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Australian Apple & Pear Marketing Board v Tonking [1942] HCA 37; (1942) 66 CLR 77 (1 October 1942)

HIGH COURT OF AUSTRALIA

H C of A

7 May 1942

Williams J.

Maughan K.C. and Asprey, for the plaintiff.

Teece K.C. and A. R. Taylor, for the defendants.

May 7

Williams J

. delivered the following written judgment:—

Since 1922 the plaintiff has owned an orchard near Orange upon thirty acres of which he has grown apples and upon four acres pears. Towards the end of 1939 he became aware of the National Security (Apple and Pear Acquisition) Regulations, (No. 148 of 1939), made under the provisions of the National Security Act 1939 and gazetted on 14th November 1939.

Reg. 9 required every grower to make application to the Board, in accordance with Form A in the schedule, to be registered as a grower. The plaintiff made the necessary application on 18th December 1939.

On 27th February 1940 an order was published in the Gazette under these regulations acquiring, inter alia, all apples and pears grown by a registered grower harvested in Australia on or after 1st March 1940 and prior to 1st July 1940. Apples are harvested in March, April and May, and pears in March, so that, by virtue of this order, practically the whole of the plaintiff's crop, totalling 3,674 cases of apples and 384 cases of pears, became, upon harvesting, the property of the Commonwealth. In accordance with its directions the plaintiff delivered these apples and pears to the Board in the usual bushel cases on rail or at the cool store at Orange. In previous years he had been in the habit of selling his apples and pears through A. H. Walker, the sole proprietor of the firm of A. H. Walker and Son, a licensed farm and produce agent, who carries on business at the City of Sydney fruit markets; so that the cases which he delivered to the Board were branded with his name and that of A. H. Walker and Son and the Board sold them all through this firm except 556 cases of apples and 19 cases of pears.

Apples and pears grown in the locality of Orange are of the highest quality. 1940 was an excellent season there, and the plaintiff's fruit, as in past years, was as good as any other crop in the district. Apples vary greatly in quality and consequently attract a wide range of prices. Those sold by Walker in 1940 varied from £1 to 2s. 6d. per case. He sold some of the plaintiff's "Delicious" and "Granny Smith" apples for £1 per case.

The proceeds of sale of the plaintiff's apples and pears acquired by the Board, after deducting the selling agent's commission, amounted to £2,040 6s. 1d., against which must be charged the marketing costs of the Board amounting to £751 16s. 7d., leaving a net balance of £1,288 9s. 6d. The plaintiff received from the Board payments amounting to £968 so that, if this sum is deducted from £1,288, the balance of the net proceeds of sale received by the Board and not paid to the plaintiff is £320. During the marketing season, which concluded at the end of December, the plaintiff had received his presentation costs and payments by way of first and second advances; and, about 12th December, a progress payment on account of the third advance. About 21st January 1941 he received from the Board a cheque of that date for £89 16s. This was the last payment made in respect of his 1940 crop, except for a small cheque of £3 12s. adjusting the amount paid to him by way of first and second advances, which arrived about 30th January 1942. The payments by way of advance were made in pursuance of the power given to the Minister by reg. 17 (3). Attached to the cheque of 21st January 1941 was a slip containing details of the advance which had stamped upon it in large words "Final Payment." The plaintiff's account for the season in the Board's loose-leaved ledger, which was called for, produced, and tendered, bears entries showing that this cheque was a final payment of the third advance in respect of which the progress payment had been made in December, so that it is possible that the cheque for this earlier payment may have been accompanied by a slip marked "Progress Payment." All the cheques were marked "Advance Account." In cross-examination the plaintiff, in answer to a question as to whether he had ever applied to the Board for compensation, said that he had discussed the matter with Mr. Lane, the secretary and accountant of the Board, and had asked him if there was any further payment coming to him for the 1940 crop and that the reply was in the negative. It was admitted that the Board has not yet made any recommendation, nor has the Minister yet made any determination in pursuance of reg. 17, as to the amount of compensation to be paid to the plaintiff for his apples and pears. Another admission states that the growers generally of apples and pears for the season 1940 were paid by way of advances in pursuance of this regulation a rate of 2s. and 3s. per bushel for apples and pears respectively which were subject to the operation of the regulations; that the total amount of such advances to the growers was calculated on that proportion of the crop of such growers which it was estimated would be of suitable quality for sale; and that, subsequently to the making of the said advances, there was paid to the growers generally by way of further advances in pursuance of the regulation 1s. per bushel for apples and pears of adequate quality delivered by such growers to the Board. No evidence was called on behalf of the defendants to contradict Mr. Lane's statement. Fifteen months have now elapsed since the final payment of the third advance, during which, apart from the small adjustment already mentioned, there has been no indication that the plaintiff will receive any further payments in respect of the 1940 crop, and I can only conclude that the final payment of the third advance in January 1941 was intended to be the final payment of any compensation moneys for that crop. It appears, therefore, that all growers have received the same recompense, namely 3s. per case for apples and 4s. per case for pears acquired by the Board, presumably calculated by ascertaining the net proceeds of sale of the mass acquisition and dividing those proceeds amongst the growers according to the number of cases of saleable apples and pears they delivered to the Board, without any regard being paid to the quality of the fruit contributed by each individual grower or to the proceeds of sale actually received from the marketing of their respective crops. If I am wrong in this conclusion, the defendants can only thank themselves for not having tendered evidence and given the Court some assistance on matters so peculiarly within their own knowledge, but it is only fair to say that Mr. Teece's decision not to call any evidence may have been reached because of the view submitted on behalf of the defendants that the assessment of compensation is a matter for the Minister and not for this Court.

