Clark King & Co Pty Ltd v Australian Wheat Board

HIGH COURT OF AUSTRALIA

Barwick C.J., Stephen, Mason, Jacobs and Murphy JJ.

CLARK KING &CO. PTY. LTD. v. AUSTRALIAN WHEAT BOARD

(1978) 140 CLR 120

8 September 1978

Constitutional Law (Cth)

Constitutional Law (Cth)—Freedom of interstate trade and commerce—Wheat—Sale by growers in New South Wales to millers in Victoria—Whether interstate trade—Joint statutory scheme by Commonwealth and States—Acquisition of wheat—Prohibition of sales—Prohibition—Regulation—Whether scheme only reasonable and practical method of regulation—The Constitution (63 &64 Vict. c. 12), s. 92—Wheat Industry Stabilization Act 1974 (Cth), ss. 21, 22, 23, 24, 25—Wheat Industry Stabilization Act, 1974 (N.S.W.), ss. 10, 11, 12, 13, 14.

Decisions

September 8.
The following written judgments were delivered:-
BARWICK C.J. The plaintiff in each of these four cases seeks declarations that, by reason of s. 92 of the Australian Constitution, certain provisions of the Wheat Industry Stabilization Act, 1974 (N.S.W.) ("the State Act") are inapplicable to certain wheat in its possession. (at p195)

2. The Australian Wheat Board is a defendant in each case but the State of New South Wales is also a defendant in the first of the four cases. (at p195)

3. In each case, the defendant party or parties has or have demurred, asserting the validity and applicability of the challenged provisions of the State Act. We thus have before us four demurrers which have been argued together. In each argument, the Commonwealth of Australia and the States of Victoria, South Australia and Western Australia were given leave to intervene. (at p195)

4. The facts alleged in the pleadings in each case are comparable but not identical. Those in the first case gave rise to a submission that in fact, for various reasons assigned, the plaintiff in that case, in relation to certain specific wheat, was not engaged in interstate trade and commerce, a submission with which I shall briefly deal in due course. But the basic points raised and the applicable principles are in each case otherwise identical. For completeness, however, I shall detail the significant facts alleged by the plaintiff in each case. (at p129)

5. Before doing so, I should set out the relevant provisions of the State Act. Sections 10, 11, 12, 13 and 14 are in the following terms:

"10. (1) Subject to this Act, a person who is in possession of wheat may deliver that wheat to the Board." (i.e., the Australian Wheat Board) "(2) Subject to this section, the Board may- (a) by notice in writing served personally on the person to whom it is addressed or served on that person by post at his usual or last-known place of abode or business; or (b) by notice published in the Gazette and addressed to persons generally or to persons included in a class of persons, require the person, or each person, as the case may be, to whom the notice is addressed- (c) to deliver to the Board, in accordance with any directions in the notice, wheat that is in the possession of that person; or (d) to deliver to the Board, in accordance with any directions in the notice, wheat that, during such period as is specified in the notice, comes into the possession of that person. (3) Upon delivery of wheat to the Board under this section, the wheat (including any corn sacks in which the wheat is contained) becomes the absolute property of the Board, freed from all mortgages, charges, liens, pledges, interests and trusts. (4) A notice under this section shall not require the delivery to the Board of- (a) wheat retained by the grower for use on the farm where it is grown; (b) wheat that has been sold by the Board; or (c) wheat that has been sold or delivered to a person with the approval of the Board. (5) A person shall not- (a) without reasonable excuse, refuse or fail to deliver any wheat to the Board as required by a notice under subsection (2); or (b) deliver to the Board wheat that has previously been sold by the Board. Penalty: An amount calculated in respect of the quantity of the wheat in respect of which the offence is committed at the rate of $200 per tonne or part thereof, or imprisonment for six months, or both. (6) For the purposes of this section and of notices under this section, where a person has possession of wheat immediately upon its harvesting, that wheat shall be deemed to have come into the possession of that person at the time of its harvesting. 11. (1) Delivery of wheat to the Board may be made by delivering the wheat to a licensed receiver and not otherwise, and the delivery is not effective unless and until the delivery is accepted by the licensed receiver. (2) A licensed receiver shall, in relation to the acceptance, or refusal of acceptance, on behalf of the Board, of the delivery of wheat in a quota season, comply with any directions of the Board that have regard to quotas that are applicable under a law of the State providing for the fixing of wheat quotas. (3) A person who delivers wheat to a licensed receiver shall, at the same time, furnish to the licensed receiver in writing the names and addresses of all persons known by him to have or to claim an interest in the wheat, in any corn sacks in which the wheat is contained or in the payment to be made for the wheat or corn sacks, and all particulars known to him of those interests. (4) Nothing in section 10 or in this section affects the operation of a scheme of apportionment of storage space under section 12A of the Grain Elevators Act, 1954. 12. (1) Except as provided in sections 10 and 11, or with the consent in writing of the Board, a person shall not- (a) sell, deliver or part with the possession of, or take into his possession, or grist or otherwise process (otherwise than for the purpose of the use of the produce of the gristing or processing on the farm where the wheat was grown), or mix with any other grain or substance, wheat of any season other than wheat specified in section 10 (4) (b) or (c); (b) move, or cause or permit to be moved, from the farm where the wheat was grown- (i) wheat of any season, other than wheat specified in section 10 (4) (b) or (c); or (ii) wheat products produced from such wheat; (c) part with the possession of, or take into his possession, wheat of any season that is the property of the Board; or (d) purport to sell or offer for sale, or purport to purchase or offer to purchase otherwise than from the Board, wheat of any season that is the property of the Board. Penalty: An amount calculated, in respect of the quantity of the wheat, or of the wheat equivalent of the wheat products, in respect of which the offence is committed, at the rate of $200 per tonne or part thereof or imprisonment for six months, or both. (2) For the purposes of this section- (a) the wheat equivalent of any wheat products is the quantity of wheat used in, or used in the production of the materials used in, the wheat products; (b) a certificate of the Board specifying the wheat equivalent of a particular quantity of a particular kind of wheat products or the wheat equivalent of particular wheat products is prima facie evidence of the facts stated in the certificate; and (c) a person shall not be taken to part with the possession of wheat by reason only of the fact that he uses the wheat on the farm where it was grown. 13. (1) Where wheat is delivered to the Board in pursuance of section 10, the Board shall pay for that wheat (including the corn sacks, if any, in which the wheat is delivered) an amount determined by the Board in accordance with this section. (2) The Board shall determine amounts payable under subsection (1) in respect of wheat of a season by - (a) ascertaining the net proceeds of the disposal by the Board of all wheat of that season delivered to the Board in Australia (whether in pursuance of this Act or otherwise); (b) deducting from the amount so ascertained an amount determined by the Board having regard to the extent to which freight charges in respect of the export of wheat of that season from the State of Western Australia to places outside Australia are lower than freight charges in Australia to places outside Australia, but not exceeding an amount calculated at the rate of ninetytwo cents per tonne of the wheat of that season exported from the State of Western Australia to places outside Australia; and (c) ascertaining the share in the remaining amount of each person entitled to payment under this section by apportioning that remaining amount amongst the persons who delivered wheat of that season to the Board in Australia (whether in pursuance of this Act or otherwise) on the basis of the quantity of wheat so delivered by each such person, with proper allowance for differences in the quality of wheat and for charges by the Board in respect of costs of the transport of wheat to terminal ports from places at which wheat has been delivered to the Board, corn sacks in which wheat was supplied to the Board, additional costs incurred by the Board in the handling and storage of wheat delivered to the Board in corn sacks and other necessary adjustments in particular cases. (3) The Board is not bound to make a final payment in respect of wheat of a season until it has disposed of the whole of the wheat of that season delivered to it in Australia (whether in pursuance of this Act or otherwise), but the Board may, with the approval of the Commonwealth Minister, make from time to time such advance payments as it considers justified. (4) Subject to this section and to section 18, the net proceeds of the disposal of wheat of a season shall, for the purposes of this section, be deemed to be the net return from the disposal of that wheat (including corn sacks in which the wheat was sold) after deducting - (a) any charge imposed by the Wheat Export Charge Act 1974 of the Parliament of the Commonwealth in relation to wheat of that season; and (b) costs incurred by the Board, to the extent that they relate wholly to wheat of that season or are reasonably allocated by the Board to wheat of that season and will not be covered by charges referred to in subsection (2) (c). (5) In ascertaining the net proceeds of the disposal of wheat of a season - (a) moneys received by the Board under a policy of insurance in respect of wheat of that season, or in respect of a transaction in relation to any such wheat, shall be deemed to be a return from the disposal of that wheat; (b) amounts paid by the Board in respect of expenses referred to in section 40 (3) of the Commonwealth Act shall be deemed to be costs referred to in subsection (4); (c) there shall be taken into account such of the payments made or received by the Board in accordance with section 17 (3) of the Commonwealth Act as the Board considers may equitably be related to wheat of that season; (d) no account shall be taken of moneys to which section 20 or a corresponding provision of the Commonwealth Act, or of an Act of another State, applies or of costs of the Board payable out of those moneys; and (e) there shall be taken into account payments made to the Board in accordance with section 18 (2) of the Commonwealth Act in relation to wheat of that season. (6) The costs referred to in subsection (4) (b) include costs paid or reimbursed by the Board in connection with the administration of a law of a State relating to wheat quotas. (7) The obligation of the Board under this section in respect of any wheat is subject to the operation of section 8 of the Wheat Tax Act 1957-1973 of the Parliament of the Commonwealth. 14. (1) In relation to a quota season, or a season that is not a quota season but immediately follows a quota season, section 13 has effect as if references in that section to wheat of a season were references to wheat included in the pool for that season in accordance with this section. (2) For the purposes of this section, "quota wheat", in relation to a quota season (in this subsection referred to as "the relevant season") means wheat of the relevant season delivered to the Board in the relevant season, or wheat of an earlier quota season delivered to the Board in the earlier quota season but not included in the pool for that season, or delivered to the Board in the relevant season, being in either case - (a) wheat which appears from the records of the Board to be part of a quota allocated, in respect of the relevant season, to the State in which it was delivered under arrangements between the Australian Government and the Governments of the States relating to wheat quotas; and (b) if, under the law of the State in which the wheat was delivered relating to wheat quotas, quotas have been allocated to individual persons in respect of the relevant season, wheat which appears from the records of the Board to be the whole or a part of a quota applicable in respect of the relevant season to a person under that law, and, for the purposes of this subsection, the Australian Capital Territory shall be deemed to be part of the State of New South Wales and the Northern Territory shall be deemed to be part of such State as is prescribed by the regulations under the Commonwealth Act. (3) The pool for a quota season (in this subsection referred to as "the relevant season") consists of the following wheat delivered to the Board (whether in pursuance of this Act or of a law of the Commonwealth or of another State): - (a) wheat which is quota wheat in relation to the relevant season; (b) any other wheat of the relevant season delivered in the relevant season, or any wheat of an earlier quota season that was not included in a pool for an earlier season, that is declared by the Board to have been sold by the Board, by way of export sale or sale for export, at a premium on the price of Australian standard white wheat, and paid for in full, during the relevant season; and (c) any other wheat, being wheat of an earlier quota season, that - (i) was delivered to the Board before the relevant season; (ii) was not included in the pool for a season before the relevant season; and (iii) is declared by the Board to have been sold by the Board, and paid for in full, before or during the relevant season. (4) The pool for a season that is not a quota season but immediately follows a quota season consists of the following wheat delivered to the Board (whether in pursuance of this Act or of a law of the Commonwealth or of another State): - (a) wheat of that season; and (b) wheat of an earlier season, being a quota season, that was not included in the pool for an earlier season. (5) The Board may, in such manner as it considers equitable, for the purposes of a declaration under subsection (3) (b) or (c), attribute sales of wheat of a particular kind to all or any of the wheat of that particular kind delivered by particular persons."

