an investigation which was being made as a prelude to a prosecution. Except, perhaps, when questioned under reg. 17 of the National Security (Prices) Regulations, a managing director has no authority to make an admission in relation to past transactions. Crowther was not interrogated under that regulation. The questions were directed to him in his own personal capacity. The answers to those questions are admissible only as against him (Ex parte Gerard & Co. Pty. Ltd.; Re Craig (1); see also Casey v. Wentworth (2)). The tendering of the appellant company's articles of association did not bring the admission within that case or within Butcher v. Longwarry & District Dairymen's Co-operative Association Ltd. (3). There is a vital distinction between this type of matter and a person dealing with a company in the ordinary course of business, such as contracts or civil matters, on principles which are well developed by the Court, which entitle him to assume that everything has been done to give an officer of the company power to exercise the authority he pretends to exercise. No person can bind a company except in relation to a transaction which he is then carrying on and has authority to carry on: Hals- bury's Laws of England, 2nd ed., vol. 1, p. 290, par. 476. An authority to do something is limited to the doing of it and does not extend to making admissions thereafter to bind a principal thereafter as to how it was done: Restatement of the Law, " Agency," par. 286. The authority to bind must be actual and not merely implied. [Srarxe J. Wilson v. Church (4) seems to show that in civil proceedings rules cannot be carried to the extent pressed for by you.] The appellant Crowther had no authority to make statements in respect of past transactions which have terminated, particularly statements which criminally involved his principal, the appellant company. In dealing with criminal matters, it is not a question of

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Ex parte Zietsch ; Re Craig (4) and Ex parte Gerard & Co. Pty. Ltd. ; Re Craig (1) show that, if there is not marked out to persons to whom the Order is directed the extent of their duty in sufficiently clear terms, the Order is bad. The expressions " directly incurred" in the definition of " cost" in par. 2 of the Order, and " substantially identical" in par. 3, are ambiguous and are not sufficiently clear to the persons to whom the Order is directed. The Order is not a good exercise of the powers conferred by reg. 23 (1) (a), (b) of the National Security (Prices) Regulations. It is not a price-fixing order, it is a fiscal order. The purported fixing of prices is capricious. It is evident that an inquiry was not made prior to the said fixing of prices. The words " substantially identical goods . . . on terms and conditions substantially identical " in par. 3 of the Order are too indefinite to be an exercise of the power conferred by reg. 23. Variations in goods and in terms and conditions are limitless. The actual facts in the case establish a variation between the terms and, conditions relating to the subject sale and the terms and conditions relating to the alleged comparable sale. The Order should be sufficiently clear to give traders a rule by which they can determine with reasonable certainty the price or prices they are permitted to charge. The respondent has not discharged the onus of proving beyond a reasonable doubt that the terms and conditions of the respective sales were " substantially identical." Paragraph 4 of the Order is bad and is not severable, therefore the Order is bad in its entirety. To provide that the cost of a service to a person shall be the price of that service is not a fixation of price. The words "customarily allowed " in par. 6 of the Order are too uncertain to mark out the content of the obligation to the person to whom it is directed. Similarly, the words " primary products" in par. 7 are too uncertain and indefinite (Producers' Co-operative Distributing Society Ltd. v. Commissioner of Taxation (N.S.W.) (5) ). When the

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of the appellant Reginald Arthur Crowther, for offences against the Black Marketing Act 1942. The company was charged for that on 19th August 1943 at Townsville it was guilty of the offence of black marketing, in that it did sell goods, namely one quarter cask of port containing thirty-eight gallons of Berri Ruby Port, to Leandro Cattana for the sum of £28 15s., a greater price than the maximum price, namely £20 7s. 2d., fixed under the National Security (Prices) Regulations for the sale of the said goods. The charge was laid under s. 4 of the Act. Section 4 of the Act provides that any person who does any act or thing, or is guilty of any omission or conduct, which constitutes black marketing within the meaning of s. 3 shall be guilty of the offence of black marketing. Section 3 includes a provision that "black marketing" means, inter alia, selling any goods at a greater price than the maximum price fixed by or under "the Regulations" (that is, regulations made under the National Security Act 1939 as amended) for the sale of those goods. Crowther was charged with the offence of black marketing for that on the same date he was the managing director actively concerned in the conduct of the business of the company which was on the said date guilty of the offence of black marketing alleged in the complaint against the company. This charge was laid under s. 5 of the Act, which is in the following terms : - " Where a person guilty of the offence of black marketing is a body corporate, every person who, at the time of the commission of the offence, was a director, officer or servant actively concerned in the conduct of the business of the body corporate shall be deemed guilty of the offence, unless he proves that the offence was committed without his know- ledge and that he used all due diligence to prevent the commission of the offence or of offences of the same character." It was proved that Crowther was a director of the company, and that he managed the business of the company. The sale to Cattana, which was alleged to be an offence against the Act, was actually made by him. Accordingly, if the company was guilty of the offence charged against it, Crowther was guilty of the offence charged against him. The company was fined £2,000, and ordered to exhibit notice of the conviction upon its premises - Black Marketing Act, s. 12. Crowther was sentenced to imprisonment for four months with hard labour.