On 1st May 1941 the plaintiff filed his statement of claim praying that the regulations might be declared ultra vires the Constitution, and alternatively that he was entitled to receive as compensation for the acquisition of his fruit the fair and reasonable market value thereof or fair compensation therefor; such value or compensation to be determined, in default of agreement, by the Court. The regulations had in the meantime been amended, but not in any manner material to this action, by 1940 Nos. 13, 38, 60, 276, 283 and 295. And, before this hearing, their constitutional validity had come up for determination by the Full Court in Andrews v. Howell[1] . The members of the Full Court, while differing on another point, held unanimously that the regulations contained just terms for the acquisition of the growers' apples and pears so as to satisfy the requirements of sec. 51 (xxxi.) of the Constitution. But, upon my reading of the judgments, my brethren, who comprised the majority of the Court, did not express a final opinion, as Mr. Teece contended, that a claimant had no right to have the amount of compensation determined by a court; while my brother Starke expressed the definite view that the regulations did confer this right. I do not read the statement of my brother Rich that "upon a proper understanding of the regulations, they sufficiently confer on the grower an absolute right to compensation determined in a fair manner by a specified administrative body" [2] as finally expressing his view that the right to compensation given to the growers by reg. 17 excluded any application to the Court. He was only dealing, I think, with the obligations of the Board. My brother Dixon, with whose judgment on this point my brother McTiernan agreed, after a considerable discussion of reg. 17, said that he did not think the Minister was able to determine what he thought fit (as compensation) "after receiving the recommendation of the Board, without adopting it. He may adopt or refuse to adopt a recommendation of the Board, but if he determines compensation it must be in pursuance of the recommendation which the Board finally makes" [3] , so that he left open the question of a claimant's rights where the Minister so refused and thereby debarred himself from determining the compensation. The appellant in Andrews v. Howell[4] had been prosecuted for moving his fruit without permission contrary to amended reg. 15 (a). The principal question, upon which the fate of the appeal mainly depended, was whether the scheme as a whole was justified by the defence power (sec. 51 (vi.)); so that it was unnecessary to decide whether regs. 12 and 17 provided for alternative methods of compensation, as my brother Starke suggested, or compensation was exclusively provided for by reg. 17; or, in the latter alternative, supposing the terms were not just because this regulation did not give an absolute right to compensation or only provided for its determination by a non-judicial and (in a legal sense) biassed person or body, to decide whether the acquisition could still be valid because, although reg. 17 was ultra vires, reg. 12 was intra vires and the scheme as a whole saved by sec. 46 (b) of the Acts Interpretation Act 1901-1937. It appears to me, therefore, that, while I am bound by the decision of the majority of the Court that the scheme is intra vires the Constitution, it is still open to me to construe the compensatory provisions of the regulations on the basis that they contain just terms which satisfy placitum xxxi. in order to determine their precise meaning and effect, deriving all the assistance which I can from the relevant observations in the judgments of my brethren in that case.

Placitum xxxi. is taken from the Fifth Amendment of the American Constitution, which provides that private property shall not be taken for public use without just compensation, and it has been held in America that, except where the assessment is made as a mere matter of calculation prior to the taking (United States v. Jones[5] ; Bauman v. Ross[6] ), just compensation requires that the determination of the amount must be made by a court (Monongahela Navigation Co. v. United States[7] ; Seaboard Air Line Railway Co. v. United States[8] ). The assessment of compensation, as it is the determination of a question affecting the rights of subjects, is a judicial function (R. v. Hendon Rural District Council; Ex parte Chorley[9] ; Errington v. Minister of Health[10] ; Estate and Trust Agencies (1927) Ltd. v. Singapore Improvement Trust[11] ).

In Frome United Breweries Co. Ltd. v. Bath Justices[12] Lord Atkinson cited with approval the following definition by May C.J. in the Irish case of The Queen v. Corporation of Dublin[13] : "The term "judicial" does not necessarily mean acts of a judge or legal tribunal sitting for the determination of matters of law, but for the purpose of this question a judicial act seems to be an act done by competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others." In The King v. Federal Court of Bankruptcy; Ex parte Lowenstein[14] my brother Starke stated: "Adopting the words of Griffith C.J. in Huddart Parker & Co. Pty. Ltd. v. Moorehead[15] and cited with approval by the Judicial Committee of the Privy Council in Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation[16] "the words "judicial power" as used in sec. 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has a power to give a binding and authoritative decision (whether subject to an appeal or not) is called upon to take action." " He also said: "Thus the determination of controversies between the sovereign and its subjects, and between subjects, is part of the judicial power of the Commonwealth which from its nature does not fall within the powers of the other departments of government" [17] .