These provisions are mirrored in the Wheat Industry Stabilization Act 1974 (Cth) ("the Australian Act") and in wheat stabilization legislation in other Australian States. As in the case of the somewhat different scheme dealt with in Wilcox Mofflin Ltd. v. New South Wales (1952) 85 CLR 488 ("the Hide and Leather Industries Case"), the wheat stabilization scheme was an Australian scheme, the State legislation complementing the Australian Act, confirming "by the exercise of State legislative power the rights" of the Australian Wheat Board and those elements of the scheme which might be beyond the power of the Parliament. The evident purpose of the legislative scheme is to stabilize the return to the grower of wheat, avoiding the consequences of fluctuating international prices and demand for wheat, and erecting a uniform domestic price for wheat secured for local consumption. Australia has a large surplus of wheat over local demand which it exports, being one of the world's larger exporters of that grain. Differing quantities of wheat produced in and costs of the transport from the various States added to seasonal irregularity have created the problem sought to be solved and at least alleviated by the scheme. With this broad description of it, I have no need to enter into detail as to its machinery. In particular, I find no need to go into the operation of the system of quotas. (at p134)

6. The Australian Wheat Board set up by Australian legislation is, by s. 7 of the State Act, empowered, amongst other things, to accept the delivery of wheat, to purchase, sell and dispose of wheat: to manage and control all matters connected with the handling, storage, shipment and sale of wheat. In the exercise of this management and control, the Board is subject to and bound to comply with the directions of the Minister of State administering the Australian Act. (at p134)

7. The critical question in the demurrers is whether the sections of the State Act which I have set out, and in particular ss. 10, 11 and 12, can lawfully apply to wheat the subject of interstate trade. (at p134)

8. Those sections ensure that the grower may not sell any of the wheat he has harvested but, if he is to gain any advantage by having grown it, he must deliver it to the Board and accept of the Board, when the Board has disposed of all the wheat of the particular season grown, not merely in New South Wales but in Australia, a dividend out of the net amount the Board has realized by the sale of the wheat. The sections apply without relevant exception to all wheat grown in New South Wales, complementary legislation applying in the same terms to all wheat grown elsewhere in Australia. (at p135)

9. I will now refer to the particular assertions made in each of the four cases. (at p135)

10. Clark King &Co. Pty. Ltd. is incorporated in the State of Victoria. It operates a mill situated at Laurens Street, North Melbourne, at which it grists, amongst other grains, wheat for the production of stock feed. The plaintiff purchases wheat directly from growers in New South Wales under contracts in writing in the following form:

"CONTRACT OF PURCHASE

This Contract is made between Clark King &Co. Pty. Ltd. of 33 Walsh Street, West Melbourne, who have agreed to buy,

and ....................................................... of ......................................................... who agree to sell the undermentioned goods in sound, merchantable condition, subject to the stipulations and conditions hereunder, and/or endorsed hereon. GOODS ................................................... QUALITY ................................................ QUANTITY .............................................. PACKAGES ..............................................

DELIVERY POINT Clark King &Co. Pty. Ltd.,

Laurens Street, North Melbourne. PRICE ................................................. The price is based on delivery by the Seller to the Purchaser's Mill situated in Laurens Street, North Melbourne and based on certified Weighbridge weights as supplied by the Purchaser. TIME OF DELIVERY ...................................... The parties agree that it is the obligation of the Seller to deliver the goods the subject of this contract to the Purchaser in Melbourne and it is a condition of this contract that the good should be so delivered. Without limiting the obligation of the Seller to deliver to the Purchaser in Melbourne the Seller will procure such delivery by a person firm or company nominated by a Purchaser provided that such person firm or company shall undertake responsibility for delivery as set out in this Agreement at and for a price not exceeding ....................................................... PAYMENT ............................................... Payment will be made by the Purchaser on collection of the goods from the Seller for delivery to Melbourne by a Carrier engaged by the Seller and in accordance with the weights shown on certified Weighbridge dockets. PROPERTY IN THE GOODS The parties hereby agree that for the purpose of this contract the property in the goods shall pass to the Purchaser upon delivery of the goods to a Carrier for delivery to Melbourne but they further agree that this provision shall not affect the obligation of the Seller to deliver the goods to the Purchaser in Melbourne. EMERGENCY That neither party will be held responsible for nonperformance caused by acts of God, labour troubles, restriction of operations by reason of any Commonwealth or State Government Laws or Regulations, or any other cause reasonably beyond the control of the affected party. LIABILITY

This Contract shall be binding on the Seller and his assigns and on Clark King &Co. Pty. Ltd. and its assigns.

CONTRACT TERMS ACCEPTED DATE .....................................................

CLARK KING &CO. PTY. LTD.

per ..................... ......................... SELLER'S SIGNATURE" The wheat thus purchased is delivered by the grower-vendors to a carrier nominated by the purchaser for carriage from New South Wales to the purchaser's mill in Victoria. From time to time, wheat so delivered to the carrier is placed in storage at Coleambally in New South Wales and "held in transit pending the completion of transportation" into Victoria. Whilst wheat so purchased was stored in New South Wales, the "WHEAT INDUSTRY STABILIZATION ACT, 1974 NEW SOUTH WALES NOTICE IN WRITING FOR DELIVERY OF CERTAIN WHEAT

TO: Clark King &Company Pty. Ltd.,

33/37 Walsh Street, WEST MELBOURNE, VIC., 3003

TAKE NOTICE that in pursuance of the powers conferred by Section 10 of the Wheat Industry Stabilization Act 1974 of the State of New South Wales the Australian Wheat Board (hereinafter called "the Board") HEREBY REQUIRES you, being a person to whom the Notice is addressed, to deliver to the Board, wheat that is in your possession at the stores operated by Ray Brooks &Company of Barooga and situated in Saleyards Road, Deniliquin, in the State of New South Wales within twenty-one days of the date of service of this Notice upon you. This Notice shall not be taken as a requirement to deliver to the Board: -

(a) Wheat retained by you for use on the farm where it is grown; (b) Wheat that has been sold by the Board; or (c) Wheat that has been sold or delivered to a person with the approval of the Board. The Board directs that delivery to the Board of such wheat shall be made by delivering such wheat to the Grain Elevators Board of Victoria facilities at Deniliquin in the State of New South Wales. DATED the 14th day of July 1977. THE COMMON SEAL of the AUSTRALIAN WHEAT BOARD was hereunto affixed in the presence of: Board Member: Secretary: (Signed)"

This plaintiff claims:

"(1) A declaration that Sections 10 and 12 of the Wheat Industry Stabilization Act 1974 of the State of New South Wales are invalid. Alternatively, (2) A declaration that the said Act cannot validly apply in respect of wheat purchased by the plaintiff in the course of interstate trade, commerce or intercourse. (3) A declaration that the Notice dated the 14th July 1977 served on the plaintiff and served by the firstnamed defendant is invalid and of no effect."

Consequential injunctive relief is also sought. (at p137)

11. K. M. M. Pty. Ltd. This plaintiff was incorporated in Victoria. It operates a flour and feed mill at Kensington in that State. Wheat is there ground into flour and stock feed for sale by the plaintiff. Wheat for the purpose of the mill is bought in quantity at the end of each wheat growing season, i.e. through the months of November, December and January, for transportation to the Victorian mill, this purpose of the plaintiff being made known to the growers from whom purchases are made. A store at Coleambally in New South Wales is operated by the plaintiff. Wheat is from time to time held in this store pending its transport to the mill. The growers are paid for the wheat on delivery to the plaintiff, which on occasions occurs when growers deliver to the store at Coleambally. As indicative of the plaintiff's course of business, there were 2,730 tonnes of wheat so purchased in the store in February 1977, of which only 553 tonnes remained there in September 1977, awaiting transport to the mill. (at p138)

12. In July 1977 the Wheat Board served upon the plaintiff a notice, purporting to be given under s. 10 of the State Act, in like terms to the notice in the preceding case, requiring the plaintiff to deliver to the New South Wales Grain Elevators Board's facilities at Coleambally all the wheat then in the plaintiff's store at Coleambally. (at p138)

13. The plaintiff seeks declarations: (1) that the State Act does not apply to trade and commerce amongst the States; (2) that the wheat in the plaintiff's store at Coleambally at the time of the service of the notice was not subject to the said Act; (3) that the notice served upon the plaintiff was invalid and ineffective in relation to the said wheat; (4) that the plaintiff was not obliged to deliver any of the said wheat to the Board. (at p138)

14. Injunctive relief to restrain action on the served notice is also sought. (at p138)

15. Bunge (Australia) Pty. Ltd. This plaintiff, also incorporated in the State of Victoria, owns and operates at Ballarat in the said State, under the name of Garden City Flour Mill, a mill in which flour is ground and mixed with other ingredients for stock feed. The plaintiff also owns a store at Coleambally. For the purposes of supplying the mill at Ballarat with wheat until the next wheat-growing season, the plaintiff purchases in New South Wales quantities of wheat grown in that State. Growers from whom wheat is purchased are made aware of the plaintiff's purpose in buying the wheat and are directed by the plaintiff to deliver the purchased wheat to the plaintiff's store at Coleambally. On delivery, the growers are paid for the wheat. Wheat is moved from the store to the mill at Ballarat as and when required by the operation of the mill. If the quantity of wheat purchased in New South Wales exceeds in any year the requirements of the mill at Ballarat, the surplus is sold by the plaintiff exclusively to other stock feed manufacturers in Victoria and South Australia. (at p138)

16. In July 1977 the Wheat Board served on the plaintiff a notice, purportedly under s. 10 of the State Act, in like terms to the notice already quoted, requiring the plaintiff to deliver all the wheat in its store at Coleambally to the New South Wales Grain Elevators Board's facilities at Coleambally. The whole of the wheat then in the plaintiff's store was committed to be transported to Victoria in the course of the plaintiff's interstate operations with wheat for gristing in its mill at Ballarat. (at p138)

17. The plaintiff seeks declarations and injunctive relief substantially in the same terms as those sought by the plaintiff, K. M. M. Pty. Ltd. (at p139)

18. Victorian Oatgrowers Pool &Marketing Co. Ltd. This plaintiff, incorporated in Victoria, operates a stock feed mill at Kerang in the said State. It also has a number of bulk stores in Victoria and elsewhere. One of these bulk stores is a Pyramid Hill, in the State of Victoria, which is now an auxiliary storage for the mill at Kerang. (at p139)

