Marine Board of Launceston v R [1924] HCA 2; (1924) 33 CLR 142 (13 February 1924)

HIGH COURT OF AUSTRALIA

The Marine Board of Launceston Plaintiff, Appellant; and His Majesty the King Defendant, Respondent.

The Marine Board of Burnie Plaintiff, Appellant; and His Majesty the King Defendant, Respondent.

H C of A

On appeal from the Supreme Court of Tasmania.

13 February 1924

Knox C.J., Isaacs, Gavan Duffy and Rich JJ.

Waterhouse and Keating, for the Marine Board of Launceston.

Waterhouse and Edwards, for the Marine Board of Burnie.

L. E. Chambers S.-G. for Tasmania and Sir Elliot Lewis, for the respondent.

The following written judgments were delivered:—

Feb. 13

Knox C.J. and

Gavan Duffy J.

The question for decision in these cases turns on the construction of the Local Public Works Loans Amendment Act of 1904 (4 Edw. VII. No. 23) as amended by the Act of 1916 (6 Geo. V. No. 64). Incorporating the amendments made by the later Act, secs. 1 and 2 read as follows, namely:—Sec. 1: "There shall be payable and paid by any public body to the Treasurer of the State upon any sum or sums of money advanced as a loan to such public body after the commencement of this Act under the Local Public Works Loans Act 1890 interest at such rate, not exceeding seven pounds per centum per annum as the Governor may from time to time fix and determine, and the Governor may, in his discretion, from time to time, revise the rate of interest so fixed, and again fix and determine the same;" &c. Sec. 2: "The interest to be so paid by the public body may from time to time be fixed and determined by the Governor at such a rate as to only include and cover (i.) Interest at the rate for the time being payable by the State and (ii.) A sum of money equal to one pound per centum per annum on any such loan as aforesaid, and such sum shall be set apart by the said Treasurer as a sinking fund until the Auditor-General shall certify that such loan has been completely liquidated; and (iii.) A sum of money equal to ten shillings per centum per annum on any such loan as aforesaid to be retained by the Treasurer, and form part of the Consolidated Revenue Fund."

The appellant contended that the "rate for the time being payable by the State" mentioned in sub-sec. I. of sec. 2 meant the average rate of interest for the time being actually paid by the Treasurer on all moneys borrowed by him for the State of Tasmania. The respondent contended that the rate of interest for the time being was the average rate of interest which the Treasurer in that half-year paid upon moneys borrowed by him by means of local inscribed stock during such half-year. In our opinion neither contention is correct. Reading the section as amended without regard to the steps by which it reached its present form, we think it is reasonably clear that the rate of interest referred to in sub-sec. I. is the rate payable by the State on the money borrowed by it and advanced to the public body. The only subject matter dealt with by the Acts of 1904 and 1916 is the interest to be paid by a public body on sums advanced to it as a loan under the Local Public Works Loans Act of 1890. A loan to a public body under that Act could only be made out of money raised by the Treasurer by the issue of debentures or other Government securities, on the amount of which interest would necessarily be payable by the Government. Having regard to this fact and to the fact that the Acts of 1904 and 1916 deal solely with interest on loans made to public bodies under the Act of 1890, we feel no doubt that the rate of interest referred to in sub-sec. I. of sec. 2 of the Act of 1904 as amended is the rate payable by the Government on the money raised for the purpose of making the advance in respect of which the public body is liable to pay interest.

The result of thus construing the section is that the rate of interest to be fixed by the Governor is limited in two respects: (1) it may not exceed seven pounds per centum per annum in any event, and (2) it can be no greater than the rate payable for the time being by the Government on the money borrowed by it and advanced to the public body together with one pound per centum per annum as a contribution to a sinking fund and ten shillings per centum per annum apparently provided to cover costs of management and administration. It was argued by both parties that the Court was precluded from adopting this construction of the section by the manner in which the Act of 1904 was altered by the Act of 1916. In the Act of 1904, sec. 2, so far as relevant, was in the following words, namely: "The interest to be paid by the public body shall be fixed and determined at such a rate as to only include and cover (i.) The interest from time to time payable by the State in respect of the moneys raised from time to time for the purposes of the loan; and (ii.) A sum of money equal to one pound per centum per annum on any such loan as aforesaid, and such sum shall be set apart by the said Treasurer as a sinking fund until the Auditor-General shall certify that such loan has been completely liquidated; and (iii.) A sum of money equal to ten shillings per centum per annum on any such loan as aforesaid to be retained by the Treasurer, and form part of the Consolidated Revenue Fund." By the Act of 1916 the provisions of this section down to and including the word "and" at the end of sub-sec. I. were struck out and the following words substituted: "The interest to be so paid by the public body may from time to time be fixed and determined by the Governor at such a rate as to only include and cover (i.) Interest at the rate for the time being payable by the State; and".

