Crothers v Sheil [1933] HCA 42; (1933) 49 CLR 399 (31 August 1933)

HIGH COURT OF AUSTRALIA

Crothers Informant, Appellant; and Sheil Defendant, Respondent.

H C of A

On appeal from the Supreme Court of New South Wales.

31 August 1933

Rich, Dixon, Evatt and McTiernan JJ.

Maughan K.C. (with him Bradley), for the appellant.

Watt K.C. (with him Dignam), for the respondent.

Maughan K.C., in reply,

The following written judgments were delivered:—

Aug. 31

Rich J.

The relevant facts are that the respondent occupies dairy premises at Camden, and is a dairyman registered under the Milk Act 1931, sec. 36. Woulfe Bros. are milk vendors at Marrickville within the metropolitan milk distributing district who distribute milk to their customers in the ordinary way by means of milk carts. The respondent supplied Woulfe Bros. with about 120 gallons of milk a day, of which they took delivery at the respondent's dairy. Respondent was prosecuted under sec. 27 (3) of the Milk Act for that being a dairyman he did supply milk for consumption or use in the metropolitan milk distributing district to Woulfe Bros. He was convicted of this offence, but on appeal by way of case stated the majority of the Full Court consisting of James and Davidson JJ., Street C.J. dissenting, held that there was no or no sufficient evidence that the milk was supplied for consumption or use in the metropolitan district. Sec. 26 (1) vests all milk supplied for consumption within the metropolitan distributing district in the Board and sec. 27 (1) requires that all milk supplied within that district shall be delivered by the dairyman producing the same to the Board. Sub-sec. 3, under which the information is laid, makes it an offence for a dairyman to supply sell or deliver milk for consumption or use in the milk distributing district to a person other than the Board unless the dairyman acts as his own retailer. The reference to supplying milk for consumption or use in the milk distributing district is not very clear. But we have not to consider the meaning of the expression in secs. 26 (1) and 27 (1), where it describes the milk which vests in the Board. I do not think it can be denied that under sec. 27 (3) milk is supplied for consumption in the milk distributing district when it is sold and delivered by the dairyman to a buyer who he knows or believes will retail it in that district. In the present case I think the evidence supports the inference that the respondent did supply milk with this knowledge or belief. According to the evidence the respondent spoke of his course of business as sending his milk to Sydney. He stood in a continuous business relation with Woulfe Bros. In the ordinary course of affairs people standing in such a relation to one another do know in a general way the character of each other's businesses. Woulfe Bros. were carrying on business openly as retailers in and from Marrickville. All this provided circumstantial evidence from which the magistrate was entitled in the absence of any evidence from the respondent to conclude that he knew that his milk was distributed in Sydney for consumption. On this point I agree with the judgment of Street C.J., and am unable to agree with that of Davidson J., with whom James J. concurred. But Mr. Watt, on behalf of the respondent, has attempted to support the order of the Full Court upon further grounds. Upon the first of these the majority of the Full Court, consisting of Street C.J. and Davidson J. was against him. Sec. 80 of the Milk Act says that any information under the Act may be taken in the name of the Milk Board by the Secretary or by any other officer authorized by the Board in that behalf either generally or in any particular case. The information is expressed to be laid by the appellant "an officer in the service of the Milk Board duly authorized to prosecute herein." Mr. Watt says that sec. 80 is not only enabling but prescribes exhaustively how proceedings may be taken and that the information does not comply with it. It is true that the information does not comply with it but I find it unnecessary to decide whether it is an exhaustive statement of the mode of prosecution. The appellant was the proper officer to lay the information on behalf of the Board and the information shows that he did so prosecute. Where the information fails to comply with sec. 80 is that the appellant exercised his authority in his own name and not in the name of his principal the Board. This, in my opinion, is a defect in the information, and is healed by sec. 65 of the Justices Act 1902. I cannot agree with Mr. Watt's contention that the information is not defective in substance or in form and that all that is wrong is that the informant has no locus standi. When sec. 80 of the Milk Act is looked at with the information what appears is that the right person has proceeded by an appropriate information and in the information has proceeded expressly on behalf of his principal but has drawn up the information in his own but not in his principal's name. We are not unfamiliar in the case of powers of attorney with authorities exerciseable in the principal's name and authorities exerciseable in the attorney's name on his constituent's behalf. If an attorney professing to act on his constituent's behalf did so in the wrong name I should call this an error or defect in the form of exercise of the power. Mr. Watt relied upon two further grounds which do not appear to have been dealt with in the Full Court. He contended that the provisions of the Milk Act, particularly secs. 23 (1), 26 (1) and (3), and 28 (2) contain a scheme which involved the imposition of a duty of excise contrary to sec. 90 of the Constitution. The suggestion is that because the proceeds of the milk vested in the Board under the compulsory acquisition from the dairyman are required to bear the costs charges and expenses of the administration of the Act and the other charges mentioned in sub-sec. 2 of sec. 28, there is a levy in the nature of a tax made upon the supply of milk. The decision of the Privy Council in Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy, Ltd.[1] was relied upon. In my opinion there is no substance in the argument. The provisions of the Milk Act do not exact any pecuniary payment from the dairy farmer. They do not impose any liability in respect of the ownership, transfer, sale or production of goods. They merely contain a scheme for the compulsory acquisition of milk and the payment of the price or compensation to be borne by the proceeds arising from the resale by the Board. The fact that these proceeds are subject to deductions would not convert the scheme into one for taxation. I should perhaps interpose by way of reservation that I am not to be taken as deciding that the minimum prices fixed by the Board are not payable although the fund described in sec. 28 (2) prove insufficient. In the Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy, Ltd. Case[2], there was an actual levy of a money sum upon the producers of milk who sold it in a liquid form; here there is no tax and no duty of excise. Mr. Watt next relied upon sec. 92 of the Constitution. The argument was that the expropriation of milk supplied for consumption or use in the metropolitan milk distributing district might offend against sec. 92 by preventing the performance of some imaginary contract for the sale and delivery of milk into another State if the contract contemplated some treatment of the milk in Sydney before it was finally despatched to the other State. It was said that such a treatment might amount to use within the metropolitan milk distributing district and thus bring the milk within the ambit of sec. 26 (1). In my opinion this argument completely fails. It first presupposes a fictitious and most unlikely transaction. It further supposes it is of such a nature as to amount to inter-State trade and commerce from its initial stages and then seeks by giving a wide construction to the section to annihilate the whole scheme contained in the provisions. It is sufficient to say that even if an actual transaction of inter-State commerce is found to be impeded by the Milk Act so that the freedom of inter-State trade is impaired sec. 92 will prevail over the Milk Act, but it is clear that merely because it cannot be foretold that such a state of things is impossible the whole of the relevant provisions of the Milk Act do not collapse.