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tions, and not to making admissions in respect of them after they were completed. But Crowther, as the manager of the company, must be regarded as having authority to deal with any inquiry into the affairs of the company in relation to a possible breach of the law by the company. He was the person who would naturally represent the company if any inquiry were made into such matters. See Kirkstall Brewery Co. v. Furness Railway Co. (1), where it was suspected that a railway porter had stolen a parcel which was in the custody of the railway company. The stationmaster who had the sole management of the station from which the parcel was stolen made statements to a police officer who was inquiring into the matter, and it was held that his authority extended to putting the police in motion in order to secure the stolen goods; and because he had this authority the statements made by him to the police were admissible in evidence against the company. In the present case, the authority of Crowther was more extensive than the authority of the stationmaster in relation to the company and was more extensive than that of a person who held only the position of director of a company. He was also the general manager of the business of the company. He was not an agent whose authority in relation to a past transaction was limited to the carrying out of that transaction ; he had general authority to act in and in relation to the business of the company, and therefore to deal with investigating officers in any matter concerning that business. In Ex parte Gerard & Co. Pty. Ltd. ; Re Craig (2), upon which the appellant company relied, it was held that when a director was answering questions under compulsion he was not acting in the usual course of business of the company or in the course of a business transaction of the company. In the present case, the questions were not answered on compulsion and the director was also the manager of the whole business of the company. If he could not bind the company by an admission, no-one could do so. It has never been held that only a formal act by the board of a company can bind the company by way of admis- sion. In my opinion, the objection to the admissibility of the evidence fails.

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of "cost"? in relation to services. It is therefore argued, and with much weight, that, as far as services are concerned, the Order does not fix any rate in the case of the services dealt with by clause 4, because the term "cost" is uncertain unless its meaning can be determined by other provisions in the relevant legislation: See Vardon v. The Commonwealth (1) and Bendiven v. Coleman (2). Clause 6 allows certain price or rate differences to be observed "where a seller or supplier of any goods or services has customarily _ allowed any difference in price or rate" in certain cases. It is contended that the word "customarily" is so vague that it is in effect meaningless. In my opinion, there is no substance in this objection. The question whether an allowance has customarily been made can be determined as a question of fact, although such a determination may involve a decision upon matters of degree. Clause 7 provides that the Order shall not apply to perishable - primary products, including specifically mentioned products. It is - urged that the term " primary products" is so vague as, in effect, - to be incapable of application. Here again there is no difficulty in determining that certain things are primary products: There may be much argument as to whether other things are or are not primary products, but once again, in my opinion, any difficulty in the application of the term does not affect the question whether or not the provision is so vague as to be incapable of forming a basis for a legal rights or duties. Clause 8 provides that, notwithstanding anything contained in the Order, the Commissioner fixes and declares the maximum price and rate at which any goods or services specified in a notice given in pursuance of the clause may be sold or supplied by any person to be such price or rate as is fixed by the Commissioner by notice in writing to that person. The Prices Regulations, under which the Order is made, provide in reg. 23 that the Commissioner may, by order published in the Gazette, (a) fix and declare maximum prices, or (6) declare that the maximum price at which goods may be sold by any person shall be such price as is fixed by the Commissioner by notice in writing to that person, and there is a similar provision - with respect to a body or association of persons. It is contended that these powers are mutually exclusive, that is, that the Commis- - sioner may (a) fix and declare a maximum price by order in the Gazette, or (b) declare that the maximum price shall be that which - is fixed by notice in writing, but that he may not do both (a) and (6) in the same order. It is said that that has been done in the Order in question, because clauses 3 and 4 fix prices in the manner provided (1) (1943) 67 CLR. 434, (2) (1943) 68 CLLR. 401.

