Harper v Victoria

[1966] HCA 26

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Taylor, Menzies and Owen JJ.

HARPER v. VICTORIA

(1966) 114 CLR 361

3 May 1966

Constitutional Law (Cth)

Constitutional Law (Cth)—Freedom of inter-State trade and commerce—State marketing law—Importation of eggs for sale from another State—Prohibition of retail sales until graded and tested by State authority—Fees payable for testing and grading—Sales subsequent to importation—Economic consequences of prohibition—Whether law regulatory—Validity—Whether fee payable a duty of excise—The Constitution (63 &64 Vict. c. 12), ss. 90, 92—Marketing of Primary Products (Egg Marketing) Act 1965 (Vict.)—Marketing of Primary Products Act 1958-1965 (Vict.), ss. 36A*, 41A, 41B*, 41C*, 41D*, 48*.

Decisions

May 3.
The following written judgments were delivered: -
BARWICK C.J. Demurrer to a statement of claim in an action in this Court by which the plaintiff seeks, in substance, declarations - (1) that the Marketing of Primary Products (Egg Marketing) Act 1965 of the State of Victoria (the Act) is wholly invalid because its provisions constitute an infringement of the freedom guaranteed by s. 92 of the Australian Constitution; (2) that so much of the Act as requires the plaintiff to pay to the Egg and Egg Pulp Marketing Board of Victoria (the Board) a fee for the grading, testing, marking and stamping of his eggs is invalid as imposing a duty of excise, and (3) that the Act in so far as it would require the plaintiff to submit his eggs for grading, testing, marking and stamping before selling them by retail does not apply to the retail sale by the plaintiff of the eggs which he has imported from New South Wales for sale in Victoria. (at p366)

2. The Act introduces into the Marketing of Primary Products Act 1958 (Vict.) (the Principal Act) a number of amendments designed to ensure that consumers of eggs in Victoria are enabled to purchase in Victoria eggs of satisfactory grade quality and standard. Unlike the Principal Act, the new sections apply to all eggs whether or not produced in Victoria; s. 3 of the Act. This was a necessary consequence of the endeavour by the amendment to protect consumers in Victoria whereas the Principal Act in relation to eggs and egg pulp was principally concerned with Victorian producers of eggs for whom it instituted a marketing scheme. (at p367)

3. Section 38A inserted into the Principal Act by s. 4 of the Act imposes upon the Board the duty to take steps within the scope of the Principal Act as amended and the regulations made thereunder or under the Act to ensure that eggs and egg products supplied and distributed to consumers in Victoria are of satisfactory grade quality and standard. (at p367)

4. Power is given to the Governor in Council to make regulations to the same end and in particular to prescribe grades, qualities and standards of eggs and egg products and names to indicate such grades, qualities and standards and to prescribe for the grading, testing, marking and stamping of eggs and egg products: see s. 41A of the Principal Act as amended. (at p367)

5. Regulations under the Act have in fact been made prescribing grades and qualities of eggs according to identifiable physical qualities, and the names by which such grades and qualities shall be known. They prescribe coloured markings to denote the grade and quality of the egg which are to be placed on it together with the date or place at which and person by whom it was graded stamped thereon. (at p367)

6. It is necessary at this point to observe some of the provisions of the Principal Act. Upon the declaration of a commodity and the creation of an appropriate Marketing Board pursuant to the Principal Act, a proclamation may be made vesting the whole of the commodity as from the moment of its production in Victoria in the Marketing Board set up to market that commodity, whereupon the commodity becomes the absolute property of that Board, the producers being left with a claim for payment therefor in accordance with the Principal Act. A Marketing Board is given power to exempt certain producers and certain sales from the operation of the vesting provisions of the Acts: see ss. 17 and 21 (d) of the Principal Act. (at p367)

7. Special provision is made for the constitution of the Egg and Egg Pulp Marketing Board (the Board): see Div. 2 of Pt 1 of the Principal Act. Eggs have been declared a commodity and a vesting proclamation has been made. Collectors of eggs, said not for any purpose to be the agents of the Board, may be licensed to collect eggs from producers and to deliver them to the Board. The Board is to pay the licensed collector as if he were a producer and he in turn shall pay the producer. The Board has power to appoint agents and has done so, presumably as a means of distribution of the eggs which have vested in the Board; see s. 20 (1) (a) of the Principal Act. (at p368)

