Nelungaloo Pty Ltd v The Commonwealth

[1947] HCA 58

75 CLR 495

NELUNGALOO PROPRIETARY LIMITED

THE COMMONWEALTH AND OTHERS

RESPONDENTS. DEFENDANTS, Constitutional Law (Oth.)-National security heal-Acquisition by Common.

wealth-Wheat Board-Wheat pool-Compensation to grower- Just terms " -Assessment of compensation-MethodSole or alternative remedies - Election by value-Export parity-InterestEntillement of grower-DeductionsSpecial tax imposed by ute-Validity-Acquisition by Commonwealth of all wheat grown-Absence of independent demand-Exercise of governmental authorityEffectConversio of wheat-Damager-Sale of wheat to BoardPrice-RegulationsOrdet made thereunder--Validity- Severability of clauser-Retrospective operation of statute-The Constitution (63 &64 Vict. c. 12), 88. 51 (x.xxi.), 55-Flour Tax (Imports and Exports) Act 1938 (No. 51 of 1938)-Wheat Industry Assistance Act 1938 (No. 53 of 1938)- Wheat Industry (War-time Control) Act 1939-1944 (No. 84 of 1939-No. 19 of 1944), s.6 Defence (Transitional Provisions) Act 1946 (No. 77 of 1946)- Wheat Tax Act 1946 (No. 78 of 1946), 88. 4, 5, 6-Wheat Export Charge Acts 1946 (No. 25 of 1946-No 79 of 1946)-Wheat Industry Stabilization Act (No. 2) 1946 (No. 80 of 1946), 8. 11-National Security (Wheat Acquisition) Regulations (S.R. 1939 No. 96-1945 No. 9), regs. 14, 19.

Regulation 14 of the National Security (Wheat Acquisition) Regulations provides, inter alia, that " the Minister may from time to time, by order published in the Gazette, make provision for the acquisition by the Common- wealth of any wheat described in the order

and the rights and interests of every person in that wheat

are hereby converted into claims for compensation." Regulation 19 provides, inter alia, that every such person may forward to the Board a claim in the prescribed form and shall be entitled to be paid such amount of compensation as the Minister, on the recommendation of the Board, determines" the basis of compensation to be recommended by the Board was to be ' the rates per bushel arrived at by reference to the surplus proceeds from the disposal of wheat" subject to the power of the Minister to deduct inter alia (a) the price of corn sacks

75 CLR 496

(b) transport charges to the terminal port (sub-reg. (2A) ) and (c) other dockages or deductions.

Held by Latham C.J., McTiernan and Webb JJ. (Rich and Dixon JJ. dissent- ing), that, whether reg. 19 provides the sole method of obtaining compensation or is merely an alternative to a right of action implied by reg. 14, a wheat grower who voluntarily delivers his wheat to the Board and accepts advances from the proceeds of sale received by the Board elects to adopt the method provided by reg. 19 and is bound by that election.

Held by Starke J. A pool constituted and administered in the manner provided by the National Security (Wheat Acquisition) Regulations contravenes the provisions of S. 51 (xxxi.) of the Constitution.

Section 11 of the Wheat Industry Stabilization Act (No. 2) 1946 provides that a certain order made under reg. 14 of the National Security (Wheat Acquisition) Regulations on 16th November 1939 " " shall be deemed to be, and at all times to have been, fully authorized by that regulation, and shall have, and be deemed to have had, full force and effect according to its tenor in respect of wheat harvested in any wheat season up to and including the

Held by Latham C.J., Starke, Dixon, McTiernan and Webb JJ. that, even if the order had not been valid when made, it was retrospectively validated by this section, and by Dixon J. that S. 11 is not a usurpation of the judicial power of the Commonwealth, and is within the defence power.

The tax imposed by S. 6 (I) of the Wheat Tax Act 1946 upon wheat acquired by the Commonwealth under the National Security (Wheat Acquisition) Regulations and levied upon wheat growers is invalid because it diminishes the compensation or the just terms to which wheat growers would otherwise be entitled pursuant to the regulations and required by S. 51 (xxxi:) of the

So held by Rich, Starke and Dixon JJ. The manner of ascertaining the compensation payable for wheat acquired, together with all other wheat, by the Commonwealth, particularly having regard to relevant legislative and administrative policies and acts, present and in futuro, satisfaction of local needs before exportation of the surplus, availability of transport facilities, and export parity, discussed.

Andrews v. Howell, (1941) 65 C.L.R. 255, and Australian Apple and Pear Marketing Board v. Tonking, (1942) 66 C.L.R. 77, referred to.

The Court being evenly divided on the question of allowing the appeal, the appeal was, pursuant to S. 23 (2) (a) of the Judiciary Act 1903-1947,

APPEAL from Williams J.

In an action commenced by Nelungaloo Pty. Ltd. against the Commonwealth of Australia, the Attorney-General for the Common- wealth of Austrana, William James Scully and the Australian

75 CLR 497

Wheat Board, the amended statement of claim was substantially as follows -

2. The plaintiff is the proprietor of a farm at Nelungaloo in the County of Ashburnham, Parish of Nelungaloo in New South Wales and was the holder of a wheat grower's licence for the crop of wheat to be produced in 1945-1946.

3. The defendant William James Scully is the Minister of State for Commerce, and the defendant the Australian Wheat Board is a board constituted under the National Security (Wheat Acquisition) Regulations.

4. On or about 16th November 1939 the then Minister of State for Commerce in pursuance of powers under the National Security (Wheat Acquisition) Regulations made and caused to be published in the Commonwealth Government Gazette an order which was, SO far as material, as follows :-

"Wheat Acquisition Regulations. Order declaring certain wheat to be acquired by the Commonwealth,

I George McLeay, Minister of State for Commerce, in pursuance of the powers conferred by regulation 14 of the Wheat Acquisition Regulations, hereby declare that the following wheat is acquired by the Commonwealth, namely

(a) all wheat harvested on or before the eighth day of October,

One thousand nine hundred and thirty-nine, which, on the date of the publication of this Order in the Gazette, is situate in Australia; and (b) all wheat which is harvested in Australia on or after the

date of the publication of this Order in the Gazette." 5. The defendants claim that at all material times the order was and is still of full force and effect.

6. 7. 8 and 9. These paragraphs of the statement of claim stated that certain quantities of the plaintiff's bagged and bulk wheat had been delivered to the agents of the defendants between the months of November 1945 and January 1946.

10. On and after the dates of delivery the defendants exercised exclusive control of the wheat and claimed to be the owners thereof.

13. Since the dates of delivery of the wheat the defendants have paid to the plaintiff the sum of £3,441 10s. 1d. and no more.

14. The plaintiff in respect of the wheat has claimed from the defendants other and additional moneys (including interest thereon from the dates of delivery of the wheat until payment) but the defendants neglected and refused and still neglect and refuse to pay any further moneys.

