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High Court of Australia |
BREAD MANUFACTURERS OF NEW SOUTH WALES AND OTHERS v EVANS AND OTHERS [1981] HCA 69; (1994)
180 CLR 404
Administrative
HIGH COURT OF AUSTRALIA
GIBBS CJ(1), MASON(2), MURPHY(3), AICKIN(4) AND WILSON(2) JJ Administrative
Law - Price fixing - Prices Commission - Public inquiry
- Private studies by
Commission - "Whether duty to disclose Consulation with Minister -
Ascertainment of ministerial policy - Effect
on validity of order - Revocation
of order - Effect of invalidity of intended new order - Discretionary power -
Ministerial order
dispensing with public inquiry - Whether duty to give
opportunity for submissions - Prices Regulation Act 1948 (N. S.W.), ss. 8B-8F,
9, 13, 15, 20, 58.
DECISION
GIBBS CJ The appellants, the plaintiffs in the action in the Supreme Court, are a trade association representing bread manufacturers in New South Wales ("the Association") and five individual bread manufacturers. The object of the appellants in bringing the action was to establish that the maximum price at which bread or bread products might be sold within New South Wales was not, at the time when the proceedings were commenced, the subject of any valid order made by the Prices Commission pursuant to the Prices Regulation Act 1948 (N.S.W.), as amended ("the Act"). For that purpose the appellants sought to show that each of three orders made by the Commission for the purpose of fixing the maximum prices at which bread and bread products might be sold by retail in New South Wales was void, in so far as that order purported to fix and declare the maximum price of the goods specified in it. The orders thus challenged were Prices Regulation Order No. 787 gazetted on 19 November 1979, Prices Regulation Order No. 792 gazetted on 3 March 1980 and Prices Regulation Order No. 798 gazetted on 14 July 1980. Each of these orders commenced by revoking the order which had previously been made by the Commission and was thought to be still in force, and then proceeded to fix the maximum price of the bread and bread products which it described. The argument submitted on behalf of the appellants was that in each case the revocation of the previous order was valid and effective, although the order fixing the price was not.
2. Bread and bread products were at all material times "declared goods" for
the purposes of the Act. The Commission therefore had
power, under s. 20(1),
by order published in the Gazette to fix and declare the maximum price at
which those goods might be sold.
That power had been exercised by Prices
Regulation Order No. 782, made on 30 July 1979 - an order whose validity is
not challenged.
On 31 July 1979 the Association on behalf of all its members
made application to the Commission for an increase in the price of bread.
The
Commission, by an advertisement published in the Gazette on 17 August 1979,
gave notice of its intention to hold an inquiry to
determine whether it should
exercise any of the powers conferred on it by s. 20 in respect of bread, and
advised that it would be
" giving particular consideration to an application
from the Bread Manufacturers of New South Wales". Further applications were
made
to the Commission by the Association on 3 September 1979 and 2 October
1979. The inquiry commenced on 2 October 1979, and continued
until 18 October
1979. There is no doubt that the Association was treated as a party to the
inquiry. On 16 November 1979 the Commission
stated its findings which were
given effect by Order No. 787. It stated that a full report of the findings
would be issued at a later
date. No full report was ever published, but the
Association later received an extract from the report. The extract stated that
the
submission of the Bread Manufacturers suggested that the price should be
fixed at an amount which would allow a rate of return of
21.5 per cent on the
value of their assets, and went on to say that a special study was undertaken
by the research officers of the
Commission to measure the return on assets
achieved by twelve listed public companies engaged in food manufacturing. In
this study,
the mean percentage return on investment and the standard
deviation were calculated, and the report stated that the sum of the mean
and
the standard deviation, namely 15.88 per cent, was taken by the Commission as
the appropriate percentage return to toe in pricing.
The study was not
tendered in evidence in the course of the inquiry and the Association was not
made aware of its existence or given
any opportunity to call evidence or make
submission in respect of its contents. The appellants contended that the
failure to inform
them (through the Association) of the commissioning and
result of the study and to give them an opportunity to be heard in relation
to
it rendered invalid the inquiry held by the Commission and the order based on
it. They further complained that the statement by
the Commission that 15.88
per cent was an appropriate return was misleading, in that the Commission in
fact allowed a lesser percentage
of return when it came to fix the price.
3. The increased price given by Order No. 787 did not satisfy the Association
or its members, and in December and January the Association
made a number of
requests to the Commission for a further increase, which was sought urgently.
The Minister dispensed with the holding
of an inquiry on 3 March 1980 the
Commission made Order No. 792. The challenge to Order No. 792 before us rested
on two grounds.
The first line of attack, which was also mounted against Order
No. 798, was based on the assertion that in considering whether an
order
should be made the Commission started with the assumption that the existing
order gave to the sellers of bread all they were
entitled to, and required the
Association, when it applied for a new order, to show that there had been an
increase in the cost of
production since the price was last fixed. Therefore,
it was said, if Order No. 787 was invalid, or failed to fix an adequate price,
Order No. 792 rested on an unsound basis, namely that Order No. 787 was a
proper starting point. Similarly, it was submitted that
if Order No. 792 was
invalid, the invalidity brought down Order No. 798. In other words, it was
submitted that the invalidity of
any order infected each order that succeeded
it. It is convenient to deal immediately with this argument. The power given
to the
Commission by s. 20(1) of the Act is to fix and determine the maximum
price at which declared goods may be sold. In terms that power
is unfettered.
The provisions of s. 58 of the Act, which require that the Act shall be
administered with a view to (a) "the prevention
of undue increases in prices
and rates for goods and services", and (b) "the regulation so far as is
necessary of prices and rates
for goods and services which are essential to
the life of the community", do not restrict the discretion in any way relevant
for
present purposes. It was clearly within the discretion of the Commission
to proceed by granting an increase in price sufficient only
to cover the
increase in the cost of production since the last order. The fact that the
earlier order was made was a matter to which
the Commission was entitled to
have regard. Even if the earlier order was invalid, the Commission might
properly regard it as in
fact stating a price which could appropriately be
taken as the starting point for the new determination. If it could be proved
that
the price fixed by the earlier order was inadequate, that would mean only
that the Commission had made an error of fact in thinking
that it provided a
sound starting point, and would not vitiate the exercise by the Commission of
its discretion. None of the orders
in question is expressed to depend on the
validity of its predecessor - each order is self-contained. Even if one order
was invalid
and the Commission believed it to be valid, that would not affect
the validity of a succeeding order.
4. The second ground of attack on Order No. 792 was that by that order the
Commission reduced the price of hamburger buns without
giving the appellants
any opportunity to place before the Commission their case as to why the
reduction should not be made, thereby
denying natural justice to the
appellants. By Order No. 792 the Commission made a general increase in the
price of bread. However
it extended to the case of bread rolls a revision of
the classification of the products whose prices were fixed which had Arcady
been naade by Order No. 787. That order had specifically fixed at 12c the
price for hamburger buns exceeding 50 grams but not exceeding
100 grams. Order
No. 792 did not expressly fix a price for hamburger buns but fixed prices for
three categories of bread rolls. The
result was said to be that hamburger buns
which could formerly be sold for 12c could be sold only at the price fixed for
medium sized
bread rolls, namely 11c, so that there was a reduction in the
price of 1c. It is common ground that the appellants were not informed
that
the reclassification of the bread products covered by the order would have
this result. This submission raises a question of
law with which it will be
necessary to deal later in this judgment.
5. As soon as the Commission announced, on 29 February 1980, the decision
which was to be given effect as Order No. 792, the Association
lodged with the
Commission an application for a further increase in the price of bread. A
further application was made on 21 March
1980. On 24 April 1980 a meeting was
held between the chairman of the Commission, some of the officers of the
Commission and some
representatives of the Association. In reply to a request
for information as to when a decision would be made on the Association's
application for an increase in price, which was claimed to be desperately
needed, the chairman said: "Because bread prices were increased
on 29 February
(that is, by Order No. 792) we decided that it was politically impossible to
make a recommendation to the Minister
so soon and we have decided to have a
meeting next month (May) on the application." The chairman said that he would
send a report
to the Minister on the meeting and would try to arrange for the
manufacturers to meet with the other Commissioners. On 28 May 1980
the
chairman of the Commission made a written report to the Minister which
referred to the fact that an application for an increase
had been received
from the Association and stated that the Commission was of opinion that a
further increase should be granted, but
that it should take effect
simultaneously with the announcement in New South Wales of any wage increases
flowing from the National
Wage Hearings, which was expected in a few weeks.
The report continued: "Would you please inform me if you desire a meeting with
the Commission before any formal recommendation is forwarded to you." The
report went on to say that the officers of the Commission
recommended an
increase in the price of 3c, which did not include an allowance for the effect
on costs of wage increases expected
to result from the National Wage Case and
that the two members of the Commission other than the chairman believed that
the best course
would be to grant an increase of 3c plus an allowance for the
National Wage Case estimated at being more than 1c. The chairman said
that he
himself disagreed with the final amount of 4c; he favoured an increase of 2c,
or 3c if the effects of a national wage decision
were to be included. On this
report the Minister made an indorsement "Please make no announcement.
Discussion with me is needed".