19. The plaintiff purchases in New South Wales at the end of each wheat-growing season quantities of wheat specifically for the purpose of supplying the mill at Kerang. Such wheat is transported from New South Wales to one of the bulk stores in Victoria. Growers from whom wheat is so purchased are made aware of the plaintiff's purpose in buying the wheat. (at p139)

20. In July 1977 the store at Pyramid Hill contained 1,000 tonnes of wheat, all of which had been purchased in New South Wales for transport to Victoria and had in fact been so transported and held as stock for the Kerang mill. (at p139)

21. In July the Wheat Board served on the plaintiff a notice, purportedly under s. 10 of the State Act, in like terms to those already mentioned, requiring the plaintiff to deliver to the Victorian Grain Elevators Board's facilities at Pyramid Hill all the wheat then in the plaintiff's store at Pyramid Hill. (at p139)

22. The plaintiff seeks declarations and injunctive relief substantially in the same terms as those sought by K. M. M. Pty. Ltd. (at p139)

23. It was submitted in the first case that the wheat in the plaintiff's (Clark King's) store at Coleambally at the date of the service by the Australian Wheat Board of the notice I have set out had never been the subject of interstate trade or, alternatively, had then ceased to be so subject. (at p139)

24. In support of this submission, the terms of the contract with the growers were attacked virtually on the basis that the contract was a sham drawn in an endeavour to cloak what was a purely intrastate transaction. In aid of this submission, the identity of the carrier who moved the wheat to the store and the length of time wheat had remained in the store were relied upon. The obligation placed on the grower to deliver the wheat to Victoria was asserted to be illusory. (at p139)

25. But, upon demurrer, the assertions of the plaintiff must be taken for the purposes of the resolution of the demurrer to have been admitted. Artificial as the form and obligation of the contract might appear, it must for these purposes be taken to be the bargain made by the parties and effect given to it according to its terms. In any case, its artificiality does not necessarily deny its reality as an instrument regulating the rights of the parties to it. (at p140)

26. The point of a provision in a contract for delivery over State lines is that the goods are thereby committed to interstate transportation and thus to interstate trade and commerce. The contract itself becomes part of interstate trade and commerce and goods appropriated to its performance themselves at the point of appropriation become subjects of interstate trade and commerce. It is clearly not enough that a person resident or sited in one State should buy goods of a person resident or sited in another State. But the acceptance by the seller of the obligation to deliver in the second State clearly involves an operation of interstate trade and commerce. Such a contractual obligation will be effective in that sense even if neither seller nor buyer has otherwise any activity in the course of interstate trade and commerce. (at p140)

27. If the purchase is treated as a purchase by description and not of specific wheat, the wheat so far as the plaintiff is concerned becomes a subject of interstate trade and commerce upon its appropriation by the grower to the contract. So far as the grower is concerned, it may possibly become subject to such trade and commerce at an earlier point of time. (at p140)

28. Thus, in my opinion, for the purposes of the demurrer, the wheat the subject of the contract, i.e. in this case both appropriated to and delivered under it, must be taken to have been committed to interstate trade and commerce. (at p140)

29. But, for the reasons I shall assign in the other three cases, this plaintiff can also rely upon his interstate trade in the purchase and transport of wheat as an essential activity of his gristing business. That business includes the purchase in one State of wheat for transport to another State for use there in a commercial activity. When, in the course of that business, wheat is purchased it becomes committed to interstate trade and commerce and remains therein till it is used for the business as planned unless diverted at some time from that course of business. The stock feed into which the grain is converted by gristing is not, of course, in interstate trade: but, in my opinion, the wheat till in the gristing process is. (at p140)

30. Wheat is grown in several of the States but in differing quantities and perhaps in various qualities. Thus, mill operators in one State have need to procure supplies in another: and to do so seasonally, and apparently in quantities exceeding the storage capacity and immediate throughput of the mill itself: hence the need for storage of the wheat in one State or another pending its use in the mill. (at p140)

31. The cases of the second, third and fourth plaintiffs may be dealt with together. In each case, wheat has been purchased for transport to the plaintiff's mill for gristing and the grower-vendor is apprised at the time of purchase of the purpose and intention of the plaintiff-purchaser as to the destination of the wheat and its intended use. The fact that the wheat "pauses" on its way across, or after crossing, the border before it is gristed in the plaintiff's mill does not deny that during its storage en route it remains in the course of interstate trade and commerce. Of course, if the intention to transport the stored wheat across the border were not maintained and the intention to use it in gristing in the second State abandoned, the wheat would cease at the time of the change in intention to be the subject of interstate trade and commerce. (at p141)

32. In deciding the question of fact, that is, whether the intention with which the wheat had been purchased had been abandoned, various factors may prove relevant, one of which may be the length of time the wheat had been so stored, its condition in relation to fitness for the purchaser's intended use and its quantity in relation to the demand of the mill. But it must necessarily be borne in mind that the operator of the mill must perforce buy his whole year's requirements during the period described as the end of the wheat-growing season and must maintain a stock of wheat upon which to draw as the gristing and disposal capacity of his mill allows. It is evident from the facts asserted in these cases that storage facilities to hold this stock of wheat may be found either in the State of the purchase of the wheat or in the State of its intended use. This course of business, in purchasing wheat in one State for transmission and use or sale in another, and holding the excess purchases over current requirements in store either in the State of purchase or in the State of use or sale, involves, in my opinion, at each point from purchase to use or sale an activity by each plaintiff in the course of interstate trade and commerce: the wheat from purchase to use or other disposal is and remains, in my opinion, the subject of interstate trade and commerce. (at p141)

33. The transactions entered into in this course of business cannot properly be analysed into two separate intrastate transactions, one of purchase and one of use, accidentally joined by interstate transportation, so as to regard that transportation as the only element of interstate trade and commerce. Williams J. in Reg. v. Wilkinson; Ex parte Brazell, Garlick &Co. (1952) 85 CLR 467, at p483 (Brazell's Case) called attention to the error which would be involved in such an analysis: and, rightly, as I think, pointed to the reasoning of Dixon J. and himself in Clements &Marshall Pty. Ltd. v. Field Peas Marketing Board (Tas.) (1947) 76 CLR 401, at p 409; (1948) 76 CLR 414, at p 420 . (at p142)

34. In the judgment of Dixon, McTiernan, Fullagar and Kitto JJ. in Brazell's Case (1952) 85 CLR, at p 478 , the transaction was analyzed as being a sale by delivery of the potatoes to a buyer who, by terms of the purchase, was bound to consign the goods purchased to a second State. The delivery from the grower's truck to the railway truck was regarded as an essential and integral, even if initial, step in the transportation of the goods interstate. Thus, the grower's delivery became part of interstate trade and commerce as did the sale and purchase of the goods. I take leave to doubt whether the contract of purchase in Brazell's Case did contain the term which their Honours stated, though undoubtedly it was the contemplation of the parties that the potatoes should be transported interstate. But whether or no there was such a term in the contract of purchase would seem immaterial in the circumstances of the case, having regard to what three of their Honours, Dixon, McTiernan and Fullagar JJ., said in the Hide and Leather Industries Case (1952) 85 CLR, at pp 519-520 . Their Honours there dealt with an exception from the statutory acquisition of hides which was expressed in s. 9 (2) of the relevant Act as follows:
"Nothing in subsection (1)" (vesting hides in a Board) "shall apply to any hides the subject of trade, commerce or intercourse between the States or required or intended by the owner of the hides for the purpose of trade, commerce or intercourse between the States". Their Honours said, "We take the expression 'the subject of trade &.' to cover at least all cases in which the hides had been placed in a course of movement which, if continued, would result in the passage of a border, all cases in which the hides had been sold specifically for delivery inter-state, or for delivery to an interState carrier, and all cases where they had been appropriated to an agreement to sell hides by description for such delivery. But we think the expression would extend further and include hides which, if the ordinary course of business went forward without interruption or change would be so delivered, even although no actual contractual obligation had been incurred." So much I take to relate to the first alternative of the subsection.
Their Honours then dealt with the second alternative as follows (1952) 85 CLR, at p 520 :
"The expressions 'required' and 'intended' go far beyond this. Even if they are interpreted as necessitating some overt act evidencing the requirement or intention, they probably go in some respects beyond the immunity given by s. 92. In any case we should regard them as sufficient to cover the case put during the argument of an owner of hides who has made an offer, which is outstanding and is as yet unaccepted, to sell hides by description for delivery into another State if he contemplated the delivery of the particular hides, or if he needed a portion of his stock of hides, to perform the contract should his offer be accepted." (at p143)

35. For my part, I would regard the instance supposed as falling within the prohibition of s. 92. Such facts would fall fairly within the classical expressions in W. &A. McArthur Ltd. v. Queensland (1920) 28 CLR 530, at pp 546-547 :

"'Trade and commerce' between different countries . . . has never been confined to the mere act of transportation of merchandise over the frontier. That the words include that act is, of course, a truism. But that they go far beyond it is a fact quite as undoubted. All the commercial arrangements of which transportation is the direct and necessary result form part of 'trade and commerce'. The mutual communings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery are all, but not exclusively, parts of that class of relations between mankind which the world calls 'trade and commerce'." And, again (1920) 28 CLR, at p 549 :

" . . . all the commercial dealings and all the accessory methods in fact adopted by Australians to initiate, continue and effectuate the movement of persons and things from State to State are also parts of the concept, because they are essential for accomplishing the acknowledged end". (at p143)

36. Of most significance to this case is the reference by their Honours in the passage quoted from the Hide and Leather Industries Case (1952) 80 CLR 488 to a course of business which, being pursued, involves movement of the subject commodity across State lines. That precisely is the case with respect to the businesses of these plaintiffs. It involves, whether of necessity or of business convenience, the purchase of wheat at a time when it is available in quantities at least sufficient to secure their gristing requirements and the movement of the wheat interstate, either immediately or as convenient, and in the latter case storing it meanwhile. That amounts to following an ordinary course of business without interruption, the interim storage being part of the course of business and not an interruption or departure from it. (at p144)

37. In Brazell's Case (1952) 85 CLR 46 , the grower had an interest at least to know, if not contractually to require, that the goods purchased were being purchased for interstate transport: otherwise he was in breach of the relevant Act. The majority justices seemed to think he had so contracted but, as I have pointed out, it may be doubtful on the evidence if that were so. But at least he knew that they would be so transported. So, in the present case, the assertion is that the growers knew the purpose of the purchase of the wheat: they also had an interest to know that purpose. In each case, it was the fact of the commitment of the goods to interstate trade and commerce which was regarded as entitling the grower to sell or dispose of the goods without breach of the prohibition of the statute, that is, as bringing them within the exception of interstate trade and commerce. Where there was no express exception, it was this circumstance, that is, the commitment of the goods to interstate trade and commerce, which entitled him to "ignore" the legislative command not to sell or move his wheat otherwise than to the Board. In Brazell's Case, the grower was acquitted of having unlawfully disposed of the potatoes. So, in this case, unless the defendants be right in their contention, the growers could not have been convicted of a breach of s. 12 of the State Act. (at p144)