Under sec. 71 of the Constitution the judicial power of the Commonwealth can only be vested in this or some other Federal court or a State court exercising Federal jurisdiction (British Imperial Oil Co. Ltd. v. Federal Commissioner of Taxation[18] ); but many administrative matters involving quasi-judicial functions have been assigned to bodies other than courts (Federal Commissioner of Taxation v. Munro[19] , on appeal, Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation[20] ). Moreover, the judgments in Andrews v. Howell[21] seem to suggest that it may be just, in the event of a dispute, to provide for the assessment of compensation by a person or body other than a court; and there are, of course in countries such as England where parliament has an unlimited jurisdiction, many instances of compensation having been left to the determination of some administrative body or person holding some personal office such as a Minister of the Crown even where such a body or the Crown is a judge in its own cause because it has to pay the amount assessed. In such cases the body or person is exercising quasi-judicial functions, and must assess the compensation on a legal basis, so that, in default, the proceedings can be quashed or restrained by a superior court by the use of the prerogative writs of certiorari or prohibition; or it or he can be ordered to do its or his duty by mandamus. Even in the case of parliaments with unlimited powers, the practice has been to leave such questions to be determined out of court only where the title of the claimant is clear, so that in the case of resumption of land, where questions of law relating to the basis of compensation and to title arise, it has always been the practice to have the matter determined by a court, and there is no distinction in principle between the rights of subjects upon the acquisition of any of their property whether real or personal. Assuming, however, that the Commonwealth Parliament, without infringing the judicial power, can provide for compensation for property which it acquires to be assessed otherwise than by a court, it would nevertheless be essential in my opinion for it to lay down some basis for the assessment so that the court can see that ""just" terms are available by law" (per Isaacs J. in The Commonwealth v. New South Wales[22] ). If "the only powers conferred upon a so-called tribunal are in the nature of calculation, or the mere ascertainment of some physical fact or facts, and not the declaration of or giving effect to a controverted matter of legal right, it may be that they do not appertain, except incidentally, to the judicial power" (per Griffith C.J. in Waterside Workers' Federation of Australia v. J. W. Alexander Ltd.[23] ). But I am clearly of the opinion that the statute or regulations must provide for the claimant receiving the full value of his property. This has been held over and over again by the Supreme Court of the United States: See the cases cited in Yearsley v. W. A. Ross Construction Co.[24] . In Richmond Screw Anchor Co. v. United States[25] the Supreme Court said: "We must presume that Congress in the passage of the Act of 1918 intended to secure to the owner of the patent the exact equivalent of what it was taking away from him." In Jacobs v. United States[26] it said: "The amount recoverable was just compensation, not inadequate compensation. The concept of just compensation is comprehensive and includes all elements "and no specific command to include interest is necessary when interest or its equivalent is part of such compensation." " In that case the Supreme Court pointed out that the right to just compensation could not be taken away by statute or be qualified by the omission of a provision for interest where such an allowance was appropriate in order to make the compensation adequate. But reg. 17 fails to give any definite direction to the Minister or the Board as to how the amount is to be determined.

In assessing the compensation under the regulation legal questions would arise (1) as to the basis of compensation generally and in certain events, and (2) as to disputed claims. Possibly the regulations could provide a basis to which the Minister on the recommendation of the Board could in a simple case apply the facts and so determine the compensation as an administrative act, but it would be difficult to frame directions sufficient to cover all the points that might arise in order to ascertain what would be a proper equivalent in every case for the value of the property taken. Even if it was possible to do so, there could still remain for determination questions of law or mixed law and fact relating to title, as, for instance, with respect to the priority of legal mortgages, crop liens or equitable charges, or to the rights of life tenants and remaindermen under wills or settlements, or as to the basis upon which the amount of compensation should be determined in the following cases:—(a) reg. 18 provides for cancellation of contracts relating to apples and pears to be acquired under the order and a question of law could arise whether in fixing compensation a grower who had a contract for the sale of his apples and pears at prices likely to be above those obtainable in the open market had a crop with a special "potential value" ; (b) reg. 21 imposes wide obligations on the growers to preserve and safeguard apples and pears in their possession or under their care after acquisition by the Commonwealth, and reg. 14 imposes an obligation to deliver or consign them as specified by the Board, but neither regulation makes express provision for the recoupment of any expenses that they may incur in doing so, and a question of law would arise as to whether a grower had any right to such recoupment or whether the only recompense he could obtain for the faithful discharge of his obligations would be from the enhanced value of his fruit. On this point it is to be noted that Mr. Walker said a certain amount of damaged fruit gets into cool storage that should not be there, sometimes because it is exposed to excessive heat during the passage from the orchard to the store, thus giving a concrete example of what would be self-evident in any event, that the marketable quality of the fruit must depend to a substantial degree upon the care with which it is picked, packed, and delivered. So I am strongly inclined to think, although it is unnecessary to express a final view, that, having regard to the variety of questions of law or of mixed law and fact which could arise and which could not be foreseen or covered by "a "direction" in law" (per Isaacs J. in British Imperial Oil Co. Ltd. v. Federal Commissioner of Taxation[27] ), the terms could only be just if the regulations provided a means of having disputes referred to a court.

It is also a fundamental principal of law that claimants should have a fair opportunity of putting their case before their claims are determined (Board of Education v. Rice[28] ; Local Government Board v. Arlidge[29] ; R. v. City of Westminster Assessment Committee; Ex parte Grosvenor House (Park Lane) Ltd.[30] ; Mulqueen v. Minister for Labour and Industry and Zinc Corporation Ltd.[31] ; Ex parte Wilson; Re Cuff [No. 2][32] ). There is no reason to believe that the defendants would not, as they did in this action, supply claimants with information as to the proceeds of sale derived from and of the expenditure incurred in connection with the disposal of the fruit in which they were interested; but, if the Minister is the sole arbiter of the amount of compensation payable, the regulations provide no express means whereby claimants have any right to put their case before him or the Board orally or otherwise or to obtain such information, which would be indispensable if it was desired to examine the fairness of the Minister's determination. Indeed, the form of claim provided by the amended regulations does not indicate any desire on the part of the defendants to know what value the claimants put on their fruit or to hear their views in the matter at all. The whole language of reg. 17 seems to point to an ex-parte administrative assessment by the Minister on the recommendation of the Board.