A meeting was arranged between the chairman and
the Minister but it did not take place because on 5 June the present
proceedings
were begun. When the proceedings commenced, the appellants stated
in court that they wished the Commission to proceed to deal with
the matters
the subject of the applications. On 2 July the chairman wrote to the Minister
seeking an interview for the purpose of
ascertaining whether the Minister
would consent to dispense with the holding of an inquiry. The letter had
attached to it a copy
of the submission which had been sent to the Minister on
28 May, and a copy of a document, also dated 28 May 1980, which had been
prepared for the Commission by one of its officers, Mr. Fleet, and which
expressed the opinion that a rise of 3c per unit could be
sustained - as had
been mentioned, that 3c did not make allowance for the effect of the National
Wage Case. There is no evidence
as to whether the Commission did see the
Minister but on 10 July 1980 it was publicly announced that the Commission had
received
the Minister's consent to announce an increase in price without
holding a public inquiry and that there would be an increase of 3c
on all
loaves of bread. Prices Regulation Order No. 798, which was gazetted on 14
July 1980, gave effect to that decision. It was
signed by all three members of
the Commission. It is apparent that one at least of the members of the
Commission must have changed
his or her mind as to the amount of the increase
between 28 May, when a disagreement amongst the members of the Commission was
made
known to the Minister, and 10 July, when the public announcement was
made. Woodward J, at first instance inferred that the Commission
had conceived
that its obligation was to fix a price and to delay the effect of it so as to
bring about a result "politically palatable
to the Government". In the Court
of Appeal, Hope and Glass JJA drew the inference that the members of the
Commission had had the
interview with the Minister that had been sought by the
letter of 2 July, and that at least one of them had changed his or her mind
as
to the amount of the increase because of something compelling that was said by
the Minister. In drawing this inference their Honours
were influenced by the
absence of any evidence that a decision in favour of a 3c increase was made
before the Commissioners saw the
Minister. They held that the inference should
be drawn that the Commission did not come to its own independent decision that
it should
recommend an increase of 3c but came to that conclusion because the
Minister, in a way not permitted by the Act, had constrained
it to do so,
either by telling it what he wanted, or by indicating that he would veto a 4c
increase. Hutley JA agreed, but expressed
his conclusion more bluntly; he held
that the Commission made an order which the Minister improperly dictated to
it. The Court held
that Order No. 798 was liable to be quashed but that the
effect of quashing it would be to reinstate Order No. 792, and that this
result would be unjust. The Court set aside the orders which Woodward J had
made quashing Orders Nos 787, 792 and 798 in so far as
those Orders purported
to fix and declare the maximum price for the goods specified therein, and
instead ordered the Commission to
reconsider according to law the applications
made on 29 February 1980 and 21 March 1980.
6. The ground on which the Court of Appeal held Order No. 798 to be invalid
was not raised by the pleadings, or, it appears, at
the trial. The Minister
was not a party to the proceedings.
7. In these circumstances five questions fall to be determined: (1) Was Order
No. 787 rendered invalid by the failure of the Commission
to make known to the
Association that it had commissioned a study as to the return on assets
derived by twelve listed public companies,
and to afford the Association an
opportunity to make submissions in relation to the study; (2) Was Order No.
792 rendered invalid
by the failure of the Commission to inform the appellants
that it was proposed to reduce the price of hamburger buns, and to give
the
appellants an opportunity to present their case against such reduction; (3)
Was Order No. 798 properly held to be invalid by
reason of the alleged
dictation or undue influence of the Minister, or by reason of the fact that
the Commission misconceived its
functions and considered matters which it
ought not to have considered; (4) Was the price fixed by any Order so
unreasonably low
as to indicate that the Commission did not properly exercise
its discretion; and (5) If any Order was invalid in so far as it fixed
prices,
was the provision revoking the previous Order also invalid.
8. The first of these questions depends upon the proper construction of a
number of provisions of the Act that were inserted or
amended by the Prices
Regulation (Amendment) Act 1976 (N.S.W.). The effect of those provisions, so
far as they are material, may
be shortly stated as follows. The Commission,
for the purpose of deciding whether it should exercise any power conferred on
it under
s. 20 (including of course the power to make an order fixing the
price of goods) must hold an inquiry unless it obtains the consent
of the
Minister to dispense with the holding of an inquiry: s. 8B. A seller of goods
may make application in the prescribed manner
to the Commission for an order
under s. 20 (s. 8(1)), and on receipt of such an application the Commission
may decide to refuse the
application or to hold an inquiry: s. 8c(2). The
combined effect of those sections is that the Commission cannot make an order
fixing
a price without first holding an inquiry, unless the Minister has
consented to dispense with the holding of an inquiry, but the Commission
can,
without first holding an inquiry, refuse an application to make such an order.
If an application is made under s. 8c(1), and
the Commission decides to hold
an inquiry, the person who made that application shall be a party to the
inquiry: s. 8c(4). At an
inquiry, any person may apply to the Commission to be
made a party to the inquiry, and if (but only if) the Commission is of opinion
that the applicant has a substantial interest in the subject matter of the
inquiry the Commission shall grant the application: s.
8E(1), (2). A party to
an inquiry, whether or no he was an applicant under s. 8c, is entitled to
appear, personally or by agent,
counsel or solicitor, and to give evidence and
call witnesses and to make submissions: s. 8E(3), (4). Section 8F is important
and
should be set out in full. It provides as follows:
"(1) An inquiry shall be held in public and, subject to this section -
and
(b) submissions in the inquiry shall be made in public.(2) If any witness objects to giving any evidence in public that the Commission is satisfied is of a confidential nature, the Commission may take that evidence in private if it considers it desirable to do so.
9. By s. 9, "for the purposes of an inquiry", the Commission may summon
witnesses, take evidence on oath and require the production
of documents,
books and papers. By s. 13, "for the purposes of an inquiry", the Commission
or an authorized officer may require any
person to furnish information and
answer questions. By s. 15, "for the purposes of an inquiry", an authorized
officer may enter upon
and search premises and inspect, inter alia, documents,
books and papers. By ss. 14 and 17 the Commission is given further powers
to
obtain information, but these powers are not expressed to be exercisable only
"for the purposes of an inquiry". It was submitted
on behalf of the Commission
in the present case that the only rights which a party to an inquiry has in
relation to the conduct of
the inquiry are those specifically conferred by s.
8E, and that they do not include the right to see all the material which the
Commission
obtains for the purpose of the inquiry, to test by
cross-examination the accuracy of such material, or to adduce further evidence
in answer to it. This is too narrow a view. Section 8F makes it clear that if
an inquiry is held, it must be a public inquiry. The
fact that the Commission
is given, by s. 9, the power, for the purposes of the inquiry, to summon
witnesses, take evidence on oath,
and require the production of documents does
not mean that the Commission can take evidence in private, or, in making its
inquiry,
have regard to documents which are never made public. The powers are
given for the purposes of an inquiry, and the inquiry is to
be held in public,
subject only to s. 8F(2). The same is true of the powers given by ss. 13 and
15. The powers under ss. 14 and 17
are not limited to the purposes of an
inquiry, and so could be used by the Commission to obtain information for use
in fixing a price
in a case in which the Minister had consented to dispense
with the holding of an inquiry, or for the purpose of functions conferred
on
the Commission by other sections of the Act. But if the Commission obtains
material under s. 14 or s. 17 which it wishes to use
for the purposes of the
inquiry, that too must be publicly adduced, unless it is confidential and
falls within s. 8F(2). It is not
clear why the powers of the Commission under
ss. 13 and 15 are limited, when those conferred by ss. 14 and 17 are not, for
the purposes
of an inquiry, but the distinction does not assist the argument
of the Commission. All four sections enable the Commission to obtain
information, but they do not enable the Commission to use it for the purposes
of an inquiry unless it is publicly presented or is
confidential and comes
within s. 8F(2). The holding of a public inquiry would be illusory if the
Commission, after solemnly taking
evidence in public, could, without notice to
the parties, base its decision on material that it had obtained in secret and
never
disclosed.
10. I do not intend to suggest that the Commission is bound to make public
any workings that may be produced by itself or its officers
for the purpose of
considering the effect of the evidence given or submissions made at an
inquiry. In the present case, however,
the officers of the Commission did more
than make calculations based on the evidence; they obtained evidence, and
neither the subject
matter nor the result of their study was made known at the
inquiry. The significance of the additional material thus privately obtained
is seen by the fact that the Commission said that it took the resulting figure
of 15.88 per cent as the appropriate percentage return
on investment to use in
pricing. The Commission did not allow 15.88 per cent, but that does not
detract from the importance of the
material. If the study had been made known
at the inquiry, the parties to the inquiry would have been entitled to lead
evidence to
show that it was based on errors of fact, or to make submissions
that the study was irrelevant or misconceived. I have already mentioned
that
the Association was treated as a party to the inquiry. It was of course acting
in a representative capacity, on behalf of the
manufacturers who, it appears,
were also sellers of bread.
11. It follows that a proper public inquiry was not held. The effect of S. 8B
is andat the holding of an inquiry (that is, a public
inquiry) is a condition
precedent to the exercise by the Commission of any power conferred by s. 20,
unless the Minister consents
to dispense with the holding of an inquiry. The
Minister did not so consent in the case of Order No. 787. That Order was
therefore
invalid.
12. The conclusion which I have reached on this question depends entirely on
the construction of the Act, and not on the application
of the rules of
natural justice. A different question arises in relation to Order No. 792.
Before that Order was made, the Minister
had dispensed with an inquiry. The
argument that the Commission was bound to disclose to the Association the fact
that it proposed
to make an order which would have the incidental effect of
reducing the price of hamburger buns can only succeed if the Commission,
although not bound to hold an inquiry, was bound to observe the rules of
natural justice, or at least the rule expressed in the maxim
audi alteram
partem.
13. In Twist v. Randwick Municipal Council (1), Barwick CJ said:
"The common law rule that a statutory authority having power to affect the
rights of a person is bound to hear him before exercising
the power is both
fundamental and universal ... But the legislature may displace the rule and
provide for the exercise of such a
power without any opportunity being
afforded the affected person to oppose its exercise. However, if that is the
legislative intention
it must be made unambiguously clear."
14. As a general statement this is correct. There is no doubt that, in the
absence of a clearly expressed legislative intention,
no one can be dismissed
from office, penalized, or deprived of or prejudiced in relation to his
property without being afforded an
adequate opportunity to be heard. It may be
said that an order fixing the maximum price at which goods may be sold affects
the existing
right of the seller to sell them at whatever price he chooses.
Such an assertion seems rather artificial when the price of the goods
is
already fixed, and the order that is challenged increases the maximum price.
But the question whether a seller who will be affected
by an order under s. 20
of the Act must be given an opportunity to put his case against the making of
the order before it is made
should not be answered in the negative only for
the reason that an order increasing the price does not adversely affect his
(1) [1976] HCA 58; (1976) 136 CLR 106, at pp. 109-110.rights. It is necessary to examine the nature of the power in question in deciding whether the observance of the principle audi alteram partem is a condition of its exercise. It is sometimes said that the question whether the rules of natural justice are applicable is one of statutory interpretation. That is only partly true. The words of a statute may of course reveal an intention to exclude the rules of natural justice. But, in order that those rules should apply, it is not necessary that the statute in question should, on its proper construction, render them applicable. I have already referred, in Salemi v. MacKellar (No. 2) (2), to Cooper v. Wandsworth Board of Works (3), where Byles J said that "although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature". In the present case, it was submitted on behalf of the Commission that the rules of natural justice do not govern the exercise of a power of a legislative kind. Jordan CJ, in In re Gosling (4), evidently took that view. The actual decision in that case was that a regulation was not invalid because it permitted the Milk Board, before fixing the price of milk, to hold a private inquiry at which persons affected by the exercise of the power had no right to be heard. Jordan CJ was of opinion that the power to fix the price was a delegated legislative power, and that the rules of natural justice were not applicable to such a power. Further support for the Commission's contention is provided by Bates v. Lord Hailsham of St. Marylebone (5), where Megarry J held that a committee set up under a statutory provision and given power to prescribe and regulate the remuneration of solicitors was not bound to consult with, or afford opportunities for representations to be made by, bodies (other than the Law Society) representing solicitors before making an order which would affect solicitors generally. Megarry J expressed the opinion that the rules of natural justice do not affect the process of legislation, whether primary or delegated (6). 1 do not doubt the correctness of the decisions in those cases. But I am not persuaded that the question whether the rules of natural justice apply should be answered by deciding whether or not the power in question should be classified as legislative.