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It is further objected that under reg. 23 (1) (b) the name of the person in respect of whom this particular power is exercised must appear in the order published in the Gazette; that clause 8 of the Order does not name any person, and is therefore invalid. (It may be observed that, if the second objection is well-founded, the first objection fails, because clause 8 would not then be an actual exercise of the power contained in reg. 23 (1) (b) simultaneously with the exercise of the power contained in reg. 23 (1) (a).) These points have been considered by the Full Court of the Supreme Court of New South Wales in Ex parte Byrne; Re King (1), where both were decided adversely to the contention now advanced. I do not find it necessary, however, to determine whether or not _ the objections to the validity of clauses 4, 6, 7 and 8 are well-founded, though, as I have said, I can see no ground for any objection to clauses 6and7. In my opinion, these clauses are all severable from clause 3. The Acts Interpretation Act 1901-1941, s. 46, provides that "' where an Act confers upon any authority power to make, grant or issue any instrument . . . (b) any instrument so made shall be read and construed . . . so as not to exceed the power of that authority, to the intent that where any such instrument would, but for this section, have been construed as being in excess of the power conferred upon that authority, it shall nevertheless be a valid instrument to the extent to which it is not in excess of that power." In my opinion, the application of this provision to the Prices Regulation Order produces the result that, even if clauses 4, 6, 7 and 8 are invalid, the validity of clause 3 is unaffected. These provisions are not connected as a matter of legislation, whatever may be said as to their inter-relation from the economic point of view. It is obviously possible to fix the price of goods without fixing the price of services, and to fix the price of services without fixing the price of goods. In the past, the prices of many services have been fixed; for example tram and railway fares, and other charges made to the public have been fixed, whereas before the war it was not usual to fix the price of goods. It is entirely a matter of policy whether the prices of all goods and all services or of all goods and no services or of all services and no goods or of some of each only should be fixed. The Acts Interpretation Act contains a declaration that provisions which are valid should be held to be valid notwith- standing the presence in the instrument in question of invalid provisions. In this case, no difficulty arises from the use of general

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The basis of the offences constituting black marketing is the contravention of regulations under the National Security Act. In effect, the Black Marketing Act gives the name " black marketing "" to certain descriptions of conduct already penalized under the National Security Act as a result of the operation of regulations and orders thereunder and affixes graver penal consequences to that conduct when the conviction is obtained for the offence so named on prosecution under the Black Marketing Act. The punishment for the offence of black marketing, if the conviction is summary, is imprisonment for not less than three months and not more than twelve months or, in the case of a corporation, a fine of not less than £1,000 and not more than £5,000; if the conviction is upon indictment, the punishment is imprisonment for not less than twelve months, or, in the case of a corporation, a fine of not less than £10,000 (s. 4 (3)). But, for the same conduct, amounting to an offence under the regulations, the National Security Act prescribes as punishment, on summary conviction, a fine of not more than £100, or imprisonment for a term not exceeding six months, or both, and, upon conviction on indictment, a fine of any amount or imprison- ment for any term or both: s. 10 (3) of the National Security Act. Section 8 of the Black Marketing Act authorizes the prosecution of the offender under either law but enacts that he shall not be liable to be punished twice for the same offence. It will thus be seen that it rests with the responsible authorities, by choosing in what form an offender shall be prosecuted, to decide in respect of which of the four scales of punishment he shall be exposed to liability. Recognizing this fact, s. 4 (4) provides that the offence of black marketing shall not be prosecuted without the written consent of the Attorney-General after report from the Minister administering the regulations in relation to which the offence was committed and advice from a committee appointed by the Attorney-General and consisting of officers representing certain departments. It is con- tended that the situation that results from these provisions amounts to an attempt to infringe upon the judicial power of the Common- wealth and that, accordingly, the material parts of the enactment are void. The argument is based upon the dissenting judgment of Jordan C.J. in Coorey's Case (1), which fully sets out the considera- tions adduced in support of it. I have had the opportunity of study- ing his Honour's reasons and those of the two learned Judges who