The objects of the regulations are contained in reg. 2, which provides that their purpose "is to minimise the disorganization in the marketing of apples and pears likely to result from the impracticability of exporting sufficient quantities of apples and pears because of the effects upon shipping of the present war and these regulations shall be administered accordingly." So it is clear that the apples and pears were being acquired by the Commonwealth, not for its own use, but in order that they might be disposed of in such a way as not to glut the local market, when it was called upon to absorb a surplus which in times of peace would have been disposed of overseas. The Commonwealth therefore only derived the indirect benefit which would accrue from sustaining the economic front, thereby enabling growers to receive the most favourable prices for their crops possible under the unfavourable conditions; so maintaining them in as affluent circumstances as possible; and giving them an incentive to preserve their orchards so that the supply of a staple product would be assured, their incomes could be assessed for income tax, and if they died their properties would retain their value for the purposes of death duties. Often the compulsory acquisition of property gives rise to an immediate claim for compensation; but, where a perishable product is being acquired in the mass with a view to its disposal as expeditiously and advantageously as possible for the benefit of a large number of owners, it would be just to postpone the determination of the value until an assessment could be made in the light of the amount which it actually realized, and the regulations appear to be framed on this basis. Thus they provide for the acquisition of apples and pears (reg. 12), their preservation by the growers pending instructions as to their disposal (which, as my brother Dixon pointed out in Andrews v. Howell[33] would have to be within a reasonable time) (reg. 14); and the making of a claim for compensation, the determination of which can be postponed until in the opinion of the Minister a sufficient quantity of apples and pears has been disposed of to enable the Board to make a just recommendation, interim distributions (called advances) being made in the meantime on account of the ultimate amount payable.

If, therefore, reg. 17 imposes an absolute duty on the Minister to assess the compensation and upon the Board to make a recommendation which he must accept subject possibly to a reference back for further consideration, the carrying out of the obligations of the Minister and Board in a proper manner would be enforceable by mandamus, which could be granted by this Court upon an application by a claimant who was interested in a crop which had been disposed of in accordance with the instructions of the Board, and who had made a claim for compensation. But a claimant is not required to make a claim, the right to do so being discretionary. It is unnecessary to make a claim to become entitled to share in the advances, which are really instalments of compensation, and the provision enabling the Commonwealth to recover overpayments means that the Minister would have to determine the compensation, whether any claims had been made or not, in order to decide whether such overpayments had been made. When a claim is made, sub-reg. 2 would at first sight seem to imply that there is an obligation upon the Minister to make a determination and upon the Board to make the necessary recommendation to enable him to do so; because, otherwise, it is difficult to see why express power should be required to enable him to postpone the determination until a sufficient quantity of apples and pears had been disposed of to enable the Board to make a just recommendation, but the contrary view of my brother Dixon, that the Minister can reject the recommendation of the Board, is supported by the potent consideration that otherwise the Board, consisting of growers' representatives, could bind the Minister by a recommendation which might seriously affect the consolidated revenue. Once the Minister has made a determination the grower would be entitled to be paid the amount assessed, but there is no express provision binding him to accept this sum. The regulation, therefore, fails to make it mandatory upon the Minister to assess the compensation, or obligatory upon the claimant to accept the amount assessed, or to enunciate the principles upon which the Minister and Board are bound to act in assessing just compensation. It does, however, contemplate that claimants will accept the amount of compensation fixed by the Minister; because, obviously, it was never intended that the effect of the mass acquisition would be to replace the famine of buyers in the market by a feast of litigation in the courts. Where the Board spread the marketing of the crops fairly over the season, allowing all growers to participate in the varying price levels of the different months; where the compensation was fixed by the Minister having regard to the proceeds of sale received by the Board in respect of each separate crop; and where there was no dispute as to the title of the claimants, the assessment of compensation would turn on questions of fact and could be dealt with administratively; so that, although the right to compensation arose immediately the apples and pears were harvested, the Court, apart from special circumstances, would frown upon any attempt to litigate a claim for compensation prior to the end of the marketing season and would be justified in standing the litigation over until the Minister had an opportunity of making a fair offer in the light of the prices actually realized by the fruit. But reg. 12, standing alone, clearly gives a claimant the right to have the compensation determined by the court, and, as the claim is against the Commonwealth, this Court under sec. 75 of the Constitution has original jurisdiction to hear and determine the claim. Reg. 17 on the other hand seems to contemplate that a claimant might require an urgent assessment. If he did so, he could forward an immediate claim or claims limited to the apples or pears acquired by the Commonwealth which he had by that time dealt with in accordance with the instructions of the Board, and would be entitled to an immediate assessment provided a sufficient quantity of fruit had been disposed of to enable the Board to make a just recommendation and this recommendation was such that the Minister was prepared to accept it.

For these reasons I am of the opinion that, even if it is possible under placitum xxxi. of the Constitution to leave the amount of compensation for property acquired by the Commonwealth, as to which there is a dispute, to be determined by any tribunal other than a court without infringing the judicial power, which I gravely doubt, reg. 12 gives the plaintiff an absolute right to have such a claim settled by the Court; and reg. 17 does not deprive him of that right where, as here, no compensation has been determined by the Minister on the recommendation of the Board and accepted by the plaintiff. If I am wrong in this, then alternatively, I must conclude that reg. 17 is ultra vires the Constitution; but, applying the construction placed upon sec. 46 (b), supra, by my brother Dixon in R. v. Poole; Ex parte Henry [No. 2][34] , this would not destroy the validity of reg. 12.

