R v McLennan; Ex parte Carr [1952] HCA 39; (1952) 86 CLR 46 (31 July 1952)

HIGH COURT OF AUSTRALIA

THE QUEEN v. McLENNAN; Ex parte CARR [1952] HCA 39; (1952) 86 CLR 46

Customs

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

CATCHWORDS

Customs - Regulations - Validity - Prohibited exports - Exportation harmful to Commonwealth - Opinion of Governor-General - Scrap non-ferrous metal - Exportation conditioned upon approval of department - Delegation of power - Consent - Nominees - Disconformity - Materiality - Customs Act 1901-1950 (No. 6 of 1901 - No. 80 of 1950), s. 112 - Customs Act 1951 (No. 56 of 1951), ss. 5, 7. - Customs (Prohibited Exports) Regulations (S.R. 1935 No. 2 - S.R. 1951 No. 122).

HEARING

Sydney, 1952, March 26, 27; July 31. 31:7:1952
APPEAL and ORDER NISI for a Writ of Prohibition.

DECISION

July 31.
The following written judgments were delivered:-
DIXON C.J., WILLIAMS, FULLAGAR AND KITTO JJ. This is an appeal pursuant to a conviction by a Court of Petty Sessions exercising Federal jurisdiction. The conviction was for an offence under s. 233(1)(c) of the Customs Act 1901-1949 which provides that no person shall export any prohibited exports. Section 111 also provides that no prohibited exports shall be exported. The defendant, who is the appellant, was convicted for that on or about 19th August 1949, he did export by the S.S. Tomar prohibited exports to wit certain specified quantities of scrap non-ferrous metal and he was adjudged to pay a penalty of 500 pounds; see ss. 240 and 245. (at p57)

2. The Customs (Prohibited Exports) Regulations purport to bring scrap non-ferrous metal under the category of prohibited exports. The ground upon which the appeal of the defendants is supported is that in so far as they relate to scrap non-ferrous metal the regulations are invalid. Regulation 6 provides that the exportation of goods specified in the Third Schedule of the regulations shall be prohibited, unless the conditions and restrictions respectively specified in that schedule opposite to the name or description of those goods are complied with. The sixty-fifth item on the Third Schedule give the name or description of "metals, non-ferrous, scrap" and opposite specifies a condition or restriction which, at the date of the offence stood thus - "The intending exporter shall produce to the Collector of Customs a covering approval issued by the Department of Supply and Development", see S.R. 1946 No. 138 as amended by S.R. 1948 No. 105. The general power to make regulations under the Customs Act is contained in s. 270 but the authority for the regulations in question must be found in s. 112. Since the conviction, which took place on 22nd June 1951, a new s. 112 has been substituted by the Customs Act 1951 (No. 56 of 1951) which came into operation on 11th December 1951 before the hearing of this appeal. But at the time when the regulations were made so much of s. 112 as is relied upon to support it was as follows:- "112(1) The Governor-General may, by regulation, prohibit the exportation of any goods - (b) the exportation of which would, in his opinion, be harmful to the Commonwealth . . . (2) The power contained in sub-s.(1) . . . shall extend to authorize the prohibition of the exportation of goods generally, or to any specified place, and either absolutely or so as to allow of the exportation of the goods subject to any condition or restriction. (3) All goods the exportation of which is prohibited shall be prohibited exports to the extent to which the prohibition extends." (at p57)

3. For the appellant it is said that under these provisions the Governor-General in Council, in order to make a valid regulation, must form an opinion, with reference to goods of some definite kind or description, that to export them would be harmful to the Commonwealth and then he must prohibit the exportation of goods of that kind or description. What has been done, so it is contended, amounts to no more than an attempt to delegate the determination of the question whether a proposed exportation of non-ferrous scrap metal would be harmful, an attempt to delegate it to the Department of Supply and Development. That department must say in each case whether a parcel of non-ferrous scrap metal is to be exported. Put another way the argument is that under the regulations it is the department and not the Governor-General that is to identify describe or define the goods the exportation of which is to be prohibited. It is denied that, within sub-s. (2) of s. 112, the Third Schedule opposite item 65 expresses a restriction or condition subject to which the exportation is to be allowed. For the appellant it was suggested that the restriction on the export of non-ferrous scrap metal was the outcome of a plan to maintain the home consumption price of lead at a lower level than export parity and to take part of the price of exported scrap lead as a contribution towards the recoupment of the deficiency in the price of lead consumed domestically. This, it was said, showed that no opinion had been formed that the exportation of non-ferrous scrap metal would be harmful to the Commonwealth. The respondent, on the other hand, did not admit that the administrative practice under or purpose of the regulation was that alleged and of course contested the conclusion. This Court cannot act upon the suggestion which in any case relates not to the meaning and effect of the regulations but something done under them. (at p58)