8. Provision is made in this division of the Principal Act for the Board to make progress payments to producers according to a price fixed by the Board for eggs of the grade, quality or standard of the eggs delivered by the producer. Out of the Board's surplus moneys at the end of prescribed periods a final payment is to be made to the producer based on the total amount of eggs (irrespective of grade, quality or standard) which the producer during that time has delivered to the Board. One of the amendments made by the Act allows the Board to make premium payments to producers and debit the amounts so paid out as part of its deductible expenditure: see s. 11 of the Act. Certain described deductions are authorized to be made from progress or final payments. (at p368)

9. Thus all eggs produced in Victoria, so soon as they come into existence, become the property of the Board, except such as are produced by the owners of domesticated fowls of more than six months of age where the owner does not own more than forty such fowls and houses them all in one premises and such eggs as are produced by what are called "small producers" whom the Board exempts from the vesting provisions: see ss. 41E and 20 of the Principal Act. (at p368)

10. It is against this background that the operative provisions of the Act must be understood and considered. In a bracket of sections numbered 41B, 41C and 41D inserted in the Principal Act by the Act, the Act takes the following steps. First, all eggs sold by retail in Victoria must be sold according to prescribed grades, qualities or standards and under the appropriate prescribed names. Second, the owner, including a person entitled to sell or dispose of eggs, may present them to the Board or to a person authorized by the Board at such place and in such manner as the Board determines to be graded, tested and to be marked and stamped to indicate grade and quality. Third, the Board is required to cause all eggs thus presented to it to be graded, tested, marked and stamped and to redeliver them to the person presenting them or as he directs at the place where they were presented. Fourth, the person presenting the eggs to the Board must pay the fee fixed by the Board as its estimated unit cost of grading, testing, marking and stamping of all eggs presented to it under the Act. (at p368)

11. As the Board will no doubt be grading, testing, marking and stamping its own eggs and, as the Act allows, debiting the cost of doing so against the amount realized for its eggs, it seems to have been thought necessary to provide in the interests of Victorian producers that, notwithstanding the wide discretion given to it to make deductions from the progress payments to producers (see s. 48 (1) (b)), the Board should be limited to the deduction from the progress payments made to producers of the unit fee it fixes in relation to eggs submitted to it by owners of eggs. But, of course, as the Act provides that all such fees collected by the Board shall be included in the funds of the Board from whose surplus final payments will be made to producers, all the expenditure of the Board in all its grading, &. activities will be taken into account before any such surplus is determined: see s. 48 (1) (ba) of the Principal Act inserted by s. 11 of the Act. Any under-estimation of its unit cost by the Board will be recouped before the surplus payable to producers is determined and any over-estimation will increase the amount of that surplus. The Board is given power to permit any producer, which, in my opinion, having regard to s. 36A and the evident purpose of the amendments made by the Act to the Principal Act, includes a producer outside Victoria, to grade, test, mark and stamp his own eggs. (at p369)

12. Lastly, it is provided that any person who sells by retail any eggs which have not been graded and tested for quality and standard and marked and stamped by the Board or by a person authorized by it or by a permitted producer commits an offence. (at p369)

13. It is thus apparent that in substance these provisions of the Act, 41B, C and D, only produce a real effect in respect of eggs not laid in Victoria, and of eggs produced in Victoria by exempt "small" producers or by limited and separately housed, small colonies of domesticated fowls. As to the latter, by reason of the smallness of their number and their domesticity, I can only conclude that the number of eggs reaching market from their production must be so small as to be negligible for present purposes. As to the former, we have no information as to what a "small" producer of eggs is or as to the basis on which the Board decides exemption or as to the quantity of eggs which are intruded into the market by such producers. One can only suspect that they must be minimal in relation to the totals handled by the Board and to the total consumption of eggs in Victoria. (at p369)

14. It is, I think, notorious that there is a substantial trade in eggs from adjacent States into Victoria as well as such a trade out of Victoria into these States. It is to my mind quite apparent that the extension of legislative control of the retail sale of eggs which the Act effects is in substance, at least predominantly, an extension to control the retail sale of eggs of inter-State origin and thereby to influence earlier dealings in such eggs. But this is by no means conclusive of any legal question that arises in this case. Yet it may not be without significance when reading the group of sections to which I have referred. None of these can be read in isolation from the others of them nor can their numerical order, in my opinion, be allowed any influence upon the totality of the effect they produce. What they provide as a whole is clear enough. No one may sell eggs by retail in Victoria which have not been graded, tested, marked or stamped by the Board or by some person (including a producer) authorized by the Board, i.e. either pursuant to s. 41C (4) or within s. 41D (1) (a). But if requested so to do at the place and in the manner determined by it, the Board shall, on payment of its fee for so doing, grade, test, mark and stamp the eggs any owner or person entitled to dispose of the eggs so presents to it. (at p370)