It is therefore necessary to determine the amount of compensation to which the plaintiff is entitled, as it is obvious that he has not been paid the fair value of his fruit. He gave evidence that if he had been allowed to market the crop himself, then, because of its keeping qualities, he could have placed it in a cool store and chosen the most favourable dates on which to sell it. He said he would not have suffered from the glut for this reason, and also because in any event there would be sufficient competition to ensure a high price for fruit of its quality. But, while satisfied that this evidence represents the bona-fide opinion of an honest witness, I am not prepared to act upon it because any hypothetical conclusion to which I could come as to its value in such a convulsed state of world and local affairs would represent altogether too dangerous a feat of the imagination.

The main part of the plaintiff's fruit was marketed by the Board through Mr. Walker (an agent with fifty years' experience who, as I have said, had previously done the plaintiff's business) during a period beginning on 13th March and ending on 11th November 1940, so that the sales were spread over practically the whole season. There is no evidence to suggest that the Board did not take proper care to sell the fruit to the best advantage or that the expenses were unreasonable. In such circumstances the safest guide to the real value of the fruit is the amount it realized, and cogent evidence would be required to justify a departure from this value.

I therefore fix the compensation at £1,288. Of this amount the plaintiff has already received £968, so that I give judgment against the Commonwealth for the sum of £320 and against both defendants for costs. The Minister should have had ample time to determine the compensation by the end of January 1941 so that I also give judgment against the Commonwealth for simple interest at 4 per cent on the sum of £320 from that date until payment.

Amount of judgment for plaintiff increased from £320 to £715 9s. 6d. Subject to this variation judgment affirmed and appeal dismissed with costs.

Solicitor for the appellants, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

Solicitors for the respondent, Campbell, Condell & Paton, Orange, by Campbell, Campbell & Campbell.

H C of A

1 October 1942

Latham C.J., Rich and McTiernan JJ.

Maughan K.C. and Asprey, for the plaintiff.

Teece K.C. and A. R. Taylor, for the defendants.

May 7

Williams J

. delivered the following written judgment:—

On 1st May 1941 the plaintiff filed his statement of claim praying that the regulations might be declared ultra vires the Constitution, and alternatively that he was entitled to receive as compensation for the acquisition of his fruit the fair and reasonable market value thereof or fair compensation therefor; such value or compensation to be determined, in default of agreement, by the Court. The regulations had in the meantime been amended, but not in any manner material to this action, by 1940 Nos. 13, 38, 60, 276, 283 and 295. And, before this hearing, their constitutional validity had come up for determination by the Full Court in Andrews v. Howell[35] . The members of the Full Court, while differing on another point, held unanimously that the regulations contained just terms for the acquisition of the growers' apples and pears so as to satisfy the requirements of sec. 51 (xxxi.) of the Constitution. But, upon my reading of the judgments, my brethren, who comprised the majority of the Court, did not express a final opinion, as Mr. Teece contended, that a claimant had no right to have the amount of compensation determined by a court; while my brother Starke expressed the definite view that the regulations did confer this right. I do not read the statement of my brother Rich that "upon a proper understanding of the regulations, they sufficiently confer on the grower an absolute right to compensation determined in a fair manner by a specified administrative body" [36] as finally expressing his view that the right to compensation given to the growers by reg. 17 excluded any application to the Court. He was only dealing, I think, with the obligations of the Board. My brother Dixon, with whose judgment on this point my brother McTiernan agreed, after a considerable discussion of reg. 17, said that he did not think the Minister was able to determine what he thought fit (as compensation) "after receiving the recommendation of the Board, without adopting it. He may adopt or refuse to adopt a recommendation of the Board, but if he determines compensation it must be in pursuance of the recommendation which the Board finally makes" [37] , so that he left open the question of a claimant's rights where the Minister so refused and thereby debarred himself from determining the compensation. The appellant in Andrews v. Howell[38] had been prosecuted for moving his fruit without permission contrary to amended reg. 15 (a). The principal question, upon which the fate of the appeal mainly depended, was whether the scheme as a whole was justified by the defence power (sec. 51 (vi.)); so that it was unnecessary to decide whether regs. 12 and 17 provided for alternative methods of compensation, as my brother Starke suggested, or compensation was exclusively provided for by reg. 17; or, in the latter alternative, supposing the terms were not just because this regulation did not give an absolute right to compensation or only provided for its determination by a non-judicial and (in a legal sense) biassed person or body, to decide whether the acquisition could still be valid because, although reg. 17 was ultra vires, reg. 12 was intra vires and the scheme as a whole saved by sec. 46 (b) of the Acts Interpretation Act 1901-1937. It appears to me, therefore, that, while I am bound by the decision of the majority of the Court that the scheme is intra vires the Constitution, it is still open to me to construe the compensatory provisions of the regulations on the basis that they contain just terms which satisfy placitum xxxi. in order to determine their precise meaning and effect, deriving all the assistance which I can from the relevant observations in the judgments of my brethren in that case.