75 CLR 498

The plaintiff claimed :- (1) A declaration that the National Security (Wheat Acquisition) Regulations (as amended) were invalid.

(2) A declaration that reg. 19 of the National Security (Wheat Acquisition) Regulations (as amended) was invalid.

(3) A declaration that the Order dated 16th November 1939 and purporting to have been made under and pursuant to powers conferred by the National Security (Wheat Acquisition) Regulations (as amended) was invalid.

(4) Compensation for the acquisition by the Commonwealth of Australia of wheat from the 1945-1946 crop as follows :-

Wheat Delivered to Silos-3786.20/60 bushels

@ 9s. 9d. per bushel Bagged Wheat-10,498 50/60 bushels @ 10s.

Less rail and handling 9d. per bushel Less compensation received

Balance claimed (5) Interest on £3,118 1s. 3d. from the dates of delivery of the wheat until payment.

(6) Alternatively to par. 4 the plaintiff claimed that the defendant The Australian Wheat Board its servants and agents converted the wheat of the plaintiff, whereby the plaintiff had suffered loss and damage and the plaintiff claimed £3,118 1s. 3d. as damages for such conversion, the detailed particulars being as set out in par. 4.

(7) Alternatively to par. 6 the plaintiff claimed that the plaintiff agreed to sell to the defendant The Australian Wheat Board and the defendant The Australian Wheat Board agreed to buy from the plaintiff certain wheat the property of the plaintiff at a price to be ascertained in accordance with the fair market value thereof and the defendants had refused to pay to the plaintiff the whole of the price and the plaintiff claims £3,118 1s. 3d. being the balance of the price remaining unpaid detailed particulars being as set out in par. 4.

By their amended statement of defence, the defendants admitted the facts and matters alleged in pars. 1 to 12 of the amended state- ment of claim. The remainder of the statement of defence was,

SO far as material, substantially as follows :-

75 CLR 499

2. In answer to par. 5 of the statement of claim the defendants say that the said order was and is a valid exercise of the powers of the Minister under the National Security (Wheat Acquisition) Regulations.

4. In answer to par. 13 of the statement of claim the defendants say that the plaintiff made a claim for compensation in respect of the wheat mentioned in pars. 6, 7, 8 and 9 of the statement of claim and that such claim was made in pursuance of reg. 19 of the National Security (Wheat Acquisition) Regulations. The defendants further say that at the time of institution of this suit no determination had been made by the Minister in pursuance of reg. 19 and that the sum of £3,441 10s. mentioned in par. 13 represents payments made on account of the plaintiff's claim for compensation in pursu- ance of reg. 19. The defendants further say that the said sum of £3,441 10s. was paid to and received and accepted by the plaintiff on account of its claim for compensation under reg. 19 and not otherwise and by reason of the foregoing facts and matters the defendants say that the plaintiff has elected and agreed to accept compensation determined in pursuance of reg. 19 and is precluded from claiming compensation on any other basis.

8. In further answer to the statement of claim the defendants say that since the institution of this suit the plaintiff has become liable to pay to the defendant the Commonwealth of Australia provisional tax under the Wheat Tax Act 1946 at the rate of Is. lgd. per bushel in respect of the wheat mentioned in pars. 6, 7, 8, 9 and 10 of the statement of claim and that this provisional tax is a proper deduction or set off against any claim the plaintiff may have for compensation in respect of the wheat.

In its replication the plaintiff joined issue upon the defendants' amended statement of defence and submitted that the matters referred to in the amended statement of defence did not constitute a defence at law.

The wheat referred to in the statement of claim constituted deliveries by the plaintiff to the Board for the season 1945-1946. Some of the wheat was bagged and some was in bulk.

Apart from Government prices for wheat for consumption within Australia in time of war, the evidence disclosed that the price or value of Australian wheat has always depended upon export prices. At about the times when the plaintiff's wheat was delivered to the Board, the prices at which the Board was selling wheat for shipment f.o.b. Australian ports was between 9s. 3d. and 9s. 9d. per bushel for bulk wheat and between 9s. 6d. and 10s. per bushel for bagged wheat.

75 CLR 500

The Board took the plaintiff's wheat of the 1945-1946 season, in common with the wheat of all other growers of that season, into a pool, the ninth it had formed since the war began. The Board had made the plaintiff certain payments called advances. The advances announced and distributed were four: the first 4s. 1d. per bushel for bulk or 4s. 4d. for bagged wheat; the second, 1s. less the deduction of 5.384d. for railage from the siding to the seaboard; the third, 6d.; and the fourth, 6d. per bushel. A further amount was to be distributed. The plaintiff refused the third and fourth advances.

Further material facts and relevant statutory provisions, regu- lations and orders appear in the judgments hereunder.

Barwick K.C. and Macfarlan, for the plaintiff. Mason K.C., A. R. Taylor K.C., P. D. Phillips K.C. and R. Else Mitchell, for the defendants.

Cur. adv. vult.

WILLIAMS J. delivered the following written judgment :- The plaintiff is a company incorporated according to the laws of New South Wales which owns a farm at Nelungaloo in the county of Ashburnham in the State of New South Wales on which it grows wheat. It was the holder of a grower's licence under the National Security (Wheat Industry Stabilization) Regulations for the crop of wheat to be produced in the year 1945-1946. The defendant, the Australian Wheat Board, is a body which is incorporated by the National Security (Wheat Acquisition) Regulations. The crop grown by the plaintiff pursuant to the licence was delivered to the Aus- tralian Wheat Board in accordance with these regulations partly at Nelungaloo and partly at Gunningbland in the months of Novem- ber and December 1945 and January 1946. It consisted of 3786.20 bushels of f.a.q. wheat delivered to the silos, and 10498.50 bushels of bagged f.a.q. wheat delivered to the sidings at these places.

The plaintiff claims the sum of £6,559 11s. 4d. being the sum of £7,095 5s. 1d. at the rate of nine shillings and nine pence per bushel for bulk wheat, and ten shillings per bushel for bagged wheat less rail and handling charges at nine pence per bushel, amounting to £539 13s. 9d., either as compensation for the acquisition of the wheat by the Commonwealth, or, if the wheat was not validly acquired, as damages for the conversion of the wheat by the Aus- tralian Wheat Board as the agents of the Commonwealth. The plaintiff admits the receipt of advances under reg. 28 of the National

75 CLR 501

Security (Wheat Acquisition) Regulations amounting to £3,441 10s. ld., so that the balance claimed is £3,118 1s. 3d. The statement of claim contains a further count claiming the same sum from the Commonwealth as the fair market value of the wheat sold by the plaintiff to the Commonwealth, but no evidence was offered in support of this count and it was not pressed.