38. The proper conclusion upon the assertions of fact in all four cases is, in my opinion, that the wheat, the subject of the notices given by the Board, was, at the time of their respective issue and receipt, committed to and in the course of interstate trade and commerce. For this conclusion there are three reasons. First, as to the wheat in store in New South Wales, it was clearly in the course of an interstate movement. The transportation of the wheat to Victoria had not at any relevant time been abandoned. Second, as to wheat the subject of the first case, it was the subject of a contract which required its transport to Victoria, no matter by whom. Third, as to wheat in all four cases, each plaintiff carried on an interstate business of purchasing wheat for transport to a second State for gristing there, and the wheat had been purchased and launched into interstate movement in the course of the conduct of such business. (at p144)

39. All plaintiffs thus made out a case which, if subsequently proved, would entitle them to maintain not only that they had an interest to challenge the impugned section but that they were not bound by the notices under s. 10 if that section were, in truth, inapplicable to wheat the subject of interstate trade and commerce. (at p145)

40. A purview of the sections of the State Act which I have set out readily indicates that they were in terms and in intendment to be applied to all wheat, including wheat which is the subject of interstate trade and commerce. There is no exception of such wheat from their operation. Indeed, the express claim of the Australian Wheat Board and the intervening Commonwealth in argument in this case is that there is no constitutional impediment to the application of s. 12, and its counterpart in the legislation of the Commonwealth and the other States, in terms to wheat which is the subject of interstate trade and commerce. The claim went so far as to assert that the Board could directly prevent the movement of wheat from State to State in the course of interstate trade and commerce: that is to say, it is claimed that an unqualified prohibition of interstate trade and commerce is in this case not inconsistent with the absolute freedom of interstate trade and commerce. The reason proffered is that, though unqualified, the prohibition is not "simple" prohibition but, having regard to the whole legislative scheme in which the prohibition is found, is indeed no more than "regulation". (at p145)

41. Sections 10, 11 and 12 of the State Act make no express exception from their operation of wheat committed to interstate trade and commerce. But s. 2 requires these sections to be read conformably to the operation of s. 92 of the Australian Constitution. Thus, if the sections as expressed offend the provisions of that section, they will not be invalid, but if capable of being so read and operated applicable only to wheat other than wheat the subject of interstate trade and commerce. (at p145)

42. The submissions made by the defendants, supported in substance by the interveners, are: First, that the State Act forms part of a legislative scheme which combines Australian and State legislation in substantially identical terms directed to the stabilization of the wheat industry in Australia, and that the nature and conditions of that industry and of the legislative scheme constitute circumstances which warrant the creation of a government monopoly in the sale and disposal of wheat as being a practical and reasonable manner of "regulation". Secondly, that only laws which discriminate against interstate trade and commerce offend the prohibition of s. 92. (at p145)

43. The first of these submissions is woven round some remarks made in the reasons of the Privy Council in The Commonwealth v. Bank of New South Wales (1949) 79 CLR 497, at p 640; (1950) AC 235, at p 310 ("the Bank Case"). I shall immediately quote them as focal to the main submission. (at p146)

44. Their Lordships first cited (1949) 79 CLR, at p 640; (1950) AC, at p 310 with complete approval a portion of the judgment of Sir John Latham in Australian National Airways Pty. Ltd. v. The Commonwealth (1945) 71 CLR 29, at p 61 ("the Airlines Case"). Sir John said:

"One proposition which I regard as established is that simple legislative prohibition (Federal or State), as distinct from regulation, of inter-State trade and commerce is invalid. Further, a law which is 'directed against' inter-State trade and commerce is invalid. Such a law does not regulate such trade, it merely prevents it. But a law prescribing rules as to the manner in which trade (including transport) is to be conducted is not a mere prohibition and may be valid in its application to inter-State trade, notwithstanding s. 92."

Of the legislation in the Airlines Case, Sir John had said:

"In the present case the Act is directed against all competition with the inter-State services of the Commission. The exclusion of other services is based simply upon the fact that the competing services are themselves inter-State services . . . The exclusion of competition with the Commission is not a system of regulation and is, in my opinion, a violation of s. 92."

Their Lordships thought that such a description fitted the legislation in the Bank Case (1948) 76 CLR 1 , which was not limited to prohibition of interstate banking but of all banking. Their Lordships added (1949) 79 CLR, at p 640; (1950) AC, at p 311 : ". . . it is an irrelevant factor that the prohibition prohibits inter-State and intra-State activities at the same time". (at p146)

45. Their Lordships then added the following, upon which the defendants have hung their argument that ss. 11 and 12 can lawfully prohibit all sale and movement of wheat, whether by an interstate transaction or in the course of interstate trade or otherwise (1949) 79 CLR, at pp 640-641; (1950) AC, at p 311 :
"Yet about this, as about every other proposition in this field, a reservation must be made. For their Lordships do not intend to lay it down that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation and that inter-State trade commerce and intercourse thus prohibited and thus monopolized remained absolutely free." (at p147)

46. Before attempting to assign an operation to these lastly quoted words, it is as well to recall what had theretofore been decided by the Privy Council, so far as presently relevant. (at p147)

47. But, before doing so, I will deal with the second submission which was principally argued by the Solicitor-General of the State of South Australia, though adopted by others. (at p147)

48. The State of South Australia, basing itself on the assumption that the decision of this Court in New South Wales v. The Commonwealth (1915) 20 CLR 54 ("the Wheat Case") was right, submitted that the discrimen by reference to which the validity of statutory enactments or executive action vis-a-vis s. 92 should be determined was "discrimination": unless the law or conduct discriminated against the interstate trader in relation to his trade or against such trade in general, there could be no conclusion of invalidity. But so to submit is to rake over embers long since dead, if indeed they ever contained any heat: and to promote to significance a construction of the constitutional provision which is, and has uniformly appeared in the decisions to be patently untenable. It was, indeed, a basis for some opinion in the Wheat Case, but not of decision. (at p147)

49. Of course, a law or conduct which does in fact discriminate against interstate trade and commerce will offend the constitutional guarantee. But such discrimination is not essential to that offence. In saying this, I refrain from any examination of what might relevantly constitute discrimination. (at p147)

50. With every respect to the judicial pronouncement that the Wheat Case was "transparently right", I venture to suggest that none of the grounds upon which any of the opinions of the justices were founded could now be accepted, particularly in the light of intervening decisions. A brief analysis of the case in relation to s. 92 might not now be out of place. (at p147)

51. A State statute gave the executive in substance power by notification to acquire wheat so that it became the absolute property of the Crown. Ancillary provisions voided executory contracts for the sale of State-grown wheat for delivery within the State. The Court affirmed the validity of these provisions. (at p147)

52. The Chief Justice, Sir Samuel Griffith, thought that the State Act, if in terms it exceeded the power of the legislature, should be construed as limited in its operation to matters within the competence of the legislature. But he held that an expropriation of a commodity could not offend s. 92, on the theory that "there cannot . . . be any conflict between the law of title and the law of disposition, and a law which deprives a man of the ownership of property does not interfere with his power of disposition while owner. Section 92 may, therefore, so far as it relates to commerce, be paraphrased thus: Every owner of goods shall be at liberty to make such contracts for the transportation of goods from one State to another as he thinks fit without interference by law. It follows that as soon as he ceases to be the owner of goods the section ceases to have any operation so far as those goods are concerned." (1915) 20 CLR, at p 68 Sir Samuel Griffith recognized that the statute did not attempt to avoid contracts for delivery of wheat outside the State of New South Wales but, with due respect, did not perceive that compulsorily to take the wheat which was held to service such a contract did deny the liberty of grower and purchaser alike to participate in the transportation of the wheat contracted to be delivered. Sir Samuel did, however, hold the view that "the term 'commerce' assumes the existence of persons willing to engage in it" (1915) 20 CLR, at p 67 . (at p148)

53. It is now quite plain that an expropriation of goods may offend s. 92: and that it will be ineffective at least with respect to goods already committed to interstate trade and commerce. For this proposition many citations may be made. A passage from the Hide and Leather Industries Case should suffice. In the joint judgment of Dixon, McTiernan and Fullagar JJ. it is said (1952) 85 CLR, at p 516 :
"Now we concede at once that the use of expropriation as a procedure for controlling the marketing of a product is not inconsistent with an invasion, by means of such a plan of marketing control, of the freedom of inter-State commerce. That is illustrated by the decision in the case of Peanut Board v. Rockhampton Harbour Board (1933) 48 CLR 266 ("the Peanut Case"), "and it is an essential part of the reasoning of Dixon J. in Field Peas Marketing Board (Tas.) v. Clements &Marshall Pty. Ltd. (1948) 76 CLR 414 . But that does not settle the question whether a plan does invade freedom of inter-State commerce. It certainly does not mean that every expropriation of a vendible commodity is invalid, because it deprives the owners of property which otherwise they might sell from one State into another. Section 92 confers an immunity from interference upon acts and transactions of a given description not upon ownership." (at p148)

54. Thus, the absolute assertions of justices in the Wheat Case are no longer acceptable. The dichotomy between the law of title and the law of disposition is of no avail as a means of determining the operation of s. 92. In the Wheat Case, it was admitted that the purpose of the expropriation was "to prevent the exportation of wheat from New South Wales". Contrary to the expressed view of Sir Samuel Griffith, that intention was highly relevant to the validity of the exercise of the power of expropriation: see James v. Cowan (1932) 47 CLR 386; (1932) AC 542 . Indeed, as I have indicated, the State Act did not seek to avoid contracts for delivery of wheat outside New South Wales: but the power of expropriation was held valid even in relation to wheat the subject of such a contract. (at p149)

55. Barton J. also rested his judgment upon the proposition that s. 92 only protected the power of disposition of the owner of the goods from governmental interference during his ownership of the goods and no further. (at p149)

56. Isaacs J. said (1915) 20 CLR, at p 100 : "When the State without reference to inter-State contracts as a criterion, . . . proceeds to acquire wheat to feed its citizens, it merely changes ownership". Accordingly, he thought the process of acquisition valid. I might here comment that, if the expropriated wheat had not been committed to interstate trade and commerce or if wheat the subject of interstate transactions had been excepted from the acquisition, Isaacs J.'s assertion would have been "transparently right". But, as stated, the quoted proposition is at best ambiguous and, unless suitably qualified, is in my opinion untenable. (at p149)

57. Gavan Duffy J. thought that no State enactment would offend s. 92 "unless it expressly forbids or restrains inter-State trade, commerce or intercourse" (1915) 20 CLR, at p 105 . The Wheat Act did not do so, making "no distinction between grain the subject matter of inter-State trade and other grain". It did no more than change ownership of the grain. (at p149)

58. Other Justices merely agreed. (at p149)

59. It is to my mind quite plain that, in the light of subsequent decisions, particularly of the three decisions of the Privy Council, the grounds on which the Wheat Case was decided are insupportable. But, also, on principle, the decisions cannot, in my opinion, be upheld. (at p149)