15. Statements will be found in many authorities that appear to support the
view that the rules of natural justice apply to
(2) [1977] HCA 26; (1977) 137 CLR 396, at p. 419.
(3) [1863] EngR 424; (1863) 14 CB (NS) 180, at p. 194 [1863] EngR 424; (143 ER 414, at p. 420).
(4) (1943) 43 SR (NSW) 312, at p. 318.
(5) (1972) 1 WLR 1373; (1972) 3 All ER 1019.
(6) ibid., at p. 1378; p. 1024.proceedings only if they are judicial or quasi-judicial in nature. Although, in England, Cooper v. Wandsworth Board of Works, and, in Australia, Sydney Municipal Council v. Harris (7), long ago showed that view to be untenable, it enjoyed something of a revival until Ridge v. Baldwin (8) gave it its quietus. It is now clear that the obligation to observe the principles of natural justice attaches whether the authority is judicial or administrative (9). Equally, it does not seem to be useful to decide the question whether the rules of natural justice apply by deciding whether the power in question should be classified as executive or legislative. The distinction between powers of an executive and those of a legislative nature is a fine one and opinions may easily differ on the question. Although, in In re Gosling, Jordan CJ held that a power to fix prices was of a legislative nature, and in Arnold v. Hunt (10) McTiernan J took the same view, two Justices (Rich and Williams JJ) in the latter case were of the opinion that such a power was of an executive rather than a legislative kind. To make the question whether the rules of natural justice apply depend on the classification of the power seems only to introduce a distracting complication into the process of decision.
16. I return to consider the nature of the power which the Commission
exercises under s. 20(1). Except in a case where an inquiry
is required to be
held, the Commission does not follow a procedure similar to that of a court.
It is not called upon to adjudicate
upon a controversy between contending
parties. The exercise of its discretion does not depend upon the formation of
an opinion as
to any particular fact or circumstance. It is no doubt required,
by s. 58, to consider such general matters as whether an increase
in price
would be "undue" and to what extent the regulation of the price of bread (an
essential commodity) is "necessary", but its
discretion is virtually
unfettered. Its function, at least in the present case, was to make a general
decision of a discretionary
character which affected all consumers and sellers
of bread. In Salemi v. MacKellar (No. 2) (11), Jacobs J drew a distinction
between
an act which directly affects a person individually, and one which
affects him simply as a member of the public or
(7) [1912] HCA 11; (1912) 14 CLR 1.
(8) [1963] UKHL 2; [1963] UKHL 2; (1964) AC 40(9) See Twist v. Randwick Municipal Council (1976), 136 CLR, at pp 112-123 and Heatley v. Tasmanian Racing and Gaming Commission [1977] HCA 39; (1977), 137 CLR 487, at pp 498-499.
(10) [1943] HCA 23; (1943) 67 CLR 429.
(11) (1977) 137 CLR, at p. 452.a class of the public, and said that an executive or administrative decision of the latter kind is truly a "policy" or "political" decision and is not subject to judicial review. Although it is unsafe to generalize, I respectfully agree with the significance of the distinction. I do not suggest that the presence (A any one of these features by itself would necessarily mean that an authority exercising a statutory power would not be required to observe the audi alteram partem rule, but the presence of all of them in the instant case does in my opinion lead to that result, particularly in the light of the fact that the Act makes detailed provision for We holding of an inquiry in certain cases, with the concomitant obligation to hear parties to the inquiry. The provisions of the Act support the view, which the nature of the power suggests, that the audi alteram partem principle has no application to the exercise by the Commission of its powers in a case in which no inquiry is required to be held.
17. On behalf of the appellants, some reliance was placed on New Zealand
United Licensed Victuallers Association of Employers v.
Price Tribunal (12).
It was there held by the Court of Appeal of New Zealand that when an
application was made to the Price Tribunal
under the Control of Prices Act
1947 (N.Z.) for a special approval fixing a maximum price the Tribunal was
under a duty to act judicially
before reaching its decision, in the sense that
it was obliged to hear the applicant. In Reg. v. Whalley; Ex parte Bordin and
Co.
(13), Gowans J cited the comment made on this case by Professor Wade (14):
"What swayed the Court of Appeal in New Zealand was the
language of the
Control of Prices Act", and the judgments of the members of the Court of
Appeal (15) show that the decision depended
very much on the language of the
statute, which is different from that of the Act in the present case.
18. Even if the audi alteram partem rule did apply, it would not be clear
that the Commission had failed to observe it. The operation
of the rule
depends on the circumstances of the case in which it is applicable. In the
present case the Commission had received and
no doubt considered the
submissions of the Association that prices should be increased, and did make
an increase in prices generally.
19. The fact that the Association was not told that it was proposed to make
an alteration to the classification of bread products
which would entail a
reduction in the price of one product (hamburger buns) would hardly seem to
amount to a failure to hear the
affected
(12) (1957) NZLR 167.
(13) (1972) VR 748, at p. 755,
(14) (1957) Cambridge Law Journal, at p. 120.
(15) esp. (1957) NZLR, at pp. 205, 210.parties on a matter sufficiently material to amount to a failure to observe this rule of natural justice. However, I need express no final conclusion on that point.
20. For these reasons this challenge to Order No. 792 must fail.
21. The attack on likes Regulation Order No. 798 commences with the
proposition that a statutory authority must not, in the purported
exercise of
its discretion, act under the dictation of some other person. This proposition
is plainly correct. The Commission is
the body entrusted with power to fix the
price, and its decision must be its own. If it acted under pressure exerted by
the Minister,
or simply gave automatic effect to a decision of the Minister,
the decision would not then really be that of the Commission but would
be that
of the Minister (16). It does not follow that it was impermissible for the
Commission to consider the views of the Minister
in coming to its decision.
For the Commission to take ministerial policy into account in making a
decision of its own is a different
thing from automatically following
ministerial policy (17). In that case the whole Court accepted that when a
discretion is vested
in the head of a government department, the policy of the
government is not necessarily an extraneous matter which he must not consider
(18). Although the members of the Commission are not all public servants and
the Commission is an independent body, the Commission
is required to give
effect to views of public policy, with which the Minister also has a
legitimate concern: see s. 58. Further,
the Minister is given important powers
in connexion with the making of price-fixing orders, by s. 20(1A) which
provides as follows:
"Notwithstanding subsection (1), the Commission shall, before causing an
order referred to in subsection (1) to be published in
the Gazette, serve a
copy of the proposed order on the Minister and shall not cause the proposed
order to be so published -
(a) unless the Minister has informed the Commission that he does not propose
to give it a direction under paragraph (b); or (b)
if the Minister, in the
public interest, has directed the Commission not to publish the proposed
order."
22. Since the Commission can fix a price only by order published in
(16) See such cases as Evans v. Donaldson [1909] HCA 46; (1909), 9 CLR 140, at pp 153, 155;
Reg. v. Anderson; Ex parte Ipec-Air
Pty. Ltd. [1965] HCA 27; (1965),
113 CLR 177, at pp 192,
200, 202 and Lavender and Son v. Minister of Housing and Local Government,
(1970) 1 WLR 1231, at
p 1241;
(1970)3 All ER 871, at p 880.
(17) See Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965), 113 CLR, at
pp 193, 201-202.
(18) ibid., at pp. 192, 200, 202-203, 204, See also Ansett Transport
Industries (operations) Pty. Ltd. v. The Commonwealth [1977]
HCA 71; (1977),
139 CLR 54, at
pp 82, 114-115.
the Gazette (s. 20(1)), the effect of s. 20(1A) is that the Minister has
complete power to prevent the Commission from fixing prices
in any case. It
would be a futility for the Commission to make an order which it knew that the
Minister would veto, and it would
therefore not be wrong for the Commission,
in considering what price it should fix, to take into account the Minister's
views, provided
that in the end the decision reached by the Commission was its
own. If the Commission can consider the Minister's views, it can treat
them as
decisive. There is obviously a fine line between a case in which the
Commission automatically obeys a ministerial pronouncement,
and that in which
it decides for itself to grant the largest increase in price that the Minister
will not veto. The fact that the
Minister has a statutory power of veto makes
the case an exceptional one.
23. In the present case the evidence does not in my opinion support a finding
that the Commission acted under the dictation of the
Minister, or that the
Minister exercised undue influence on the Commission. The failure to call
either the Minister or the members
of the Commission to give evidence on this
point loses its significance when it is remembered that the issue was not
raised by the
pleadings or at the trial. A further matter, relied on by Hutley
JA, was that in response to a subpoena requiring the production
of all
proposed orders served on the Minister under s. 20(1A), no proposed orders
were produced. It may be inferred that the Commission
ascertained from the
Minister whether he would agree to a particular order and did not simply serve
a copy of a proposed order on
the Minister without knowing whether he would
veto it or not. It may further be inferred that the reason for the change of
mind on
the part of one or more members of the Commission was that it was
known or believed that the Minister would not consent to an increase
greater
than 3c. If it was right to conclude that the Minister expressed his views to
the Commission, and that the Commission took
those views into account in
reaching its conclusion, that does not mean that either the Minister exerted
improper pressure or that
the Commission considered anything that was not a
proper matter for its consideration. To say that the Commission considered
that
it should bring about a result "politically palatable" to the Government
is, with all respect, to move into the realm of speculation.
It is consistent
with the evidence that the Commission decided for itself that it was better to
allow an increase in price of 3c
which would become effective, than to
determine upon an increase of 4c which the Minister would veto, with the
result that there
would be no increase at all.