The Commonwealth purported to acquire the wheat pursuant to an order published on 16th November 1939 made by the then Minister of State for Commerce under the authority of reg. 14 of the Wheat Acquisition Regulations. The order, the full text of which appears in the statement of claim, related to wheat which had already been harvested and wheat to be harvested in the future. In this action I am only concerned with par. (b) of the order by which, with certain immaterial exceptions, the Commonwealth purported to acquire all wheat which is harvested in Australia on or after the date of the publication of the order in the Gazette. The plaintiff claims that the taking of its wheat of the 1945-1946 crop was tortious, because this paragraph of the order was not authorized by reg. 14. The plaintiff commenced its action on 24th July 1946. The statement of claim was filed on 9th September 1946. The Wheat Acquisition Regulations were made under the authority of the National Security Act 1939. The National Security Act 1946 provided for the termination of the principal Act on 31st December 1946, so that, apart from further legislation, the Wheat Acquisition Regulations would have expired on that date. But by the Defence (Transitional Provisions) Act 1946, these regulations were continued in force until 31 December 1947. Further, the Wheat Industry Stabilization Act 1946; assented to on 9th August 1946 (as amended by the Wheat Industry Stabilization Act (No. 2) 1946, assented to on 14th December 1946) provides in S. 11 that, subject to this Act, the National Security (Wheat Acquisition) Regulations shall, by force of this Act, insofar as they relate to wheat harvested in any season up to and inclusive of the 1946-1947 season, continue in force until such date as is fixed by proclamation, and shall, during such con- tinuance, have the force of law. But 8. 2 of the principal Act pro- vides that the several sections of the Act shall commence on such dates as are respectively fixed by proclamation and I was not referred to any proclamation of this section. Section 2 however, of the amending Act provides that it shall come into operation on the day on which it receives the Royal Assent, and S. 11 of this Act provides that: The order made by the Minister of State for Commerce under regulation fourteen of the National Security (Wheat Acquisition) Regulations and published in the Gazette on the

75 CLR 502

sixteenth day of November, One thousand nine hundred and

thirty-nine, shall be deemed to be, and at all times to have been, fully authorized by that regulation, and shall have, and be deemed to have had, full force and effect according to its tenor in respect of wheat harvested in any wheat season up to and including the 1946-1947 season."

The plaintiff contends that the relevant portion of the order of 16th November 1939 was not authorized by reg. 14 of the Wheat Acquisition Regulations, and that, if the order was not SO authorized, S. 11 of the Wheat Industry Stabilization Act (No. 2) 1946 was not effective to cure the defect. The plaintiff claims the same amount of damages for tort as it claims for compensation, but contends that it is necessary to decide whether the taking of the wheat was tortious or not because, if the acquisition was lawful, the plaintiff is liable to be taxed under the Wheat Tax Act 1946 (if valid), whereas if the taking was unlawful, the plaintiff would escape this tax (at least until such time as an equivalent tax was substituted for it).

I think that it is convenient to dispose of these contentions at this stage. In my opinion, they both fail. Regulation 14 of the Wheat Acquisition Regulations provides that :- " For securing the public safety and the defence of the Commonwealth and the Terri- tories of the Commonwealth, for the efficient prosecution of the war, and for maintaining supplies and services essential to the life of the community, the Minister may, from time to time, by order published in the Gazette, make provision for the acquisition by the Commonwealth of any wheat described in the order, and that wheat shall, by force of and in accordance with the provisions of the order become the absolute property of the Commonwealth, freed from all mortgages, charges, liens, pledges, interests and trusts affecting that wheat, and the rights and interests of every person in that wheat (including any rights or interests arising in respect of any moneys advanced in respect of that wheat) are hereby converted into claims for compensation."

Regulation 15 of these regulations provides that All persons having wheat acquired by the Commonwealth in their possession control or disposal on the date of the publication of an order describ- ing that wheat shall, within fourteen days of that publication, furnish to the Board a return in accordance with Form A in the Schedule to these Regulations."

I agree with the submission that reg. 15 can only apply to wheat in existence at the date of the publication of an order of acquisition made under reg. 14. But I do not agree that, as a consequence, reg. 14 means that the Minister is only authorized to make orders

75 CLR 503

acquiring wheat already in existence. Wheat of any particular season is harvested in different parts of Australia in different months, 80 that, if this is the true meaning of reg. 14, the Minister in each season would have to make a number of successive orders or wait until the whole of the wheat had been harvested. Regulation 14 authorizes the Minister to make orders for acquisition from time to time so that he is authorized to make a number of orders. It also authorizes the Minister to acquire any wheat described in the order thus enabling him to acquire wheat by a general or specific descrip- tion (Victorian Chamber of Manufactures v. The Commonwealth 1 There is nothing in the regulation to limit the authority of the Minister to making orders acquiring wheat already in existence. In my opinion, the regulation is wide enough to authorize him to make an order acquiring all or any specific wheat already harvested, or all or any specific wheat to be harvested in the future. If the order relates to wheat of a future harvest, reg. 15 would not be applicable. But the quantity of wheat to be harvested in the future is no doubt capable of expert estimation, and the delivery to the Commonwealth of the wheat when actually harvested is amply safeguarded by the provisions of regs. 16, 17 and 18.

Assuming however that this construction of reg. 14 is wrong,

I am of opinion that the original invalidity of the order was cured by S. 11 of the Wheat Industry Stabilization Act (No. 2) 1946. It was contended that this section infringes the judicial power because it does not amend the law prospectively but attempts to prescribe the construction to be placed upon an existing law by the court and the determination of the meaning of a statute is of the essence of the judicial power. The result of this contention, if sound, would be that the Commonwealth Parliament has no power to pass a declaratory statute which only has a retrospective operation. cannot agree with this contention. It was within the ambit of the defence power for the Commonwealth Parliament, subject to complying with S. 51 (xxxi.) of the Constitution, to acquire all wheat harvested in Australia during hostilities or their aftermath as a means of prosecuting and winding up the war. The order of 16th November 1939 was made to give effect to this legislative purpose, and to authorize the Commonwealth lawfully to acquire the wheat of the 1939-1940 harvest and subsequent harvests. Later it was contended that reg. 14 was not wide enough to authorize the order under which the Commonwealth believed that it was authorized to act. It is trite law that the powers conferred upon the Common- wealth Parliament by S. 51 of the Constitution are plenary powers

1(1943) 67 C.L.R. 335. 75 CLR 504

of legislation as large and of the same nature as those of the

Imperial Parliament itself (R. v. Burah 1 ).

The plenary nature of these powers includes the power to legis- late retrospectively as well as prospectively (Millner v. Raith 2 ). Some limitation is placed upon the power to legislate retrospectively by S. 48 of the Acts Interpretation Act 1901-1941 where the legis- lation is by regulation. But S. 11 of the Wheat Industry Stabiliza- tion Act (No. 2) 1946 is part of a statute of the Commonwealth Parliament and is therefore not subject to S. 48. Possibly it would have been preferable to have amended reg. 14 by inserting the necessary words to make it clear that the Minister was authorized ab initio to make the order of 16th November 1939. But this is in substance the effect of the first limb of the section, and in case this limb fails, the second limb gives the language of the order statutory force and effect and makes this force and effect retrospec- tive to 16th November 1939.

