Burkard v Oakley [1918] HCA 70; (1918) 25 CLR 422 (25 November 1918)

HIGH COURT OF AUSTRALIA

Burkard Plaintiff; and Oakley (Commonwealth Public Trustee) and Another Defendants.

H C of A

25 November 1918

Griffith C.J.Barton, Gavan Duffy, Powers and Rich JJ.

Leverrier K.C. (with him J. A. Browne), for the plaintiff.

Blacket K.C. and Flannery, for the defendants, were not called upon.

Griffith C.J.

I do not think it necessary to say more than that I can see no reason to doubt the validity of the regulation impeached.

Barton J.

These regulations are made under sec. 4 of the War Precautions Act "for securing the public safety and the defence of the Commonwealth." That with which we are immediately concerned is reg. 11 (2) of the War Precautions (Enemy Shareholders) Regulations 1916. After a provision in reg. 9 that after 15th April 1916 the Attorney-General may by order declare that (a) shares specified in the order, or (b) some or all of the shares held by (inter alios) an enemy subject, are thereby transferred to the Public Trustee, with other consequential provisions, reg. 11 provides that "(1) Any enemy subject or naturalized person of enemy origin, whose shares have been transferred to the Public Trustee under these Regulations, may apply in writing to the Attorney-General for a direction to the Public Trustee to sell the whole or any part of the shares which have been transferred to him. (2) The Attorney-General may, if he thinks fit, and whether he has received any such application or not, direct the Public Trustee to sell the whole or any part of any shares which have been transferred to him, and the Public Trustee shall sell the shares accordingly." The plaintiff is an enemy subject. There has been a direction by the Attorney-General under reg. 11 (2) to the Public Trustee to sell certain shares which had already been transferred to him under reg. 9, and it has been contended that reg. 11 (2) is ultra vires. It is not contended that the power conferred by reg. 9 on the Attorney-General to declare shares to be transferred to the Public Trustee is ultra vires, but it is contended that reasonable precaution for the public safety and the defence of the Commonwealth with regard to disposing of the shares of enemy aliens cannot be held to justify reg. 11 (2). I do not think that we can say that. Granted that the power conferred by the War Precautions Act will support an order declaring that the shares are transferred to the Public Trustee, and a vesting of the shares in him by virtue of the order, it does not seem to me to be an unwarranted exercise of that power to authorize a sale of the shares so transferred. It may be that in some instances a beneficial interest remains in some person, firm or company, notwithstanding the transfer to the Public Trustee; but the shares are to be transferred in the books of the company to the name of the Public Trustee, who then has the sole control of the shares and of their disposal, subject to the Regulations. It is contended that the enemy shareholder may deal with his beneficial interest in the shares. That may or may not be so. If he has that right it may, on the one hand, be a due precaution for the public safety to take away that power to deal with the beneficial interest by disposing of the shares and handing the money, under reg. 11 (3), to the person by whom the shares were transferred unless the Attorney-General otherwise directs. On the other hand, it may be a wise precaution in the interest of the enemy shareholder himself that the Public Trustee should be able, by selling the shares, to prevent any undue loss to the beneficial interest through a fall in the market value. In whichever way the regulation is looked at, it is nothing more than the application of a little common sense to the consequences of an obviously valid regulation. I reject altogether the idea that reg. 11 (2) is to be regarded as an invasion of State rights. If that were so, State legislation would have to be invoked to enable the Public Trustee, an officer of the Commonwealth, to divest himself of the shares in the event of its being unsafe to the Commonwealth or needlessly injurious to the enemy shareholder that the officer should continue to retain them. That would be an absurd result. The provision is really incidental—it may fairly be considered necessarily so—to the exercise of the power.

I think, therefore, that the first and second questions should be answered in the negative.

Gavan Duffy J.

In view of the previous decisions of this Court I think it is impossible to hold that any part of this regulation is invalid.

Powers J.

I agree that reg. 11 (2) is valid.

Rich J.

In certain events the vesting of shares of alien enemies in the Public Trustee might have the effect of reducing the number of shareholders below seven, and if the Public Trustee may not sell and transfer the shares a winding up must follow. The company then ceases to carry on business except for the purpose of the winding up. This is clearly against the interest of the Commonwealth, and justifies the exercise of the power.

Questions 1 and 2 answered in the negative. Question 3 not answered. Plaintiff to pay costs of special case.

Solicitors for the plaintiff, Villeneuve-Smith & Dawes.

Solicitor for the defendants, Gordon H. Castle, Crown Solicitor for the Commonwealth.