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The appellant company was charged with the offence of black marketing. This offence is defined by ss. 3 (a) and 4 (1) of the Black Marketing Act 1942. The alleged incriminating sale was a cash sale of Berri Ruby Port. The company made this sale on 19th August 1943 at 12s. 6d. per gallon. It was necessary for the prose- cutor to prove that this price exceeded the maximum at which the company was permitted by the Prices Regulation Order No. 1015 to sell Berri Ruby Port for cash on the above date. The prosecutor relied upon a sale of port wine on 4th March 1943 to prove that such - maximum price was 8s. 1d. per gallon. On this date, the company sold port wine to a buyer named Mcllrath at 8s. 1d. per gallon. There is no evidence that this was not a cash sale: in the absence of such evidence it does not seem open to doubt that it was a cash sale. It is necessary for the prosecutor's case that it was the com- pany's last sale of Berri Ruby Port prior to 12th April 1943. The invoice describes the goods sold to MelIlrath as port wine. Proof that it was Berri Ruby Port was furnished by the Commonwealth officers who conducted an investigation into the company's obsery- ance of the above Prices Regulation Order. This evidence was that Crowther, the company's manager and managing director told them in the course of such investigation that the port wine so sold to MclIlrath was Berri Ruby Port. It was argued that evidence that Crowther said that the wine was Berri Ruby Port was not admissible because he had no authority to make an admission which would be binding on the company about a past transaction. I do not agree with this argument. It was within the scope of Crowther's duty and authority as the manager of the company's business to communi- cate to the officers making the above investigation what information he had as to the identity of any goods which the company sold in the past to enable them to ascertain the maximum price at which the company was permitted under the above Prices Regulation Order to sell such goods: Cf. Kirkstall Brewery Co. v. Furness Railway Co. (1).

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Article 42 of the articles of association of the appellant company enables the board of directors to confer upon a managing director authority to exercise all the powers of the company. In Biggerstaff y. Rowatt's Wharf Ltd. (2) Lindley L.J. said: " What must persons look to when they deal with directors? They must see whether according to the constitution of the company the directors could have the powers which they are purporting to exercise. Here the articles enabled the directors to give the managing director all the powers of the directors except . . . The persons dealing with him must look to the articles, and see that the managing director might have power to do what he purports to do, and that is enough for a person dealing with him bona fide." More recent cases appear to have somewhat restricted this statement of the law. The most recent English case is, I think, British Thomson-Houston Co. Ltd. v. Federated European Bank Ltd. (3), where these cases are discussed, and I agree with Tucker J. in Clay Hill Brick & Tile Co. Ltd. v. Rawlings (4), that they were correctly summarized by the reporter when he said that they show that "if the articles merely empower the directors to delegate to an officer authority to do the act, and the officer purports to do the act, then - (a) if the act is one which would ordinarily be beyond the powers of such an officer, the plaintiff cannot assume that the directors have delegated to the officer power to do the act ; and if they have not done so, the plaintiff cannot recover . . (b) if the act is one which is ordinarily within the powers of such an officer, then the company cannot dispute the officer's authority to do the act, whether the directors have or have not actually invested him with authority to do it" (5). I agree with Lowe J. in Butcher v. Longwarry and District Dairymen's Co-operative Association Ltd. (6), that a company must have power to make admissions in relation to its business, and that the board of directors of a company, in whom the management of the business is vested by the articles, must have power to make such admissions on its behalf. It was, therefore, a power which the board of directors of the appellant company was authorized to confer upon Crowther, and one which a stranger

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previously to 12th April 1943, and par. 4 fixing prices and rates for goods and services not sold or supplied previously to that date. It is also difficult to uphold the validity of the challenged portion of par. 4. But reg. 22, which authorizes the Minister by separate declarations to declare any goods or services to be declared goods or services for the purposes of the Regulations, and reg. 23, which authorizes the Commissioner to fix prices and rates with respect to any declared goods or services, clearly contemplate that all or any goods or all or any services, in their totality or separately, may have their prices and rates declared and fixed. Further, the Acts Interpretation Act 1901-1941, s, 46 (6), provides that, where any Act confers upon any authority power to make any instrument, any instrument so made shall be read and construed subject to the Act under which it was made, and so as not to exceed the power of that authority, to the intent that where any such instrument would, but for this section, have been construed as being in excess of the power conferred upon that authority, it shall nevertheless be a valid instru- ment to the extent to which it is not in excess of that power, while the National Security Act 1939-1943, s. 5 (5), provides that the Acts Interpretation Act shall apply to the interpretation of any orders made in pursuance of the regulations in like manner as it applies to the interpretation of regulations and for the purposes of s. 46 of that Act those orders shall be deemed to be Acts. The reference to Acts in the sub-section is intended, I think, to make orders notional Acts for the purposes of the second limb of s. 46 (a). In these circumstances, it seems to me that if par. 3 fixes and declares a price within the meaning of the Regulations, s. 46 (b) must operate to preserve its validity, although other parts of the Order may be invalid. It is clearly severable from these other parts, and will con- tinue to operate in the same manner with respect to the goods and services to which it applies as it would have done if the Order as a whole had been valid.