4. Many of the subsidiary arguments which might otherwise be employed in support of the appeal are precluded by the decision of this Court in Radio Corporation Pty. Ltd. v. The Commonwealth [1938] HCA 9; (1938) 59 CLR 170 : see too Poole v. Wah Min Chan [1947] HCA 37; (1947) 75 CLR 218 . (at p58)

5. These cases were, however, decided upon ss. 52(g) and 56, not on s. 112, and for the appellant it was claimed that independent considerations arose upon s. 112 and the form of the particular regulation which, without encountering either of these decisions, led to the conclusion that the regulation so far as concerned item 65 was invalid. The argument already briefly stated was accordingly advanced. The argument appears to assume that s. 112(1)(b) cannot be used if the opinion of the Governor-General is that the uncontrolled exportation of the specified goods would be harmful although it might be permitted, for example, in limited quantities or for specific purposes or upon special occasions or when the exporter fulfilled conditions calculated to avoid or reduce the mischief. (at p58)

6. But what must be considered harmful is the exportation of the goods. The harm may result from a consequent shortage, from financial or economic consequences that would ensue, or possibly from the use that would be made of the goods abroad or perhaps in the case of some kinds of goods even from the risk of political objection on the part of the country of destination. The fact that the regulation prohibits exportation of the goods unless the department approves does not mean that the decision of the question whether exportation is harmful is delegated. Nor does it mean that the Governor-General must have been of opinion that to export the goods would be harmful subject to the department not thinking otherwise. It is quite consistent with an opinion that it would always be harmful but justice or wisdom required or made it desirable to permit exceptions pursuant to an administrative discretion. It is also consistent with the view that uncontrolled exportation would be harmful but that the harmful tendencies would be sufficiently reduced or mitigated by an administrative control by a system of permits. The Order in Council by which the regulation inserting item 65 was made (S.R. 1946 No. 138, 21st August 1946), recited that the Governor-General was of opinion that the exportation specified in the regulation, except with the consent of the Minister of Trade and Customs, would be harmful to the Commonwealth. An opinion in this form is within s. 112(1)(b) (2) and (3). It is within these provisions because, construing them together they seem clearly enough to contemplate a prohibition which is not absolute but is conditional or is restrictive only, restrictive that is in the sense that it is less than a complete prohibition, and because the opinion need go no further than "the extent to which the prohibition extends", to use the words of sub-s. (3). It is true that there seems to be some disconformity between the recited exception of the consent of the Minister of Trade and Customs and the actual provision opposite item 65 specifying the approval of the Department of Supply and Shipping (as did the first form of the condition or restriction). But this disconformity means only an immaterial variation in the choice of the Minister responsible for the exercise of the discretion, immaterial to validity. The truth is that the ground left uncovered by the two decisions of this Court to which reference has been made gives no sufficient support for an attack upon the validity of the regulations in relation to item 65. (at p59)

7. As has been said already, s. 112 under which the regulations were made has since been replaced by a new s. 112: see s. 5 of Act No. 56 of 1951. Section 7 of the last mentioned Act says that all regulations made under the Customs Act 1901-1934, or under that Act as amended, prohibiting the exportation of goods whether absolutely or subject to conditions or restrictions shall be deemed to have been at all times and to be as valid and effectual as if made under the Principal Act (Customs Act 1901-1950) as then amended, i.e. by the Act No. 56 of 1951. (at p60)

