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High Court of Australia |
WRAGG v. STATE OF NEW SOUTH WALES [1953] HCA 34; (1953) 88 CLR 353
Constitutional Law (Cth.)
High Court of Australia
Dixon C.J.(1), McTiernan(2), Williams(3), Webb(4), Fullagar(5), Kitto(6) and
Taylor(7) JJ.
CATCHWORDS
Constitutional Law (Cth.) - Potatoes - Grown in Tasmania - Consumers in New South Wales - State legislation - Price - Fixation - Order - Effect - Freedom of inter-State trade or commerce - Validity of statutory provision and order - The Constitution (63 & 64 Vict. c. 12), ss. 51 (i), 92 - Prices Regulation Act 1948-1949 (N.S.W.) (No. 26 of 1948 - No. 24 of 1949) - Prices Regulation Order No. 322 (N.S.W.).
HEARING
Sydney, 1953, March 25-27, 30, 31.DECISION
June 9.2. The argument upon which the plaintiffs depend appears to me to mean that in the case of an article imported into a State, State law cannot fix the maximum price at which it may be sold in any transaction between buyer and seller at any stage between importation and purchase by the actual consumer. It is of course clear that in the case of most imported articles sales which take place in the course of distribution to the consumer are, when considered by themselves, entirely intra-State transactions. If they take on the character of inter-State commerce it must be in virtue of some inseparable connection with the importation of the article from another State. The distinction which is drawn between inter-State trade and the domestic trade of a State for the purpose of the power conferred upon the Parliament by s. 51 (i.) to make laws with respect to trade and commerce with other countries and among the States may well be considered artificial and unsuitable to modern times. But it is a distinction adopted by the Constitution and it must be observed however much inter-dependence may now exist between the two divisions of trade and commerce which the Constitution thus distinguishes. A legislative power, however, with respect to any subject matter contains within itself authority over whatever is incidental to the subject matter of the power and enables the legislature to include within laws made in pursuance of the power provisions which can only be justified as ancillary or incidental. But even in the application of this principle to the grant of legislative power made by s. 51 (i.) the distinction which the Constitution makes between the two branches of trade and commerce must be maintained. Its existence makes impossible any operation of the incidental power which would obliterate the distinction. Section 92 does not confer power but restricts it. It is commonly said that it confers an immunity. For it denies power to the legislatures to impair the freedom of trade, commerce and intercourse among the States. The argument for the plaintiffs presents all the appearance of an attempt to take the principles relating to the inclusion in a grant of power of what is incidental or ancillary to its fulfilment, and, by applying such principles to the denial of power which is involved in s. 92, to extend the area of the immunity. Moreover, the extension of the area of immunity proposed by the argument is inconsistent with the maintenance of the distinction which s. 92 makes as clearly as does s. 51 (i.). (at p386)
3. It may be conceded that in general it is true that to fix the price at which commodities may be sold at any of the successive stages between production or importation and consumption will produce some economic effect upon production or importation, as the case may be. But that is to say little more than that the course of trade and commerce in a commodity is not divisible and that one transaction is interdependent with another. The economic interdependence of trade and commerce among the States with the domestic trade of a State cannot lead to a weakening of the legal distinction which the Constitution itself makes. Some closer connection must appear than the interdependence of domestic transactions within a State with the importation which itself amounts to inter-State trade in the commodity. Difficulties doubtless exist in saying when the importation which amounts to inter-State trade is complete, so that any further dealing with the commodity, whether by way of handling, sale or other disposition, does not belong to the inter-State transaction. It may be conceded that what is indispensable to the completion of the actual importation is within the protection of s. 92. An illustration or analogy is supplied by our decision in Fergusson v. Stevenson (1951) 84 CLR, at p 435 . There possession of the article was penalized by State law. We said: "The transaction in which the defendant's company engaged was essentially one of inter-State trade and the possession which the informant makes the ground of the prosecution was an inseparable concomitant or consequence of that transaction". Accordingly we held that s. 92 protected possession from the penal consequence which the State law sought to affix. (at p387)
