Otzen v Beabout [1947] HCA 49; (1947) 75 CLR 116 (12 December 1947)

HIGH COURT OF AUSTRALIA

Otzen Informant, Appellant; and Beabout Defendant, Respondent.

H C of A

12 December 1947

Latham C.J., Starke, Dixon, McTiernan and Williams JJ.

Louat, for the appellant.

The following written judgments were delivered:—

Dec. 12

Latham C.J.,

Dixon, McTiernan and Williams JJ.

This is an appeal from a decision of a court of petty sessions exercising Federal jurisdiction. The decision dismissed an information laid under the National Security Act 1939-1946 for a contravention of the National Security (Prices) Regulations. The contravention alleged consisted in selling in the lounge of the Hydro Majestic Hotel, Medlow Bath, declared goods, namely spirituous liquors (whisky) at a price greater than the maximum price fixed under the regulations in relation to such goods. It appeared from the evidence that the defendant was the licensee of the hotel. The sale was not made by him, but by a barmaid. The owner of the hotel and the proprietor of the business was shown to be The Hydro (Medlow Bath) Ltd., an incorporated trading company. Whisky was in fact sold at a price 1d. above the maximum price fixed under the Prices Regulations. The defendant and the barmaid were both servants of the company. The magistrate was of opinion that the sale made by the barmaid was a sale by the company and not by the defendant, and on that ground he dismissed the information.

Regulation 29 (1) (a) of the Prices Regulations provides that a person shall not sell or offer for sale any declared goods at a greater price than the maximum price fixed in relation thereto under the regulations for the sale of those goods. Sub-regulation (3) of reg. 29 provides that for the purpose of the regulations any person on whose behalf or at whose place of business any declared goods are sold or offered for sale at a greater price than the maximum price fixed, whether the goods are sold or offered for sale contrary to the instructions of the person or not, shall be deemed to have contravened the provisions of this regulation unless the court is satisfied that the sale or offering for sale took place without his knowledge and that he had systematically used all due diligence to secure observance of these regulations.

The defendant gave evidence that he had instructed those employed in the hotel to sell liquors within the maximum prices, and that the sale made by the barmaid in question was made without his knowledge or prior information. The magistrate did not say whether he accepted this evidence or not, but he said that he was not satisfied that the defendant had systematically used all due diligence to secure observance of the Prices Regulations. If it had been shown that the defendant had procured or had in any way been directly or indirectly knowingly concerned in or party to the sale he would, under s. 5 of the Crimes Act 1914-1941, have been deemed to have committed the principal offence, and would have been punishable accordingly; but no reliance was placed upon that provision for lack, doubtless, of the necessary finding of fact.

We must, we think, assume that the defendant gave no express prior authority for a sale of spirits above the fixed price, and that the sale was in fact made without his actual complicity. His employment with the company was regulated by a contract of service under which he was employed at a weekly wage and at a percentage of takings. He was required to devote his whole time and attention to the conduct and management of the hotel, and to hold the publican's licence for the hotel in trust for the company. He contracted with the company to comply with the requirements of the Liquor Act.

It is, of course, State law, not Federal law, to which it is necessary to refer in order to determine whether a given transaction amounts to a sale or to establish the identity of the seller.

It is the law of sale which decides such questions. Under that law a man may occupy the position of seller in a contract of sale, although he is not the actual owner of the goods. The property will pass under the sale if the seller has the authority of the owner: see per Hilbery J., Hotel Regina (Torquay) Ltd. v. Moon[1].

It is, therefore, of no importance that the licensee is not himself the owner of the liquor he sells. It is sufficient that he is the real seller and has authority over the disposal of the liquor.

Under s. 43 of the Liquor Act 1912 N.S.W. it is an offence for a person to sell liquor without holding a licence authorizing the sale thereof unless he is the agent or servant of the holder of such licence. Section 15 provides that the publican's licence shall authorize the licensee therein named to dispose of liquor, but only on the premises therein specified. According to State law, therefore, the defendant himself as licensee might lawfully have sold liquor, and any of the persons employed in the business, provided they were his agents or servants, might have done so. This condition of State law gives rise to a prima-facie presumption which can be relied upon in the administration of the Federal law that the barmaid in selling the liquor acted either as the licensee's servant or as his agent. Upon the facts it seems clear that she was in fact the servant of the company, and not of the licensee. This circumstance, however, leaves open the inference that she acted as the defendant's agent. If she were not, her action would have been completely unlawful and for that reason alone it should be assumed that in selling the liquor she acted under his authority. It is, moreover, the natural inference from the circumstances that the servants of the company placed at the disposal of the manager were intended to act under his directions and, as it was necessary that he should take the responsibility under the law as licensee, that they should have his actual authority as licensee for what they did. This does not mean that it is to be presumed that she had his actual authority for infringing the Prices Regulations by selling above the fixed prices. But it does justify a conclusion that for the purposes of sub-reg. (3) of reg. 29 he was a person, to use the language of that regulation, on whose behalf declared goods are sold or offered for sale at a greater price than the maximum price.