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Reference was also made to the recent decisions of the same Supreme Court in Ex parte McMillan; Re Craig (1) and Ex parte Byrne ; Re King (2). 1 adhere to the view expressed in Vardon v. The Commonwealth (3) and Arnold vy. Hunt (4) that the legislation is contained in the Prices Regulations, and that the declaration and fixation of prices of goods and rates of services by the Commis- sioner is an executive act: Cf. R. v. City of Westminster Assess- ment Committee; Ex parte Grosvenor House (Park Lane) Ltd. (5), where Scott L.J. said that the assessment committee, except when performing certain quasi judicial functions, "is an executive or ministerial body of an expert character, whose function is to make the list on the lines laid down by the relevant legislation." If the Commissioner does not define the price, either specifically or by means of a formula the application of which will determine the price, he has not exercised the power because he has not fixed any price. Paragraph 3 purports to fix a price by a formula. The ingredients which constitute the formula are clearly prescribed. The difficulty, if any, is to ascertain whether the two sales are of substantially identical goods sold upon substantially identical terms and conditions. Since traders are unlikely to have altered their business methods since April 1943, this difficulty is probably more argumentative than real. As Jordan ©.J. said in Ex parte O'Sullivan ; Re Craig (6), " a thing can be identical only with itself. Absolute identity between two different things is, in the nature of things, impossible. To say of two things that they are substantially identical means that they are exactly similar in everything that matters for all relevant purposes. Whether two things are substantially identical is a question of fact which may be difficult of determination in a particular case, but the problem is clearly enough set." Regulation 23 (1a) (/) contains express power for the Commissioner to fix maximum prices relative to prices charged by individual traders on any date he specifies ; reg. 23 (2a) (g) contains a similar power in the case of services, and this is what he has done in the present case. I can see no necessity to name any individuals in the exercise of this power. Paragraph 3 of the Order, so far as it relates to goods, is therefore

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The third ground urged by Mr. Spender was that the Black Marketing Act 1942 is invalid because s. 4 (4) infringes the judicial power of the Commonwealth. This sub-section provides that the offence of black marketing shall not be prosecuted without the written consent of the Attorney-General after report from the Minister administering the regulations in relation to which the offence was committed and advice from a committee appointed by the Attorney-General and consisting of a representative of the department administered by that Minister, a representative of the Attorney-General's Department and a representative of the branch of the Department of Trade and Customs known as the Prices Branch. It is true that the same set of facts will constitute an offence under the Prices Regulations or under the Act, and that, under the Regulations and the Act, this offence may be tried summarily or upon indict- ment. But the determination whether the accused is to be charged under the Regulations or the Act is, I think, a purely administrative function of the same essential quality as the determination whether an accused shall be tried summarily or on indictment for an offence triable summarily or on indictment under a single Act, and the determination is still administrative whether it is made by the Attorney-General or any other law officer of the Crown on his sole initiative or upon or after any report or advice from any specified person or body of persons. The whole prosecution, when it is launched, takes place in a court, the accused is found innocent or guilty by a court, and Parliament is entitled to make the punish- ment of an offence upon conviction what it likes, and to make it differ according to the alternative sections of an Act or Acts under which the charge is laid. The view that the whole function is administrative receives support, I think, from the judgment of the Privy Council in the recent case of King-Emperor v. Benoari Lal Sarma (1). There special courts were set up by the Governor-General of India by an ordinance made under the Government of India Act 1935, read with the India and Burma (Emergency Provisions) Act 1940, and it was held that the ordinance was not invalidated by reason of provisions which left it to the local government or some officer of the local government empowered by it in that behalf to

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