4. It is, I think, undeniable that once the potatoes imported from Tasmania in the course of business which is described in the case stated have been delivered from the wharf in Sydney any further dealing with them by sale or other disposition forms part of the domestic trade of New South Wales. If any such sale is brought within the protection of s. 92, so that it cannot be governed by State legislation fixing the maximum price, it can only be on the ground that the fixing of the maximum price for the domestic sale produces economic consequences prejudicing importation because it affects the domestic price which an importer can afford to pay. This cannot, in my opinion, justify the application of s. 92 to the transactions. The law restricting the price is not one operating in reference to or in consequence of any matter or thing itself forming part of trade, commerce or intercourse among the States. It does not limit the legal freedom to import potatoes or to contract to buy them for shipment from Tasmania. Its operation is to create conditions of trade in potatoes within New South Wales which react on the economic, not the legal, capacity of the trader desiring to import Tasmanian potatoes. The economic consequences which it may have upon inter-State trade may well be serious, but that is a different thing from interference by law or government action with the freedom which s. 92 confers. When it is said that s. 92 gives protection against restrictions upon trade, commerce and intercourse among the States which are direct as distinguished from laws or governmental acts which involve some indirect or consequential prejudice, it is this kind of thing that is contemplated. On the other hand if the operation of the law is upon acts, matters or things which in themselves form part of inter-State trade I do not suppose that it matters that it is done by circuitous or devious means. It is a time-honoured principle that you cannot do indirectly what you are forbidden to do directly. It would be strange if the principle did not apply to the effectuation of a constitutional limitation or restriction like s. 92. But no such question arises in the present case. Apart from the special position of the primary wholesaler this case seems to me to depend simply on an attempt to push the operation of s. 92 into the domestic trade of a State on the ground that inter-State importation must depend on that trade. I cannot see how that can be done. (at p388)
5. But there remains the special position of the primary wholesaler. No doubt
from a practical point of view it is of small consequence
whether the first
sale, the sale made by him, is protected from price fixing, if the succeeding
sales are not. The ground for suggesting
that the first sale may be protected
lies in the course of business in importing potatoes from Tasmania to Sydney
as it is described
in the case stated. It is the result of that course of
business that the first sale made in New South Wales is part and parcel of
the
process of importation because without it potatoes would remain at the ship's
side and not go into intra-State trade? Paragraph
17 (c) of the case stated as
amended is as follows:-
"On arrival at Sydney the potatoes shipped are allotted by the P. I. C. Pty.
Ltd. among Sydney merchants who are primary wholesalers
within the meaning of
the Prices Regulation Orders, and who sell potatoes exclusively, or almost
exclusively, to persons in New South
Wales who are secondary wholesalers
within the meaning of the said Orders. Except in the case of the small
proportion sold otherwise
than to secondary wholesalers, the merchant does not
take the imported potatoes into store, but sells them ex wharf, and delivery
is taken by the purchaser at the wharf". (at p388)
6. Does this mean that the sale by the primary wholesaler is an inseparable part of the inter-State transaction? In my opinion the facts stated are insufficient to justify that conclusion. I think that they show no more than a course of business in which it is convenient to make the first intra-State sale from the wharf. (at p388)
7. I am therefore of opinion that nothing appears which prevents the Prices Regulation Acts 1948-1949 (N.S.W.) operating upon the declarations and orders referred to in the case stated so that they apply to the sales of potatoes by the plaintiffs. (at p388)
8. After the case was stated the orders went out of force. It is perhaps desirable to add that, even had my opinion been that they could not, while in force, validly apply to the selling of Tasmanian potatoes in New South Wales, I should doubt whether we ought in such circumstances to make any declaration of right in the plaintiff's favour concerning the operation of the revoked orders. However, this is not a matter which I need pursue. (at p388)