24. The challenge to Order No. 798 on this ground therefore fails.
25. The next question is whether either Order No. 792 or Order No. 798 fixed
a price that was so unreasonably low as to indicate
that the Commission had
not properly exercised its discretion. The evidence shows that the prices
fixed by the Commission by those
orders were lower than was recommended by the
Commission's own officers. One can understand the feeling of the appellants
that the
prices fixed were inadequate. But there is no right of appeal from
the Commission's orders to the Supreme Court or to this Court.
If it is open
to challenge an order made under s. 20(1) on the ground of unreasonableness,
the challenge can only be successful if
it is shown that the price fixed was
so unreasonably low that no reasonable body, properly understanding its
duties, could have made
the order. The evidence does not disclose what
material the Commission had before it when it made these orders, and the Court
of
Appeal rightly concluded that the appellants failed to discharge the onus
of showing that either order suffered front unreasonableness
of the kind which
(d a challenge on that ground is open) would lead to invalidity.
26. Finally, the question arises, although it is perhaps of no importance,
whether cl. 2 of Order No. 787, which revoked Order No.
782, was valid and
effective notwithstanding the fact that Order No. 787 was invalid in so far as
it fixed new prices. By s. 20(13),
of the Act, the Commission is empowered at
any time by order published in the Gazette to amend, vary or revoke any order
made under
s. 20. However, s. 8B requires the Commission to hold an inquiry
for the purpose of determining whether it should exercise any power
conferred
on it by s. 20 - not merely the power to fix a price - unless it obtains the
consent of the Minister to dispense with the
holding of an inquiry. Since no
valid inquiry was held and the Minister did not consent to dispense with an
inquiry, the order made
under s. 20(13) was equally as bad as that made under
s. 20(1); in other words, Order No. 787 was entirely invalid. In any case,
it
would be difficult to conclude that the Commission would intend that a
provision contained in a price-fixing order would be effective
to revoke a
previous order unless the new provisions intended to replace the previous
order were valid and effective. Order No. 787
therefore did not revoke Order
No. 782. But Order No. 792, although expressly revoking Order No. 787, plainly
revealed an intention
to revoke earlier orders inconsistent with it, and by
implication revoked Order No. 782.
27. In substance the appeal must fail, and the cross-appeal should succeed. A
declaration should be made that Prices Regulation
Order No. 787, in so far as
it purported to fix and declare the maximum price for the goods specified in
the order, was invalid,
but the appellants' action should otherwise be
dismissed.
MASON AND WILSON JJ This is an appeal and cross-appeal by special leave from
the decision of the Court of Appeal of the Supreme Court
of New South Wales.
The appellants are companies which manufacture and sell bread and bread
products in New South Wales and a trade
association described as Bread
Manufacturers of New South Wales ("the Association") which acts on behalf of
bread manufacturers generally.
The respondents are and were at all material
times the members of the Prices Commission (the Commission) constituted by the
Prices
Regulation Act 1948 (N.S.W.), as amended ("the Act").
1. History of the case
2. Bread and bread products are "declared goods" within the meaning of the
Act. The effect of a declaration to that effect is that
the Commission may
inter alia, from time to time, by order published in the Gazette, fix and
declare the maximum price at which any
such goods may be sold (s. 20). This
power has been exercised in relation to bread from time to time for many
years, with the result
that all sales of bread by retail with specified
districts have been subject to the fixation of a maximum price.
3. In essence, the appellants attack the validity of each of three successive
price fixations. These fixations were contained in
Prices Regulation Order No.
787 published on 19 November 1979, P.R.O. No. 792 published on 3 March 1980,
and P.R.O. No. 798 published
on 14 July 1980. The grounds of attack in each
case may be summarized as follows:
(1) P.R.O. No. 787 was alleged to be invalid because: (a) the appellants
were denied natural justice in that the contents of a
study initiated by the
Commission were not disclosed to them in the course of an inquiry held prior
to the making of the order; (b)
further, or alternatively, the Commission
misdirected itself as to the question for consideration in the inquiry and
with a view
to the fixation of a maximum price, and (c) further, or
alternatively, the fixation was unreasonable.
(2) P.R.O. No. 792 was alleged to be invalid because: (a) the appellants
were denied natural justice in that they were not given
an opportunity to be
heard, prior to the order being made, on a proposal which would have the
effect of reducing the price of hamburger
buns; (b) further, or alternatively,
the whole fixation was unreasonable; and (c) in any event, it proceeded from
the basis established
by P.R.O. No. 787 which was itself invalid (this was
described in the course of argument as "the infection argument").
(3) P.R.O. No. 798 was alleged to be invalid because: (a) the Commission
made a decision which was dictated to it by the Minister;
(b) further, or
alternatively, it failed to act in accordance with the Act; (c) further, or
alternatively, the fixation was unreasonable:
and (d) the fixation was
infected by the invalidity of the proceeding Orders Nos 792 and 787.
4. In addition to these issues, there was another question which has assumed
importance in the case. It has been described as the
severability issue. Each
of the orders which was under attack included a clause which revoked the
previous order. The appellants
argued that this clause represented the
exercise by the Commission of the power to revoke an order which was quite
independent of
the power to fix a price, and that it was valid and effective
notwithstanding that the new fixation was invalid. The proper conclusion
was
that there was no present control over the maximum price at which bread may be
sold.
5. At the trial before Woodward J the appellants succeeded handsomely. His
Honour made findings adverse to the Commission on all
issues. He quashed the
three orders that were under challenge save with respect to the revocation
clause, and declared that there
was then no presently operative order fixing
the maximum price of bread. We should add that in relation to P.R.O. No. 798
there was
no suggestion either in the pleadings or in the course of the trial
unless perhaps during the final address of counsel that the Minister
had acted
improperly in his relations with the Commission. The emphasis at the trial was
rather directed to the alleged misunderstanding
by the Commission of its role
which led it to have regard to the views of the Minister and to matters of
political expediency in
the hope of Ring a price which would escape a veto by
the Minister.
6. The Commission appealed to the Court of Appeal, which unanimously reversed
the trial judge on a number of grounds. In summary,
their Honours (Hope,
Hutley and Glass JJA) upheld the finding that P.R.O. No. 787 was invalid by
reason of a denial to the appellants
of natural justice, and rejected wholly
the attack on P.R.O. No. 792. With regard to P.R.O. No. 798, they held that it
was invalid
by reason of ministerial intrusion in that the Minister acted
contrary to the Act in exerting pressure on the Commission to fix the
price it
did. Notwithstanding this finding, their Honours recognized a dilemma that
confronted them in that a quashing of the order
would in their view revive
P.R.O. No. 792 and a price which could no longer be supported as a reasonable
price. This involved the
rejection of the appellants' argument on the
severability issue. In the result, the Court adopted a course which had the
merit of
expediency. It declined to quash P.R.O. No. 798, but ordered the
Commission to exercise afresh its power to fix the maximum price
of bread and
to submit a proposed order to the Minister within fourteen days or such
extended time as the Court may allow.
7. So much for the history of the case. It will be seen that although the
parties are in contention over many events relating to
bread in the recent
history of the Commission, the solution to most of the issues lies in the
proper construction of the Act, with
particular reference to the powers and
duties of the Commission in relation to the Minister, the appellants and the
public generally.
We therefore address ourselves to that general question.
2. The Act
8. As we have already indicated, the Act constitutes a Prices Commission,
consisting of one full-time commissioner and two parttime
Commissioners
appointed by the Governor (ss. 4, 4A(1)), Of the part-time Commissioners, one
shall be a person who is appointed to
represent consumers, and the other shall
be a person who is experienced in business or commerce (s. 4A(2)). A
Commissioner shall,
subject to the Act, hold office for a period of three
years and be eligible for reappointment subject to compulsory retirement on
attaining the age of seventy years (ss. 4D, 4F). The Governor may for any
cause which to him seems sufficient remove any Commissioner
from office (s.
4c,(1)) and he shall be deemed to have cause if -
"(a) a commissioner has any direct or indirect pecuniary interest in any
declared goods or declared service or any goods or service
the subject of
investigation or inquiry by the Commission, other than an interest which he
has in the like manner applicable, and
subject to the like conditions
applicable, in the case of persons who are not commissioners; or
(b) a commissioner, by virtue of his office as a commissioner, accepts or
acquires any personal profit or advantage other than
under this Act." (s.
4G,(2)).
9. All three commissioners must be present in order to establish a quorum for
the transaction of any business of the Commission
(s. 4L(3)).
10. Prior to 1976, prices were fixed under the Act by a single Commissioner,
who had extensive powers of private investigation to
aid him in his task. He
could also call in the aid of advisers possessing expert or business
knowledge. The timing of a new fixation
of a maximum price in respect of
declared goods was entirely in his discretion, there being no provision for
any person to apply
for an exercise of the power. Consistently with the notion
of privacy that surrounded the activities of the Commissioner leading
up to
the making of an order fixing a price, there was no provision for any kind of
public inquiry.
11. Much of this was changed by the amending Act No. 65 of 1976. A number of
new provisions were inserted in the principal Act,
including the following:
"3.(1) In this Act, unless the contrary intention appears -'inquiry', in relation to the Commission, means an inquiry held by the Commission pursuant to -
(a) a direction of the Minister under section 8A(l)(b);
(b) section 8B or
(c) a decision of the Commission under section 8c(2);8A.(1) The Minister, for the purpose of determining whether he should exercise any power conferred on him under section 19, may direct -
(a) the Chairman to furnish a report to him; or(6) the Commission to hold an inquiry and furnish a report to him, with respect to such goods or services or goods and services as are specified in the direction.
8c.(1) A person -
(a) who is a seller of goods; or
(b) who supplies or carries on a service,to which an order made under section 20 relates, may make application to the Commission, in the prescribed manner, for an order under that section in relation to those goods or that service, as the case may be.
8F.(1) An inquiry shall be held in public and, subject to this section -(a) evidence in the inquiry shall be taken in public on oath or affirmation; and
(b) submissions in the inquiry shall be made in public.(2) If any witness objects to giving any evidence in public that the Commission is satisfied is of a confidential nature, the Commission may take that evidence in private if it considers it desirable to do so.
12. It will be noted that certain of these sections refer to s. 19 and s. 20
of the Act. The former is a provision which empowers
the Minister to declare,
inter alia, any goods to be "declared goods". Section 20 is the keystone of
the Act. It empowers the Commission
to determine the maximum price at which
declared goods may be sold. It was amended in 1976 by the deletion from sub-s.
(1) of the
words "in his absolute discretion", and by the insertion of a new
sub-section numbered (LA). This sub-section and the material part
of sub-s.
