Cam & Sons Pty Ltd v Chief Secretary of NSW [1951] HCA 59; (1951) 84 CLR 442 (17 October 1951)

HIGH COURT OF AUSTRALIA

CAM & SONS PTY. LTD. v. THE CHIEF SECRETARY OF NEW SOUTH WALES [1951] HCA 59; (1951) 84 CLR 442

Constitutional Law

High Court of Australia
Dixon(1), McTiernan(2), Williams(1), Webb(1), Fullagar(1) and Kitto(1) JJ.

CATCHWORDS

Constitutional Law - Freedom of inter-State trade and commerce - State marketing legislation - Sale of fish for human consumption - Sale in market - Compulsion - Seizure of fish - Legislative power of State - Reading down clause in statute - Injunction - Extent - Discretion of Court - The Constitution (63 & 64 Vict. c. 12), s. 92 - Fisheries and Oyster Farms Act 1935-1949 (N.S.W.) (No. 58 of 1935 - No. 41 of 1949), ss. 1 (3), 4, 14, 40B, 94.

HEARING

Sydney, 1951, April 16-18.
Melbourne, 1951, October 17. 17:10:1951
APPEAL from the Supreme Court of New South Wales.

DECISION

October 17.
The following written judgments were delivered:-
DIXON, WILLIAMS, WEBB, FULLAGAR and KITTO JJ. This is an appeal from a a suit brought by the appellant company against the respondents. The object of the suit was, primarily, to obtain a decision that s. 40B(1) of the Fisheries and Oyster Farms Act, 1935-1949 (N.S.W.) is invalid as inconsistent with the freedom of trade, commerce and intercourse among the States which is guaranteed by s. 92 of the Constitution of the Commonwealth. Alternatively a decision was sought that s. 40B(1) is to be construed as limited so as not to have an operation infringing the constitutional guarantee. (at p450)

2. Section 40B(1) provides that, subject to the provisions of the Act, no person shall in any district sell any fish for human consumption unless such fish have first been brought to and sold in the market for the district, or in any market established, controlled or operated by a trading society under and in accordance with the provisions of s. 10A of the Co-Operation Act, 1923-1949 (N.S.W.). The expression "shall . . . sell" must be construed in accordance with s. 4(1), which provides that "'To sell' means to sell by wholesale or by retail or by auction, and includes barter or exchange, supply for profit, offer for sale, receive for sale, have in possession for sale, expose for sale, send, forward or deliver for sale, cause or suffer or allow to be sold, offered or exposed for sale; and words derived therefrom have a corresponding meaning". The word "sold", however, in the context of s. 40B(1) is clearly used in its ordinary sense; and the sub-section, in order that it shall not be self-contradictory, must be construed as prohibiting selling (in the defined sense of the term) otherwise than in one of the markets to which it refers. (at p450)

3. Fish sold (in the defined sense) for human consumption, contrary to the provisions of s. 40B(1), are made by s. 94 liable to forfeiture to His Majesty; and s. 14(c) empowers an inspector appointed under the Act to seize, take, detain, remove and secure any fish which he has reason to believe is liable to be forfeited under the Act. (at p450)