15. As perhaps a minor matter, though not one to be ignored when considering the administrative possibilities, the Board is not under any express obligation as to the convenience to the trader of the location at which the eggs must be delivered to it or as to the time the Board occupies in its process of grading, testing, marking and stamping or as to the time of re-delivery of the eggs. Even if by some implications the Board could be made liable in damages for delay in any of these respects, such a possibility does not afford any answer to a trader who complains that the obligation to submit his eggs to the Board before retail sale is an impediment to his inter-State trade. He is in business to sell his eggs not to acquire a law suit. However, I find no need to place any weight on these aspects of the Act in the decision of this demurrer. (at p370)

16. The generality of the prohibition in s. 41B and the permissive nature of s. 41C present a disarming aspect; but, read with s. 41D, the totality of the prohibition is quite plain. The sections cannot, in my opinion, be read as providing that the Board is enabled to perform for the owner of eggs a service of which he may avail himself if he chooses so to do, in order that he, or some person deriving title, or a power of disposition through him can comply with a general requirement of the law as to retail sale of eggs. For one thing s. 41B itself does not require marking or stamping before retail sale, and for another, the retail seller has no choice; he can only sell eggs marked or stamped by the Board or with its authority. The "services" of the Board must under compulsion of law be sought and accepted if the eggs are to be sold by retail. (at p371)

17. This analysis of the operation of the Act quite clearly means that a trader in eggs who has brought them inter-State, if he would sell them by retail in Victoria must first present them to the Board at the place and in the manner it prescribes, paying its fixed fee. (at p371)

18. The plaintiff who imports eggs to sell them by retail in Victoria submits, in substance, that the compulsion thus to submit his eggs to the Board is a substantial impediment to his inter-State trade, and that the law imposing that impediment is not regulatory in its nature. He also submits that, in any case, the fee which is exacted for the grading, &. is a duty of excise and its imposition beyond the competence of the State legislature. (at p371)

19. Because of the operation of s. 3 of the Acts Interpretation Act 1958 of Victoria and the terms of the Act, no declaration of the invalidity of the Act can be made in the circumstances of this case. The question so far as s. 92 is concerned in this case is whether the statute may lawfully require compliance by the plaintiff whith its provisions concerning the marking and stamping of eggs in so far as the plaintiff sells by retail in Victoria eggs which he has imported from another State. The question is one of the applicability of the statute. (at p371)

20. The principles upon which such a question is to be decided are not in doubt. A State statute which in its operation would directly as distinct from consequentially or remotely place an impediment in the way of or a burden upon the inter-State trade of a person will not be allowed so to operate unless the statutory provisions are in their nature no more than "regulatory" in the sense we have come to understand in this area of discussion. A restraint upon or hindrance to the trader's ability to carry out his inter-State transactions will not be regarded as a relevant burden or impediment if the law from which it derives is "regulatory" in its nature. Where such a provision as s. 3 of the Acts Interpretation Act is available, and the statute can be given a distributive operation, its commands or prohibitions will then be held inapplicable to the person whose inter-State trade would thus be impeded or burdened. Of course, the question of validity or applicability will only be dealt with at the instance of a person with a sufficient interest in the matter; and, in my opinion, in general, need only be dealt with to the extent necessary to dispose of the matter as far as the law affects that person. (at p371)

21. As I have explained, the Act prohibits a person selling by retail the eggs which he has brought across the border unless and until he has delivered them to a body set up by the State and that body has graded and marked the eggs and returned them to him. He must also pay to that authority its costs of the process of grading, testing, marking and stamping. (at p372)

22. To my mind, and with every respect to those who think otherwise, I cannot believe that this intrusion into the plaintiff's course of business is anything but a substantial impediment and a serious burden upon his inter-State trade in eggs. It is immediate, direct and within the precise legal operation of the State statute. It prevents him from completing the purpose of his having brought his commodity across the border. (at p372)

23. The sale of the eggs within Victoria though viewed in isolation an intra-State transaction, is indeed an indispensable and inseparable concomitant or conclusion of the inter-State commercial operation. It is as at least as inseparable from it in commercial reality as the possession of the skins was held to be in Fergusson v. Stevenson (1951) 84 CLR 421, at p 435 or the capacity of the purchaser from the importer to sell to a purchaser and at a place of his choice dealt with in Fish Board v. Paradiso (1956) 95 CLR 443, at p 452 To deny to an importer the ability to sell what he brings inter-State must directly impede his freedom to trade inter-State. Sale of the imported article is in truth a part of that trade. If sale by retail is a mode of such sale, it is no answer to the importer desiring to sell by retail who complains of a prohibition against his selling by retail that he is free to sell by wholesale or for that matter to consume the commodity himself by use of it in manufacture or otherwise. (at p372)