60. In so far as the decision might involve the proposition that only a discriminating law can offend s. 92, as the State of South Australia insists, not only has that view been uniformly rejected in later decisions - expressly so, for instance, in James v. The Commonwealth (1936) 55 CLR 1, at p 56; (1936) AC 578, at pp 627-628 - but the proposition that interstate trade should only be as free as the law allows intrastate to be, scarce begins to do justice to the emphatic words of the section, "shall be absolutely free". (at p150)

61. In my opinion, the second submission in support of the validity of the State Act should be rejected. (at p150)

62. I now return to the first submission which has a number of elements, though principally founded on the remarks I have quoted from the Bank Case (1949) 79 CLR, at pp 640-641; (1950) AC, at p 311 . These remarks need to be considered in the light of the definitive principles which the Privy Council had already laid down. (at p150)

63. It had been established that the freedom constitutionally guaranteed is the freedom of individuals. The section does not merely protect trade and commerce in the abstract so that validity of statute or executive act is demonstrated if the flow of goods and services across State lines would remain undiminished: Bank Case (1949) 79 CLR, at p 635; (1950) AC at p 305 . Nor is the protection limited to transactions actually on foot in interstate trade and commerce - it is not limited to trade "in being and in motion". To prevent its inception is as invalid as to arrest its progress. But, of course, the citizen seeking a declaration of invalidity must make out his relevant interest to maintain a suit in that behalf: and, in some instances, though not in all, the existence of the interstate trade or commerce may need to be established. (at p150)

64. A passage from the Bank Case (1949) 79 CLR, at pp 634-635; (1950) AC, at p 305 might well here be quoted:
"But because it" (s. 20 of the South Australian Act dealt with in James v. Cowan (1932) 47 CLR 386; (1932) AC 542 ) "authorized a determination at the will of the Board the effect of which would be to interfere with the freedom of the grower to dispose of his products to a buyer in another State, it was invalid. And for the same reason the Commonwealth Act" (dealt with in James v. The Commonwealth (1936) 55 CLR 1; (1936) AC 578 ) "fell. The necessary implications of these decisions are important. First may be mentioned an argument strenuously maintained on this appeal that s. 92 of the Constitution does not guarantee the freedom of individuals. Yet James was an individual and James vindicated his freedom in hard-won fights. Clearly there is here a misconception. It is true, as has been said more than once in the High Court, that s. 92 does not create any new juristic rights, but it does give the citizen of State or Commonwealth, as the case may be, the right to ignore, and if necessary, to call upon the judicial power to help him to resist, legislative or executive action which offends against the section. And this is just what James successfully did." (at p151)

65. I have emphasized these few stated principles because of the nature of the arguments presented in support of the universal and unqualified validity of s. 12. In the above quoted passage, their Lordships were not enunciating new doctrine: they were refuting an argument which in reality sought to overturn the consistent stream of authority in Australia. This Court, right from its earliest consideration of the scope of s. 92, had asserted that the protected trade was trade carried on by individuals. Isaacs J.'s remark in the Wheat Case (1915) 20 CLR, at p 100 , sometimes I think misunderstood, "that trade and commerce consists of acts not things", referred to acts of the citizens and in truth emphasized the position of the individual in relation to interstate trade and commerce. (at p151)

66. The notion that the full extent of the operation of s. 92 was the prohibition of border duties could never have survived a perusal of the Constitution itself. Section 90 precluded the States from imposing border duties when the common external tariff was imposed. If s. 92 only spoke as to border duties, it then in reality was only addressed to the Commonwealth in that respect, the States already being precluded from the imposition of border duties by s. 90. That the "barbarism of borderism" was a factor in the acceptance of s. 92 may be conceded. But border duties were but the more obvious manifestation of legislative and executive acts which share in that barbarism. The idea that the Commonwealth would impose border duties, which of necessity must be uniform and without discrimination so far as States were concerned, is somewhat ludicrous. That s. 92 was only designed to prevent the Commonwealth pursuing such a course is beyond belief. (at p151)

67. It is perhaps worth emphasizing at this point that the reasons of their Lordships in the Bank Case (1949) 79 CLR 497; (1950) AC 235 broke little new ground in point of principle. In the main, as in James v. Cowan (1932) 47 CLR 386; (1932) AC 542 and James v. The Commonwealth (1936) 55 CLR 1; (1936) AC 578 , their Lordships' reasons were but a synthesis of the prior decisions of this Court. The new directions given by the Bank Case (84) were first of all finally to reject the idea developed by Latham C.J. and Evatt J. in Milk Board (N.S.W.) v. Metropolitan Cream Pty. Ltd. (1939) 62 CLR 116 , that only laws "aimed at" or "directed to" interstate trade and commerce would offend: see also per Evatt J. in Willard v. Rawson (1933) 48 CLR 316, at p 335 , and in the Peanut Case (1933) 48 CLR, at p 301 . This was in truth but a variant of a discrimination test. For that error, founded as their Lordships thought upon a misapprehension of some words in the earlier decision of the Privy Council, the operation of the law was substituted as a means of determining whether the law offended. What the law, whatever its subject matter, effected, saving remote consequences, was decisive. Secondly, laws regulatory in nature were compatible with freedom. Thus, the extreme positions expressed by Dixon J. in the Peanut Case and by Evatt J. in the passages to which I have referred were avoided. (at p152)

68. In the area with which s. 92 is concerned, therefore, it is the trade across State lines in which individuals participate which is to remain absolutely free: and, if a provision regulatory in its nature is to be accepted as compatible with that freedom, it must, in my opinion, be regulatory of trade by individuals. For if s. 92 "does not give the citizen of State or Commonwealth, as the case may be, the right to ignore, and if necessary, to call upon the judicial power to help him resist, legislative or executive action which offends against the section", it is only if the impugned law or conduct is in truth in its nature regulatory of such trade that the citizen will fail in his resistance to such legislative or executive acts, or in any demand for judicial assistance to make his resistance effective. (at p152)

69. I have spoken elsewhere of the inherent limitations in the concept of freedom under law (see Samuels v. Readers' Digest Association Pty. Ltd. (1969) 120 CLR 1, at pp 14-15 ). The accommodation of the relationship of free men in trade and commerce each to other in an ordered society provides that limitation. So much of untrammelled licence as one must yield to the other in the interests of that freedom of each within the society sets the limits to what is regulatory in nature and to what may be accepted as compatible with freedom. It is because in the final analysis they fit this description that laws as to health, safety, fraud and restrictive practices, depending on their terms, are found to be compatible with the guaranteed freedom. A citizen is not unfree if, being infected with a contagious or infectious disease, he is restrained from moving amongst his fellows: or if he is unable to sell a diseased cow in the market place. (at p152)

70. Section 92 binds both Commonwealth and State: within its ambit no infringing law may validly be made. There is thus a legislative gap. The lawyer, particularly one familiar with the paramount sovereignty of Parliament in a unitary system of government does not readily accept a void within which no law may be made: perhaps the legislator is even less willing to do so. But the Constitution undoubtedly has created, and if it matters has deliberately created, such a void. The problem is the delineation of its margins. What is no more than in its nature regulatory of trade carried on by individuals indicates, in my opinion, the limits of relevant legislative power. It is perhaps unfortunate that the law does not offer a less ambiguous description than that of "regulatory in nature" to describe laws accommodating the mutual relationship of free men in trade. Regulation of trade in the abstract is of a different order. Regulation of an industry again involves quite a different concept. In a sense, all legislative interference with business activity is regulatory: but, clearly, that sense of the word is inapplicable and potentially misleading in the universe of discourse which concerns s.92. But, elusive as sometimes both the connotation and the denotation of the description "regulatory in nature" may be, its distinctive features are generally recognizable, particularly if it is remembered that what is sought is something which must be compatible with freedom of interstate trade and commerce. (at p153)

71. Something was sought to be made by the Commonwealth of the view that s. 92 has a public aspect and that therefore an element in determining whether a law is of its nature regulatory is whether the public or some section of it benefits by the restraint of individual trading. I can neither accept the view on which the argument is built nor the conclusion sought to be drawn from it. Of course, the Constitution as a whole is in the public interest. It is for the public interest that interstate trade and commerce shall be free. That indeed is the significant and paramount public interest. As I have remarked elsewhere, it is vital in a federation with a common external tariff that interstate trade and commerce shall be free. That the constituent States are of uneven resource and development underscores the essential and paramount nature of s. 92. (at p153)

72. But so to say does not mean that therefore the regulatory nature of a law can be determined, wholly or in any part, by balancing what might be thought to be of advantage to the community or to some part of it against the loss of the individual's ability to participate in interstate trade and commerce; by concluding that the scheme of legislation is in that sense reasonable. The decision whether or not a community or some part of it benefits from legislation involves social and political theory and must inevitably involve passage down a slippery path, better suited to the feet of legislators than to those of judges. There are those who would maintain that a prohibition on all sale of tobacco, including interstate sale, would confer a singular benefit on the community: but would such a law for that reason be regulatory in nature in the relevant sense? The answer cannot be in doubt. In relation to the concept of freedom, conceding as it does some areas for restraint, the test of the nature of the law must surely relate to those engaged in trade, must concern their mutual relationship in trade. There is, in my opinion, a world of difference between the question whether the legislated benefit to the community as a whole or to some part of it is justified though it is procured at the expense of individual participation in a commercial activity and the question whether a statute is in its nature regulatory, in the sense of making no more than an accommodation of individual relationships in trade. The former is, in my opinion, an irrelevant inquiry when the Court is deciding whether a statutory enactment or an executive act does or does not infringe the guaranteed freedom. (at p154)

73. Of course, the question whether any given legislative enactment or scheme is but regulatory in its nature must be decided in the time and circumstances of its operation. Doubtless what restraint of individual action which the citizen must accept as part of that accommodation which free life in an ordered community demands will vary from time to time. What might have been bearable yesterday may not be bearable today and vice versa. In that sense, the question whether the legislative limits have been exceeded, whether the legislation is no more than regulatory in its nature, will involve political, social and economic considerations pertinent to the times. But the basic tenet of the Constitution of absolute freedom of interstate trade and commerce may not itself be watered down by recourse to social or economic theory of the times. Section 92 remains as a paramount and permanent provision to which all powers deriving from the Constitution are subject. The freedom it guarantees must remain no matter what the climate of the day, social, economic or political, may be. After all regulatory restraint has been conceded, what remains must qualify as freedom of interstate trade in which individuals are able to participate. There can be no warrant, in my opinion, by reason of changing political or economic climate for pushing out the perimeters of laws regulatory in nature to the point where they effectively destroy the guaranteed freedom. (at p154)