(1) now read as follows:
"20.(1) The Commission may, with respect to any declared goods, from time to
time, by order published in the Gazette -
(a) fix and declare the maximum price at which any such goods may be sold
generally or in any part of the State or in any proclaimed
area; or
20.(1A) Notwithstanding subsection (1), the Commission shall, before causing
an order referred to in subsection (1) to be published
in the Gazette, serve a
copy of the proposed order on the Minister and shall not cause the proposed
order to be so published -
(a) unless the Minister has informed the Commission that he does not propose
to give it a direction under paragraph (b); or (b)
if the Minister, in the
public interest, has directed the Commission not to publish the proposed
order."
13. The investigative powers of the Commission are contained within a group
of sections numbered from 9-17. They include the power
to summon witnesses and
take evidence on oath (s. 9), require information to be given and questions
answered (s. 13), require the
production of balance sheets and other accounts
(s. 14), enter upon and search any premises and inspect any documents or goods
taking
copies or samples thereof as the case may be (s. 15), and require a
return to be furnished by any person or class of persons containing
particulars of the quantity and cost of any goods in possession and of prices
charged or proposed to be charged in respect of them
(s. 17). Some but not all
of these sections were amended in 1976 by the addition of the words "For the
purposes of an inquiry" at
the beginning of the section. This was done in the
case of ss. 9, 13 and 15, but no such change was made to ss. 14 and 17. The
reason
for this differential treatment does not readily appear.
14. Finally, in this citation of those provisions which appear to bear most
directly on the problem of the scope of the powers of
the Commission and the
nature of its role, it is necessary to notice s. 58, which reads:
"58. This Act shall be administered with a view to -(a) the prevention of undue increases in prices and rates for goods and services; and
15. We now propose to identify the features of this legislation which in our
opinion are most relevant to the central issue that
divides the parties.
3. The nature of the power
16. Section 20 invests the Commission with a discretionary power to fix a
maximum price in respect of declared goods. In terms,
that discretion is
absolutely unfettered, although no doubt there is an obligation on both the
Commission and the Minister, each
of whom has explicit responsibilities in the
administration of the Act, to observe the administrative policy declared in s.
58. Although,
as we have already mentioned, the amending Act of 1976 deleted
from s. 20(1) the phrase "in his absolute discretion", we are unable
to
interpret that amendment as having the slightest effect on the scope of the
discretion as it existed before 1976. Whilst removing
an express declaration
of the existence of an unfettered discretion, the amending Act did nothing to
limit the scope of the discretion
as it had previously existed. It may be
noted that while the phrase in question was deleted from sub-s. (1) of s. 20,
it was allowed
to remain in sub-s. (5) of the same section. This is a
provision empowering the Commission to fix the maximum rate at which any
declared
service may be carried on. For all practical purposes, the Act treats
these two powers, namely, the power to fix the maximum price
of declared goods
and the power to fix the maximum rate for a declared service, as of precisely
the same character. The disparate
treatment in this one respect tends to
confirm our conclusion that the deletion of words from s. 20(1) was without
any practical
effect.
4. The scope of the power
17. The discretion to fix the price of declared goods is not merely
unfettered in terms, but its exercise is clearly intended to
be broadly based
in terms of the public interest. In support of this conclusion, we point,
first, to the composition of the Commission.
It is to consist of a full-time
chairman and two part-time Commissioners. One is appointed to represent
consumers. The other is to
be experienced in business and commerce. It follows
that the Commission is intended to provide by reason of its membership the
assurance
of a specialized regard to the interests of both consumers and
traders. Secondly, we refer to s. 58, the provisions of which have
already
been set out. Mr. McHugh QC, for the appellants, sought support from this
section for the proposition that any adjustment
to the maximum price for bread
which failed to reflect with some precision proven increases in the costs of
manufacture must be unreasonable.
It was urged that the mandate given to the
Commission is to prevent undue increases in price, and that this objective
will be secured
so long as it ensures that the ]creases applied kg by We
appellants are no more than can be justified by reference to increased costs.
We are unable to accept the argument. The Shorter Oxford Dictionary definition
of the term "undue" which appears in s. 58(a) includes-
"2. Not appropriate or suitable; improper
3. Not in accordance with what is just and right; unjustifiable;
4. Going beyond what is appropriate, warranted or natural; excessive."(Compact Edition, Vol. 2, p. 3498.) The word cannot be read, as the appellants seek to read it, as if it referred only to economic considerations from the point of view of the manufacturer or retailer. It must be read as referring to what is appropriate or warranted having regard to the interests, not only of manufacturers and traders, but of consumers and the community generally. The policy declared by s. 58(a) is that the Commission will so exercise its discretion as to fix prices which are appropriate or warranted in this sense. For example, the Commission may conclude that it is appropriate to deny to manufacturers the full re coupment of increased costs because it considers that existing prices yield too high a margin of profit or because it is of opinion that costs could be reduced by more efficient management or manufacture or because the increase sought is so large that it will reduce public demand. It is to act in accordance with As view of what is just and right in the circumstances. In doing so, it will prevent undue increases in the price of declared goods. We do not think it helpful to attempt a more specific definition of the policy in par. (a).
18. In any event, even if it were thought that our reading of the word
"undue" in s. 58(a) was too wide, the terms of par. (b) must
be regarded. It
was not disputed that bread is a product which is essential to the life of the
community. If that is so, then par.
(b) declares the policy of the Act to be
that the price of bread be regulated "so far as is necessary". What is
"necessary" lies,
in the first instance, in the unfettered discretion of the
Commission. When a proposed order is served on the Minister, then his
independent discretion comes into play, guided by the same declaration of
policy, but of course unfettered by any view that may have
been taken by the
Commission. The Act expressly requires that the Minister will only direct the
Commission not to publish a proposed
fixation of a maximum price by reference
to "the public interest" (s. 20(1A)), but it will already be clear that we do
not find this
consideration to furnish any element not already implicit in s.
58. Of course, his view of what the public interest requires in a
particular
situation may differ from that of the Commission.
5. The Commission and the Minister
19. We turn now to examine the relationship between the Minister and the
Commission. It may be said at once that the Act does not
subject the
Commission to the control of the Minister. Its independence and the detailed
provisions which provide security of tenure
to its members are significant
features of the Act. The powers of the Minister in relation to the
price-fixing process are clearly
defined. He may direct the chairman or
Commission to furnish him with a report with respect to any named goods or
services to assist
him in determining whether to "declare" such goods or
services pursuant to s. 19 (s. 8A). The Commission, for the purpose of
determining
whether it should exercise any power conferred on it under s 20,
must hold a public inquiry unless it obtains the consent of the
Minister to
dispense with such an inquiry (s. 8B). Reference has already been made to the
power of veto conferred on the Minister
by s. 20(1A). Mr. McHugh pointed to
evidence in the case that suggested a degree of consultation between the
Minister and the chairman
of the Commission which went beyond the strict
necessities of the provisions we have mentioned, and argued that this was
improper
and not in accordance with the Act. A similar argument found some
favour both at first instance with Woodward J and with the Court
of Appeal.
With respect, we think the submission is based on a misconception of the Act.
All that can be said is that the Act requires
the Commission to make up its
own mind, to come to a decision of its own, in fixing the maximum price of
bread, without dictation
from the Minister and without merely deferring to the
Minister so that the decision ceases to be that of the Commission and becomes
that of the Minister.
20. The extent to which a tribunal or public official required by statute to
make decisions which affect the rights of the citizen
can take into account
and act upon the views of the Government or a minister has been, and no doubt
will continue to be, a vexed
question. See e.g., the differences in approach
and emphasis expressed in the judgments of this Court in Reg. v. Anderson; Ex
parte
Ipec-Air Pty. Ltd. (19); and Ansett Transport Industries (Operations)
Pty. Ltd. v. The Commonwealth (20). As these judgments tend
to show, the
problem is not one which admits of an answer having a universal application.
So much depends on a variety of considerations,
for there are few cases in
which the statute explicitly provides that the tribunal is bound to give
effect to, or to give weight
to, a ministerial direction. One must take into
account the particular statutory function, the nature of the question to be
decided,
the character of the tribunal and the general drift of the statutory
provisions in so far as they bear on the relationship between
the tribunal and
the responsible Minister, as well as the nature of the views expressed on
behalf of the Government. What is permitted
to one organization may be
prohibited to another. What will be an extraneous consideration to a tribunal
applying the law to
(19) [1965] HCA 27; (1965) 113 CLR 177.
(20) [1977] HCA 71; (1977) 139 CLR 54.the facts, e.g., the Court Martials Appeal Tribunal, may be a relevant consideration to a tribunal such as the Commonwealth Conciliation and Arbitration Commission which takes into account government economic policy.
21. As so often happens the statute in the present case gives no explicit
guidance. We are left then to spell out what is appropriate
from the framework
of the relationship which the statute has sketched in. We have the initial
complication that arises from the split
personality of the Commission - the
quasi-judicial character which it is required to assume in conducting public
inquiries and the
executive style role which it plays in making other
determinations.
22. In making such determinations the Commission is not expected to operate
in a vacuum, giving vent to arbitrary or capricious
decisions. One would
expect it to engage in gathering, from a wide variety of sources, information
which has relevance to declared
goods and services, information which will
provide the basis for the consideration of the Commission in preparing a
proposed order.
There is nothing in the Act to exclude the Minister from the
category of those who may be able to contribute information that is
relevant
to the Commission's task.
23. In some contexts it may be important to draw a distinction between the
gathering of information and the gathering of what is
merely opinion. But we
do not think that this distinction is material in relation to the function of
the Commission in determining
a maximum price, when it is not conducting a
public inquiry, having regard to s. 58(a) and the relationship that exists
under the
statute between the Commission and the Minister. As we have already
said, s. 58(a) requires the Commission to take account of the
interests of
consumers and of the community generally, as well as those of manufacturers
and traders. In the absence of a statutory
prohibition, the Commission is free
to take into consideration the opinion or view of the Minister as to the
impact on consumer or
community interests of a proposed increase in the
maximum price.
24. No doubt there is some ground for apprehension that if the members of a
statutory body are entitled to take into account the
views of a Minister they
will merely defer to them or give too much weight to them. However the remarks
of Menzies J in Ipec (21)
provide a reassuring answer.
25. It is evident that the operation of s. 88 requires that there will be
consultation between the Commission and the Minister.