24. Therefore, in my opinion, unless the statute can in relation to its prohibition of sale by retail of eggs not marked and stamped by the Board be characterized as regulatory in its nature, it would clearly infringe the plaintiff's freedom to carry on his inter-State trade. Consequently, it could not lawfully operate to compel the plaintiff to submit his eggs brought inter-State for sale in Victoria to the Board for grading and marking before selling them by retail. This would mean that s. 41D could not operate to prevent him selling by retail eggs which he has brought inter-State for sale in Victoria but which have not been graded, tested, marked and stamped by or under the authority of the Board. (at p372)

25. It must be observed that I have confined my attention to the situation of the plaintiff and the particular interest which he has in the question of the invalidity or in that of the applicability of the Act. In consequence, I have no need in this case to consider the question whether the prohibition on sale by retail in s. 41D has a direct as distinct from a consequential or remote operation upon the inter-State trade of an importer of eggs into Victoria who sells his eggs by wholesale. That question, which I do not regard as directly arising in this case, remains unresolved as far as I am concerned. (at p373)

26. It is not claimed that the provisions of the Act are laws to secure that the commodity is free from disease or other quality harmful to humans. They are not and cannot be sought to be justified as in their nature regulatory for that reason. I observe in passing that there is no need in this case to examine the regulations to decide whether the provision therein as to useless eggs can be supported, either as authorized by the Act or by the Principal Act or as not infringing the Constitution. (at p373)

27. I apprehend that in relation to an importer of eggs who desires to sell eggs brought from another State into Victoria for sale there, it is said by the defendant that the prohibition upon retail sale until the Board has graded, tested, marked and stamped the eggs is "regulatory" because it is a law for the protection of consumers of eggs against imposition by the retail sellers of eggs. Such a submission raises several problems only one of which I think must be solved in order to dispose of this demurrer. First, there is the far-reaching question whether a law which merely requires the seller by retail to sell according to prescribed grades and qualities, under penalty should he fail to do so, is in its nature regulatory in the relevant sense and so not a breach of s. 92 as applied directly to the first sale of eggs imported from another State for sale in Victoria. If such a question could properly be answered in the affirmative, the further question would arise whether an additional requirement that such eggs be marked and stamped before retail sale did not, at least to the extent of that additional requirement, remove the regulatory character of the enactment. To answer those questions, close examination of Hartley v. Walsh (1937) 57 CLR 372 would have to be made and a decision taken whether the reasoning on which it proceeds can now be fully supported. In other words, can a State circumscribe inter-State trade in unbranded eggs by preventing their disposal by retail by the importer? See Bierton v. Higgins (1961) 106 CLR 127 Neither of these questions however need be resolved in this case: but a third, it seems to me, must be resolved. That is whether, even if a law which required the retail seller of eggs to sell under prescribed grades and qualities and to mark and stamp his eggs accordingly, could be regarded, as applied to an importer of eggs inter-State, as regulatory in its nature, a law such as the present which requires the grading, testing, marking and stamping to be done by a Government Board, its cost of the operation being payable by the owner of the eggs, is, in relation to the importer, regulatory in its nature. It does not, in my opinion, follow that, if it be permissible under the Constitution so to insist upon sale of eggs by retail according to grades and qualities, or even if it is permissible in that connexion to require the eggs to be marked or stamped, the owner or seller of the eggs being free to do so himself, matters on which I express no opinion, the importer may be compelled to submit his eggs to a Government authority for such grading, marking and stamping as an indispensable prelude to his sale of them by retail. It seems to me that whatever the relevant nature or character of laws of the former kind, a law which prohibits the retail sale until a Board has graded, marked or stamped the commodity is not regulatory in its nature in the relevant sense. It remains prohibitory and the impediment or burden which in its operation it imposes upon a trader's inter-State trade is an infringement of the constitutional guarantee of the freedom of such trade. (at p374)

28. The judicial discussion of what limitations upon a trader's activities are no more than "regulatory" has mostly occurred in connexion with road transport, as for example, in McCarter v. Brodie (1950) 80 CLR 432; Huges and Vale Pty. Ltd. v. State of New South Wales (1953) 87 CLR 49; (1955) AC 241; Hughes and Vale Pty. Ltd. v. State of New South Wales (No. 2) (1954) 93 CLR 1; (1955) 93 CLR 127; Armstrong v. The State of Victoria (No. 2) (1957) 99 CLR 28, and Greutner v Everard (1960) 103 CLR 177 The resolution of the question whether or not a specific provision governing conduct on the road is "regulatory" will not in general be difficult. The physical necessities of the road and the easily recognizable background of safety and of the need to eliminate congestion to aid facility of movement renders the problem in that context less difficult. But as Fullagar J. said in McCarter v. Brodie (1950) 80 CLR 432: "The real, and truly baffling, difficulties of s. 92 seem to me to lie outside the field of transportation" (1950) 80 CLR, at p 497 (at p374)