It was also contended that the operation of S. 11 is to divest a wheat grower of a vested right of action in tort against the Com- monwealth, and that the section is not a valid exercise of the defence power because legislation passed at the end of the year 1946 for the protection of the Commonwealth against rights of action which had already accrued could have no connection with the defence of the Commonwealth. But it was decided in Werrin V. The Commonwealth 3 that the Commonwealth Parliament can exercise legislative control over such causes of action. The only difference between Werrin's Case (3) and the present case is that the Commonwealth Parliament was there legislating under the taxation power, which is a power with a constant ambit, whereas the ambit of the defence power fluctuates between a very wide ambit during hostilities, and a comparatively narrow ambit in peacetime. Section 11 was enacted on 14th December 1946. In several recent judgments of this Court it has been pointed out that the contraction of the ambit of the defence power after hostilities is a gradual process. One of the most serious consequences of the recent hostilities is an acute shortage of food in many parts of the world. Wheat is the most important ingredient in bread, which is one of the staple foods, SO that the ambit of the defence power in relation to the acquisition of wheat was still very wide at the end of 1946. But in any event, I think that the Commonwealth Parliament is authorized under the defence power at any future time to legislate retrospectively with respect to past occurrences

1(1878) 3 App. Cas. 889, at p. 904. 2(1942) 66 C.L.R. 1. 3(1938) 59 C.L.R. 150. 75 CLR 505

where the ambit of the power would have been wide enough at the time of such occurrences to enable similar legislation to have been then passed having a prospective operation. Otherwise the Com- monwealth Parliament, after the cessation of hostilities, could not pass an ordinary Indemnity Act indemnifying its subjects against the consequences of bona-fide acts unlawfully done in the prosecution of the war.

For these reasons I am of opinion that the acquisition of the plaintiff's wheat by the Commonwealth was lawful, and its only cause of action is a claim for compensation under the Wheat Acquisition Regulations. Regulation 14 provides that the property of the plaintiff in its wheat is converted into a claim for compensa- tion. Regulation 19 provides a method of determining the amount of compensation. Regulations 14 and 19 give similar rights to compensation to those conferred by regs. 12 and 17 of the National Security (Apple and Pear Acquisition) Regulations which were con- strued by this Court in Andrews v. Howell 1 and Australian Apple and Pear Marketing Board v. Tonking 2. It was held in the latter case that regs. 12 and 17 provided two alternative means of assess- ing the compensation, the one by action in the courts under reg. 12, and the other by the administrative means provided by reg. 17. My own opinion of the legal effect of these regulations appears in the register 3. The present action is to enforce a right of compensation conferred upon the plaintiff by reg. 14 similar to the right of action conferred upon the plaintiff in Tonking's Case (2) by reg. 12. The Commonwealth is a defendant to the action SO that this Court has original jurisdiction under S. 75 (iii.) of the Constitution. Section 51 (xxxi.) of the Constitution provides that the Commonwealth Par- liament may make laws with respect to the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws. This placitum does not of itself give a right of action for compensation. But it requires that when a law of the Commonwealth provides for the acquisition of property it must also provide for just compensation, otherwise the acquisition will be unlawful. The provisions of each law must be judged on their merits. The placitum does not mean that these provisions must necessarily comply in every respect with the principles of the common law relating to the assessment of compensa- tion for the compulsory acquisition of property. But reg. 14 of the Wheat Acquisition Regulations simply converts the interest of the grower in the wheat into a claim for compensation. It does

1(1941) 65 C.L.R. 255. 2(1942) 66 C.L.R. 77. 3(1942) 66 C.L.R., at p. 89. 75 CLR 506

506

HIGH COURT not seek to alter the common law principles in any respect. These principles are therefore applicable to the present action.

The right to compensation arises at the moment of acquisition. LTD. If the property acquired is an ordinary commodity which is being

bought and sold in the market: 'The value of any such article at any particular time can readily be ascertained by the prices being obtained for similar articles in the market" Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam 1 Australian wheat is an ordinary commodity of trade and commerce which before the outbreak of war was being bought and sold in the market for local use and for export. The price obtainable was usually the same whether the wheat was bought for local use or for export, except where the export market was firm and rising, in which case the local merchants often had to pay up to a penny a bushel more than the export price. Since the outbreak of war the Commonwealth has acquired all the Australian wheat under the provisions of the Wheat Acquisition Regulations, and disposed of the whole crop through the Australian Wheat Board. The policy of the Board has been to sell locally that portion of each crop (usually about half) required for home consumption and to sell the balance for export through its London agents. In November and December 1945 and January 1946, therefore, when the plain- tiff's wheat of the 1945-1946 season was acquired, there was no ordinary Australian market for the sale of wheat either for local use or for export. Certain records were produced on subpoena duces tecum from the New South Wales Department of Agriculture which purported to give the prices quoted on the English market at the selling centre in London for Australian wheat f.o.b. Australian ports for the period commencing on 2nd January 1942 and ending on 31st December 1946. The first and fifth columns of these records were admitted by agreement of the parties, subject to relevance, as evidence of their contents. At first I was under the impression that these were quotations of buyers in London of the prices at which they were prepared to purchase Australian wheat. But the Australian Wheat Board were the only sellers of Australian wheat for export during this period, and it later appeared that these figures were simply quotations of the prices at which the Board from time to time entered into contracts for the sale of Australian wheat. If they had been quotations of ordinary buyers, the question would have arisen whether they were evidence of the market value of Australian wheat.

1(1939) A.C. 302, at p. 312. 75 CLR 507

It has been held in this Court in the case of land that the only admissible evidence of collateral facts affecting value is that of concluded contracts (McDonald v. Deputy Federal Commissioner of Land Tax (N.S.W.) 1 ). But in England, in the case of The Cygnus reported in Roscoe, The Measure of Damages in Actions of Maritime Collisions, 3rd ed. (1929), p. 154, Gorell Barnes J. admitted and acted upon evidence of offers to purchase in a collision case. It would seem that evidence of offers is admitted in England. For instance, in Waters v. Thorn 2 Lord Romilly said The test to which this Court looks with the greatest confidence, viz., the price actually bid at a sale by auction, or the offer of a person bona fide desirous to become a purchaser by private contract is want- ing in this case." Further the Imperial Assessment of Compensation Act 1919, S. 2 3, provides that any bona-fide offer for the purchase of land made before the passing of the Act which may be brought to the notice of the arbitrator shall be taken into consideration. In Percival v. Peterborough Corporation (3) the Earl of Reading C.J., said "It" (an offer) is, I suppose, some evidence of what was then thought to be the value of the land." But I need not pursue the point because I think that it is clear that there was not an ordinary market for the sale of Australian wheat, either for local use or for export, at the date of the acquisition of the plaintiff's wheat.