The Minister, in
deciding whether he will dispense with a public inquiry,
(21) (1965) 113 at p. 202.is entitled to ask the Commission what is the likely outcome of their deliberations in the event that no public inquiry is held and what are the perceived advantages and disadvantages of proceeding without such an inquiry. It is only to be expected that the Commission will respond to such a request. Further, it would not be unreasonable for the Commission to ascertain the views of the Minister before making a final determination under s. 20. The Commission will, in the nature of things, wish to avoid an exercise by the Minister of his power of veto under s. 20 if it can be avoided consistently with the Commission making a determination of its own.
26. It is impossible to suppose that the legislature intended that the only
avenue whereby the Minister can express a view concerning
the fixation of a
maximum price under the Act which it is his task as a Minister of the Crown to
administer is by way of a public
rejection of a formal decision of the
Commission in the form of a veto of a proposed order. This would be an
extraordinary intention
to impute to the legislature in any circumstances, but
particularly in the light of the many situations where the Act cannot operate
without consultation between the two bodies who between them are responsible
for the administration of the Act. Apart from the provisions
already mentioned
there is provision for a report, and we think a consequential need for
consultation concerning the report, in connexion
with extension of the range
of declared goods or services (s. 8A). The need for close involvement between
the Commission and the
Minister is apparent from other sections (see ss. 4H,
4K, 4M, 8, 43, 49 and esp. s. 24).
6. The Commission and the public
27. The final feature of the Act which, in this general review, it is
necessary to examine is the relationship of the Commission
to other persons.
It is to this feature that the arguments of counsel on the question of natural
justice are most relevant. We do
not think that any question of natural
justice could have arisen under the Act as it was prior to the substantial
revision in 1976.
The Commissioner acted entirely of his own motion. There was
no provision for any person to apply to him for a price-fixing order.
There
was no provision for any kind of formal inquiry, whether public or private.
Consequently, there was no person capable of standing
in such a relationship
to the Commissioner as would provide any sort of a foothold for a natural
justice claim.
28. However, as has already been noted, the 1976 amendment provided for three
types of public inquiry. We are not concerned with
the first, which relates to
the possible exercise by the Minister of his powers under s. 19 to make a
declaration subjecting goods
or services to the price-fixing procedures of the
Act. The second type of inquiry is that referred to in s. 8B. It shall be held
for the purpose of enabling the Commission to determine whether it should
exercise is powers under s.20, unless the Minister consents
to its being
dispensed with. The third form of inquiry is envisaged by s. 8c. An essential
condition precedent to the holding of
such an inquiry is an application to the
Commission, in the form prescribed by the regulations by a person who is
either a seller
of goods or supplier of a service, for an order under s. 20
(s. 8c). On receipt of such an application, the Commission may decide
to
refuse the application or to hold an inquiry. The same general rules (ss. 8D,
8E and 8F) apply to each of these inquiries. Notice
of the inquiry must be
published. Any person may apply to be made a party, and the application shall
be granted if the Commission
is of the opinion that the applicant has a
substantial interest in the subject matter of the inquiry. A party may appear
in person
or by his agent, counsel or solicitor. He is entitled to give
evidence, or call witnesses and make submissions. An inquiry shall
be held in
public and, subject to an exception in respect of material of a confidential
nature, all evidence and submissions shall
be given or made in public.
Evidence is to be given on oath or affirmation.
29. Mr. Porter QC, for the respondents, advanced two answers in the
alternative to the appellants' claim in respect of a denial
of natural
justice. The first submission was that the Commission was exercising delegated
legislative power, there was no lis, the
whole community was liable to be
affected by any order which the Commission made, and therefore there could be
no obligation to extend
natural justice to a favoured few. In our view, we
doubt whether in the context of this legislation the task of the Commission is
properly described as a legislative one rather than as an administrative one;
but whether this be so or not, we are quite sure that
whatever may have been
the law in earlier times, the question of the application of the rules of
natural justice is not to be determined
merely by affixing a label to describe
the character of the task which is under consideration.
30. The principles of law touching the question are now well established, and
have been expounded more than once recently in this
Court (22). The
application of the rules is flexible, varying in
(22) Heatley v. Tasmanian Racing and Gaming Commission [1977] HCA 39; (1977), 137 CLR 487;
Salemi v. MacKellar (No. 2) [1977]
HCA 26; (1977), 137 CLR 396; Twist
v. Randwick Municipal
Council [1976] HCA 58; (1976), 136 CLR 106.
extent from case to case, and falls to be determined in the case of a
statutory body exercising statutory powers by reference to
the proper
construction of the statute. In the present case, while there may not be a
lis, there are certainly parties to an inquiry,
and, subject to Mr. Porter's
alternative submission, we see no difficulty in applying the rules in this
case.
31. Mr. Porter's second argument was that the legislature has exhaustively
enumerated the rights which parties to an inquiry shall
have, and that further
rights should not be implied. Again, in this respect, the principles are
clear:
"The court will approach the construction of the statute with a presumption
that the legislature does not intend to deny natural
justice to the citizen."
(23)
"But the rule is subject to a sufficient indication of an intention of the
legislature to the contrary. Such an intention is not
to be assumed nor is it
to be spelled out from indirect references, uncertain inferences or equivocal
considerations." (24)
32. The twin pillars of natural justice are that a tribunal will act without
bias, and that a party is entitled to be heard. The
question of bias is not a
relevant consideration in the present case. Here the appellants complain:
(a) with respect to P.R.O. No. 787, that in the course of an inquiry to
which the Association was a party, the Commission gathered
research material
relevant to the subject matter of the inquiry which it failed to disclose in
the inquiry, whereby the Association
was denied an opportunity to be heard
upon it; and
(b) with respect to P.R.O. No. 792, the Commission failed to give an
opportunity to the Association to make submissions on a proposal
which, if
published as a Prices Regulation Order, would have the effect of reducing the
price at which hamburger buns could be sold
notwithstanding that the
Association had applied for an increase in the price.
33. Mr. Porter argues that on the proper construction of the Act there was no
obligation to disclose the research material. The
Act says nothing about the
Commission giving evidence, and in any event the rights of the parties are
expressly stated to extend
to giving evidence, calling witnesses, and making
submissions. There is no right to cross-examine witnesses called by other
parties,
nor to
(23) Twist (1976), 136 CLR, at p. 110.(24) Commissioner of Police v. Tanos [1958] HCA 6; (1958), 98 CLR 383, at p 396. See also Heatley (1977), 137 CLR, at pp 499, 500, per Aickin J.
34. Nevertheless, however intriguing these questions may be with respect to
legislative purpose, the fact remains that the 1976
amendments reflect a clear
intention that the powers contained in the sections in question were
henceforth to be employed only for
the purposes of an inquiry. It must
therefore be taken to have been in contemplation that the Commission would
itself summon witnesses
and adduce evidence and that the requirement that
evidence be taken in public on oath or affirmation would extend to that
evidence.
This conclusion may be directly ascribed to the statutory
provisions, as we construe them, in their application to a public inquiry,
rather than to the audi alteram partem rule as such.
35. The complaint in respect of P.R.O. No. 792 attracts different
considerations. It is conceded by the appellants that although
the Association
had made three applications for price increases subsequent to the publication
of P.R.O. No. 787 and before the publication
of P.R.O. No. 792, the Commission
acted of its own motion in making the order pursuant to s. 20, it having
obtained the consent of
the Minister, in accordance with s. 8B, to dispense
with be holding of an inquiry. In these circumstances therefore a very
different
picture emerges from that which we have discussed in relation to
P.R.O. No. 787. There was no inquiry, and there were no parties.
Furthermore,
the non-disclosure complained of by the appellants does not relate to material
gathered from persons in the course of
investigation, but rather to the result
of the Commission's own deliberations or the recommendations of its officers.
36. Nonetheless, the case for the appellants on this issue is simply that the
Commission was authorized by the statute to make a
determination which
affected the rights of the bread manufacturers who are members of the
Association, and that, in accordance with
the principle recognized in Heatley,
they should have been given an adequate opportunity of being heard. True it
was that on this
occasion the Commission acted of its own motion, but, in
doing so, it nevertheless dealt with the three applications from the
Association.
37. From the history of the matter A appears that the Commission took this
course so as to avoid the necessity for a lengthy public
inquiry and
consequent delay which would have arisen had it acted on the applications
pursuant to s. 8c. In substance, therefore,
we accept the submission that,
although not acting pursuant to s. 8c, the Commission in effect made a
determination with respect
to applications made by the Association. But in
doing so, the Commission had the benefit of material submitted by the
Association
in support of those applications. One would be entitled to ask
whether, in the scheme of this statute, this fact does not represent
an
adequate recognition of the right to be heard. Indeed, there would seem to be
considerable difficulty attending the notion that
a body charged with the
determination of the maximum price at which an article essential to the life
of the community may be sold
must invite comment on the particulars of a
proposed variation from those who might be thought to be adversely affected by
it in
the event that it subsequently became effective.
38. Be that as it may, the specific complaint here is that the Commission
should have notified the Association of the possibility
that the price of
hamburger buns would be reduced. However, as the Court of Appeal observed, the
reduction of the maximum price in
respect of one item was simply a minor
incident in a major revision of the price framework covering the whole range
of bread products.
The effect of that major revision was generally to increase
prices. There was, in our opinion, no obligation on the Commission to
give
advance notice of this development or of the possibility of its occurrence.
7.Application of the act to the facts
39. It is convenient at this point to summarize our view of the effect of the
discussion so far on the detailed allegations of the
appellants as we have set
them out at the commencement of these reasons.
(a) P.R.O. No. 787. The appellants adduced evidence in an inquiry which
favoured the fixation of a maximum price which would allow
to the
manufacturers a return in the vicinity of 21 per cent.
40. Unbeknown to the appellants the Commissioner initiated a survey of the
profitability of twelve public companies listed on the
Sydney Stock Exchange
but which were not engaged in bread manufacture which suggested that an
allowance in the vicinity of 15-16
per cent would be appropriate. It did not
disclose in the form of evidence in the inquiry either the facts of the survey
or the conclusion
to be drawn from it. It would appear that the maximum price
which was fixed by P.R.O. No. 787 represented a return substantially
less than
that which would have resulted from the mere application of the result of the
survey, but we regard that as immaterial
because the survey could well have
been only one of the matters which together with the evidence were considered
by the Commission.
Mr. Porter argued that the sole purpose of the inquiry was
to enable the Commission to determine whether it should exercise the power
conferred under s. 20, and was not concerned with the question of what the
fixation should be in the event of the power being exercised
(Cf. s. 8B).