McTIERNAN J. I agree with the reasons for judgment of the Chief Justice and my brother Taylor, and I am of opinion that the questions asked in the case stated should be answered accordingly. (at p389)
WILLIAMS J. I agree substantially with the reasons of the Chief Justice and Taylor J. and that leads me also to agree with the answers to the questions in the case stated proposed by Taylor J. (at p389)
WEBB J. I would find as a fact that s. 92 is not infringed by this State general price-fixing legislation, or by anything done or proposed to be done under it; and I would answer the questions in the case in the negative. (at p389)
2. In James v. The Commonwealth (1936) AC, at p 620; 55 CLR, at p 49 the Privy Council intimated that State general price-fixing legislation, did not infringe s. 92. It is true that their Lordships based this view on price-fixing being a sovereign right of the States, and on s. 92 not being intended to give a preference to inter-State trade over intra-State trade; whereas in The Commonwealth v. Bank of New South Wales (1950) AC 227, at p 313; (1949) 79 CLR, at p 642 the application of s. 92 was said by the Privy Council to depend on whether the legislation in question has a direct and not merely a remote effect on inter-State trade; and if it has a direct effect then whether in its true character it is regulatory. However, in my opinion, it is by no means clear that their Lordships in the James' Case (1936) AC 578; 55 CLR 1 did not apply the test afterwards stated in the Banks' Case [1949] HCA 47; (1950) AC 235; (1949) 79 CLR 497 . It is, I think, open to us to conclude that their Lordships thought that, if or although general price-fixing legislation had a direct effect, still it was merely regulatory, and so was the exercise of a soveriegn right of the State enacting it if, like this legislation, it did not discriminate against inter-State trade. At all events, I do not think that their Lordships said anything from which it must necessarily be deduced that they took a view inconsistent with that expressed in the Banks' Case (1950) AC 235; (1949) 79 CLR 497 . (at p389)
3. In W. & A. McArthur Ltd. v. Queensland (1920) 28 CLR, at p 559 general price-fixing legislation of the State of Queensland was formally held by this Court to infringe s. 92 only where the contract stipulated that the goods were to be brought from New South Wales to Queensland; although some of the reasoning of their Honours suggests that s. 92 would have been infringed even where the goods had been brought from the one State to the other without any such stipulation (1920) 28 CLR, at p 545 . Their Lordships in the James Case (1936) AC 578; 55 CLR 1 could not have overlooked that. Yet they thought that this Court had in McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 denied a sovereign right of the State of Queensland. (at p390)
4. As in dealing with the transport legislation, so in dealing with this general price-fixing legislation, or any other legislation claimed to infringe s. 92, I am content to adopt and apply the views of the Privy Council on the legislation once they have been intimated, whether obiter or otherwise, and until they are modified, unless it is incontestable that such views are erroneous. I say this because counsel supporting this general price-fixing legislation did not rely either wholly or mainly on the observations of their Lordships in the James Case (1936) AC, at p 620; 55 CLR, at p 49 . But if those observations are to be disregarded, then I think that State general price-fixing legislation, because of its terms or its operation, may well be found to infringe s. 92 and not merely to the limited extent indicated by the formal order in McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 . In Field Peas Marketing Board (Tas.) v. Clements & Marshall Pty. Ltd. [1948] HCA 10; (1948) 76 CLR 414 the buyers of the commodity in the producing State were able to retain it against the State's proclamation of compulsory acquisition of the commodity, even when there was no stipulation in the contract with the producers that the commodity should be taken to another State. But the effect of s. 92 does not end in the producing State. As pointed out by Evatt J. in Vacuum Oil Co. Pty. Ltd. v. Queensland "the main element in the inter-State trade is the marketing of the goods in the second State" (1934) 51 CLR, at p 134 . Section 92 may then protect against a maximum price declared under State legislation not only the first sale but also subsequent sales in the second State until the commodity loses its identity as the produce of the first State, whether by being mixed with other similar produce or otherwise; at all events where, as here, the maximum prices on the subsequent sales are based on the maximum price on the first sale. In deciding as a question of fact whether s. 92 is infringed such economic considerations are relevant: the Banks' Case (1950) AC, at p 310; (1949) 79 CLR, at p 639 . (at p390)