The words "on whose behalf" do not necessarily imply that the transaction was with the actual authority of the person represented. The exculpatory part of the sub-regulation shows that that is not intended. Notwithstanding that the defendant was the servant of the company, it may be taken to have been the common intention of the company and the defendant that in transactions with the public he should, as between the company and the public, occupy the position of principal. It may be true that as between himself and the company the defendant was their servant or agent, but that is quite consistent with the company's putting him forward as the licensee of the hotel as a party principal to the sale of food and liquor made in the course of the business. Nor would it matter that some or all of the members of the public who bought food or liquor in the hotel were aware that the company was the true proprietor of the business. The common intention between the defendant and the company that the ultimate control of the conduct of the business and the exclusive enjoyment of its proceeds, less his percentage deduction, should rest with the company is not incompatible with the common intention between them that he should be the party to the relations with others which arose out of the daily conduct of the business. Licensing laws make the existence of the latter common intention almost imperative. In New South Wales and in England it would appear to be the position that the sale of liquor on hotel premises by a person who is neither the authorized agent of the licensee nor a person selling through the licensee as the apparent principal is an offence. The licensee must be no mere dummy. He must be a responsible actor in the conduct of the business. But no offence is committed by a principal if the sales are made by a licensed person, notwithstanding that the liquor belongs to the principal: see Mellor v. Lydiate[2] and Peckover v. Defries[3].

These considerations give rise to a conclusion of fact, for such we think it is, that the sale of the liquor by the barmaid on the occasion in question was as between the customer and the licensee—a sale made on behalf of the licensee in purported execution of his authority. That brings the defendant within the application of sub-reg. (3). The operation of that sub-regulation is to place upon him vicarious responsibility for the sale made by the barmaid at a price above the maximum fixed.

For these reasons we are of opinion that the decision of the magistrate was erroneous, and his decision dismissing the information should be set aside. It was suggested that this Court might convict the defendant and impose a penalty, but in our opinion the proper course is to remit the information to the magistrate.

Starke J.

The Hydro (Medlow Bath) Ltd. is an incorporated company which owns the Hydro Majestic Hotel. It engaged the respondent as manager of the hotel and the business thereof under the supervision in all things of the company or its managing directors.

The publican's licence in respect of the hotel was granted to the respondent under the Liquor Act 1912 of New South Wales. The licence authorizes the licensee to sell and dispose of liquor in the hotel premises subject to the provisions of the Act (see Act, s. 15). And any person who sells liquor without holding a licence authorizing the sale, unless he is the agent or servant of the holder of such licence, is guilty of an offence (Act, s. 43). Further, the Act makes the licensee responsible for the conduct of the premises in respect of which he is licensed.

The respondent was charged under the National Security (Prices) Regulations that he sold in the hotel declared goods, to wit liquor, at a price greater than the maximum price fixed by the regulations (reg. 29). The evidence disclosed that a barmaid who was employed in the hotel sold liquor contrary to the regulations. She was under the direction of the respondent as manager of the hotel but could not lawfully sell liquor in the hotel unless she was his servant or agent. She did sell it however and under his direction and with his knowledge.

In general a person is responsible only for his own acts but there are cases in which the law imposes on him vicarious responsibility for the acts of others. And the present is a case in which such a responsibility is brought about by force of the provisions of the Liquor Act and also by force of his own direction as licensee of the hotel.

The stipendiary magistrate, nevertheless, acquitted the respondent but stated a case for the determination of this Court, the question being whether his determination was erroneous in point of law.

In my opinion it was and the question stated should be so answered and this appeal allowed.

Appeal allowed with costs. Order of the magistrate set aside. Matter remitted to the stipendiary magistrate to be dealt with according to law.

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

[1] (1940) 2 K.B. 69, at p. 72.

[2] (1914) 3 K.B. 1141.

[3] (1906) 95 L.T. 883.