Placitum xxxi. is taken from the Fifth Amendment of the American Constitution, which provides that private property shall not be taken for public use without just compensation, and it has been held in America that, except where the assessment is made as a mere matter of calculation prior to the taking (United States v. Jones[39] ; Bauman v. Ross[40] ), just compensation requires that the determination of the amount must be made by a court (Monongahela Navigation Co. v. United States[41] ; Seaboard Air Line Railway Co. v. United States[42] ). The assessment of compensation, as it is the determination of a question affecting the rights of subjects, is a judicial function (R. v. Hendon Rural District Council; Ex parte Chorley[43] ; Errington v. Minister of Health[44] ; Estate and Trust Agencies (1927) Ltd. v. Singapore Improvement Trust[45] ).

In Frome United Breweries Co. Ltd. v. Bath Justices[46] Lord Atkinson cited with approval the following definition by May C.J. in the Irish case of The Queen v. Corporation of Dublin[47] : "The term "judicial" does not necessarily mean acts of a judge or legal tribunal sitting for the determination of matters of law, but for the purpose of this question a judicial act seems to be an act done by competent authority, upon consideration of facts and circumstances, and imposing liability or affecting the rights of others." In The King v. Federal Court of Bankruptcy; Ex parte Lowenstein[48] my brother Starke stated: "Adopting the words of Griffith C.J. in Huddart Parker & Co. Pty. Ltd. v. Moorehead[49] and cited with approval by the Judicial Committee of the Privy Council in Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation[50] "the words "judicial power" as used in sec. 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has a power to give a binding and authoritative decision (whether subject to an appeal or not) is called upon to take action." " He also said: "Thus the determination of controversies between the sovereign and its subjects, and between subjects, is part of the judicial power of the Commonwealth which from its nature does not fall within the powers of the other departments of government" [51] .

Under sec. 71 of the Constitution the judicial power of the Commonwealth can only be vested in this or some other Federal court or a State court exercising Federal jurisdiction (British Imperial Oil Co. Ltd. v. Federal Commissioner of Taxation[52] ); but many administrative matters involving quasi-judicial functions have been assigned to bodies other than courts (Federal Commissioner of Taxation v. Munro[53] , on appeal, Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation[54] ). Moreover, the judgments in Andrews v. Howell[55] seem to suggest that it may be just, in the event of a dispute, to provide for the assessment of compensation by a person or body other than a court; and there are, of course in countries such as England where parliament has an unlimited jurisdiction, many instances of compensation having been left to the determination of some administrative body or person holding some personal office such as a Minister of the Crown even where such a body or the Crown is a judge in its own cause because it has to pay the amount assessed. In such cases the body or person is exercising quasi-judicial functions, and must assess the compensation on a legal basis, so that, in default, the proceedings can be quashed or restrained by a superior court by the use of the prerogative writs of certiorari or prohibition; or it or he can be ordered to do its or his duty by mandamus. Even in the case of parliaments with unlimited powers, the practice has been to leave such questions to be determined out of court only where the title of the claimant is clear, so that in the case of resumption of land, where questions of law relating to the basis of compensation and to title arise, it has always been the practice to have the matter determined by a court, and there is no distinction in principle between the rights of subjects upon the acquisition of any of their property whether real or personal. Assuming, however, that the Commonwealth Parliament, without infringing the judicial power, can provide for compensation for property which it acquires to be assessed otherwise than by a court, it would nevertheless be essential in my opinion for it to lay down some basis for the assessment so that the court can see that ""just" terms are available by law" (per Isaacs J. in The Commonwealth v. New South Wales[56] ). If "the only powers conferred upon a so-called tribunal are in the nature of calculation, or the mere ascertainment of some physical fact or facts, and not the declaration of or giving effect to a controverted matter of legal right, it may be that they do not appertain, except incidentally, to the judicial power" (per Griffith C.J. in Waterside Workers' Federation of Australia v. J. W. Alexander Ltd.[57] ). But I am clearly of the opinion that the statute or regulations must provide for the claimant receiving the full value of his property. This has been held over and over again by the Supreme Court of the United States: See the cases cited in Yearsley v. W. A. Ross Construction Co.[58] . In Richmond Screw Anchor Co. v. United States[59] the Supreme Court said: "We must presume that Congress in the passage of the Act of 1918 intended to secure to the owner of the patent the exact equivalent of what it was taking away from him." In Jacobs v. United States[60] it said: "The amount recoverable was just compensation, not inadequate compensation. The concept of just compensation is comprehensive and includes all elements "and no specific command to include interest is necessary when interest or its equivalent is part of such compensation." " In that case the Supreme Court pointed out that the right to just compensation could not be taken away by statute or be qualified by the omission of a provision for interest where such an allowance was appropriate in order to make the compensation adequate. But reg. 17 fails to give any definite direction to the Minister or the Board as to how the amount is to be determined.