5. However, this general price-fixing legislation provides in s. 1 (3) that it is to be construed "subject to the Commonwealth of Australia Constitution Act" and so it does not purport to give a power to interfere with inter-State trade. Then the only question that arises if the observations in the James Case (1936) AC, at p 620; 55 CLR at p 49 are disregarded is whether declarations, notifications or other action purporting to be made or taken under the legislation infringes s. 92. But unless the contrary appears it must be assumed that any such declaration, notification or action has, like the legislation itself, no application to inter-State trade, if otherwise it would prohibit or restrict that trade or purport to confer a power so to do. There are at present no declarations or notifications under this general price-fixing legislation applying to potatoes: they have been revoked or cancelled. However, it is said that the Minister administering this legislation has intimated that they may be reissued. Even if they were reissued they would not necessarily infringe s. 92, either in their terms or in their operation. Nor is there any threat of action in relation to particular potatoes such as warranted the Court's intervention in Cam & Sons Pty. Ltd. v. Chief Secretary (N.S.W.) [1951] HCA 59; (1951) 84 CLR 442 . (at p391)
FULLAGAR J. In this case I agree with the judgment of Taylor J. and with the observations of the Chief Justice. (at p391)
KITTO J. I am of the same opinion, and have nothing to add. (at p391)
TAYLOR J. The case stated by Fullagar J. in this matter raises a number of questions for the consideration of the Full Court but before referring to them it is convenient to advert to the circumstances in which these questions arise. (at p391)
2. The plaintiffs Wragg, Brown, Wing and Malley are growers of potatoes in the State of Tasmania, whilst Clements & Marshall Pty. Ltd. is a company, incorporated in that State, which there carries on the business of a merchant dealing in potatoes. The plaintiff Cameron & McFayden Pty. Ltd. is a company incorporated in New South Wales and there carries on the business of a merchant dealing, inter alia, in potatoes grown in Tasmania and imported into New South Wales. It is common ground that potatoes grown in Tasmania, where, in general, the production exceeds the demand, are and have, for a number of years, been imported into New South Wales in considerable quantities, and that there is an extensive trade in such potatoes between merchants in this State and growers or their representatives in Tasmania and also between importers and wholesalers and retailers in New South Wales. It is in these circumstances that the plaintiffs sought declarations concerning the validity of the Prices Regulation Act 1948-1949 (N.S.W.) and Prices Regulation Order No. 322 made thereunder claiming that they infringed the provisions of s. 92 of the Constitution. (at p391)
3. The prices Regulation Act purports to be an Act to make provision for the regulation of prices and rates of certain goods and services. By s. 20 the prices commissioner is entitled, at his absolute discretion, to fix and declare maximum prices at which any declared goods may be sold generally, or in any part of the State, and to declare that the maximum price at which any such goods may be sold by any person shall be such price as is fixed by the commissioner by notice in writing to that person. Maximum prices may be fixed under this section upon any basis determined by the commissioner. This power, as appears from what I have said, applies only with respect to declared goods and the power to declare any goods to be "declared goods" for the purposes of the Act is reposed in the Minister administering the Act. The Act does not prescribe any limitations to these generally expressed powers to declare goods and to fix maximum prices, but, apart from the provisions of s. 1 (3), it is reasonably clear that declarations made thereunder may extend to all existing or future goods in New South Wales and that maximum prices may be prescribed in relation to all sales in New South Wales of declared goods. (See Bradshaw v. Gilbert's (Australasian) Agency (Vic.) Pty. Ltd. [1952] HCA 58; (1952) 86 CLR 209 ). But such an operation of the provisions of the Act would be sufficiently wide to embrace sales made in New South Wales of goods imported from or to be forwarded by a seller in another State or of goods to be forwarded to a purchaser in another State. The prescription of maximum prices with respect to such sales, it is claimed, would constitute an infringement of s. 92 and accordingly, it is said, the provisions referred to should be read down pursuant to s. 1 (3). But the plaintiffs, as subsequently appears, sought to advance their argument beyond this point. (at p392)