41. We reject the submission, both because the inquiry was held pursuant to
s. 8c(2), and because in any event the attempted distinction
is unreal. Any
inquiry into the propriety of the exercise of the power to fix a price must
necessarily in our opinion have regard
to the likely result should the power
be exercised. In the light of the statutory provisions to which we have
referred, we conclude
that the Commission should have produced the survey in
the course of the inquiry and given the Association the opportunity, not
necessarily
of cross-examining any witness upon it, but of making submissions
in relation to it. We would therefore hold that P.R.O. No. 787
was invalid
because the Association was denied the opportunity of being heard in relation
to material which should have been disclosed
in the inquiry. In this respect,
we agree with the decision both of Woodward J and the Court of Appeal.
42. However, apart from the question of non-disclosure, bearing in mind the
broad considerations to which the Commission is obliged
to have regard
pursuant to s. 58, and the scope of its discretion, the evidence does not
support a conclusion that it misdirected
itself, or that the fixation was so
unreasonable that no body acting reasonably could have made it.
(b) P.R.O. No. 792. For the reasons which have already appeared, we do not
think that the Commission was obliged to give the Association
an opportunity
to make representations in relation to a proposed fixation of price, nor would
it have been proper to do So' Nor can
it be said that the whole fixation was
so unreasonable as to be invalid. The appellants also attacked the validity of
P.R.O. No.
792 by reference to the "infection argument" It us said that
because P.R.O. No. 787 was invalid, and because it was the practice
of the
Commission to confine its attention in determining the price to be fixed by a
fresh order to trends and circumstances which
had occurred since the previous
fixation, then P.R.O. No. 792 must necessarily be invalid. We are unable to
accept the notion that
infection is always and necessarily contagious. Every
exercise of the power conferred on the Commission by s. 20 is a new and
independent
exercise of discretion, which is to be evaluated having regard to
the circumstances under which, and the considerations by reference
to which,
it is exercised. The Commission, when it made P.R.O. No. 787, fixed the price
of bread by reference to the costs of production
up to the date specified. The
information as to those costs was made available to the Commission by a firm
of accountants on behalf
of the Association. The Commission in making P.R.O.
No. 792 proceeded on the footing that it was necessary for the manufacturers
to show increased costs after that date. The Commission did not give further
consideration to the costs prevailing before that date,
except in so far as it
used those costs for the purpose of determining the difference between them
and the new increased costs. The
process of reasoning of the Commission is
clearly disclosed by two paragraphs in the media release. They are in these
terms:
"The Commission's last decision took effect in November, 1979, when
increases ranging from 2 cents to 3 cents were granted. The
present claim of
the manufacturers include increased labour costs (national wage case increases
and vendors' awards) and rises in
ingredient costs (flour and milk powder).
The Commission has examined this application and recognises that
manufacturers have in fact been faced with increased costs of
manufacture
since the Commission's last decision. In view of these increased costs, the
Commission has decided to increase the price
of bread generally by 2 cents per
loaf. This increase will become effective on Monday, 3rd March, 1980. The new
prices for the 680
gram sliced milk loaf and the 450 g special loaf will be 61
cents in the metropolitan area and 63 cents in certain country areas."
43. The appellants' argument on this point was rejected by the Court of
Appeal. Hope and Glass JJA having noted that the Commission's
procedure was to
investigate changes which had taken place since an earlier fixation of prices
and to determine what alteration those
changes and other relevant
circumstances might require in the prices previously fixed, found that it was
not the Commission's general
practice "to investigate, before making each
order, the whole question of price de novo".
44. It is evident that it is a permissible and practical approach to the
fixing of maximum prices to ascertain what changes have
taken place since the
earlier fixation and to decide what alteration to the prices earlier fixed
should be made in the light of those
changes and other relevant circumstances
found to exist. In the circumstances of this case we do not think that the
invalidity which
affected that determination can be used as a ground for
holding the new determination to be invalid. The Association applied for
an
increase in the prices previously fixed by reference to increased costs
incurred since the date on which the previous order was
based. The Association
did not apply for a determination on the basis of a reconsideration of costs
generally or on the footing that
the earlier determination was erroneous or
invalid. The Commission dealt with the applications accordingly and its
determination
was a valid exercise of the power conferred by s. 20.
(c) P.R.O. No. 798. We have already examined at some length those provisions
of the Act which determine the respective rights and
duties of the Commission
and the Minister, and which thus establish the proper relationship between
them. Woodward J took a view
of the Act and of the evidence which led him into
strong criticism of the Commission. On the appeal the emphasis shifted
markedly,
and the Court of Appeal concluded that the Minister had brought
duress to bear on the members of the Commission in order that they
would
propose a fixation with which he agreed.
45. With great respect to all their Honours, we have arrived at a different
result. We are unable, on the evidence, to find support
for either conclusion.
The appellants relied on the evidence relating to a number of events which
occurred between the publication
of P.R.O. No. 792 on 3 March 1980, and that
of P.R.O. No. 798 on 14 July 1980. These events included the failure of the
Commission
to respond to applications by the Association for an increase in
the price of bread, followed by a conference on 24 April 1980 in
the course of
which the chairman of the Commission informed representatives of the
Association that "because bread prices were increased
on 29 February (the date
of the order, not of its publication) we decided that it was politically
impossible to make a recommendation
to the Minister so soon, and we have
decided to have a meeting next month (May) on the application". Consequent on
that foreshadowed
meeting, which was held on 26 and 28 May, the Chairman wrote
to the Minister on 28 May informing him of the course of events, and
indicating a difference of opinion between the members of the Commission as to
whether the increase should be 3 or 4c, the two part-time
members favouring
4c. The report bears a notation made by the Minister, reading "Please make no
announcement. Discussion with me
is needed." The meeting was arranged, but not
then held because the appellants commenced this litigation in the Supreme
Court seeking,
inter alia, an order of mandamus directed to the Commission.
46. Subsequently the appellants requested the Commission to proceed with its
consideration of an increase in price, and on 2 July
the chairman informed the
Minister of this request and sought an interview to ascertain whether he would
agree to dispense with the
holding of an inquiry. The evidence then discloses
that on 10 July the Commission announced that the price of bread would rise by
3c per loaf from 14 July. It is apparent that between 28 May and 10 July at
least one of the part-time members changed on the question
whether the
increase should be 4 or 3c. On the basis of the evidence of these events,
Woodward J found that the Commission had misconceived
its responsibility under
the Act while the Court of Appeal attributed the change of mind to ministerial
intrusion. In our opinion,
the evidence does not sustain either of these
approaches. It is clear that as at 28 May the Commission could not proceed to
fix a
price unless the Minister was prepared to dispense with an inquiry. This
he had not done. It is not clear from the terms of the chairman's
report
whether a meeting was sought merely to discuss that matter, or whether it was
intended to seek a more general discussion of
the matters on which the members
of the Commission were then in disagreement. In view of the terms of the
further letter to the Minister
dated 2 July, we doubt whether the latter
inference can be drawn from the report, but even if it was drawn we would find
nothing
improper about it.
47. As we have already indicated, our view of the Act is that it is improper
for the Commission to accept any direction from the
Minister as to the price
which should be fixed, but it is not improper for it to seek or to receive an
expression of his views. There
is no sufficient basis in the evidence for
inferring that the Minister had intruded improperly or that any member of the
Commission
had forsaken his or her independence. The evidence is wholly
consistent with the conclusion that between 2 July and 10 July the Commission
received the necessary dispensation from the Minister and proceeded to review
all the information in its possession and resolved
to order an increase of 3c.
The fact that in earlier discussions a majority of the Commission had then
favoured an increase of 4c
loo0des an infirm foundation for a conclusion that
the subsequent decision must been arrived at improperly.
48. In support of its proposition that P.R.O. No. 798 was invalid because the
Commission had adverted to extraneous considerations
which should have found
no place in its deliberations, the appellants pointed to the Chairman's
reference at the conference on 24
April to "political possibilities" which
affected the timing of a fresh fixation of price. Reference was also made to a
sentence
in the Chairman's report of 28 May which indicated that some members
of the Commission felt "that a series of small price rises is
destructive of
consumer confidence". But these submissions are prompted by a misunderstanding
of the scope of the discretion with
which the Act invests the Commission. It
will be clear from our discussion of the proper construction of s. 58 that the
administrative
policy of the Act permits considerations of the kind we have
indicated to be taken into account. The regulation of the price of goods
which
are essential to the life of the community is a concept which postulates a
need for a price which on the one hand will secure
to manufacturers sufficient
profitability to ensure an adequate supply of the goods in question, and on
the other hand will not be
so high as to discourage demand. The frequency and
amount of price increases are clearly matters which may affect consumer
confidence,
and therefore in our view they cannot be said to fall outside the
range of matters which the Commission may take into account. As
for political
considerations, viewed in its entirety the task of the Commission is rightly
described as involving the recognition
of a blend of economic and political
realities. Of course, we use the word "political" in the best sense, that of
pertaining to government,
divorced from sectional partisanship.
49. P.R.O. No. 798 was also challenged on the ground that the fixation was so
unreasonable as to be invalid, and also on the ground
that it was infected by
the invalidity attaching to P.R.O. No. 787. In our view, neither ground is
made out, for the same reasons
that we have indicated in relation to the
earlier orders.
50. It follows, then, that P.R.O. No. 798 was a valid order.
8. Validity of the revocation orders
51. The conclusion to which we have come makes it unnecessary to consider
whether in the event of a fixation of price being held
to be invalid that part
of the order which revokes the preceding order is nevertheless effective.
Woodward J accepted the appellants'
argument that the revocation was the
exercise of an independent power and remained valid whatever the fate of the
new fixation The
(Court of Appeal came to a contrary conclusion. It may be
desirable to indicate where we stand on the question. In our opinion, the
test
must be the intention of the maker. We find it inconceivable that the
Commission could have intended to revoke an existing fixation
regardless of
whether their fresh fixation was effective. We would therefore regard the
revocation clause as incapable of severance,
with the result that the whole
order is either good or bad.
9. Conclusion
52. For these reasons, we would dismiss the appeal, and allow the
cross-appeal save as respects the validity of P.R.O. No. 787.
MURPHY J The challenged Prices Regulation Orders are presumed to be valid, and in view of the extremely serious consequences (I invalidation, evidence required to rebut the presumption should be compelling. Prices Regulation Orders Nos 792 and 798 are valid and also (although a decision is unnecessary) the revocation clauses are not severable. I agree generally with the reasons given by Mason and Wilson JJ in reaching the conclusions that those orders are valid.