In the absence of a market, the value of the property taken must be ascertained by estimating the sum which a reasonably willing vendor would have been prepared to accept and a reasonably willing purchaser would have been prepared to pay for the property at the date of the acquisition. The value of the property is its value to the seller, SO that it has been said that the most practical form in which the matter can be put is that the plaintiff is entitled to receive the sum which a prudent purchaser would have been willing to give for the property sooner than fail to obtain it (Pastoral Finance Association Ltd. v. The Minister 4 ).

The plaintiff admits that the prices at which the Board sold the wheat of the 1945-1946 crop for export were the best prices that could be obtained, so that, in estimating this sum, the prices which the Board was obtaining at the relevant period f.o.b. Australian ports for the wheat which it was selling for export are evidence of what the value of Australian wheat would have been under the ordinary law of supply and demand in a free market at that

1(1915) 20 C.L.R. 231. 2(1856) 22 Beav. 547, at p. 557 [52 3(1921) 1 K.B. 414, at p. 421. 4(1914) A.C. 1083, at p. 1088. E.R. 1219, at p. 1223]. 75 CLR 508

period. These prices indicate that, if there had been such a market at the date of acquisition, the plaintiff would have been able to sell its wheat at from 9s. 3d. to 9s. 9d. for bulk wheat and from 9s. 6d. to 10s. for bagged wheat. But I think that it is quite impossible to assume that if each harvest had not been acquired by the Commonwealth, the Commonwealth would have allowed the price of wheat for local use to rise to such an extent that the price of bread would have been affected or that the Commonwealth would have allowed any wheat to be sold for export except such wheat as was in excess of local requirements. As I have already said, about half the wheat of each crop was required for this purpose.

I agree with Mr. Barwick that the amount of compensation should be the same whether the hypothetical purchaser should be considered to include all the possible purchasers who would have existed if there had been an ordinary market, or whether the circumstances were such that the Australian Wheat Board should be considered to be the only possible purchaser. I think that the proper approach to the problem is to assume that the Board, which was in possession of all the facilities for handling the wheat, was the only possible purchaser, but that the growers as reasonably willing vendors could only be expected voluntarily to sell their wheat to the Board at the same price as they would have obtained if there had been an ordinary market (Vyricherla's Case 1; Geita Sebea v. Territory of Papua 2 ). But in estimating the price which the growers could reasonably expect to receive in such a market, all the probable circumstances must be taken into account.

In the first place, it is necessary to consider the legislation of the Parliaments of the Commonwealth and of the States passed to give effect to the conference referred to in the recitals to the Com- monwealth Wheat Industry Assistance Act 1938. This legislation was summarized and explained in the judgments of this Court and of the Privy Council in Deputy Federal Commissioner of Taxation (N.S.W.) V. W. R. Moran Pty. Ltd. 3 and it is unnecessary to cover the same ground again. The purpose of this legislation was to ensure to wheat growers a payable price for wheat, and at the same time, to prevent speculation in flour and stabilize the price of bread. It is apparent that a price for wheat f.o.r. Australian ports of 5s. 2d. per bushel for bagged wheat was considered to be a payable price, and to be a figure at which the price of flour and bread for local use could be fixed at a reasonable sum. To ensure to wheat growers a payable price for wheat when the export value of wheat f.o.r.

1(1939) A.C., at pp. 316, 317. 2(1941) 67 C.L.R. 544. A.C. 838; 63 C.L.R. 338. 3(1939) 61 C.L.R. 735; (1940) 75 CLR 509

Australian ports was below 5s. 2d., taxes were imposed upon wheat manufactured into flour and on stocks of flour in existence in Australia by the Flour Tax Act 1938; and the Flour Tax (Stocks) Act 1938; and upon flour imported into Australia by the Flour Tax (Imports and Exports) Act 1938. The formula for the tax was as follows: "The rate of tax, not in any case exceeding £7 10s. per ton of flour, shall be at such rate per ton of flour as the Minister, from time to time, and in accordance with a recommendation by the Committee, declares, by notice published in the Gazette, to be the amount by which the price per ton of flour based upon the price of wheat per bushel free on rails at Williamstown, in the State of Victoria at the time of the recommendation by the Committee, is less than what, in the opinion of the Committee, the price of flour would be if the price of wheat per bushel free on rails at Williamstown were 5s. 2d."

To meet the case when the value of wheat f.o.r. Australian ports rose above 5s. 2d. per bushel, provision was made by the Wheat Tax Act 1938 for a tax upon wheat grown in Australia, and, on and after a date to be fixed by proclamation, sold to a wheat merchant; and by the Flour Tax (Imports and Exports) Act 1938, B. 4 (b) for a tax upon all wheat exported from Australia, on or after a date to be fixed by proclamation, not being wheat upon which tax was imposed by the Wheat Tax Act 1938. The formula for these taxes was as follows:- The rate of tax, not in any case exceeding one shilling per bushel of wheat shall be at such rate per bushel of wheat as the Minister, from time to time, and in accord- ance with a recommendation by the Committee, declares, by notice published in the Gazette, to be the amount which bears the same proportion to the excess of the price of a bushel of wheat free on rails at Williamstown in the State of Victoria, at the time of the recommendation by the Committee over five shillings and twopence as the quantity of wheat which, in the opinion of the Committee, will be consumed in Australia (whether as wheat or as products derived from wheat) during the twelve months following the preceding first day of October bears to the total crop which, in the opinion of the Committee, will be harvested during that period." The Act relating to the imposition assessment and collection of all these taxes was the Flour Tax (Wheat Industry Assistance) Assessment Act 1938. Section 12 (2) of this Act pro- vided that the tax upon wheat exported from Australia on and after a date to be fixed by proclamation should be paid by the exporter of the wheat. Section 13 (2) provided that the tax imposed by the Wheat Tax Act 1938 should be paid by the wheat