4. At the time of the commencement of the suit potatoes were declared goods for the purposes of the Act, and Prices Regulation Order No. 322, which was promulgated on 6th March, 1953, and which related to the maximum prices which might be charged upon sales of potatoes, was in force. But when this appeal came on to be heard the order was no longer in force and potatoes were no longer declared goods. This circumstance, however, does not disentitle the plaintiffs to have considered the questions which have been stated in the case. (at p392)
5. Prices Regulation Order No. 322 prescribed the maximum prices for potatoes upon sales by retail, sales by "primary wholesalers" and sales by "secondary wholesalers". The expression "primary wholesaler" was defined by the order to mean "in relation to the sale of any potatoes, a person who sells those potatoes to a person other than a retailer and who - (a) is registered as a primary wholesale potato merchant with the Potato Marketing Board; . . . (b) or has bought or in any way acquired those potatoes from a grower in New South Wales . . .; (c) or has imported those potatoes from a source outside New South Wales". "Secondary wholesaler" was defined to mean "in relation to the sale of any potatoes, a person other than a primary wholesaler who sells potatoes by wholesale". The definitions of these expressions raise difficulties of their own, but it is unnecessary in this case to advert to them, for it is reasonably clear that the order purported to fix prices upon the sale of potatoes, whether imported or not, at every stage of the trade until they found their way into the hands of the consumer. A maximum price is fixed in relation to any sale by the importer, upon any subsequent sale by a wholesaler and upon the ultimate sale by retail to the consumer. It is reasonably obvious that if maximum prices may validly be prescribed for all sales by retail or for all sales by wholesale a declaration that an importer of Tasmanian potatoes is entitled to make his purchases free of any restrictions imposed by the Act, would not advantage the plaintiffs for the bare prescription of a price at which potatoes may be sold by retail would in a substantial measure determine the price which the importer, and any subsequent wholesaler, would be able, economically, to pay to their immediate suppliers. No such declaration is sought, nor did the order purport to fix maximum prices upon purchases by importers from their suppliers in any other State. But the plaintiffs do contend that the fixing of a maximum price upon sales by retail, or upon any anterior sale, would infringe the provision of s. 92, for it is claimed that the business of importing potatoes cannot be freely carried on if, upon a sale at any stage of their marketing, a maximum price is fixed. With this view, I am unable to agree. It is, no doubt, true that when potatoes are imported into New South Wales they are imported in order that they may ultimately be sold to consumers, but it does not necessarily follow that the prescription of a maximum price upon a sale at any stage of their marketing constitutes a direct burden upon or impediment to trade, commerce and intercourse among the States or otherwise impairs the freedom guaranteed by s. 92. No doubt the prescription of a maximum price for retail sales might, as already indicated, have an economic effect upon the importing business, but the effect would vary, if not from day to day, then from time to time. (at p393)
6. The relation to s. 92 of legislation operating to fix maximum prices for
goods generally was considered in W. & A. McArthur
Ltd.
v. Queensland [1920] HCA 77; (1920)
28 CLR 530 , and it is of importance to note that the Court was there
concerned with transactions,
some of which
it thought
formed part of trade,
commerce and intercourse among the States and some of which it thought did
not. In
that case, the
Court was
concerned with the question of the validity
of a notification which purported, under statutory authority,
to fix maximum
prices at
which certain goods could be sold in the State of Queensland. The
case has been referred to as one which
establishes the
proposition
that the
legislature of one State is debarred by s. 92 from authorising the fixing of
prices which may
be charged in
that State for
goods imported from another
State, but as far as I can see McArthur's Case did not establish any such
wide
proposition.
The pleadings
in the case specified four different classes of
transactions with which the plaintiff was concerned
and it is convenient
to
set out
the material allegations from the statement of claim (1920) 28 CLR, at
p 532 :-
"7. The plaintiff Company has in New South Wales stocks of woollen goods,
blankets, sheetings, millinery and all kinds of textile
materials and
including (inter alia) calico sheeting, sheets and men's felt hats.