For these reasons I think the appeal should be allowed.

Dixon J.

I concur in the judgment delivered by Rich J.

Evatt J.

One of the points raised for the respondent to this appeal is that sec. 26 of the Milk Act 1931 is invalid because of its inconsistency with the guarantee of sec. 92 of the Commonwealth Constitution that trade among the States shall be absolutely free. It is suggested that, as a result of the judgment of the majority of this Court in the recent Peanut Case[3], a State cannot lawfully undertake a system of compulsory acquisition for the purpose of pooling and selling the products of the growers, because it is always possible that some grower may desire to sell his products inter-State.

In the present case, it is conceivable that some very optimistic milk producer may wish to sell inter-State. But the machinery of compulsory vesting in the Board (sec. 26), disposal thereof by the Board (sec. 28) and payment to the grower of the proceeds less expenses (sec. 28) must effectually prevent him from so selling.

The answer to the argument based on sec. 92 is that expropriation by the Board proceeds only in relation to "milk supplied for consumption or use within the metropolitan milk distributing district or ... sub-district thereof." As a consequence, there is an exclusion by the statutory definition itself of that very element of inter-State transport which is the essential feature of the concept of trade "among" the States. It is only after and so far as the possibility of inter-State transport has been removed from each transaction, that the products come within the range of the compulsory acquisition.

One other possibility was envisaged, that a producer might consign his milk for (a) treatment within the metropolitan area, and (b) export, in its altered form, to another State. If such a case is within the purview of sec. 26, so that the milk would be divested from the producer (as to which I express no opinion), the chance of subsequent inter-State transport of the milk in its altered form seems to me to be so remote from the primary transaction that it cannot convert the latter into a transaction of inter-State commerce.

I am therefore of opinion that sec. 92 does not invalidate the scheme of compulsory acquisition of milk under sec. 26 of the Milk Act.

Upon the other aspects of the case I concur with the judgment of my brother Rich, and agree with him that the appeal should be allowed.

McTiernan J.

In my opinion the appeal should be allowed. I agree with the judgment of my brother Rich.

Appeal allowed. Order of the Supreme Court set aside. Question asked by case stated answered No. Costs in this Court to be paid by the appellant in accordance with the order granting leave. No order as to costs in the Supreme Court.

Solicitor for the appellant, J. E. Clark, Crown Solicitor for New South Wales.

Solicitors for the respondent, J. J. Carroll & Son.

[1] (1933) A.C. 168.

[2] (1933) A.C. 168.

[3] [1933] HCA 11; (1933) 48 C.L.R. 266.