8. The respondent contended that even if the regulations were not authorized by s. 112 as it stood, this provision validated them. For had the new provision been in force when the regulations were made, it would have sufficed to authorize them. (at p60)

9. The provision in the new s. 112 upon which the respondent relied is s. 112(1) and (2)(c) considered in combination. Sub-section (1) confers a power by regulation to prohibit the exportation of goods from Australia. Sub-section (2) provides that this power may be exercized by prohibiting the exportation of goods unless prescribed conditions or restrictions are complied with. The reasons already given for the conclusion that the regulations so far as they concern item 65 are within the power conferred by the old s. 112 apply with equal force to these provisions. The question therefore does not arise whether if the terms of the new s. 112 had been insufficient to cover the regulations, they would have gone out of force owing to the repeal by s. 5 of Act No. 56 of 1951 of the provision under which they had been made and to the terms of s. 7; cf., Craven v. City of Richmond (1930) VLR 153 . In view of the conclusions already expressed still less does the question arise whether upon an appeal to this Court from an order made before the passing of a provision in the form of s. 7, that provision is to be taken into account. (See New Brunswick Railway Co. v. British and French Trust Corporation Ltd. (1939) AC 7, at p 33 ; Performing Right Society Ltd. v. Bray Urban District Council (1930) AC 377 ; Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan [1931] HCA 34; (1931) 46 CLR 73 , cf. Millner v. Raith [1942] HCA 21; (1942) 66 CLR 1 ). (at p60)

10. For the foregoing reasons the appeal should be dismissed and the order nisi discharged with costs. (at p60)

WEBB J. This is an application to make absolute an order nisi for a prohibition restraining proceedings on a conviction of the prosecutor, Tony Carr, before a magistrate for a breach of a regulation purporting to be made under the Customs Act 1901-1949 in exporting (in August 1949) non-ferrous scrap metal without the covering approval of the Department of Supply and Shipping, and adjudging Carr to pay a fine of 500 pounds. (at p60)

2. The questions now left for determination are:- (1) Whether the regulation was valid; and, if not, (2) whether it was validated by s. 7 of the Customs Act 1951; and, if so, (3) whether such validation is to be disregarded for the purpose of these proceedings. (at p61)

3. As to (1): s. 112 of the Customs Act 1901-1936 provided, so far as material, that
"(1) The Governor-General may, by regulation, prohibit the exportation of any goods . . .
(b) the exportation of which would, in his opinion, be harmful to the Commonwealth . . .
(2) The power contained in subsection (1) . . . shall extend to authorize the prohibition of the exportation of goods generally, or to any specified place, and either absolutely or so as to allow of the exportation of the goods subject to any condition or restriction". (at p61)

4. By the Customs (Prohibited Exports) Regulations the exportation of goods specified in six schedules is prohibited except that in the Third Schedule there is a list of classes of goods the exportation of which is prohibited unless the conditions and restrictions specified in that schedule opposite the names or descriptions of such goods are complied with. (at p61)

5. In S.R. 1946 No. 138 the Governor-General, after reciting the provisions of s. 112 of the Customs Act 1901-1936, states, omitting immaterial parts:-
"and whereas I am of opinion that the exportation of goods specified in this Regulation, except with the consent of the Minister of State for Trade and Customs, would be harmful to the Commonwealth;

Now therefore I . . . make the following regulation . . .
Amendment of the Customs (Prohibited Exports) Regulations.
The Third Schedule . . . is amended (b) by adding, at the end

thereof the following items:-
65. Metals, non-ferrous, scrap The intending exporter shall produce to the Collector of

Customs a covering approval
issued by the Department of
Supply and Shipping". (at p61)

6. It will be observed that in the recital reference is made to the Minister of State for Trade and Customs; whereas in the condition opposite item 65 the reference is to the Department of Supply and Shipping. (at p61)