In assessing the compensation under the regulation legal questions would arise (1) as to the basis of compensation generally and in certain events, and (2) as to disputed claims. Possibly the regulations could provide a basis to which the Minister on the recommendation of the Board could in a simple case apply the facts and so determine the compensation as an administrative act, but it would be difficult to frame directions sufficient to cover all the points that might arise in order to ascertain what would be a proper equivalent in every case for the value of the property taken. Even if it was possible to do so, there could still remain for determination questions of law or mixed law and fact relating to title, as, for instance, with respect to the priority of legal mortgages, crop liens or equitable charges, or to the rights of life tenants and remaindermen under wills or settlements, or as to the basis upon which the amount of compensation should be determined in the following cases:—(a) reg. 18 provides for cancellation of contracts relating to apples and pears to be acquired under the order and a question of law could arise whether in fixing compensation a grower who had a contract for the sale of his apples and pears at prices likely to be above those obtainable in the open market had a crop with a special "potential value" ; (b) reg. 21 imposes wide obligations on the growers to preserve and safeguard apples and pears in their possession or under their care after acquisition by the Commonwealth, and reg. 14 imposes an obligation to deliver or consign them as specified by the Board, but neither regulation makes express provision for the recoupment of any expenses that they may incur in doing so, and a question of law would arise as to whether a grower had any right to such recoupment or whether the only recompense he could obtain for the faithful discharge of his obligations would be from the enhanced value of his fruit. On this point it is to be noted that Mr. Walker said a certain amount of damaged fruit gets into cool storage that should not be there, sometimes because it is exposed to excessive heat during the passage from the orchard to the store, thus giving a concrete example of what would be self-evident in any event, that the marketable quality of the fruit must depend to a substantial degree upon the care with which it is picked, packed, and delivered. So I am strongly inclined to think, although it is unnecessary to express a final view, that, having regard to the variety of questions of law or of mixed law and fact which could arise and which could not be foreseen or covered by "a "direction" in law" (per Isaacs J. in British Imperial Oil Co. Ltd. v. Federal Commissioner of Taxation[61] ), the terms could only be just if the regulations provided a means of having disputes referred to a court.

It is also a fundamental principal of law that claimants should have a fair opportunity of putting their case before their claims are determined (Board of Education v. Rice[62] ; Local Government Board v. Arlidge[63] ; R. v. City of Westminster Assessment Committee; Ex parte Grosvenor House (Park Lane) Ltd.[64] ; Mulqueen v. Minister for Labour and Industry and Zinc Corporation Ltd.[65] ; Ex parte Wilson; Re Cuff [No. 2][66] ). There is no reason to believe that the defendants would not, as they did in this action, supply claimants with information as to the proceeds of sale derived from and of the expenditure incurred in connection with the disposal of the fruit in which they were interested; but, if the Minister is the sole arbiter of the amount of compensation payable, the regulations provide no express means whereby claimants have any right to put their case before him or the Board orally or otherwise or to obtain such information, which would be indispensable if it was desired to examine the fairness of the Minister's determination. Indeed, the form of claim provided by the amended regulations does not indicate any desire on the part of the defendants to know what value the claimants put on their fruit or to hear their views in the matter at all. The whole language of reg. 17 seems to point to an ex-parte administrative assessment by the Minister on the recommendation of the Board.

The objects of the regulations are contained in reg. 2, which provides that their purpose "is to minimise the disorganization in the marketing of apples and pears likely to result from the impracticability of exporting sufficient quantities of apples and pears because of the effects upon shipping of the present war and these regulations shall be administered accordingly." So it is clear that the apples and pears were being acquired by the Commonwealth, not for its own use, but in order that they might be disposed of in such a way as not to glut the local market, when it was called upon to absorb a surplus which in times of peace would have been disposed of overseas. The Commonwealth therefore only derived the indirect benefit which would accrue from sustaining the economic front, thereby enabling growers to receive the most favourable prices for their crops possible under the unfavourable conditions; so maintaining them in as affluent circumstances as possible; and giving them an incentive to preserve their orchards so that the supply of a staple product would be assured, their incomes could be assessed for income tax, and if they died their properties would retain their value for the purposes of death duties. Often the compulsory acquisition of property gives rise to an immediate claim for compensation; but, where a perishable product is being acquired in the mass with a view to its disposal as expeditiously and advantageously as possible for the benefit of a large number of owners, it would be just to postpone the determination of the value until an assessment could be made in the light of the amount which it actually realized, and the regulations appear to be framed on this basis. Thus they provide for the acquisition of apples and pears (reg. 12), their preservation by the growers pending instructions as to their disposal (which, as my brother Dixon pointed out in Andrews v. Howell[67] would have to be within a reasonable time) (reg. 14); and the making of a claim for compensation, the determination of which can be postponed until in the opinion of the Minister a sufficient quantity of apples and pears has been disposed of to enable the Board to make a just recommendation, interim distributions (called advances) being made in the meantime on account of the ultimate amount payable.

For these reasons I am of the opinion that, even if it is possible under placitum xxxi. of the Constitution to leave the amount of compensation for property acquired by the Commonwealth, as to which there is a dispute, to be determined by any tribunal other than a court without infringing the judicial power, which I gravely doubt, reg. 12 gives the plaintiff an absolute right to have such a claim settled by the Court; and reg. 17 does not deprive him of that right where, as here, no compensation has been determined by the Minister on the recommendation of the Board and accepted by the plaintiff. If I am wrong in this, then alternatively, I must conclude that reg. 17 is ultra vires the Constitution; but, applying the construction placed upon sec. 46 (b), supra, by my brother Dixon in R. v. Poole; Ex parte Henry [No. 2][68] , this would not destroy the validity of reg. 12.

Amount of judgment for plaintiff increased from £320 to £715 9s. 6d. Subject to this variation judgment affirmed and appeal dismissed with costs.

Solicitor for the appellants, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

Solicitors for the respondent, Campbell, Condell & Paton, Orange, by Campbell, Campbell & Campbell.

1. [1941] HCA 20; (1941) 65 C.L.R. 255.

2. (1941) 65 C.L.R., at p. 264.

3. (1941) 65 C.L.R., at pp. 283, 284.

4. [1941] HCA 20; (1941) 65 C.L.R. 255.