4. The effect of s. 40B(1) cannot be appreciated without reference to certain other provisions of the Act. First, s. 40(1A), which was inserted by the Co-operation (Amendment) Act 1949 (N.S.W.), provides that, as from the commencement of the 1949 Act, no person other than the corporation sole constituted under s. 41A (that is, the defendant the Chief Secretary of New South Wales), or a trading society to which the Governor has given approval to establish, control or operate markets for the sale of fish pursuant to s. 10A of the Co-operation Act, 1923-1949, shall sell fish in any market referred to in s. 40(1), that is (having regard to the repeal of the Sydney Corporation Act, 1932-1942 by the Act No. 30 of 1948) any market established under the Act or provided and controlled by the council of a municipality or shire. Next it is to be observed that s. 40A creates a fish supply district to be known as the Metropolitan Fish Supply District, with boundaries which, by proclamation under the Act, have been extended to include within it (as we have been informed by counsel), the whole of New South Wales except the Western Division. Thirdly, the expression in s. 40B(1), "the market in the district", must be understood, in the light of the definition of "market" in s. 4 and the repeal of the Sydney Corporation Act 1932-1942, as meaning any fish market established in and for a district under the Act; and the power to establish fish markets is reposed in the Minister (that is, the defendant the Chief Secretary) by s. 41B(1)(a). Finally, it must be observed, in regard to the reference in s. 40B(1) to "any market established, controlled or operated by a trading society under and in accordance with the provisions of section 10A of the Co-operation Act, 1923-
1949", that the last-mentioned section prohibits a trading society from establishing, controlling or operating any markets for the sale of fish except with the approval of the Governor after a report and recommendation furnished to the Minister by an advisory council or an advisory committee. (at p451)

5. It will be seen, in view of these provisions, that the qualifying words in s. 40B(1) exclude only such fish as have been brought to and sold in the market established by the Minister in and for the Metropolitan Fish Supply District, or in a market established, controlled or operated by a trading society with the approval of the Governor. There is an exception created by sub-s.(3) of s. 40B in favour of a licensed fisherman who is the holder of a consent given by the Minister, but that is inapplicable in the present case. (at p451)

6. Section 40B(1), therefore, in its application to the plaintiff purports, subject to the provisions of the Act, to preclude the plaintiff from selling (including having in possession for sale) in the Metropolitan Fish Supply District any fish for human consumption, otherwise than by sale in a market established either by the Minister or by a trading society with Executive approval, unless such fish have first been brought to and sold in such a market. (at p451)

7. The statement of claim, as amended, alleges that the plaintiff is a company carrying on business at Pyrmont (par. 1); that the defendant the Chief Secretary of the State of New South Wales is the Minister vested by the Fisheries and Oyster Farms Act, 1935-
1949 (N.S.W.) with the administration of that Act (par. 2); that the defendant Buttsworth is the Under-Secretary to the defendant Minister (par. 3); and that the defendants have established markets for the purposes of the Act (par. 4). It alleges also that the plaintiff carries on the business of catching fish by means of deep sea trawling and the business of providoring (par. 5); that fish so caught are brought to the plaintiff's premises and there cleaned, graded and packed (par. 6); that a portion of the fish caught by the plaintiff, when packed, is sold by it to buyers residing in and carrying on business in the States of Victoria and Queensland, and not in any market established under the Act (pars. 7 and 12); that a further portion is forwarded by the plaintiff for sale by the defendants on a commission basis in markets established by them pursuant to the Act (pars. 8 and 11); and that the remaining portion is sold by the plaintiff in the course of its providoring business and not in any market established under the Act (pars. 9 and 12), the providoring business consisting in the sale of fish to buyers residing and carrying on business in the States of New South Wales, Victoria and Queensland (par. 10). All the fish so sold are conceded to be sold for human consumption (par. 10A). Then follow allegations that on 5th September 1950 the plaintiff received from the defendant Under-Secretary a letter ordering the plaintiff in future to deliver all fish taken by it to the markets in conformity with s. 40B of the Act (par. 13); that since receiving that letter the plaintiff has continued to carry on its business as previously described (par. 14); and that on 21st September 1950 certain inspectors appointed under the Act came to the plaintiff's premises and seized and took away certain of the plaintiff's fish on the ground that the plaintiff had failed to comply with the directions contained in the letter and had failed to deliver those fish to the market in conformity with s. 40B (par. 15). It is alleged also that the plaintiff fears that further parcels of its fish will be seized in purported pursuance of the provisions of the Act for the failure of the plaintiff to deliver such fish to the market in conformity with the section mentioned, and that the plaintiff will be seriously hampered in the carrying on of its business and will suffer irreparable injury (par. 16). (at p452)

