Cann's Pty Ltd v The Commonwealth

Case [1946] HCA 5


71 CLR 210

CANN'S PROPRIETARY LIMITED

THE COMMONWEALTH AND ANOTHER National Security-Price control-Fixing of prices by reference to a standard-Order

- Validity-Uncertainty-National Security (Prices) Regulations (S.R. 1940 No. 176-1944 No. 113), reg. 23-Prices Regulation Orders Nos. 1454, 1878.

A prices regulation order purported to fix maximum prices to be charged by manufacturers for various articles of women's outerwear by methods which April 9.

were made; in the case of some articles, of the "cost" of a specified length " of the material used " was to be ascertained and, in the case of others, of the 'actual cost of the material used " was to be ascertained, The order contained the following definitions:- " Actual cost of the material used means, in relation to any article length of material or materials

of the same width as that used in the means in respect of any material

the actual purchase price of that

has been purchased with that part of the total purchase price which is properly attributable to such first-mentioned material." Material means the principal material or materials used and does not include any material used for linings, facings or trimmings."

Held, by Latham C.J., Starke and Williams JJ. (Dixon J. dissenting), that the order was not a valid exercise of the power conferred by reg. 23 of the National Security (Prices) Regulations in as much as the methods it prescribed involved elements of estimation, approximation and apportionment and it therefore did not establish a certain objective standard by reference to which prices could be calculated.

King Gee Clothing Co. Pty. Ltd. v. The Commonwealth, ante, p. 184, applied.

71 CLR 211

In an action in the High Court against John Albert Beasley and the Commonwealth the plaintiff in its statement of claim (indorsed on the writ and dated 25th October 1945) pleaded substantially as follows :-At the material times the plaintiff carried on the businesses of manufacturer and retailer of women's and girls' outerwear in Melbourne. On 29th February 1944 one McCarthy, acting as the Assistant Prices Commissioner of the Commonwealth, purported to make Prices Regulation Order No. 1454 under the National Security (Prices) Regulations purporting to fix and declare the maxi- mum price at which any manufacturer might sell women's and girls' outerwear. The Order was published in the Commonwealth Gazette on 2nd March 1944. The defendants contended that the provisions of the Order No. 1454 applied to the plaintiff and to its operations that the purported Order was invalid and a nullity on the ground that it was not authorized by the Prices Regulations, and on the further ground that it was uncertain. The defendant John Albert Beasley was a member of the Federal Executive Council acting for and on behalf of the Attorney-General of the Commonwealth. The defendant Beasley for and on behalf of the Attorney-General informed the Supreme Court of Victoria and charged that on various dates in July and August 1944 the plaintiff had contra- vened the Black Marketing Act 1942 by selling articles…

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Cann's Pty Ltd v The Commonwealth [1946] HCA 5
Case
[1946] HCA 5
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CaseChat Overview and Summary

Cann's Pty Ltd (the plaintiff) sought a declaration that Prices Regulation Order No. 1454, made under the National Security (Prices) Regulations, was invalid and void. The plaintiff, a manufacturer and retailer of women's outerwear, argued that the Order, which purported to fix maximum prices, was not authorised by the Regulations and was uncertain. The defendants demurred to the statement of claim, asserting the Order was a valid exercise of power. The dispute was heard in the High Court of Australia.

The central legal issue before the court was whether Prices Regulation Order No. 1454, as amended, constituted a valid exercise of the power conferred by reg. 23 of the National Security (Prices) Regulations. Specifically, the court had to determine if the methods prescribed by the Order for calculating maximum prices were sufficiently certain and objective, or if they involved elements of estimation, approximation, and apportionment that rendered them invalid. This involved examining the definitions of "cost" and "material" within the Order and their application to the pricing mechanisms set out in its schedules.

A majority of the High Court, comprising Latham C.J., Starke and Williams JJ., held that the Order was an invalid exercise of power. The Court reasoned that the definitions of "cost" and "material" within the Order, particularly the provisions requiring the apportionment of a total purchase price where goods were bought together and the identification of "principal material," introduced elements of estimation and subjective judgment. This uncertainty meant that the Order did not establish a certain, objective standard by which prices could be calculated, a requirement derived from precedent, notably *King Gee Clothing Co. Pty. Ltd. v. The Commonwealth*. Dixon J. dissented.

The Court found that for a significant number of garments, no valid price was fixed by the Order due to these uncertainties. The plaintiff's claim for a declaration that the Order was void was therefore upheld.

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