74. Deciding judicially whether a given restraint is merely regulatory of trade is no doubt frequently difficult. It is but to be expected that judicial minds will differ from time to time as to the extent of the restraints on the individual which he is bound to accept as necessary accommodation of the mutual relationship of free men in trade and commerce in an ordered society. But it may well be that the differences will be less frequent if the dominant consideration remains the freedom of interstate trade and commerce in which individuals may take part, with "regulation" but the exception, as it were, to the paramount rule. The approach, in my opinion, should not be to find a means of reducing the legislative void created by the Constitution or to find means of increasing the scope of legislative power. The impairment of or burden upon interstate trade and commerce by legislative or executive action should be accepted only if its necessity in the regulatory sense I have mentioned is most convincingly made out. Within the confines of what is regulatory in nature will be found, in my opinion, ample scope for the legislature to secure the protection of the community from dangers to health, safety of person and property, and to honest and fair trading. In reciting these possibilities I by no means intend to be exhaustive of the area open for legislative control. (at p155)

75. The Privy Council in the Bank Case (1949) 79 CLR 497; (1950) AC 235 had no need to perform any such task; had no need to consider whether the Act with which the case was concerned was in whole or in part regulatory in nature. They had before them a case of simple prohibition: the business of banking by individuals was sought to be absolutely forbidden. Consequently, as their Lordships said, they did not attempt to define the boundary between what is merely regulatory in nature and what is in truth an impairment of freedom. Though they offered definitive guidance in point of principle, they of necessity had to leave the particular application of those principles to subsequent decision. (at p155)

76. Their Lordships did not say that prohibition of the interstate trade of the individual was compatible with the guaranteed freedom of interstate trade and commerce. Their tentative reservation which I have quoted was not intended, in my opinion, as a substantive qualification of the principles they had expressed. Indeed, throughout the definitive parts of their judgment they specifically denied the proposition that prohibition of the carrying on of interstate trade by the individual was compatible with the guaranteed freedom. They contrasted prohibition and "regulation", the former inimical to the Constitution, the latter, if no more than regulation, admissible: and they were speaking throughout those parts of their reasons of interstate trade carried on by individuals. As they were not attempting an exhaustive denotation of what could be held to be regulatory, they were led, in my opinion, into making the reservation tentatively expressed. (at p156)

77. The terms used by their Lordships are most tentative. Obviously, no clear definitive case was in mind. Rather, in an area where time and circumstance may affect decision in the identification of laws but regulatory in nature, they sought to avoid any absolute pre-emption of the future. (at p156)

78. The most that can be wrung out of their Lordships' quoted words, in my opinion, is that their Lordships thought it conceivable that in some future situation it might be possible to hold that, because of prevailing circumstances, State monopoly of trade generally was the only practicable and reasonable method of regulation of interstate trade and commerce. As I have said, there is really nothing in their Lordships' language to indicate a fundamental departure from what they had already decided. In making their reservation they did not intend to abrogate or abandon the basic principles which they had definitively accepted and enunciated, principles so largely founded on long-standing decisions of this Court. They seem to have conceived that in some age the only practical and reasonable manner of accommodating one man's freedom to that of another, in that sense to "regulate" trade, was to deny all freedom to either. For my part, the possibility strains my credulity: but that I must attribute to the limitations of my own imagination. It is sufficient to say for the purposes of this case, two things. First, that as I have said, the reservation made by their Lordships did not deny or qualify the principles already adopted and, second, of the instant scheme, to which I later turn, it can scarce be said, and, indeed, as I understand counsel for the Australian Wheat Board, ultimately it was not said, that the legislative scheme under consideration here was the "only practicable or reasonable means of regulation". Having regard to the scheme involved in the case of Nelungaloo Pty. Ltd. v. The Commonwealth (1947) 75 CLR 495 , where no reliance was placed on s. 92, it is apparent that other schemes of stabilization are possible. (at p156)

79. As I have indicated, their Lordships' definitive reasons had been built on the basis that the Constitution gave to the individual immunity from all laws and executive acts which impaired his freedom to trade across State lines. No other proposition could explain the adoption of the earlier cases, from the Peanut Case (1933) 48 CLR 266 on. That adoption involved, in my opinion, the rejection of the proposition put forward by Evatt J. in that case and in Milk Board (N.S.W.) v. Metropolitan Cream Pty. Ltd. (1939) 62 CLR, at p 152 . The argument that interstate trade and commerce remain free if carried on exclusively by a government agency, in one form or another, had been put in all the marketing cases, only to be uniformly rejected. Incidentally, the remarks in the Bank Case which I have quoted were vigorously and vainly pressed on the Board which heard the appeal in Hughes and Vale Pty. Ltd. v. New South Wales (1954) 93 CLR 1; (1955) AC 241 . The first submission in this case can only be accepted, in my opinion, if it is concluded that all the prior marketing cases were wrongly decided. (at p157)

80. The Commonwealth's argument began with the proposition that the Privy Council, in the passage I have quoted, held that the prohibition of citizen participation in interstate trade was consistent with the freedom of interstate trade guaranteed by s. 92. The Commonwealth then proceeded to submit that, if the prohibition is part of what is described as a larger legislative scheme which in totality confers a benefit on the community or on a section of it, interstate trade will remain free so long presumably as it is carried on by a government instrumentality. Indeed, it is added that the citizen is compensated, if not benefited, by receiving a guaranteed price in exchange for the loss of his ability to sell his product by a transaction in interstate trade. (at p157)

81. It is said that the provision of a guaranteed price to all growers of produce assists to make the prohibition upon his trading with his produce but regulatory. It might be remarked that, odd as it may seem to some, some, probably the majority, still value the ability to do what they may with their own as of incalculable value. It cannot be an answer to the objection to a prohibition of individual trade that a fixed price is guaranteed. With these propositions of the Commonwealth I have already dealt in substance. (at p157)

82. The Australian Solicitor-General pressed on the Court the proposition that different considerations should be applicable to a legislative scheme reflected in Acts of the Parliament and of all the State legislatures from those considerations which could properly be applied to a legislative scheme of a single State. I find great difficulty in appreciating why this should be so. Section 92 binds both the Parliament and the legislature of the several States, no less in a joint or co-operative activity than individually. This case concerning as it does only the validity and applicability of sections of the State Act, no argument has been possible as to the validity or effect of the Commonwealth legislation in so far as it purports to operate outside the Australian Territories. The validity of all legislative elements implementing the scheme has been assumed. The attack on the State Act has been confined to its suggested infraction of s. 92. (at p158)

83. No doubt, in considering the meaning of the State Act, it is proper to have regard to the overall Australian legislative scheme which the State Act seeks to implement in relation to New South Wales. It is necessary for this purpose to consider the scheme as a whole because the State Act by its terms makes its own operation dependent on provisions in other legislation. But the question remains whether the State Act, in what it effects, infringes the guaranteed freedom. If the State Act standing alone would be invalid by reason of the provisions of s. 92, it can gain no validity, in my opinion, because of the existence of mirroring legislation in the Commonwealth and the other States. (at p158)

84. It is important, however, in the light of the Solicitor-General's submission, to examine the manner in which the identical Australian and State Acts operate in this case. The Australian Act operates only in the Australian Capital Territory and in the Northern Territory, neither substantial producers of wheat. No room, in my opinion, exists in the nature or in the terms of this legislation for an operation of the Australian Act in other parts of the Commonwealth by use of the reasoning in Lamshed v. Lake (1958) 99 CLR 132 . The States by their legislation cannot give to the Parliament legislative power except by a reference of some matter so that the power given by s. 51 (xxxvii.) may be attracted. Thus, the identical legislation of the States does not increase the legislative power of the Commonwealth or the area of the operation of the Australian Act. Nor does the Australian Act increase the legislative power of the States. The State legislation, by its own force, applies where the Australian Act cannot and does not apply. The sole purpose, and indeed the only consequence, of the passage of identical legislation by the Parliament and the State legislatures is to ensure that in each area of legislative power, there are identical provisions and to endow the Wheat Board with powers which no one legislature could give to it. But those powers do not come from any combination of statutory provisions: they are separate powers which are reposed in the Wheat Board by the several statutes. A question raised before this Court and never resolved is whether a chief executive of such a body so endowed is a federal officer in relation to acts which depend for their validity upon a State Act: see Reg. v. Gallagher; Ex parte Australian Coal and Shale Employees' Federation (1966) 115 CLR 335 . The Wheat Board, in my opinion, exercises both federal and State functions each appropriate to the legislative source of its authority to perform them respectively. (at p159)

85. There thus being no change in constitutional power by the enactment of identical legislation by the Parliament and the State legislatures, and each statute being subject to s. 92 - which denies legislative power - it must follow that the impact of that section cannot be lessened by the fact that such identical legislation exists or that the purpose of enacting it is to enable a scheme to be implemented upon an Australia-wide basis. In particular, an Act of a State which is not in its nature of a regulatory character in the relevant sense can scarce be of a different nature because a statute exists in another State or States or in areas within the competence of the Parliament. (at p159)

86. To the examination of the legislative scheme I now turn. Its most significant provision for present purposes is s. 12. In terms that section constitutes, in my opinion, an unqualified or, as Sir John Latham said, a "simple" prohibition. It is, of my opinion, the antithesis of a provision regulatory in its nature. Of course, a prohibition relaxed in stated conditions will not be a simple prohibition. Depending on the nature of the relaxing conditions it may in truth be regulatory in nature. Here the prohibition is bare of qualifying provisions. (at p159)

87. Of the State Act it can be said, and indeed of the Australia-wide scheme of stabilization it can be said, to use the language of the High Court in the Peanut Case (1933) 48 CLR, at p 285, per Starke J , that it was entirely restrictive of any freedom of action on the part of the producers: it involves a compulsory regulation and control of all trade, domestic, interstate and foreign. Yet it is said that its enforcement is compatible with the freedom guaranteed by s. 92. (at p159)

Bunge (Australia) Pty. Ltd.

6. This plaintiff also operates a stock feed mill in Victoria - at Ballarat. For the purpose of supplying that mill, it purchases in New South Wales wheat grown in New South Wales. Any wheat purchased which proves to exceed requirements for its mill at Ballarat is sold to other stock feed manufacturers in South Australia and Victoria. The growers in New South Wales are aware of the purpose for which the plaintiff buys their wheat. At the plaintiff's direction, the New South Wales growers deliver the wheat to the plaintiff's store at Coleambally in New South Wales and are then paid. The plaintiff from time to time transports the wheat from its store at Coleambally to its stock feed mill at Ballarat as required. On 14th July 1977 the plaintiff was served with a notice under s. 10 of the New South Wales Act (s. 21 of the Commonwealth Act) requiring it to deliver to the Board all wheat in its store at Coleambally by delivering it to the Grain Elevators Board of New South Wales at that town. All the wheat in the store at Coleambally on that day was wheat purchased as we have described and awaiting transport to Ballarat for use in the stock feed mill. The plaintiff delivered the wheat under protest but claims that the notice could not validly apply to this wheat because of s. 92 and that the wheat remains its property. (at p183)

K.M.M. Pty. Limited.

7. This plaintiff carries on business as a flour miller and feed miller at Kensington in Victoria. It has wheat stores in New South Wales, including one at Coleambally. It purchases wheat in New South Wales from growers in that State for the purpose (known to those growers) of transporting the wheat to Victoria and using it in its mill at Kensington. The wheat is delivered by the growers to the store at Coleambally. The wheat is transported to Kensington as and when required. On 14th July 1977 the Board served notice under s. 10 of the New South Wales Act requiring delivery of the wheat in the store to the Grain Elevators Board of New South Wales at Coleambally. All the wheat then in the store was purchased as aforesaid and was stored while awaiting transport by the plaintiff to Kensington for use in its mill. (at p184)

8. These facts are essentially similar to those in the case of Bunge (Australia) Pty. Ltd. (at p184)

Clark King &Co. Pty. Ltd.