8. The statement of claim seeks injunctions restraining (1) the seizure of fish the property of the plaintiff upon the ground that such fish have not first been brought to and sold in the market for the district pursuant to the provisions of s. 40B of the Fisheries and Oyster Farms Act, 1935-1949, and (2) the seizure, upon the same ground, of fish the property of the plaintiff which is intended to be or is being sold by the plaintiff inter-State. (at p452)

9. The plaintiff moved on notice before Roper C.J. in Eq. for an interlocutory injunction restraining the defendants until the hearing of the suit or further order from seizing the plaintiff's fish or taking any other action provided by the Act. At the hearing of the motion the defendants demurred ore tenus to the statement of claim, but after argument had been heard on the demurrer, affidavit evidence was read. (at p453)

10. The evidence established that a portion of the plaintiff's fish is sold by the plaintiff direct to both local and inter-State buyers. It proved three instances, all on 7th September 1950, of consignments of fish to consignees in other States. In two of these instances the fish were consigned for sale by the consignee on behalf of the plaintiff. It was also proved that before and since 7th September 1950 the plaintiff has consigned various quantities of fish "by way of sale" to inter-State buyers. (at p453)

11. The letter referred to in the statement of claim was proved to be a letter in the following terms:- (at p453)

12. "As you are aware a proportion of the fish caught by your Company's vessels is retained at your Company's premises and is not delivered to the markets as required by law. (at p453)

13. This has given rise to serious complaints and I have to notify you that in future all fish taken by your Company for sale must be delivered to the markets in conformity with the provisions of Section 40B of the Fisheries and Oyster Farms Act". (at p453)

14. The seizure alleged in the statement of claim was proved. Evidence adduced by the defendants of a conversation which took place at the time of the seizure showed that the fish seized had come off the plaintiff's trawler the previous night, that they were about to be delivered by the plaintiff to a certain cafe in Sydney, that they had not been through any market, that they were intended for human consumption, and that they were being seized for the reason that they had not passed through a market. (at p453)

15. The evidence also established the facts alleged in pars. 1, 2, 3, 5, 7 and 8 of the statement of claim. (at p453)

16. The learned Chief Judge in Equity took the view that on the evidence before him the plaintiff was not entitled to succeed in the suit. The motion was thereupon turned by consent into a motion for decree, and the suit was dismissed. (at p453)

17. The learned Judge held, first, that s. 40B(1) is consistent with s. 92, because it must be construed, having regard to s. 1(3) of the Act, as applicable only to circumstances in which its operation produces no conflict with s. 92. Section 1(3) is in the following terms:- "This Act shall be read and construed subject to the Commonwealth of Australia Constitution Act, and so as not to exceed the legislative power of the State, to the intent that where any provision of this Act, or the application thereof to any person or circumstance is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances shall not be affected." (at p454)

18. Secondly his Honour held that no case had been made for an injunction against seizures of fish in derogation of the freedom of inter-State trade protected by s. 92, because he saw no evidence of any threat to seize any fish other than fish which the plaintiff intended to sell in New South Wales in circumstances similar to those which had existed with regard to the fish seized on 21st September 1950, and in regard to those fish no element of inter-State trade was involved. (at p454)