75 CLR 510

merchant to whom the wheat was sold. The Wheat Industry Assistance Act 1938 provided for the destination of the proceeds of these taxes. Section 5 provided for the opening of a fund to be known as the Wheat Industry Stabilization Fund, into which there should be paid all moneys from time to time collected under the Flour Tax (Wheat Industry Assistance) Assessment Act 1938. Section 6 (1) provided that, subject to this Act, the moneys standing to the credit of the fund should be applied in making payments to the States as grants of financial assistance. Section 6 (3) pro- vided that there should be kept in the fund an account to be known as the Wheat Industry Special Account to which there should be credited out of the receipts of the fund in the first year the sum of £500,000, and in the following four years such amounts not exceeding this sum as the Minister determined. Section 6 (4) provided that there should be kept in the fund an account to be known as the Wheat Tax Account, to which should be credited out of the receipts of the fund all moneys collected under the Flour Tax (Wheat Industry Assistance) Assessment Act 1938 as a tax upon wheat exported from Australia or upon wheat produced and sold in Australia. Section 7 provided for the allocation from the Wheat Industry Special Account between the States of New South Wales, Victoria, South Australia and Western Australia. The amounts paid in the first year were to be applied in the provision of relief to distressed wheat growers and in the subsequent years towards meeting the cost of transferring wheat farmers from land unsuitable for the economic production of wheat, or to arranging for such land to be used for other purposes. Section 8 provided for payments from the Wheat Tax Account to the States by way of financial assistance upon condition that these amounts were distributed to the flour millers in these States in accordance with such methods of distribution as was decided by the Minister after advice from the State Minister. Section 10 provided that where the Governor-General was satisfied, inter alia, that (b) a State had not taken steps adequately to protect consumers of flour and other wheat products against excessive prices in respect of those com- modities, the Governor-General might, by notice in the Gazette, suspend payments to that State under the Act during such periods as, in his opinion, (d) those consumers were not protected against such excessive prices. At the same time as this Commonwealth legislation, the States passed legislation for the purpose of fixing the minimum and maximum prices of flour and the prices of bread. This legislation took the form of authorizing the Governors of the States to make proclamations for this purpose. Pursuant to this

75 CLR 511

authority a number of proclamations were made in the various States.

It is clear from this legislation that in 1938 the Governments of the Commonwealth and the States took the broad view that while the export value of wheat was below 5s. 2d. per bushel f.o.r. Australian ports, the Australian public as consumers of bread should be taxed indirectly to provide a subsidy for wheat growers; but that, if and when the export value of wheat exceeded 5s. 2d., the price which the wheat growers would otherwise have received for their wheat should be reduced by the wheat merchant or exporter having to pay a tax not exceeding 1s. per bushel on the wheat which he purchased, and that the proceeds of this tax should be used as a subsidy to keep down the local price of flour.

On 21st October 1940 a declaration was made under the Flour Tax Act 1938 and the Flour Tax (Imports and Exports) Act 1938 by the Minister that the amount by which the price per ton of flour based upon the price of wheat per bushel free on rails at Williams- town in the State of Victoria on that date was less than what, in the opinion of the Committee, the price of flour would be if the price of wheat were five shillings and twopence, was two pounds eight shillings and tenpence. It is common ground that the price per bushel of bulk wheat is threepence less than the price per bushel of bagged wheat. As I understand the evidence, the declaration was made on the basis that the export value of wheat f.o.r. Aus- tralian ports was three shillings and elevenpence farthing per bushel for bulk wheat. No subsequent declaration was made under these Acts although there was a gradual rise in the export value of wheat. This was because all wheat was being delivered to and sold by the Australian Wheat Board in accordance with the Wheat Acquisition Regulations, and the Board adopted the policy of keeping the price of wheat sold for flour for local consumption pegged at the arbitrary price of three and elevenpence farthing on a bulk basis so that the flour tax would remain constant at £2 8s. 10d. per ton, despite the fact that during and after the first half of 1944, the export value of Australian wheat rose above 4s. 11d. per bushel f.o.r. Australian ports for bulk wheat. In consequence no proclama- tions were made bringing the Wheat Tax Act 1938 or the Flour Tax (Imports and Exports) Act, S. 4 (b), into operation. But provision was made by the Wheat Industry (War-time Control) Act 1939, as amended, to divert to the Board the payments of flour tax which would otherwise have been made to the States for distribution among the wheat growers, so that these moneys could be added to the funds available for the payment of compensation to the growers under reg. 19 of the Wheat Acquisition Regulations.

75 CLR 512

At the date of the acquisition of the plaintiff's wheat of the 1945- 1946 crop (1) The export of flour without a licence had been prohibited by the Export (Flour) Regulations as from 3rd October 1940. (2) The price of bread was fixed in the various States by orders made under the National Security (Prices) Regulations, or proclamations made under the State legislation already mentioned, which would not allow flour millers to pay more than 3s. 111d. per bushel whilst the flour tax remained at £2 8s. 10d. per ton, or to pay more than 4s. 11d. per bushel for bulk wheat if there was no tax. (3) There was in force Prices Regulation Order No. 1015, known as the ceiling prices order, which fixed the price of all goods and services as those prevailing on 13th April 1943. (4) The export value of Australian wheat f.o.b. Australian ports was about 9s. 6d. per bushel for bulk wheat (the f.o.b. price is approximately one- third of a penny less than the f.o.r. price); SO that if the price of wheat for local use was allowed to rise to this value, it was probable that the Wheat Tax Act and the Flour Tax (Imports and Exports) Act, S. 4 (b) would be proclaimed. The tax under these Acts, if half of the crop was exported, would reach the maximum rate of 1s. per bushel when the export price was 7s. 2d. (5) There was no prohibition of the export of wheat required for local use, but this was because no prohibition was necessary while the whole of the wheat was being disposed of by the Australian Wheat Board.

I agree with Mr. Barwick that the plaintiff should not be pre- judiced by the artificial pegging of the price of wheat for manufac- ture into flour at 3s. 111d. SO that the flour tax should remain constant at £2 8s. 10d. per ton, because the manifest intention of the Flour Tax Act was that this tax should disappear when the export value of wheat f.o.r. Williamstown reached 5s. 2d. per bushel. But I agree with Mr. Mason that in estimating the price which the plaintiff could reasonably have expected to receive for his wheat upon a voluntary sale, importance must be attached to the fact that the legislation of 1938 proceeded upon the basis that a price of 5s. 2d. per bushel f.o.r. Williamstown would give the wheat grower a fair return and allow flour to be manufactured and sold in Australia at a figure which would allow the price of bread to be fixed at a reasonable sum. I also agree with Mr. Mason that importance must be attached to the fact that at the date of acquisition there was a general system of price control operating under the National Security (Prices) Regulations to prevent the risk of inflation in Australia under war conditions, and that in particular it was essential to control the prices of such necessities of life as food, clothing, and shelter.

75 CLR 513

I must assess the compensation in as practical a manner as possible on such materials as are available to me. The whole potential value of a commodity like wheat to the owner lies in the price which he can reasonably expect to obtain on a sale soon after the crop has been harvested. The total harvest for 1945-1946 was 123 million bushels, and of that amount about one-half was required for local use. I think that it must be assumed that if this harvest had not been acquired by the Commonwealth, purchasers in an ordinary market could only have reasonably expected to be allowed to export half the wheat they purchased. I also think that it must be assumed that the maximum price fixed for wheat required for local consumption would not have been allowed to exceed 5s. 2d. per bushel for bagged wheat f.o.r. Australian ports. In April 1943, when the ceiling prices order came into force, the export value of bulk wheat f.o.b. Australian ports was about 4s. 3d. SO that if there had been an ordinary market, the price of wheat for local use would have been about 4s. 3d. and this order would in the first instance, have pegged the price of wheat at this figure. My own view of the importance of price fixing in relation to the assessment of compen- sation is stated in Johnston Fear &Kingham &The Offset Printing Co. Pty. Ltd. v. The Commonwealth 1. Since the price of wheat was kept fixed at 3s. 111d. by the Australian Wheat Board for administrative reasons and not to prevent inflation, I think that

I should assume for the purpose of compensation that the maximum price for wheat for local use in an ordinary market under war con- ditions in 1945-1946 would have been that contemplated by the 1938 legislation, that is to say, 5s. 2d. per bushel f.o.r. Australian ports for bagged wheat.