9. This plaintiff, also incorporated in Victoria, carries on business as a purchaser of wheat and producer of stock feed. In the course of its business it purchases wheat from growers in New South Wales pursuant to a form of contract set out in the statement of claim. The standard form names the plaintiff and has places for the vendor's name, the quantity, and the price. The provision of the contract respecting delivery is as follows:
"DELIVERY POINT Clark King &Co. Pty. Ltd.

Laurens Street, North Melbourne."

The form of contract contains the following further provisions:

"TIME OF DELIVERY The parties agree that it is the obligation of the Seller to deliver the goods the subject of this contract to the Purchaser in Melbourne and it is a condition of this contract that the goods should be so delivered. Without limiting the obligation of the Seller to deliver to the Purchaser in Melbourne the Seller will procure such delivery by a person firm or company nominated by a Purchaser provided that such person firm or company shall undertake responsibility for delivery as set out in this Agreement at and for a price not exceeding........ PAYMENT Payment will be made by the Purchaser on collection of the goods from the Seller for delivery to Melbourne by a Carrier engaged by the Seller and in accordance with the weights shown on certified Weighbridge dockets. PROPERTY IN THE GOODS

The parties hereby agree that for the purpose of this contract the property in the goods shall pass to the Purchaser upon delivery of the goods to a Carrier for delivery to Melbourne but they further agree that this provision shall not affect the obligation of the Seller to deliver the goods to the Purchaser in Melbourne." (at p184)

10. The question has been argued on behalf of the State of New South Wales whether these terms meaningfully impose an obligation on the seller to deliver the wheat in Victoria. We think that in law they are capable of effectually imposing such an obligation on the seller. In form the seller's obligation is not fully performed until actual delivery is made in Victoria. The wheat sold by New South Wales growers to the plaintiff is delivered to a New South Wales company for transportation by road from New South Wales to the premises of the plaintiff in North Melbourne. The cost of this delivery is a cost to the growers. (at p185)

11. From time to time the wheat is carried by the carrying company into a store leased by the plaintiff in New South Wales and held pending the transport into Victoria. One such store is situated in Deniliquin in New South Wales. On 14th July 1977 the Wheat Board served on this plaintiff a notice requiring delivery to the Board of wheat in its possession at this Deniliquin store. Delivery was required to be made to the Grain Elevators Board of New South Wales facilities at Deniliquin. (at p185)

12. The defendants have demurred to the statements of claim. Essentially the defendants submit that the Wheat Industry Stabilization Acts are valid because they provide what their titles suggest, wheat industry stabilization, and that they should be regarded as regulation, not prohibition, of trade and commerce, including interstate trade and commerce, in wheat within the distinction drawn in the Banking Case (The Commonwealth v. Bank of New South Wales) (1949) 79 CLR 497; (1950) AC 235 . (at p185)

13. Although the exposition on the meaning and operation of s. 92 given by the Judicial Committee in the Banking Case was strictly obiter dicta, it has long been accepted as authoritative and has regularly been applied and developed in this Court. It is a convenient starting point in the present case. It was stated (1949) 79 CLR, at pp 639-641; (1950) AC, at pp 309-311 :

"It is generally recognised that the expression 'free' in s. 92, though emphasised by the accompanying 'absolutely,' yet must receive some qualification. It was, indeed, common ground in the present case that the conception of freedom of trade commerce and intercourse in a community regulated by law presupposes some degree of restriction upon the individual. . . . it seems that two general propositions may be accepted: (1) that regulation of trade commerce and intercourse among the States is compatible with its absolute freedom and (2) that s. 92 is violated only when a legislative or executive act operates to restrict such trade commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which may fairly be regarded as remote. In the application of these general propositions, in determining whether an enactment is regulatory or something more, or whether a restriction is direct or only remote or incidental, there cannot fail to be differences of opinion. The problem to be solved will often be not so much legal as political, social or economic. Yet it must be solved by a court of law. . . . Difficult as the application of these general propositions must be in the infinite variety of situations that in peace or in war confront a nation, it appears to their Lordships that this further guidance may be given. In the recent case of Australian National Airways Pty. Ltd. v. The Commonwealth (1945) 71 CLR, at p 61 the learned Chief Justice used these words: 'I venture to repeat what I said in the former case (viz. Milk Board (N.S.W.) v. Metropolitan Cream Pty. Ltd. (1939) 62 CLR 116, at p 127 ): 'One proposition which I regard as established is that simple legislative prohibition (Federal or State), as distinct from regulation, of inter-State trade and commerce is in valid. Further, a law which is "directed against" inter-State trade and commerce is invalid. Such a law does not regulate such trade, it merely prevents it. But a law prescribing rules as to the manner in which trade (including transport) is to be conducted is not a mere prohibition and may be valid in its application to inter-State trade, notwithstanding s. 92.' With this statement which both repeats the general proposition and precisely states that simple prohibition is not regulation their Lordships agree . . .

Yet about this, as about every other proposition in this field, a reservation must be made. For their Lordships do not intend to lay it down that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation and that inter-State trade commerce and intercourse thus prohibited and thus monopolized remained absolutely free." (at p186)

14. Their Lordships were directing their words in particular to cases of government monopoly in the conduct of a particular trade or business activity - banking in that case and commercial airlines in the case from which the words of Latham C.J. were taken. However, it seems to us that their words in the last paragraph which we have quoted apply a fortiori to a compulsory marketing plan. (at p186)

15. It may be accepted that s. 12 of the State Acts (s. 23 of the Commonwealth Act) in its application to interstate contracts and interstate transportation imposes a direct restriction upon both. Its operation affects the right of any individual farmer to engage in an interstate transaction. Indeed it prohibits him from doing so. The section also forbids a purchaser from interstate taking possession of wheat purchased and moving wheat purchased to its interstate destination. It also forbids a purchaser, who has purchased wheat interstate and transported it to its destination, gristing or processing the wheat at its place of destination. The act of gristing or processing is itself an intrastate action but the context discloses an intention to prohibit any dealing with wheat at all, other than wheat sold by the Board or wheat sold and delivered with the approval of the Board. (at p187)

16. However, this does not mean that a person who purchases wheat interstate and transports it to its destination in the other State must be left free to grist the wheat in the State to which it has been transported. In the case of Victorian Oatgrowers Pool &Marketing Co. Ltd. the wheat had been purchased in and transported from New South Wales, but this does not give the wheat a special quality which it retains indefinitely and which makes it different from the general stock of wheat situated in Victoria. The transportation of the wheat into Victoria was an act of trade commerce and intercourse among the States. The purchase of the wheat in New South Wales with the present intention of transporting it into Victoria, a purpose known to the seller, was an act or transaction of trade commerce and intercourse among the States. However, once the act or transaction under the contract and the act of transportation were ended, the wheat became wheat situated in Victoria; as such it was subject to the laws of Victoria. (at p187)

17. That an owner of wheat wishes to grist wheat in Victoria which it has transported from New South Wales does not give the gristing of itself the quality of an act or transaction of trade commerce and intercourse among the States. It has never been held that use of a product within a State either for purposes of manufacture or otherwise has the quality of interstate trade or commerce because the product has its origin in another State. But it has been held that resale of a product purchased from another State is not of itself interstate trade and commerce: Wragg v. New South Wales (1953) 88 CLR 353 . It will not fall within the scope of s. 92 unless the effect of a prohibition on resale is directly to prevent the interstate sale and purchase. (at p187)

18. If resale is not itself such trade and commerce, then we cannot see how use in the course of a process of manufacture can be so in the absence of some discrimination against the product arising from its interstate origin. So also if manufacture for the express purpose of fulfilling an order under a contract of sale and purchase for delivery interstate is not such trade and commerce (Beal v. Marrickville Margarine Pty. Ltd. (1966) 114 CLR 283 ) then we cannot see that use for purposes of manufacture in the State into which the goods are transported or delivered can be so in the absence of discrimination. (at p188)

19. It has been submitted that the prohibitions in the statutes are "simple" prohibitions within the language adopted by the Privy Council in the Banking Case (1949) 79 CLR, at pp 639-641; (1950) AC, at pp 309-311 from the words of Latham C.J. in the Airlines Case (1945) 71 CLR, at p 61 . Though the Wheat Industry Stabilization Acts do more than prescribe rules as to the manner in which trade (including interstate trade) in wheat is to be conducted, there is nevertheless more than a simple legislative prohibition, as there is in the creation of a government monopoly. To hold otherwise would mistake the meaning which their Lordships and Latham C.J. intended by the words "simple prohibition". They were directing their attention to monopolies which simply prohibit trade and commerce in competition with the monopolist. They did not mean that all one need do is look at the trade of an individual trader and classify as simple prohibitions those which prevent him from trading as and with whom he wishes. It is true that s. 92 protects the trade of individuals. If there is imposed an invalid burden on trade commerce or intercourse among the States, an individual can ignore the legislative burden and he and any other person interested can invoke the judicial power to prevent the application to their interstate trade and commerce of the invalid law. In this way s. 92 confers rights on an individual. (at p188)

20. However, if there is what is found on examination to be not mere prohibition but regulation of trade commerce or intercourse among the States the fact that the regulation of that trade commerce and intercourse involves a prohibition of the trade or commerce of an individual does not give that individual the right simply to say "My trade and commerce is prohibited; therefore s. 92 is infringed". Such a view of the Banking Case would not be consistent with the careful proviso which their Lordships made in the last paragraph of the passage which we have earlier quoted. Prohibition of the trade and commerce may be a regulation of trade and commerce, including trade commerce and intercourse among the States. (at p188)

21. It is therefore necessary to examine the whole context in which the prohibitions are found in order to determine whether in their own setting of time and circumstance the Wheat Industry Stabilization Acts are the only practical and reasonable manner of regulation of the trade and commerce (including interstate trade and commerce) in wheat. In order to determine that question it is necessary to know something of the nature and history of the wheat industry and of the legislation. We have been provided with general information on that industry sufficient to enable an informed appreciation to be made of the circumstances and background against which the cases fall to be decided. Fortunately we have not been left in ignorance of the wheat-growing industry and of the practical operation of the wheat pools and the statutes, a position of which Dixon, McTiernan and Fullagar JJ. spoke in respect of the hides industry in the Wilcox Moffin Case (1952) 85 CLR, at p 507 :
"As in the case of most war-time controls of trade and industries the then existing organization of the hide trade and the common course of business in the trade are accepted as the basis of the plan of control. Unfortunately the parties did not enter into formal or full proof of these and other matters which would have enabled us, at all events, to obtain an understanding which we felt more adequate of the real significance, effect and operation of the statutes, information of a kind that we have come to think almost indispensable to a satisfactory solution of many of the constitutional problems brought to this Court for decision; though we are bound to say that it is not an opinion commanding much respect among the parties to issues of constitutional validity, not even those interested to support legislation, who, strange as it seems to us, usually prefer to submit such an issue in the abstract without providing any background of information in aid of the presumption of validity and to confine their cases to dialectical arguments and considerations appearing on the face of the legislation." (at p189)