29. We have become increasingly accustomed to legislative control of considerable areas of trading and commercial activity. But, however much this must be accepted as in the interests of the community generally in intra-State trading and commercial activities, the constitutional emphasis upon the freedom of inter-State trade requires that any such control in its operation upon or in respect of inter-State trade and commerce shall be clearly compatible with that freedom. It is not enough that there are perceptible reasons for the enactment of the law valid enough in the eyes of a legislature pursuing some policy conceived by it to be for the public good or the general welfare. The basic nature of the permissible limitations on the trader's activities so far as inter-State trade and commerce is concerned must be the mutual accommodation of the rights and actions of those engaged in that trade and commerce so that each is free in respect of such trade and commerce, though none have licence. (at p375)

30. I respectfully agree in this connexion with what Kitto J. says in Hughes and Vale Pty. Ltd. v. State of New South Wales (No. 2) (1955) 93 CLR, at pp 217-219 No doubt the very expression of the concept has its difficulties: its application is certain to give rise to considerable divergences of opinion. But limitations on the activities of inter-State traders are not compatible with that freedom upon which the Constitution insists merely because they appear reasonable in the interests of the public as a whole or of the public regarded as consumers of goods, or as reasonable administrative expedients to ensure compliance with laws which might in their general provisions be thought to be no more than regulatory. (at p375)

31. Whilst very conscious of the room for different views on such a question, I find myself quite unable to accept the proposition that the requirement that the inter-State importer of eggs must submit them to the Board for grading, testing, marking and stamping before he may sell them by retail however reasonable in the interests of consumers is compatible with the absolute freedom which s. 92 demands. That a fee quantified according to the Board's costs of performing these acts should also be payable is but an additional circumstance making such acceptance to my mind impossible. (at p375)

32. Being clearly of this opinion, I have no need to discuss the extent of the Court's decision in Wragg v. State of New South Wales (1953) 88 CLR 353 That case decided that a general power given by a State law to fix prices at which sales of potatoes, including an importer's first sale, could take place within the State, did not infringe the constitutional guarantee, at any rate where the authorized basis of the price fixing was that of a fair price as between buyer and seller. But that decision could not, in my opinion, support a State law which required the importer to hand over his potatoes to a government authority for grading and marking before the importer could sell them by retail. In my respectful opinion, it has nothing to say on that problem. Nor would the view expressed in that case as to the effect of the variable economic effect of the prices fixed for wholesale and retail sale of the commodity upon the extent of its importation inter-State be relevant, in my opinion, to the question whether the direct prohibition of the sale by retail by the importer of his imported commodity is an impediment or burden. (at p376)

33. Accordingly, in my opinion, the plaintiff whilst not entitled to the first of the declarations he seeks, is entitled to the third of them. This conclusion is sufficient to dispose of the demurrer. Consequently, I express no opinion upon the other question which the plaintiff raised, namely whether the fee fixed by the Board to be paid by the person presenting to it eggs for grading, testing, marking and stamping is an excise. None the less I permit myself the observation that I retain a considerable doubt as to whether a fee payable by statute in respect of acts to which the subject is compelled to submit can be regarded as a payment for services rendered in the sense in which the expression should be understood when considering whether an exaction is or is not a tax. (at p376)

34. I would overrule the demurrer. (at p376)

McTIERNAN J. The plaintiff attacks the validity of ss. 36A, 41B, 41C and 41D of the Marketing of Primary Products Act 1958 (Vict.). These and other sections were enacted and inserted by the Marketing of Primary Products (Egg Marketing) Act 1965 into the former Act. Section 36A brings eggs which are not the produce of Victoria within the operation of the sections introduced into the Principal Act by the Act of 1965. These sections embody a plan for grading all eggs, whether the produce of Victoria or not, sold in that State; and for having them graded by the Egg and Egg Pulp Marketing Board or other authorized person or by the owner of the eggs himself. This plan is consummated by a provision forbidding the retail sale in Victoria of eggs that have not been graded as required. Besides grading there are requirements of testing, quality and marking the eggs which are also elements of the plan. The sections in which this plan is contained are principally ss. 36A, 41B, 41C and 41D. (at p376)

2. The interest of the plaintiff on which he relies for his title to bring the action is that he conducts in Victoria a retail business of selling eggs bought from poultry farmers in the State of New South Wales. (at p376)

