Cann's Pty Ltd v The Commonwealth

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.