22. Wheat is produced on approximately 47,000 farms across Australia. The quantity was in the 1975-1976 season about twelve million tonnes. Of this amount 69 per cent was exported. The proportion of wheat exported is greater than that of any other of the large wheat-producing countries except Canada. The price of Australian wheat sold on the world market has fluctuated considerably over the years. Even in recent years it has moved between a low figure of $46.85 per tonne in May 1970 to a high figure of $156 per tonne in November 1974. Wide fluctuations in world prices of wheat, before the introduction in Australia of Wheat Stabilization Schemes, were reflected in wide fluctuations in home prices. Although the 1920s were years of prosperity for wheat farmers, the depression struck heavily in 1930 and from then until the war prices were very low and great hardship was suffered by farmers. Relief was provided by Farmers' Relief Acts of the States and by wheat bounties and Wheat Growers' Relief Acts of the Commonwealth. Wheat growers' associations during the 1930s called for some scheme to relieve farmers and to stabilize prices but no agreement was reached between the Commonwealth and the States on an acceptable scheme. (at p190)

23. With the outbreak of war in 1939 the Commonwealth felt able under the defence power to take unilateral action. An Australian Wheat Board, the precursor of the present Board, was constituted under the National Security (Wheat Acquisition) Regulations and the Wheat Industry (Wartime Control) Act 1939 (Cth) was passed. A guaranteed price for the total crop was introduced. Subsequently it was found necessary to limit the guaranteed price to a quota supplied by each grower. A Wheat Industry Stabilization Board was established to control a system of registration of farms and licensing of areas sown to wheat. (at p190)

24. With the coming of peace, the Commonwealth was anxious to continue a stabilization scheme and in 1946 legislation was passed to that end but the agreement of the States was not obtained until 1948. By legislation of the Commonwealth and the States of that year a Wheat Stabilization Plan was introduced. The plan was for a five-year period but for each succeeding five-year period successive stabilization plans have been implemented by complementary Commonwealth and State legislation. The current plan is that implemented by the 1974 legislation. (at p190)

25. We have already referred to that part of the plan which continues in existence the Australian Wheat Board, provides in effect for delivery to it of all wheat, and provides the basis for calculating the price to be paid for the wheat. Other features of the plan and of the problems which it sets out to solve can be briefly stated. We shall give references to the relevant sections of the Commonwealth Act. The Minister declares an average export price for a season, ascertained in accordance with the section, and a stabilization price, $73.49 for the 1974 season with adjustment in respect of later years according to a formula (s. 29). A home consumption price is also fixed by the Minister after consultation with State Ministers. Under the present scheme this is a "basic price" of $70.41 with variations according to a formula (s. 32) which includes provision for increased costs of production. By application of the formula the home consumption price had risen to $105.40 for the 1976-1977 season. (at p190)

26. In some years the home consumption price exceeds the average export price and in other years the position is reversed. During the currency of the existing plan the export price exceeded the home consumption price during the earlier years but by 1976-1977 the average export price had fallen, production costs had risen, and the home consumption price exceeded the average export price. (at p191)

27. The purpose of the Stabilization Fund, maintained under the Wheat Industry Stabilization Act 1974 (Cth), is to smooth out these fluctuations. In the years when the export prices are high the growers contribute to the Fund. In the last year of such conditions the contribution was about $3 per tonne. But when the average export price is less than the stabilization price, the deficiency in price in respect of wheat exported is paid from the Fund to the Wheat Board and is deemed part of the proceeds of disposal of wheat of that season for purposes of s. 24. If there is an insufficiency in the Fund for any year, there is paid to the Fund an amount from Consolidated Revenue (up to certain maximum amounts) to make up the deficiency. Thus growers are assured of a certain home consumption price and a certain minimum price for wheat exported. The calamitous conditions of the past have been effectively prevented. (at p191)

28. In the absence of a system of licensing and registration of growers, an inability to ensure that all wheat (other than that used on the farm where it is grown) be delivered to the Wheat Board would mean that a grower by selling outside the Board in a good year could avoid contribution to the Stabilization Fund, but in a bad year that grower could deliver to the Board and receive a price made up by drawings from the Stabilization Fund and Consolidated Revenue. (at p191)

29. A consequence of the nature of the scheme is that any particular grower is not concerned whether his wheat goes for sale on the home or the overseas market. His payment per tonne will be the same. One other feature worthy of mention is that in Western Australia production is high, but consumption low compared with the eastern States. Also Western Australia is most favourably situated for export of wheat. In good export years, without a plan, this would favour Western Australia growers, but in bad export years would strongly disfavour that State. Under the plan Western Australian wheat can be exported and eastern wheat used to a greater extent to supply the domestic market. The Wheat Board can arrange its contracts accordingly. The growers receive equal treatment throughout the Commonwealth. (at p191)

30. The efficacy of the scheme depends upon the delivery of the whole wheat crop to the Wheat Board and the efficiency of the scheme depends upon delivery being made at the facilities in or near where the wheat has been grown. (at p191)

31. An acquisition of the wheat at a fair price after any interstate act or transaction in respect of the wheat has been completed does not of itself directly burden the prior interstate act or transaction. The legislation could leave the interstate trade and commerce unaffected until that trade had been completed. Then acquisition and delivery provisions could apply. A consequence might be that there would be little attraction to a purchaser in the making of such a contract of sale with a grower in another State; but that is a consequence which, in accordance with Beal v. Marrickville Margarine Pty. Ltd. (1966) 114 CLR 283 and Wragg v. New South Wales (1953) 88 CLR 353 , should be regarded as an economic consequence only. That being so, we do not think that the further steps which this legislation takes of requiring delivery to the Wheat Board before the completion of the interstate acts or transactions has the same merely prohibitive effect as in other contexts it might be found to have. That the Commonwealth and all the States have passed complementary legislation to establish an Australia-wide pool of wheat, all of which is acquired by single authority, the Wheat Board, distinguishes the circumstances from those which arise under a State marketing scheme created by a statute of one State only. In this connexion it is apposite to refer to the words of Dixon J. in the Field Peas Case (1948) 76 CLR, at p 426 :

"A State pooling of any commodity exported from the State is necessarily directed wholly or in part to trade across the boundaries of the State concerned and that includes export to the other States as well as to other countries. An Australia-wide pool is concerned with export to other countries and Australian domestic trade independently of State boundaries. The manner in which Australian domestic trade is affected by the pool may or may not be considered to involve an invasion of the freedom of inter-State trade."

A State marketing scheme which prohibits sale and delivery of a product interstate faces immediate problems with s. 92, and it is not easy to see how such a prohibition is regulatory of all trade and commerce (including interstate trade and commerce) in the product. An Australia-wide scheme providing for acquisition of the product by a single marketing authority constituted by the Commonwealth and existing in each State means that at one place or another the product will come within the operation of the complementary statutes of the Commonwealth and the States. (at p192)

32. It is in this context of an Australia-wide wheat pooling scheme as well as in the circumstances of the Australian wheat industry which we have described that it must be determined whether a scheme which includes the burdens placed on the interstate sale and transportation of wheat by growers and purchasers is the only practical and reasonable manner of regulation of trade and commerce (including interstate trade and commerce) in wheat. We are satisfied that it is. This primary industry, which has been and is of vital importance to Australia, has been clearly shown to need a stabilization scheme. To conclude that a comprehensive scheme is the only reasonable and practical manner of regulating the wheat industry goes a long way towards a conclusion that all trading in wheat should be able to be brought within the scheme. We are left in no doubt that a stabilization scheme is needed and that the tests of practicality and reasonableness (which includes fairness to all without discrimination throughout Australia) are satisfied by the comprehensive compulsory scheme which has been adopted. We would allow the demurrers. (at p193)

MURPHY J. In separate actions, the four plaintiffs claim declarations that the Wheat Industry Stabilization Act, 1974 (N.S.W.) does not, by reason of s. 92 of the Constitution, apply to certain wheat in their possession and claim consequential relief in respect of acquisition notices made by the Australian Wheat Board under the Act. The defendants demur on the ground that s. 92 does not make the provisions of the Act inapplicable to the plaintiff's wheat (either directly or by the saving provision in s. 2 of the Act). (at p193)

2. The Act is part of an arrangement between the Commonwealth and all the States whose Parliaments have cooperated in legislating to deal with a national problem of stabilization of wheat prices. This is done through a marketing scheme which involves the Australian Wheat Board's acquisition of all wheat grown in Australia (with exceptions which are not material). The State Parliaments have acted under their general legislative powers; the Australian Parliament has acted under its enumerated legislative powers which include, powers to make laws for the territories, with respect to trade and commerce among the States and with other countries, and external affairs. Since 1948, the Australian Parliament has adhered to a wheat stabilization scheme substantially the same as the one under attack, although from time to time the details have been altered. This was done with the cooperation of successive governments in all States whose Parliaments passed complementary legislation which eliminates in an economic sense, the State boundaries. Each grower delivers his wheat and is paid as if some proportion of it were used for home consumption and some for export. Prices are stabilized and equalized; every grower receives an equal price per bushel for the same quality wheat. This nationwide scheme was introduced and has been conducted with the support of the wheatgrowing community. (at p194)

3. The plaintiffs are engaged in trade and commerce among the States and the wheat in question is the subject of that trade and commerce. They claim that the New South Wales Act is invalid in so far as it applies to wheat in the course of trade and commerce among the States. Their argument applies to the Act of the Australian Parliament as well as those of the State Parliaments. If the plaintiffs are right, it is difficult to see why s. 92 would not prevail against any legislation directed to acquisition and distribution of such wheat for any purpose. If they are right, the Australian Parliament and all the State Parliaments, even in cooperation, do not have legislative power to acquire wheat which is the subject of interstate trade in order to overcome a national famine or to fulfil an international obligation to give assistance in a world famine, or to advance Australia's defence. (at p194)

4. An earlier wheat stabilization scheme was challenged over sixty years ago on the ground that it contravened s. 92, but the challenge was unanimously rejected by this Court in the Wheat Case (New South Wales v. The Commonwealth (1915) 20 CLR 54). (at p194)

5. The Act does not impose, directly or indirectly, any customs duty or similar tax discriminating against trade or commerce among the States. For this reason neither the Act nor the notices in their application to wheat which is the subject of trade and commerce among the States contravene s. 92 of the Constitution. I adhere to what I said in Buck v. Bavone (1976) 135 CLR 110 ; H. C. Sleigh Ltd. v. South Australia (1977) 136 CLR 475 ; and Finemores Transport Pty. Ltd. v. New South Wales (1978) 139 CLR 315. (at p194)

6. The demurrers should be allowed. (at p194)

Orders

Demmurrers allowed with costs.

Actions dismissed with costs.

[1978] HCA 34

8 September 1978

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