On these assumptions the greatest sum which the plaintiff could reasonably expect a prudent purchaser to pay for its wheat at the date of acquisition sooner than fail to obtain it would be as follows: - 5249 bushels of bagged wheat @ 5s. 2d. per bushell £1,356 5249 1893 1893

I think that the estimate made by the plaintiff of 9d. per bushel for rail and handling charges amounting to £539 13s. 9d. may be slightly on the low side but that it can be accepted. Deducting this amount from the sum of £5,279 7s. leaves a balance of £4,740.

1(1943) 67 C.L.R. 314, at p. 334. 75 CLR 514

But I have not SO far deducted any sum for taxation and it is reasonable to assume that if the export value of bagged wheat had been 9s. 9d. per bushel, the Flour Tax (Imports and Exports) Act, S. 4 (b) would have been proclaimed, and that the purchaser of wheat for export would have had to lower his price for the 7,132 bushels of wheat he purchased for export by 1s. per bushel, amount- ing to £357, and if this sum is deducted, the balance is reduced to £4,383.

I was referred by Mr. Mason to certain matters which occurred in 1946 after the date of acquisition (1) On 22nd May 1946 regul- ations were made under the Customs Act 1901-1936 prohibiting the export of flour and wheat until the intending exporter produced to the Collector of Customs a covering approval issued by the Depart- ment of Commerce and Agriculture. (2) The Wheat Export Charge Act came into operation on 9th August 1946. This Act was amended by the Wheat Export Charge Act (No. 2) 1946 which was assented to on 14th December 1946 but was deemed by S. 2 to have come into operation on 9th August 1946. Section 4 (1) (aa) provides that a charge should be imposed and levied and paid on all wheat harvested on or after 1st October 1945 and before 1st October 1947 and expor- ted from the Commonwealth by any person other than the Australian Wheat Board on or after 1st December 1945. Section 4 (2) provides that subject to a lower rate being prescribed by the regulations the rate of the charge per bushel of wheat exported by any person other than the Board should be fifty per cent of the amount by which the price per bushel, at the date of export, for export of fair average quality bagged wheat free on rail at the port of export, as declared by the Board, or such lower rate as is prescribed

exceeds 5s. 2d. (3) The Wheat Tax Act 1946 was assented to on 14th December 1946, but S. 2 provides that the Act should be deemed to have come into operation on 9th August 1946. Section 3 defines wheat to mean wheat harvested on or after 1st October 1945 and before 1st October 1947. Section 4 provides that a tax should be imposed and levied and paid in respect of all wheat which has been acquired or is acquired by the Commonwealth, and that the tax shall be payable by the grower of the wheat. Section 5 (2) provides that the total amount of the tax to be levied in respect of wheat of a season shall be ascertained by multiplying an amount equal to fifty per cent or such lower percentage as is prescribed, of the amount by which the average price per bushel f.o.r. at the ports of export for f.a.q. bagged wheat of all the wheat of that season exported by the Board, or such lower price as is prescribed, exceeds 5s. 2d. by the total of the number of bushels of wheat of that season,

75 CLR 515

and of the wheat equivalent

of wheat products manu- factured from wheat of that season, exported by the Board or sold by the Board for export or for manufacture into wheat products for export. Section 5 (3) provides that the rate of the tax in respect of wheat of a season shall be an amount per bushel of wheat arrived at by dividing the total amount of tax to be levied in respect of wheat of that season

by the total number of bushels of wheat of that season in respect of which the tax is imposed. Section 5 (5) provides for the Minister notifying in the Gazette a provisional rate of tax. Section 6 1 provides that the Common- wealth or the Board may deduct any amount of tax payable by any grower from any moneys payable by the Commonwealth or the Board to that grower on any account whatsoever, and any amount so deducted shall be applied in payment, or part payment, of the tax so payable. By notification published in the Commonwealth of Australia Gazette on 17th January 1947, the Minister notified that the provisional rate of tax in respect of wheat of the season commencing on 1st October 1945 was one shilling one and one-eighth pence per bushel. (4) Section 18 of the Wheat Industry Stabilization Act 1946 which contemplates that a price of 5s. 2d. f.o.r. Australian ports for bagged wheat is a fair return to the wheat grower.

The question arises whether these subsequent matters should be taken into consideration in assessing the compensation under reg. 14.

I venture to repeat what I said in Minister for the Army v. Parbury Henty &Co. Pty. Ltd. (1) :- The right to compensation arises at the moment of acquisition

The amount of compensation, being a matter of assessment, can, like damages, be calculated in the light of any subsequent facts to the extent to which they throw light upon the items of value which can properly be taken into account in the calculation, having regard to the circumstances existing at the date of acquisition." In Willis v. The Common- wealth 2 Dixon J. has collected a number of recent cases showing the growing inclination of the courts to prefer subsequent facts to prophecies where such facts are available at the hearing. It may be that, speaking generally, Acts of Parliament passed subsequently to the date of acquisition would not be relevant, but in the present case the existing legislation SO clearly indicated that a tax would be placed on the export of wheat when the price exceeded 5s. 2d. per bushel that in my opinion, it is permissible to take the Wheat Export Charge Act into account. Under this Act a purchaser of the plaintiff's wheat would have had to reduce his price by at least 2s., amounting to £714 on the 7,132 bushels he purchased for export thereby réducing the previous balance of £4,383 to £4,026.

1(1945) 70 C.L.R. 459, at p. 514. 2(1946) 73 C.L.R. 105, at p. 116. 75 CLR 516

The addition of the sums which the plaintiff has already been paid and will receive under reg. 19, apart from taxation, is £4,925 4s. NELUNGALOO