19. On the first point his Honour was clearly right. Plainly s. 40B(1) cannot validly operate, consistently with s. 92 of the Constitution, to prevent the plaintiff from disposing of its fish in the course of inter-State trade; but s. 1(3) makes it impossible to hold that s. 40B(1) is intended to have such an operation. It was submitted for the plaintiff that the intention manifested by s. 40B(1) would be completely defeated by adopting a construction which would avoid conflict with s. 92. It was said that the policy of the section was that all fish must be sold in a market, and that to import any exception into it so as to give effect to s. 92 would be to create a new and different enactment. The argument appeals to an inappropriate principle. It has of course been held repeatedly that an enactment which would be invalid if given a full operation according to its terms cannot be saved by the application of a general reading-down provision such as is found in s. 15A of the Acts Interpretation Act 1901-1950 (Cth.) if a positive indication appears in the enactment that the legislature intended it to have either a full and complete operation or none at all. This principle, however, is inappropriate in relation to s. 40B(1), because, with s. 1(3) forming part of the same legislative instrument and actually being repeated by reference in the introductory words of s. 40B(1) itself, there is no room for a conclusion that that section indicates an intention inconsistent with a partial operation in the event of complete operation being held to offend against the Constitution. The section must therefore be construed, as the learned Chief Judge in Equity held, so as to leave untrammelled the freedom of trade and commerce among the States for which s. 92 provides. So construed, it is plainly valid. (at p454)

20. The learned Judge thought that this conclusion disentitled the plaintiff to any relief in the suit, being of opinion that there was no evidence of any threat to act in excess of the powers which the Act confers consistently with s. 92. But the defendants had not at any stage retreated from the position taken up in the letter of 4th September 1950. They had not suggested that inspectors appointed under the Act were not under their control, and they had not denied their intention to meet by seizure any attempt on the part of the plaintiff to sell fish for human consumption otherwise than by sale in the markets. They had relied upon ss. 14(c), 94 and 40B as together authorizing their threatened actions; and, by contending that s. 40B was merely regulatory and therefore was capable of a full operation according to its terms without infringing s. 92, they had made it abundantly clear that they intended to cause seizure of the plaintiff's fish without regard to any effect which the seizures might have in preventing the plaintiff from dealing with its fish in inter-State trade. The uncontradicted evidence showed that the plaintiff had a trade in the course of which he made sales to inter-State buyers. (at p455)

21. In this Court the defendants repeated their submission that s. 40B is merely regulatory; and they added alternative submissions to the effect that the section should be regarded as legislation for the preservation of health or the prevention of famine. The conclusion they sought to draw was that s. 40B requires no qualification of its terms in order to be consonant with s. 92, and that therefore it operates to prohibit the selling for human consumption of any fish, without exception, which have not first been brought to and sold in a specified market. There is no basis for this argument. Section 40B cannot be regarded as regulatory legislation, for, unless the seeming completeness of its prohibition is subject to a qualification in respect of inter-State trade, it operates directly to terminate, and not to regulate, the inter-State trade in fish of persons in the position of the plaintiff. The submission that the section is to be regarded as a health measure is unsupported by anything to be found in the Act. It is true that sub-s.(2) of s. 40B provides that when fish have been brought to the market in any district they shall not be sold for human consumption until they have been inspected and certified as fit for human consumption; but this is plainly an appendage to the scheme. The sub-section applies only to sales in markets established by the Minister. Sales in markets established by trading societies and sales by licensed fishermen holding the Minister's consent are not made subject to any similar provision. The apparent object of the section is not the preservation of health, but the diversion of fish to the specified markets. The suggestion that the section is directed to the protection of the populace from famine may be dismissed as untenable, without staying to consider how an enactment really directed to that purpose would stand in relation to s. 92. (at p455)

22. The conclusion that s. 40B (1) must be construed as limited in its operation so as not to detract from the freedom of trade among the States carries the consequence that ss. 14(c) and 94 do not operate, by reason of the prohibition in s. 40B(1), to authorize any seizure of fish whereby freedom of inter-State trade is denied to the plaintiff. (at p456)

23. The case made by the plaintiff for protection against seizures in excess of the statutory powers thus limited clearly attracts the equitable jurisdiction of the Supreme Court. It is a case of a threat to cause the commission of repeated trespasses to the plaintiff's goods, which, if committed, would result in serious damage to the plaintiff's business; and it is well-established that a Court of Equity will grant an injunction to restrain the execution of such a threat: Kerr on Injunctions, 6th ed. (1927), p. 93; see also Beswicke v. Alner (1926) VLR 72, at pp 76, 77 ; Model Dairy Pty. Ltd. v. White (1935) 41 ALR 432, at p 434 ; Penfolds Wines Pty. Ltd. v. Elliott [1946] HCA 46; (1946) 74 CLR 204, at pp 239, 240 . (at p456)