8. The plaintiff Company employs its travellers or agents in the State of
Queensland for the purpose of selling its said goods
there, and such
travellers or agents there offer goods of the said descriptions for sale to
persons in the said State for delivery
in Queensland.
9. The said travellers or agents as agents for the plaintiff also obtain
from persons in Queensland offers to purchase goods of
the said descriptions
for delivery in Queensland, and the said travellers or agents forward to the
plaintiff such offers and the
plaintiff in Sydney accepts the same and
despatches the goods to the said persons in Queensland to supply the said
offers.
10. The said travellers or agents also as agents for the plaintiff agree in
Queensland to sell goods of the said descriptions to
such persons in
Queensland for delivery in Queensland.
11. The said travellers or agents as agents for the plaintiff also agree in
Queensland to sell goods of the said descriptions to
persons in Queensland,
the goods to be despatched from the plaintiff's warehouse in Sydney and to be
delivered by plaintiff to purchasers
in Queensland". (at p394)
7. In their joint judgment Knox C.J. and Isaacs and Starke JJ., after full consideration, said "The prohibition by a State Legislature of inter-State sales of commodities either absolutely or subject to conditions imposed by State law is, in our opinion, a direct contravention of sec. 92 of the Constitution, and the freedom guaranteed by that section is so fundamental a provision of the Constitution that it is not permissible for a majority of a Full Bench of this Court in full agreement as to constitutional principle and interpretation to follow the decision in Duncan's Case [1916] HCA 67; (1916) 22 CLR 556 if in their opinion it is wrong in law" (1920) 28 CLR, at p 555 . But their Honours did not hold that each class of transactions above referred to constituted a part of trade, commerce and intercourse among the States and, for the application of the general proposition which they propounded, found it necessary to consider "whether any of the four methods of transacting business above detailed are outside the operation of the Act, because they are of an inter-State character" (1920) 28 CLR, at p 559 . On this point they said: "The first (par. 8) and third (par. 10) of these methods do not necessarily involve any act done outside Queensland or any transaction of an inter-State character. The goods offered for sale or agreed to be sold are not stated to be either by express stipulation or necessary implication supplied from New South Wales, or anywhere outside Queensland. A contract of sale if effected or the delivery of goods agreed to be sold might, at the option of the vendor, for all that appears, be consummated entirely within the State of Queensland. If so, it is impossible to say these transactions are of an inter-State character. . . . The first and third methods, as alleged, are consistent with either domestic or inter-State character. If the vendor elects to supply the goods from New South Wales, the actual movement of the goods from State to State would, of course, be inter-State trade and commerce; and would be protected accordingly. But the 'offer for sale' and the 'agreement for sale' would not be changed in character, and they are all we are concerned with as to the two methods mentioned. As to the second (par. 9) method, the traveller in Queensland does an act by which he aids or abets or becomes knowingly concerned in the making of a contract in New South Wales which, if done in Queensland, would be an offence under sec. 12. By the terms of sec. 29 (7) he is deemed to have committed the offence itself, and is punishable accordingly. Now, the thing done outside Queensland which is imputed to the traveller, namely, a contract made according to the second method, is similar to the first and third methods; that is, it is a contract for goods which neither by the expressed terms of the contract nor by its implications are necessarily deliverable from any State but Queensland, and, therefore, is not shown to be an inter-State transaction. The offence, consequently, as far as appears is one relating to purely domestic trade. The fourth (par. 11) method, according to the criterion of inter-State trade, commerce and intercourse above stated, is distinctly an inter-State transaction" (1920) 28 CLR, at pp 559, 560 . (at p396)
8. With this view Rich J. (1920) 28 CLR, at pp 569, 570 agreed and Higgins J. expressly held that the Act was invalid only "so far as it imposes a penalty on travellers in Queensland of a New South Wales firm, for selling, agreeing to sell or offering for sale goods to be sent from the firm's warehouse in Sydney" (1920) 28 CLR, at p 563 . (at p396)