It was said that this alteration indicated the intention of Parliament that the rate of interest payable by the State in respect of the money raised for the purposes of the loan should no longer be a factor in the determination by the Governor of the rate of interest payable by the public body; and this view seems to have found favour with the majority of the learned Judges in the Supreme Court. But, in our opinion, the alteration made discloses no such intention on the part of Parliament.

The objects of the amending Act of 1916 appear to have been (i.) to raise the maximum rate of interest chargeable from six pounds to seven pounds per centum per annum; and (ii.) to confer on the Governor power to revise from time to time the rate of interest which he had fixed. The alteration in the wording of sec. 2 appears to us to be due to an attempt by the draftsman to improve upon the drafting of sec. 2 of the Act of 1904. The expression in sub-sec. I. of that section "the interest from time to time payable by the State" is clearly inaccurate, and does not conform to the accurate phrasing of sub-secs. II. and III., "a sum of money equal to" &c. Apparently the draftsman of the Act of 1916 sought to remedy this defect by bringing the frame of sub-sec. I. into line with sub-secs. II. and III.. In doing this he dropped out the words "in respect of the moneys raised from time to time for the purposes of the loan," probably because he regarded them as superfluous; but, however this may be, the omission of these words in the amending Act is not, in our opinion, sufficient to warrant the inference that Parliament intended to abandon as a factor or standard in fixing the rate of interest payable by a public body, the rate of interest payable by the Government on the money raised for the purpose of the loan.

For these reasons we are of opinion that the appeals should be allowed, and that both cases should be remitted to the Supreme Court with a declaration in each case that, in the opinion of this Court, the rate of interest mentioned in sub-sec. I. of sec. 2 of the Local Public Works Loans Act 1904 as amended by the Act of 1916 is the rate of interest for the time being payable by the State on the money raised by the State and advanced to the appellant in pursuance of the Local Public Loans Works Act 1890.

The respondent should pay the cost of the appeal and the costs in the Supreme Court in each case.

Isaacs and Rich JJ.

These two appeals are identical in question and result. They both depend on the true construction of a few words in the Act No. 23 of 1904 introduced into it by the Act No. 64 of 1916, namely, "interest at the rate for the time being payable by the State." We must confess that we have not been able to entertain any doubt whatever as to the meaning of those words.

When the relevant statutes are considered as a whole and their successive provisions are read with a view to give to them what, in another department of law, is called "business efficacy," the intention of the Legislature seems to us reasonably plain. If the Act No. 23 of 1904 had been originally framed as it now stands, it could scarcely have been doubted that the words we have quoted would refer exclusively to the moneys raised by the State for the purposes of the loan to the public body. This would be clear from the ordinary force of the language employed. Sec. 2, by its opening words, "The interest to be so paid by the public body," throws us back to sec. 1 in order to see what is meant by the phrase "to be so paid." Sec. 1 says: "There shall be payable and paid by any public body to the Treasurer of the State upon any sum or sums of money advanced as a loan to such public body after the commencement of this Act under the Local Public Works Loans Act 1890 interest at such rate," &c. The words "upon any sum or sums of money advanced as a loan to such public body" are thus an essential portion of the circumstances involved in the expression "to be so paid by the public body" in sec. 2. In other words, they are naturally an essential constituent of the subject matter dealt with by par. I. of sec. 2, that is, by the words "Interest at the rate for the time being payable by the State." Other sums of money borrowed by the State at other times, and used for other purposes, by authorities other than the given "public body" would obviously be elements quite foreign to the whole scheme of legislation we are dealing with. If, then, the Act No. 23 had been originally passed in its present form, the words under construction would have been reasonably capable of but one reference, namely, to the moneys previously indicated in sec. 1.