2. State legislation, read in the light of constitutional conventions, may
provide the answer to whether a State officer or body
is bound to give effect
to, or give weight to, a ministerial direction. In Commonwealth legislation
the provisions of the Constitution must also be considered, particularly s. 64
which contemplates that the Departments of State will be administered by
Ministers (25).
3. In my opinion, Prices Regulation Order No. 787 is also valid. Even if the
Commission did not observe a statutory procedural direction
in the conduct of
its inquiry it does not follow that the order subsequently published in the
Gazette, after the Minister has declined
to exercise his power under s. 20(1A)
to direct the Commission not to publish the proposed order, is invalid. If
invalidity were
to be the result, it might not become apparent or certain for
months or years. Those who charged maximum prices relying upon the
order would
be in breach of the Prices Regulation Act 1948 (N.S.W.), as amended ("the
Act"). In view of the enormous public inconvenience
of those consequences such
an
(25) See Ansett Transport Industries (Operations) Pty. Ltd. v. The
Commonwealth [1977] HCA 71; (1977),139 CLR 54.
intention should not be imputed to the legislature in the absence of
unambiguous language. There is none here.
4. Further, I am not satisfied that there was a failure to observe a
statutory direction. By s. 8B of the Act the Commission was
bound to hold an
inquiry for the purpose of determining whether it should exercise its powers
to fix and declare maximum prices (under
s. 20), unless it obtained the
Minister's consent to dispense with the holding of an inquiry. It was entitled
to undertake the survey
or other research. A survey of the profitability of
twelve public companies (not bread manufacturers) listed on the stock exchange
is the kind of general information which one would expect the Commission to
use as background without having to disclose it to those
concerned with a
public inquiry under the Act. A survey of the interest payable on government
or local government bonds would fit
into the same category. This kind of
information is generally available in business journals, but may require
assembling and analysis.
Even courts sometimes look at material and arguments
other than those dealt with by parties and sometimes arrive at conclusions
unanticipated
by parties. For a recent example see Pennant Hills Restaurants
Pty Ltd v. Barrell Insurances Pty. Ltd. (26). For an earlier example
see
Starke J in R. v. Bevan; Ex parte Elias and Gordon (27). There is no express
statutory requirement that any work done by the
Commission before or during an
inquiry, must be revealed to those who might be concerned if the Commission
decided to exercise its
powers under s. 20. To read the Act as impliedly
prohibiting the Commission from such an exercise without revealing it to the
parties
is a very narrow view which would result in an undue hobbling of the
Commission. Equally, natural justice does not require the revelation.
Adverse comments on Minister
5. No court or other tribunal should make findings against the honour or
reputation of a person where no allegation has been made
against the person by
any party or witness especially where the person is not a party or a witness.
6. In the Court of Appeal, the judgments contained statements extremely
adverse to the Minister for Consumer Affairs, the Honourable
S. D. Einfeld.
Mr. Einfeld has had a long and distinguished career as a member of the New
South Wales and Federal Parliaments and
as a Minister in the Government of
New
(26) [1981] HCA 3; (1981) 145 CLR 625.
(27) [1942] HCA 12; (1942) 66 CLR 452, at p. 465.South Wales, as well as being prominent in other public affairs. He is one of the most respected citizens in the State. Hutley JA said:
7. Hope and Glass JJA said:
"In all the circumstances the inference should be drawn that the Commission
did not come to its own independent decision that it
should recommend an
increase of three cents, but that it came to that conclusion because the
Minister, in a way not permitted by
the Act, had constrained them to do so,
either by telling them what he wanted, or by indicating that he would veto a
four cent increase."
8. These findings, if accepted by the Government or Parliament, were enough
to warrant the Minister's dismissal from office. However,
there was no
foundation for the findings. It is enough to say that a thorough examination
of the whole of the record shows that there
is no evidence to support them.
This is understandable because there was no allegation against the Minister in
the pleadings. We
were informed that the allegations against the Minister were
not advanced by the appellants in the Court of Appeal, but were raised
by that
Court itself during the respondent's address. The appellants' counsel informed
us that he did not ask the Court of Appeal
for a finding of impropriety
against the Minister, and that the Court of Appeal took it upon itself to make
the findings. The Minister
has not been a party or a witness in the
proceedings at any stage, although he sought unsuccessfully to be joined as a
party in this
Court to deal with the statements by the Court of Appeal. It is
disturbing that the declaratory procedure has been used by the Court
of Appeal
to make findings adverse to the Minister although no party to the proceedings
sought any such finding. Apart from the absence
of evidence, the members of
the Court of Appeal seem also to have overlooked the presumption of innocence,
and the presumption that
official acts have been regularly and properly
performed.
AICKIN J The material facts and the legislation upon which this appeal and cross-appeal depend are set out in the joint reasons for judgment of Mason and Wilson JJ and I do not need to repeat them. The grounds of attack on the validity of each of the Prices Regulation Orders in question are likewise set out in the joint judgment. In general I agree with the conclusions reached in that judgment but there are some aspects of the reasoning with which I am not in agreement, though that does not affect my agreement with the end result. There are some observations which I wish to add.
2. As to P.R.O. No. 787, I agree with their conclusion that it was invalid, a
conclusion which was also reached by Woodward J at
first instance and by the
Court of Appeal of the Supreme Court of New South Wales, though somewhat
different reasons were given for
that conclusion.
3. Notwithstanding the deletion in 1976 of the words "in his absolute
discretion" from s. 20(1) of the Prices Regulation Act 1948
(N.S.W.) as
applied to the former Commissioner, the discretions and powers of the
substituted Commission are in most respects as
wide as those of the
Commissioner. This is made clear by the retention in sub-s. (5) of the words
omitted from sub-s. (1). Sub-section
(5) deals with the fixing of charges for
declared services and sub-s. (1) with fixing the price of declared goods. It
is unlikely
that the amendments were intended to apply different criteria to
the exercise of those two closely related powers. Moreover there
is nothing in
the form of the other amendments which could be regarded as specifying some
limit or restriction on the exercise of
the statutory discretion.
4. In some respects however the powers of the Commission differ from those of
the former Commissioner. The Commission is bound to
hold a public inquiry
before making or varying a Prices Regulation Order unless the Minister
dispenses with that requirement, whereas
the former Commissioner had wide
powers of inquiry and investigation but no power to hold a public inquiry.
Moreover those extensive
powers of inquiry and investigation formerly held by
the Commissioner are not given to the Commission except for the limited
purpose
of the holding of a public inquiry. In my opinion this imposes upon
the Commission the obligation to disclose at the public inquiry
information so
obtained, for otherwise the public inquiry would be pointless. It is the
Commission's failure to disclose at the public
inquiry the material it had
obtained which vitiated P.R.O. No. 787. In the ordinary case that would leave
the previous P.R.O. (No.
782) operative until some later P.R.O. repealed it or
substituted some other maximum figure.
5. It was contended however that the result of that sequence of events was to
leave every person who sold bread during the purported
operation of P.R.O. No.
787 at the prices therein specified in the position of having contravened the
provisions of P.R.O. No. 782.
It was then pointed out that the classification
of bread in P.R.O. No. 787 was different from that in P.R.O. No. 782. P.R.O.
No.
782 divided bread into four categories and attached a price to each
category. P.R.O. No. 787 divided bread into three categories
and again
attached a price to each category. It was argued that because P.R.O. No. 787
changed the classification of bread, and thereby
changed the whole pricing
system, there was indicated a separate intention to repeal the former
classification, and that the revocation
of P.R.O. No. 782 was therefore
entirely independent of the latter part of P.R.O. No. 787 which prescribed the
maximum price for
each new category of bread. Acceptance of this argument
would lead to the result that there was thereafter no operative price control
on bread. It is clear enough that the attention of the Commission was not
directed to this possibility and that it had no actual
intention to produce
such a result. I am unable to see how it can be regarded as a necessary
consequence of what the Commission did.
It is plain that the Commission
intended to produce two results at the same point of time - the repeal of the
old and the coming
into operation of the new, but nonetheless in an assumed
order. The intention necessarily involved in such a process is that both
events should happen. The intention is that a new set of maximum prices should
come into force, supplanting the old, not that the
old set shall come to an
end, nothing being substituted in its place. If the new set does not come into
operation nothing supplants
the old, which remains operative. There is nothing
in the words used or the context to suggest any other intention.
6. As to P.R.O. No. 792 there is nothing which I wish to add to what is said
in the joint judgment of Mason and Wilson JJ beyond
saying that if an
interested party wished the Commission, before fixing a new price, to
re-examine a former order on the ground that
it had previously proceeded on a
wrong basis, rather than merely looking at intervening events, an express
request should be made.
No such request was made and in those circumstances it
was proper for the Commission to confine its attention to new factors arising
after the former determination.
7. As to P.R.O. No. 798 I would add that in my opinion the evidence falls
just short of warranting the inference that there was
improper pressure
brought to bear on the Commission or an abrogation by the Commission of its
independent function. It may well be
that there are grounds for suspicion but
there is not sufficient material to warrant an affirmative finding to that
effect. I would
not regard it as proper for the Commission, or any of its
members to "sound out" the Minister with a view to ascertaining how far
they
would have to adjust their views to avoid the exercise of his veto power. That
would be an abandonment of their statutory function.
However the material
available fails to prove that that was what occurred.
8. I would accordingly dismiss the appeal and allow the cross-appeal save in
so far as it relates to the validity of P.R.O. No.
787.
9. Appeal dismissed.
10. Cross-appeal allowed.
11. Order of the Court of Appeal of the Supreme Court of New South Wales set
aside and in lieu thereof order as follows:
Appeal allowed.
12. Judgment of Woodward J set aside, and in lieu order:
(i) that it be declared that Prices Regulation Order No. 787, in so far as
it purported to fix and declare the maximum price for
the goods specified in
the order, was invalid;
(ii) that the action be otherwise dismissed;(iii) that the plaintiffs pay to the defendants two-thirds of the taxed costs of the action.
13. Further order that the present appellants pay to the present respondents
two-thirds of the taxed costs of the appeal to this
Court (including the
cross-appeal) and to the Court of Appeal.
14. Solicitors for the appellants, Stephen, Jaques and Stephen.
15. Solicitor for the respondents, H. K Roberts, Crown Solicitor for the
State of New South Wales.
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