9. These passages indicate to my mind that the Court did not in McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 hold that the legislature of the State of Queensland was not entitled to regulate its own domestic prices, though the Judicial Committee of the Privy Council appears, in James v. The Commonwealth (1936) AC 578; 55 CLR 1 , to have taken the view that the decision "deprived Queensland of its sovereign right to regulate its internal prices" (1936) AC, at p 620; 55 CLR, at p 49 . As I read McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 it is an express decision to the effect that the Queensland legislature has power to fit maximum prices upon all sales in Queensland, except those made in the course of trade, commerce and intercourse among the States. But, however this may be, there is nothing in James' Case (1936) AC 578; 55 CLR 1 to throw any doubt upon the view that the State of Queensland could validly prescribe the maximum prices which might be charged in that State for all goods other than those the subject of sales in the course of inter-State trade, nor upon the further proposition that where "a contract of sale if effected or the delivery of goods to be sold might, at the option of the vendor, for all that appears, be consummated entirely within the State of Queensland . . . it is impossible to say these transactions are of an inter-State character". (at p396)
10. The second of these propositions does not appear to be, as was suggested in argument, in conflict with the views expressed in The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 , where the burden attracted by the first sale of motor spirit in South Australia or by its use in that State was regarded as a tax on the goods in the importers' hands, nor with the reasons for the decision in Vacuum Oil Co. Pty. Ltd. v. Queensland [1934] HCA 5; (1934) 51 CLR 108 in which case a majority of the Court held the Queensland legislation to be in conflict with s. 92, not because the first sale of petrol in Queensland was itself a part of trade, commerce and intercourse among the States, but rather because "the person chosen for the imposition of the liability is selected because he is the importer" (per Rich J. (1934) 51 CLR, at p 118 ), or because the legislation "imposes upon the person, who introduces petrol into the State for sale, a burden to which he would not otherwise be subject" (per Dixon C.J. (1934) 51 CLR, at p 126 ). McTiernan J. expressly pointed out that the validity of the Queensland legislation under s. 92 did not depend upon whether the operation of the Act was confined solely to intra-State sales and went on to say that the Act imposed "a burden on the plaintiff in respect of the first 'sale' made by it in Queensland of motor spirit which it brings there from some other State in carrying on its business in the manner alleged in the statement of claim" (1934) 51 CLR, at p 141 . The destruction of the legislation under consideration in the last two cases may well be said to have resulted, not because the affected transactions were themselves necessarily part of inter-State trade and commerce, but because the particular burdens imposed were, in the circumstances, considered to be burdens directly imposed upon inter-State trade as such. Upon this view it was not material that the burden was imposed at a stage when the goods themselves may have ceased to be the subject of inter-State trade for as Dixon C.J. observed in Field Peas Marketing Board (Tas.) v. Clements and Marshall Pty. Ltd. (1948) 76 CLR 414, at p 423 , "freedom 'as at the border', freedom of passage across State lines, means a freedom from restrictions and burdens operating against transference from one State to another at whatever point the burden or restriction is imposed. It may be before or after the actual movement from one State to another. It may be in the State in which the trade originates or in that where it terminates. It may be a prior restraint or a subsequent burden". (at p397)
11. The restrictions which result from the provisions of the Prices Regulation Act are of a character entirely different from the imposts considered in The Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia [1926] HCA 47; (1926) 38 CLR 408 and Vacuum Oil Co. Pty. Ltd. v. Queensland [1934] HCA 5; (1934) 51 CLR 108 . They do not result in the levying of a tax upon goods or upon importers, nor in the imposition of an impost or burden upon a person because he has introduced goods from one State into another. The prescription generally of a maximum selling price for any commodity does not subject any person to a burden or impost or other disability because he is the importer of particular goods; he is subject to the restrictions in his dealings in the commodity whether he is an importer or not. (at p398)