3. He contends in the first place that s. 41D which prohibits the retail sale in Victoria of any ungraded, untested or unmarked eggs is contrary to s. 92 of the Constitution because it imposes an unconstitutional burden on his inter-State commerce with the poultry farmers of New South Wales. I do not agree with this contention. It is clear that the section does not directly interfere with that commerce. The section does not attempt to hinder his carrying on that commerce. The section operates after importation or the inter-State commerce has ended. When the obligation imposed by s. 41D to grade, test and mark the eggs arises the eggs are already committed to the intra-State retail trade of Victoria. The section operates at that stage, not beforehand; it does not restrict the plaintiff's trade as at the frontier. If the section entails any consequence to the plaintiff's inter-State commerce the consequence is economic: it does not operate on the inter-State commerce; its restrictive operation is limited to the domestic retail commerce. In my view the contention of the plaintiff as to the application of s. 92 of the Constitution is met by the principles enunciated by Dixon C.J. in Wragg v. State of New South Wales (1953) 88 CLR 353 (at p377)

4. The plaintiff also relies on s. 90 of the Constitution. The basis of this attack is s. 41C (5). This sub-section says: "Every person presenting eggs under this section shall pay to the Board for the grading testing marking and stamping of such eggs such fee or fees as may be fixed by the Board to defray the expenses incurred therefor". The issue raised is whether a fee for which this sub-section provides is a tax and, if so, whether it is a duty of excise. The payment of the fee is compulsory if the person concerned has taken advantage of the facilities provided by the Board for grading &. In my opinion the fee is nevertheless not a tax for the reason that it is a charge for services rendered. The purpose for which the fee is exacted is to defray the cost of those services. Further, s. 48 (1) (ba), a provision inserted by the amending Act of 1965, shows pretty clearly that the fees are not devoted to building up consolidated revenue. (at p377)

5. I agree that the demurrer should be allowed. (at p377)

TAYLOR J. In my opinion the provisions of the Marketing of Primary Products (Egg Marketing) Act 1965 (Vict.) the validity of which is impugned in this case, do not infringe the provisions of s. 92 of the Constitution. The problem raised is clearly covered by the decision in Wragg v. State of New South Wales (1) - which decided that a company which had imported goods from another State into New South Wales could, notwithstanding s. 92, be bound by local legislation not to sell them by retail at prices in excess of those fixed for sales by retail - and is plainly distinguishable from that with which the Court later dealt in Fish Board v. Paradiso (1956) 95 CLR 443 where the legislation was held to interfere directly with the performance of an inter-State contract calling for the delivery of goods from the vendor in one State to the purchaser in another. I adhere to the observation which I made in the earlier case, and accordingly, it follows that I agree that the demurrer should be allowed. (at p378)

2. I also agree that it is impossible to regard the fee for which s. 41c (6) provides as a duty of excise. It would, of course, be an abuse of the power vested in the Board by that sub-section if fees were fixed which bore no relation to the expenditure incurred by it with respect to the grading, testing, marking and stamping of eggs delivered and presented to it and, no doubt, it would constitute an infringement of s. 92 if the fees were fixed in such a way that there was discrimination between the fees payable with respect to eggs produced in Victoria and those produced in other States and such discrimination operated adversely to persons presenting eggs of the latter character. No such questions, however, arise in the present case. (at p378)

MENZIES J. I agree that the objections based upon ss. 90 and 92 of the Constitution to the validity of the Marketing of Primary Products (Egg Marketing) Act 1965 (Vict.) should fail, and I agree with the reasons given by other members of the Court for this conclusion. I wish to do no more than make one or two observations relating to the scope of s. 92 in a case such as this. (at p378)

2. I do not regard s. 92 as denying full validity to what may be described as standard-fixing legislation of a general character which has no special features which burden inter-State trade. Nor do I think it would necessarily constitute an infringement of s. 92 were such legislation to require further that, upon the retail sale of goods for which standards have been fixed, the standard attributed to the goods being sold must for some reason, such as the protection of consumers, be evidenced in some satisfactory way, by marking, by certificate or otherwise. It might possibly happen that legislation, by imposing onerous requirements as to these matters, could burden inter-State trade in breach of s. 92; but I am unable to find that, upon its face, the legislation here in question does so. All it requires is that no eggs should be sold by retail unless they have been tested and graded and marked to show their standard. This testing, grading and marking must be done by the Board, a person authorized by the Board, or by a producer who holds the requisite permit from the Board. Of course, the testing, grading and marking of eggs as the Act requires must add to the cost of eggs for retail sale but this will be so whether the testing, grading and marking of eggs is done by a producer himself, by the Board, or by some other person. The additional cost entailed cannot, however, be regarded as an unlawful burden upon the inter-State trade constituted by bringing eggs into Victoria. To the objection that, where a retailer such as the plaintiff is in possession of eggs for retail sale brought into Victoria from another State which have not been tested, graded and marked as required by the Act, he must of necessity take his eggs to the Board for handling as aforesaid and pay for the services rendered to him, it would, I think, be sufficient to say that, of itself, this practical compulsion to take advantage of the services offered by the Board is not a burden upon the inter-State trade whereby the eggs were brought into Victoria. It may be added, however, that s. 41C, sub-ss. (5),(6) and (7) does ensure that what such a retailer has to pay to the Board for those services must be the proportionate part of the expenses which the Board actually incurs in testing, grading and marking all eggs presented to it for those purposes. (at p379)