But, from the fact that par. I. of sec. 2, as passed in 1916, and already quoted, replaced par. I. of sec. 2 as passed in 1904, it has been assumed as a postulate by everyone concerned that the Legislature deliberately departed from the original basis, namely, the "moneys raised from time to time for the purposes of the loan," and therefore that that basis must be excluded whatever else may happen. True, no express substitution of any other basis was made, which of itself would be strange if so distinct an intention were entertained. Nor is there any clue to an implication of any other basis which could be accepted as reasonable. According to the argument, Parliament has left its language so vague and defective that, if not insensible, it is incapable of any interpretation except by applying considerations appropriate only to a legislature. We do not agree with that argument. We think the language is sufficiently clear and that the primary assumption of legislative intention to abandon the original basis cannot be maintained. It has arisen from an incomplete review of the amendments made in 1916, and the financial importance of the matter pressed upon us by the earnest arguments of learned counsel on both sides induces us to state with some elaboration the reasoning by which we are led to our conclusions.

Each of the parties has suggested a construction which is unsupported by any express legislative language and is opposed to the general nature of the scheme, the dominant purpose of the Legislature of 1916 and the inherent justice of the case. To impose upon the public body the burden of other undertakings with which it is entirely unconnected, or to relieve it of its own proper burden at the expense of the general public, is transparently open to the observations just made. But that would be equally the effect of the suggestion of either of the parties, although the actual suggestions differ. Let us place ourselves for a moment in the position of the Tasmanian Parliament in 1916, immediately before the passing of the amending Act. We need not go further back than the Act of 1904. By sec. 1 of that statute, part of which has been quoted, the maximum interest payable by the public body was 6 per cent, but the rate not exceeding 6 per cent had to be fixed by the Governor "from time to time," and when so fixed that interest was chargeable upon the revenues of the public body. "From time to time" there meant as "the sums of money" were advanced, and, once the rate as to any given sum was "fixed and determined," it was inalterable, whatever new arrangements the State might make as between the lenders and itself. By sec. 2 the first element which the Governor was required to take into his consideration when the rate was "fixed and determined" was thus expressed: "The interest from time to time payable by the State in respect of the moneys raised from time to time for the purposes of the loan." The words "from time to time" there occur twice. Reading the paragraph with sec. 1, there can be little doubt that the words "from time to time" there meant as the moneys were borrowed, and "the interest from time to time payable by the State" meant the interest payable at the time the money was raised. There was no power to revise, and the original fixation and determination could not have reference to future fluctuations in the "interest ... payable by the State." That was a fixed quantity ascertainable once and for all.

Now, in 1916, when circumstances led the Parliament to amend the law, it found it necessary to raise the maximum to 7 per cent, and it also clearly provided for possible fluctuations in its own liability in respect of the money it had borrowed or might borrow for public bodies. This it did by giving the discretionary power of revision from time to time, when, if exercised, the rate might again be "fixed and determined." That is the dominant purpose of the legislation of 1916. But here arises the important consideration. If par. I. of sec. 2 had remained unaltered, the new revisionary power in sec. 1 would have been a dead letter, because the "interest from time to time" would have continued to mean what it had previously meant, or at least that might reasonably have been the case. The Parliament carefully guarded against this, by altering the language to read "interest at the rate for the time being payable by the State." The essence of the change is in the words "for the time being," which brings the "interest" which is to be ascertained down to the moment of the "revision," if revision is entered upon, and allows full play to the dominant purpose of the Act. There is no express mention of the moneys raised for the purposes of the loan; but there is no express exclusion of them and no express substitution of any other moneys. There is still a natural and even necessary reference to the "sum or sums of money advanced" as found in sec. 1. The revision is as to the interest on those moneys, and those only, and the words "so paid" in the governing words of sec. 2 lead directly back to those moneys, and those moneys only. We, therefore, unhesitatingly hold that the Act of 1904 as now amended should receive the natural construction of its own language unaffected by the assumed abandonment of the original basis of money borrowed for the purposes of the scheme.

Our opinion is that par. I. of sec. 2, as enacted in 1916, requires the interest payable by the public body to the State to be calculated or otherwise ascertained at the rate, not exceeding 7 per cent, which at the time of fixing and determining it, whether initially or on revision, is the rate that the State under its then existing obligation is bound by law to pay in respect of the moneys it has borrowed and actually lent to the public body.

In each case order as stated in the judgment of Knox C.J. and Gavan Duffy J.

Solicitors for the appellants, Ritchie & Parker Alfred Green & Co., Launceston, by Simmons, Wolfhagen, Simmons & Walch; Crisp & Edwards, Burnie, by Griffiths, Crisp & Baker.

Solicitor for the respondent, A. Banks Smith, Crown Solicitor for Tasmania.