12. In the present case the facts show that some of the sales are made by importers whilst subsequent sales are made by persons who do not fall within this category. Sales by the latter persons are clearly not part of inter-State trade and McArthur's Case [1920] HCA 77; (1920) 28 CLR 530 is clear authority for the proposition that local price fixing legislation may validly apply to them. I have already said that there is nothing in James' Case (1936) AC 578; 55 CLR 1 to weaken the authority of this proposition, but the plaintiffs' arguments require that it should be re-examined in the light of the decision of the Judicial Committee in The Commonwealth v. Bank of New South Wales (1950) AC 235; (1949) 79 CLR 497 . The substance of the plaintiffs' argument on this point was that the prescription of maximum prices at any stage of the marketing in New South Wales of Tasmanian potatoes directly burdens or interferes with inter-State trade as such. But it is important again to observe that both the Act and the order made thereunder deal generally with goods, whether locally produced or imported from any other country, and any effect which the prescription of a general price for intra-State sales may have on the business of importing potatoes from Tasmania is not a direct effect but an economic consequence too remote to constitute an impairment of the freedom which s. 92 assures. It is an effect which, as I have already said, will vary from time to time. Indeed, this is recognised by the allegation in the statement of claim that by reason of the maximum price which it is able to offer the plaintiff Cameron & McFadyen Pty. Ltd. "is at times unable to obtain its full requirements of Tasmanian potatoes". The italics are mine and serve to emphasize the proposition that the disadvantage alleged did not result directly from the operation of the provisions of the Act or of the Price Fixing Order but was the indeterminate and variable product from time to time of a number of economic factors of which the existence of the order was but one. I cannot regard any such effect as the "necessary legal effect" as distinct from "the ulterior effect, economically or socially", or as distinct from "some indirect or consequential impediment which may fairly be regarded as remote". The conclusion might well be different if it were established in any particular case that a Prices Regulation Order relating to intra-State sales had been promulgated for the purpose of preventing or impeding or otherwise burdening the business of importing such goods into New South Wales from another State. (at p399)
13. With respect to sales by "primary wholesalers" who are importers there may be stronger grounds for invoking s. 92, for some of these sales may actually be made in the course of inter-State trade. But before the plaintiffs can invoke s. 92 they must establish that, at least, some of those sales are of such a character as to be within the protection of s. 92. In my opinion, the facts leave this matter completely open. It is true that, except in the case of the small proportion sold by primary wholesalers otherwise than to secondary wholesalers, the primary wholesaler does not take the imported potatoes into store but sells them ex-wharf and delivery is taken by the purchaser at the wharf, but such sales are not necessarily part of inter-State trade. Possibly, upon examination, some may be found to fall within this category, but this is not sufficient to entitle the plaintiffs to any declaration based on the assumption that all or any of them constitute a part of trade, commerce and intercourse between the States even if, by reason of s. 92 such sales are not subject to the provisions of the legislation - a point which the views above expressed leave completely open. (at p399)
14. For the reasons which I have given I am of the opinion that the questions
asked should be answered as follows:-
Question 1. Are the plaintiffs or any and which of them entitled to any and
which of the declarations claimed by the statement
of claim or to any other
and what relief by reason of the facts and matters herein stated? Answer: None
of the plaintiffs is entitled
to any part of the relief claimed.
2. May potatoes imported from Tasmania be lawfully sold in New South Wales
-
(a) by the plaintiff Cameron & McFadyen Pty. Ltd. andother primary wholesalers:
(b) by secondary wholesalers:at prices in excess of the maximum prices respectively fixed from time to time by Orders made under the Prices Regulation Act of New South Wales? Answer: (a) No. (b) No. (c) No.
(c) by retailers:
ORDER
Questions in the case stated answered as follows:-
1. None of the plaintiffs is entitled to any part of
the relief claimed.
2. (a) No.
(b) No.
(c) No.
3. No.
Case stated remitted to Fullagar J. with these answers.
Costs of the case stated to abide the order of the judge on the further hearing of the suit.
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