24. Since the defendants have shown plainly an intention to act towards the plaintiff on the basis that the prohibition in s. 40B(1) operates to prohibit the plaintiff from selling its fish even in inter-State trade, the plaintiff is entitled to relief. It would be possible to grant an injunction in general terms, restraining the defendants and each of them from causing or permitting any inspector to seize any fish of the plaintiff in excess of the powers conferred upon him by the Act; but it is undesirable as a matter of discretion to grant such an injunction, first because the defendants may be expected to endeavour to secure that in future the Act is applied in a manner consistent with s. 92, and secondly because it is desirable that an injunction, if any is required for the adequate protection of the plaintiff, should relate to specific instances of threatened action in excess of the authority which the Act confers when construed as subject to s. 92. The relief to which, in our opinion, the plaintiff is entitled in the circumstances of the case is a declaration that s. 40B of the Fisheries and Oyster Farms Act, 1935-1949, does not apply to a selling of fish (within the definition of "to sell" in s. 4) if the selling forms part of or is for the purpose of inter-State trade, and a further declaration that ss. 14 and 94 in combination do not in their application to s. 40B (1) authorize the seizure of fish by reason of their being sold (within the said definition of "to sell") if the selling forms part of or is for the purpose of inter-State trade. No declaration which could be framed consistently with the statute as affected by the combined operation of s. 92 of the Constitution and s. 1(3) could avoid leaving the defendants with the difficulty of determining for themselves and at their own risk whether each seizure which is contemplated in future for breach of s. 40B is within the residue of power which remains after giving effect to s. 92, the legislature having chosen to give no other guidance than that which is provided by making the application of s. 40B to any given circumstances dependent upon its consistency with the Constitution. The plaintiff will be sufficiently protected by reserving to it liberty to apply to the Supreme Court in this suit for an injunction in the event of any threat or apprehension of a seizure or detention of fish of the plaintiff which, having regard to s. 92, are not liable to be seized or detained under the powers conferred by the Act. (at p457)

25. The appeal should be allowed with costs, the decree of the Supreme Court should be set aside, and in lieu thereof there should be a decree making declarations and reserving liberty to apply as abovementioned, and ordering the defendants to pay the costs of the suit up to and including the decree. (at p457)

McTIERNAN J. In my opinion the appeal should be dismissed. (at p457)

2. The appellant claims an injunction to restrain the respondents from seizing its fish upon the ground that the appellant has disobeyed s. 40B of the Fisheries and Oyster Farms Act 1935-1949 (N.S.W.). The fish in respect of which an injunction is claimed is placed by the statement of claim in two categories, namely, the appellant's fish in general and fish which it intends to sell or is selling inter-State. (at p457)

3. It is argued that s. 40B offends against s. 92 of the Constitution and it would therefore be unlawful for the respondents to seize any of the appellant's fish for disobedience to s. 40B. If it were unlawful the appellant would have an equity to the relief claimed. The Parliament of New South Wales has, of course, power to make a law in the terms of s. 40B applying to fish which is not the subject of inter-State trade. It is argued that s. 40B offends against s. 92 and it cannot be construed to apply only to fish the subject of intra-State trade. I do not agree with that argument. It is implicit in the statement of claim that fish which the appellant intends to sell but has not yet sold inter-State is, for the purposes of s. 92, the subject of inter-State trade. There is as yet no authority for this proposition. (at p457)