3. In my opinion, the demurrer should be allowed. (at p379)

OWEN J. The plaintiff, whose business consists of buying eggs in New South Wales and bringing them into Victoria for sale there by retail, attacks the validity of certain provisions of the Marketing of Primary Products (Egg Marketing) Act 1965 (Vict.). In the alternative he seeks a declaration that these provisions have no application to eggs which are purchased in New South Wales and brought to Victoria to be sold there by retail. The Act of 1965 to which the attack is directed amends the Marketing of Primary Products Act 1958 (Vict.) which is referred to in the amending Act as the Principal Act, and before dealing with the plaintiff's contentions it is desirable to give an outline of the relevant provisions of both Acts. Division 1 of Pt I of the Principal Act provides for the setting up of marketing boards for various products which may be declared by the Governor in Council to be "commodities" and contains a number of provisions dealing with marketing boards generally. Where a product has been declared to be a "commodity" and a marketing board for that commodity has been appointed, the Governor in Council may, by proclamation, declare that the property in the commodity concerned then in existence or thereafter to come into existence shall be divested from those who produced it and vest in the board as the owner thereof and the interest of the person from whom the property has been divested is thereupon converted into a claim for payment in accordance with the Act (s. 17 (1) and (2)). By sub-s. (3), nothing in that section and no proclamation made under it is to affect "such portion of any commodity as is the subject of trade commerce or intercourse between the States or as is required by the producers thereof for the purposes of such trade commerce or intercourse or as is intended by the producers thereof to be used for such trade commerce or intercourse". The Division also confers on marketing boards wide marketing powers, permits them to make levies on producers and provides for the payment by them to producers for the commodity the property in which has become vested in the board set up to deal with that commodity. Division 2 of Pt I, which comprises ss. 36 to 48 of the Act, provides for the constitution of an Egg and Egg Pulp Marketing Board and, by s. 48, that Board may make progress and final payments to producers and may deduct from such payments expenditure incurred or estimated to be incurred by the Board in the marketing and treatment of eggs and egg pulp and the costs, charges and expenses or estimated costs, charges and expenses of its administration. The amending Act of 1965 adds a number of new sections to Div. 2 of Pt I of the Principal Act. They include ss. 36A, 38A, 41A, 41B, 41C, 41D and 41E. The new s. 38A imposes upon the Board the duty to take such steps as are necessary or expedient to ensure that eggs and egg products supplied to consumers in Victoria are of satisfactory grade, quality and standard and s. 41A enables regulations to be made for these purposes. By s. 41B, all eggs and egg products sold by retail in Victoria must be sold according to such grades, qualities and standards as are prescribed and failure to comply with this requirement is made an offence. Section 41C (1) provides that "any person who owns or is entitled to sell or dispose of any eggs may present the same to the Board or a person authorized in that behalf by the Board . . . for grading and testing and for marking or stamping so as to indicate the grade and quality". The Board is to cause all eggs so presented to be graded, tested, marked or stamped and re-delivered to the person presenting them (s. 41C (3)). It may, however, permit producers selected by it to carry out the work of grading, testing, marking or stamping eggs of which they are the producers (s. 41C (4)). By s. 41C (5), every person presenting eggs to the Board under s. 41C (1) is required to pay to the Board for its work in grading, testing, marking or stamping such eggs a fee fixed by the Board to defray the expenses incurred therefor. The Board is, from time to time, to estimate the expenditure incurred by it in carrying out the work of grading, testing, marking or stamping, and to "determine and fix accordingly" the fee to be charged (s. 41c (6)). It is made an offence for any person to sell by retail any eggs which have not been graded and tested for quality and standard and marked or stamped in accordance with the Act and regulations (s. 41D). Section 41E provides (inter alia) that s. 17 of the Principal Act, the provision which divests the producer of his property in eggs produced by him and vests it in the Board, shall not apply to owners of less than forty fowls, with the result that such persons retain their property in eggs produced by them and are at liberty to sell them, subject of course to the other provisions of the Act. By s. 36A, the words "eggs" and "egg pulp" where they occur in ss. 38A, 41A, 41B, and 41C, and in certain provisions of the Principal Act to which it is unnecessary for present purposes to refer, are declared to mean "eggs and egg pulp whether or not the same (a) have been produced in Victoria; or (b) are or have at any time been vested in the Board or required to be delivered to the Board". It thus appears that eggs produced in another State and imported into Victoria the property in which has not vested in the Board under the Principal Act cannot, if the amending Act be given its prima facie meaning, be sold by retail in Victoria unless they have been graded and tested for quality and standard and marked or stamped in accordance with the Act and regulations, and that the owner of such eggs - if he wishes to sell them by retail - must present them to the Board or to some person authorized by the Board for grading, testing, marking or stamping and in the case of eggs presented to the Board must pay the fee fixed by it to make good its expenditure or estimated expenditure for performing that work. It is to these last provisions that the plaintiff's attack is directed. He contends that to be forbidden to sell by retail in Victoria eggs which he has imported from New South Wales unless he first has them graded and tested for quality and standard and stamped or marked denies him the protection of s. 92 of the Constitution. Accordingly, so he argues, the provisions which forbid him to sell by retail unless this statutory requirement is fulfilled are either wholly invalid or, if capable of being read down under s. 3 of the Acts Interpretation Act of Victoria, must be construed as having no application to him. He contends also that the fee which the Act requires him to pay to the Board to recompense it for the cost of doing the work of grading, testing and stamping or marking is a duty of excise and as such is not within the competence of the Victorian Legislature. In my opinion both contentions fail. The second of them is answered by the fact that under the Act the fee payable to the Board is payable for services rendered by it and its amount is determined by the cost to the Board or the cost, as estimated by the Board, of rendering those services. (at p382)