7. Now is the condition set out opposite item 65 a valid condition? (at p61)

8. In my opinion it is not. (at p61)

9. The goods, the exportation of which is, in the opinion of the Governor-General, harmful to the Commonwealth are the goods the exportation of which is not consented to by the Minister of Trade and Customs: not the exportation of all non-ferrous scrap metal, but only that to which the Minister does not consent. This determination is made by the Governor-General exclusively under s. 112(1)(b) and is valid, although the Governor-General limits what is harmful by reference to the Minister's consent. This is not an exercise of the power given to the Governor-General by s. 112 (2) to permit exportation subject to conditions or restrictions. The Governor-General purports to exercise that further power later in the amendment to the regulations by adding to item 65, the so-called condition appearing opposite thereto. If this condition were imposed on the exercise of a power to prohibit the exportation of goods absolutely, and not with reference to the harmful nature of such exportation in the opinion of the Governor-General, the validity of the condition could not be questioned (Radio Corporation Pty. Ltd. v. The Commonwealth [1938] HCA 9; (1938) 59 CLR 170 ). Here, however, the class of goods the exportation of which is sought to be prohibited is itself determined by reference to a condition, that is to say, to the existence of the opinion of the Governor-General that their exportation would be harmful to the Commonwealth. Then the condition opposite item 65 is a condition imposed upon a condition. But this further condition cannot be held to be a proper condition and valid if it is inconsistent with the first condition, as I think it is if it leaves the Department of Supply and Shipping free to grant its covering approval for a reason which conflicts with the opinion of the Governor-General. Now I think that is what it does. To be valid it should have indicated the reason for which the covering approval might be granted, but assuming always that the exportation would otherwise be harmful to the Commonwealth. (at p62)

10. I think then that the part of the regulation under which the prosecution was launched was invalid. (at p62)

11. As to (2): s. 112 of the Customs Act 1901-1950 was repealed by s. 5 of the Customs Act 1951 and the following new section was enacted:- "(1) The Governor-General may, by regulation, prohibit the exportation of goods from Australia.
(2) The power conferred by the last preceding sub-section may be exercised - (a) by prohibiting the exportation of goods absolutely; (b) by prohibiting the exportation of goods to a specified place; or (c) by prohibiting the exportation of goods unless prescribed conditions or restrictions are complied with". (at p62)

12. Section 5 of the 1951 Act does not effect a repeal and re-enactment of s. 112(1)(b). If it did the regulations made under the repealed s. 112(1)(b) would continue in force as the re-enactment would then be retrospective: Re Ashcroft; Ex parte Todd (1887) 19 QBD 186 . Then, if the Act of 1951 made no further provision, all regulations made under the repealed s. 112(1)(b) would fall with the repeal, as they would no longer have any statutory support (Watson v. Winch (1916) 1 KB 688 ; Victorian Stevedoring and General Contracting Co. Pty. Ltd. and Meakes v. Dignan (1931) 46 CLR, at p 102 per Dixon J.). To meet this situation s. 7 of the Act of 1951 was enacted. It reads:-
"All regulations made under the Customs Act 1901-1934, or under that Act as amended, prohibiting the exportation of goods, whether absolutely or subject to conditions or restrictions, shall be deemed to have been at all times, and to be, as valid and effectual as if made under the Principal Act as amended by this Act." (at p63)

13. It will be observed that s. 7 does not refer to regulations purporting to be made under the Customs Act. However, if s. 7 were unnecessary as regards valid regulations made under the repealed s. 112 then it could properly be taken to refer to, and to be intended to validate, invalid regulations; otherwise it would serve no purpose. But as s. 7 is necessary to keep in force valid regulations it cannot, in my opinion, properly be held that Parliament also took the extreme step of validating invalid regulations, and thereby of creating offences out of acts or omissions which, when they were done or omitted, were innocent, or at least were not unlawful. (at p63)

14. As to (3): This question need not be decided by me because of the answers I have given to the first two questions. But I cannot see how in deciding what was the law when a conviction was recorded, we can, without disregarding the intention of Parliament, exclude from consideration an enactment made retrospective to a date before the conviction, and which would have warranted the conviction. The limitation of an appeal to a determination on the materials before the Court below and on the state of the law when that Court's decision was given does not, in my opinion, justify such exclusion. (at p63)

15. I would make the order absolute. (at p63)

ORDER

Appeal dismissed and Order Nisi discharged with costs.