5. [1883] USSC 249; (1883) 109 U.S. 513, at p. 519 [27 Law. Ed. 1015, at p. 1017].

6. [1897] USSC 116; (1897) 167 U.S. 548, at p. 593 [42 Law. Ed. 270, at p. 289].

7. [1893] USSC 95; (1893) 148 U.S. 312 [37 Law. Ed. 463].

8. [1923] USSC 63; (1923) 261 U.S. 299, at p. 304 [67 Law. Ed. 664, at p. 669].

9. (1933) 2 K.B. 696, at p. 704.

10. (1935) 1 K.B. 249, at p. 259.

11. (1937) A.C. 898, at p. 914.

12. (1926) A.C. 586, at p. 602.

13. (1878) 2 L.R. Ir. 371, at p. 377.

14. [1938] HCA 10; (1938) 59 C.L.R. 556, at pp. 575, 576.

15. [1909] HCA 36; (1908) 8 C.L.R. 330, at p. 357.

16. (1931) A.C. 275, at p. 295; [1930] HCA 41; 44 C.L.R. 530, at p. 542.

17. (1939) 59 C.L.R., at p. 577.

18. [1925] HCA 4; (1925) 35 C.L.R. 422.

19. [1926] HCA 58; (1926) 38 C.L.R. 153, at pp. 174-180.

20. [1930] HCA 41; (1931) A.C. 275; 44 C.L.R. 530.

21. [1941] HCA 20; (1941) 65 C.L.R. 255.

22. [1923] HCA 34; (1923) 33 C.L.R. 1, at p. 47.

23. [1918] HCA 56; (1918) 25 C.L.R. 434, at pp. 443, 444.

24. [1940] USSC 28; (1940) 309 U.S. 18, at p. 21 [84 Law. Ed. 555, at p. 557].

25. [1928] USSC 14; (1928) 275 U.S. 331, at p. 345 [72 Law. Ed. 303, at p. 308].

26. [1933] USSC 130; (1933) 290 U.S. 13, at pp. 16, 17 [78 Law. Ed. 142, at p. 143].

27. (1925) 35 C.L.R., at p. 438.

28. (1911) A.C. 179, at p. 182.

29. (1915) A.C. 120.

30. (1941) 1 K.B. 53, at p. 68.

31. (1938) 38 S.R. (N.S.W.) 583, at pp. 591-593.

32. (1940) 40 S.R. (N.S.W.) 559, at pp. 563, 564.

33. [1941] HCA 20; (1941) 65 C.L.R. 255.

34. [1939] HCA 19; (1939) 61 C.L.R. 634, at pp. 651, 652.

35. [1941] HCA 20; (1941) 65 C.L.R. 255.

36. (1941) 65 C.L.R., at p. 264.

37. (1941) 65 C.L.R., at pp. 283, 284.

38. [1941] HCA 20; (1941) 65 C.L.R. 255.

39. [1883] USSC 249; (1883) 109 U.S. 513, at p. 519 [27 Law. Ed. 1015, at p. 1017].

40. [1897] USSC 116; (1897) 167 U.S. 548, at p. 593 [42 Law. Ed. 270, at p. 289].

41. [1893] USSC 95; (1893) 148 U.S. 312 [37 Law. Ed. 463].

42. [1923] USSC 63; (1923) 261 U.S. 299, at p. 304 [67 Law. Ed. 664, at p. 669].

43. (1933) 2 K.B. 696, at p. 704.

44. (1935) 1 K.B. 249, at p. 259.

45. (1937) A.C. 898, at p. 914.

46. (1926) A.C. 586, at p. 602.

47. (1878) 2 L.R. Ir. 371, at p. 377.

48. [1938] HCA 10; (1938) 59 C.L.R. 556, at pp. 575, 576.

49. [1909] HCA 36; (1908) 8 C.L.R. 330, at p. 357.

50. (1931) A.C. 275, at p. 295; [1930] HCA 41; 44 C.L.R. 530, at p. 542.

51. (1939) 59 C.L.R., at p. 577.

52. [1925] HCA 4; (1925) 35 C.L.R. 422.

53. [1926] HCA 58; (1926) 38 C.L.R. 153, at pp. 174-180.

54. [1930] HCA 41; (1931) A.C. 275; 44 C.L.R. 530.

55. [1941] HCA 20; (1941) 65 C.L.R. 255.

56. [1923] HCA 34; (1923) 33 C.L.R. 1, at p. 47.

57. [1918] HCA 56; (1918) 25 C.L.R. 434, at pp. 443, 444.

58. [1940] USSC 28; (1940) 309 U.S. 18, at p. 21 [84 Law. Ed. 555, at p. 557].

59. [1928] USSC 14; (1928) 275 U.S. 331, at p. 345 [72 Law. Ed. 303, at p. 308].

60. [1933] USSC 130; (1933) 290 U.S. 13, at pp. 16, 17 [78 Law. Ed. 142, at p. 143].

61. (1925) 35 C.L.R., at p. 438.

62. (1911) A.C. 179, at p. 182.

63. (1915) A.C. 120.

64. (1941) 1 K.B. 53, at p. 68.

65. (1938) 38 S.R. (N.S.W.) 583, at pp. 591-593.

66. (1940) 40 S.R. (N.S.W.) 559, at pp. 563, 564.

67. [1941] HCA 20; (1941) 65 C.L.R. 255.

68. [1939] HCA 19; (1939) 61 C.L.R. 634, at pp. 651, 652.

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