2. The arguments in support of the first contention seem to me to be in substance those which this Court rejected in Wragg v. State of New South Wales (1953) 88 CLR 353 The obligations and prohibitions which the Act imposes upon those who wish to sell eggs by retail do, no doubt, affect the price at which retail sales can profitably be made and may also affect the price which the plaintiff, as an importer of eggs from New South Wales, can afford to pay for those eggs. In this sense, the Victorian law may indirectly result in some prejudice to the plaintiff's inter-State trade of importing eggs. But the retail sale in Victoria of eggs brought from New South Wales is no part of the plaintiff's inter-State trade and it is not because he is an importer of eggs that he is required to comply with that law. It is because he wishes to conduct an intra-State business of selling eggs by retail that he is required to comply with a Victorian law designed to afford protection to those who buy eggs by retail. (at p382)

3. For the plaintiff, however, reliance was placed upon the decision in Fish Board v. Paradiso (1956) 95 CLR 443 which, it was said, covered the present case. In my opinion that decision is distinguishable. The section of the Act there in question - and I quote from the joint judgment of Dixon C.J., Williams, Webb, Fullagar, Kitto and Taylor JJ. was "a provision designed to ensure that all fish in Queensland shall be initially distributed in each particular district by means of sales conducted by the board" (1956) 95 CLR, at p 451 It "operated to prohibit the sale by the defendant of the fish ordered by him" from New South Wales "as from the moment of its entry into Queensland and the event which attracted the prohibition was its entry into that State" (1956) 95 CLR, at p 452 It forbade a purchaser of fish in the course of his inter-State trade to deal with fish so purchased otherwise than by delivering it to the Board to be disposed of by it and its impact on his inter-State trade was, as the Court said, "immediate and direct" (1956) 95 CLR, at p 453 But these things cannot be said of the provisions under consideration in the present case. A person who in the course of his inter-State trade brings eggs into Victoria from another State is not required to place them at the disposal of the Board. He may sell them wholesale, he may turn them into egg pulp, he may send them on to another State and he may sell them by retail, provided that in such last-mentioned case he first submits them to be graded and tested for quality and marked or stamped to indicate their grade and quality. To say that this last requirement infringes s. 92 seems to me to be a proposition that cannot be supported. It amounts to saying that a State law which has the effect of increasing the cost of selling goods by retail is invalid because by increasing that cost an importer of those goods from another State finds it less profitable or perhaps unprofitable to do so. (at p383)

4. The defendant is, in my opinion, entitled to judgment on the demurrer. (at p383)

Orders

Demurrer allowed with costs.

Judgment in the action for the defendant with costs.