4. In sub-s.(3) of s. 1, Parliament has provided for the contingency that a court may hold that some provision in the Act is invalid because, for example, it is contrary to s. 92 of the Constitution. The clear intention of the sub-section is that if s. 40B should be held to be in conflict with s. 92, s. 40B should apply to fish which the State Parliament has power to bring within the scope of the section. The result is that, as to fish which are not the subject of inter-State trade, it would be lawful for the respondents to carry out their threat of seizure, a sanction provided by s. 94 for disobedience to s. 40B. There is no equity to restrain the seizing of such fish. (at p458)

5. There is no evidence that the respondents seized any fish except a parcel which was in transit from the appellant's premises in Sydney to a cafe in Sydney. The appellant set up that it is part of its business to sell fish inter-State; and proved two sales of fish which it made across the borders of New South Wales. The evidence shows that these two sales were made after the respondent warned the appellant that its fish would be seized if it did not comply with s. 40B. The warning applied to all fish caught by the appellant for human consumption. No distinction was made between the categories of intra-State and inter-State trade. The proof of the appellant's interest to claim an injunction to keep its inter-State trade free from the trammels of s. 40B rests upon the evidence of these two sales. (at p458)

6. The insertion of sub-s. (3) of s. 1 may be regarded as ex majore cautela. The principal Act was passed when the doctrine of McArthur's Case (W. & A. McArthur Ltd. v. Queensland) [1920] HCA 77; (1920) 28 CLR 530 was in force. The question whether s. 40B offends against s. 92 has to be decided in the light of more recent cases. The case which solves a problem under s. 92 most like the problem raised by s. 40B is the Milk Board (N.S.W.) v. Metropolitan Cream Pty. Ltd. [1939] HCA 28; (1939) 62 CLR 116 (at p458)

7. Section 40B is part of a legislative plan analogous to that contained in the Milk Act 1931-1936 (N.S.W.). The section is in Division 6 of Part III. of the present Act. This Division deals with the "Consignment and sale of fish". It comprises provisions relating to the preparation of fish for sale, the packing of fish, the labelling of containers, the standard of containers, the licensing of fish agents and salesmen and the constitution of fish supply districts. Section 40B regulates the sale of fish intended for human consumption. Sub-section (1) provides that no person shall sell any such fish in any district unless it has been brought to and sold in the market in the district. Sub-section (2) forbids the sale of any fish brought to the market in any district until it has been inspected and certified as fit for human consumption. Sub-section (3) of s. 40 gives power to the Minister to issue a consent to any licensed fisherman to sell otherwise than in accordance with sub-s. (1) but subject to the conditions which the sub-section prescribes. (at p459)

8. Section 40B is part of a plan for the regulation of the marketing, inspection and distribution of fish intended for human consumption. The plan is of the same type as that provided in the Milk Act 1931-1936, which was held in the Milk Case to be consistent with s. 92 of the Constitution. The reasoning in that case which determined the judgment of the Court applies in the present case. In my opinion s. 40B should not be held to offend against s. 92; and it would not be unlawful for the respondents to enforce the sanctions of the Act against the appellant if it does not observe the provisions of sub-ss. (1) and (2) of s. 40B in selling fish for human consumption. (at p459)

ORDER

Appeal allowed with costs. Decree of Supreme Court of New South Wales set aside. In lieu thereof declare that s. 40B of the Fisheries and Oyster Farms Act 1935-1949 does not apply to a selling of fish (within the definition of "to sell" in s. 4 of the said Act) if the selling forms part of or is for the purpose of inter-State trade.

And further declare that ss. 14 (c) and 94 in combination do not in their application to s. 40B (1) authorize the seizure of fish by reason of their being sold (within the said definition of "to sell") if the selling forms part of or is for the purpose of inter-State trade.

Reserve to the plaintiff liberty to apply to the Supreme Court of New South Wales in this suit as it may be advised for an injunction in the event of any threat or apprehension of a seizure or detention of fish of the plaintiff, which, having regard to s. 92 of the Constitution, are not liable to be seized or detained under the powers conferred by the Act.

Order the defendants pay the costs of the plaintiff of the motion and suit up to and including this date.