From this sum the Board proposes to deduct £805 18s. 2d. for tax at the source under the Wheat Tax Act 1946 leaving a balance of £4,119 5s. 11d. Strictly speaking the question whether the Board is lawfully entitled to deduct this tax at the source, or whether, even if the tax cannot lawfully be deducted at the source, the plaintiff is nevertheless liable for the tax, does not affect its quantum (Jordan V. Limmer &Trinidad Lake Asphalt Co. Ltd. 1 ). But I was asked by Mr. Mason to deal with the only contention raised against its validity, that is that the Wheat Tax Act 1946 is invalid because it infringes S. 55 of the Constitution. This section provides, SO far as material, that laws imposing taxation shall deal only with the imposition of taxation, and that any provision therein dealing with any other matter shall be of no effect. It also provides that laws imposing taxation shall deal with one subject of taxation only. The Wheat Tax Act is a law imposing taxation, but it is in my opinion an Act which deals only with the imposition of one subject of taxation and with provisions incidental and ancillary to the assessment of the tax. It has recently been held by this Court in Cadbury-Fry-Pascall Pty. Ltd. v. Federal Commissioner of Taxation 2 that such provisions do not infringe S. 55. In my opinion the whole of the Act is valid. Even if the incidental provisions infringe S. 55, this would not invalidate the taxing provisions. But the Wheat Tax Act 1946 and the Wheat Export Charge Act 1946 provide for taxation in the two alternatives of a tax on wheat acquired and on wheat not acquired by the Commonwealth, in each case for export, SO that in estimating the amount of compensation to which the plaintiff would be entitled under reg. 14 and comparing this amount with that which it will receive under reg. 19, I think that all questions of tax should perhaps be left out of account, and a comparison made between the two sums of £4,740 and £4,925. This comparison shows that the plaintiff will receive under reg. 19 a slightly larger sum than that to which it would be entitled upon an assessment under reg. 14, SO that the action fails.

It is therefore unnecessary to consider the defence that, by accept- ing the first and second advances, the plaintiff must be taken to have elected to accept compensation under reg. 19 in lieu of exercis- ing his right to sue for compensation under reg. 14.

But I think that I should add that the statement of claim contains a claim for interest. The Wheat Acquisition Regulations do not

1(1946) 175 L.T. 89. 2(1944) 70 C.L.R. 362. 75 CLR 517

authorize the Court to award interest. Neither do they contain any provision purporting to prohibit the Court from awarding interest. The present views of the Court as a whole upon the question whether just terms require that the Court should have a discretion to award interest where there is no delay in payment of compensation are summarized by the Chief Justice in Grace Bros. Pty. Ltd. v. The Commonwealth 1. It is apparent from this summary that the only view for which there is at present a majority is the view that the Court, in the absence of any provision in the regula- tions, can award interest where the contract would have been specifically enforceable if the property had been acquired not by compulsion but voluntarily, and the Court of Equity could have awarded interest on equitable principles. A voluntary contract for the sale of wheat would not be SO enforceable SO that I have no power to award interest in this action. However, even if I had the power, I do not think that this would be a proper case in which to award interest. The plaintiff is entitled to slightly less than 6s. per bushel for his wheat after deducting all expenses of realization and taxation, and of this amount it received an immediate advance of 4s. 1d. per bushel and either received or became entitled to but would not accept subsequent advances at reasonable intervals leaving about 1}d. per bushel still unpaid, and I am not satisfied that the plaintiff could have converted its wheat into money on an ordinary market more speedily than the Board has realized the whole crop and distributed the net proceeds.

As this case may go further, I think that I should also add that

I accept all the witnesses as honest and reliable witnesses. In particular I was very impressed with the fair and frank manner in which Mr. Perrett, the General Manager of the Board, gave his evidence. But it is not a case in which there is any real conflict on the facts. The difficulty lies in their application.

For these reasons I give judgment for the defendants with costs. From that decision the plaintiff appealed to the Full Court. Barwick K.C. and Macfarlan, for the appellant. Barwick K.C. There is no dispute that the amount of the railage and storage charges claimed by the appellant is correct. The subject wheat should be valued by assuming an open market and that on such market the appellant would have received export parity less the railage and storage charges. It is not conceded that

1(1946) 72 C.L.R. 269, at pp. 281, 282. 75 CLR 518

legislation enacted in 1946 relating to the wheat industry and which, among other things, purported to validate an order made by the Minister in 1939, could affect the market. Regard must be had to the possibilities and probabilities of the market, and full effect must be given to the Wheat Tax Act 1938 and other relevant legislation passed in that year. The taking by the appellant of an advance under the order made under the National Security (Wheat Acquisi- tion) Regulations was not an election finally to accept a determination by the Minister under reg. 19. A determination by the Minister would be void, or, alternatively, could be accepted or rejected by the grower. The whole scheme of the legislation of 1938 was to allow the market to operate quite freely and normally. The maximum amount of tax payable under the Wheat Tax Act 1938 was one shilling per bushel, SO that the export parity prices of 9s. 9d. per bushel bulk and 10s. per bushel bagged would at most have been respectively reduced by one shilling. Those prices, according to the evidence, could not have made any very substantial impact upon the price of bread. There was no shipping difficulty, since buyers of wheat had freight, and more wheat could have been absorbed abroad than was in fact exported. The home consump- tion price followed export parity. Even if there is only one possible purchaser the same method of valuing must be applied (Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapa- tam 1 ). It should be assumed that there is an open market and that the only possible purchaser is the Crown (Geita Sebea v. Terri- tory of Papua 2 ). " 'Free market" is a market free from Govern- ment acquisition and from Government control that is specifically directed towards controlling the value of the commodity. Export control, but not price-fixing, is assumed. The scheme of the 1938 legislation was not to reduce the price to the grower but to enable the grower to receive the full export price. Under that legislation the miller had to pay sufficient to have his wheat accord with the export price, subject to flour tax (Deputy Federal Commissioner of Taxation (N.S.W.) v. W. R. Moran Pty. Ltd. 3; on appeal W. R. Moran Pty. Ltd. v. Deputy Federal Commissioner of Taxation (N.S.W.) 4 ) The grower's price is affected only by wheat tax and for him there was no division of the market into local and export. "Just terms require payment at the price the grower would receive in an open market free from any Commonwealth legislative controls directed to reducing the value of his wheat.

1(1939) A.C. 302, at pp. 313, 316, 2(1941) 67 C.L.R. 544, at pp. 554, 3(1939) 61 C.L.R. 735, at pp. 752, 4(1940) A.C. 838, at pp. 850, 851 ; 63 C.L.R. 338, at pp. 342, 343. 75 CLR 519

Just terms " cannot be obtained by taking the average between the local price and the export price. A possible ban on the export of flour or wheat subject to a license under the Customs Act would be irrelevant because, if there were an exportable surplus, export licenses would have to be granted. On the evidence any grower could have obtained the prices obtained by the Board. This case is governed by the word " compensation" in reg. 14 of the National Security (Wheat Acquisition) Regulations, not by S. 51 (xxxi.) of the Constitution. It may, perhaps, be that the National Security (Wheat Acquisition) Regulations are valid because they are indis- tinguishable from the National Security (Apple and Pear Acquisition) Regulations (Australian Apple and Pear Marketing Board v. Ton- king 1). The word "compensation" as used in reg. 14 implies a right of action, and, doubtless, jurisdiction in the Court under S. 75 (iii.) to assess it. It is assumed that although "just terms' may be less than common law compensation (Grace Bros. Pty. Ltd. V. The Commonwealth 2 ) common law compensation would be "just terms." The value of wheat held by growers would be affected only by existing legislation. The price-fixing that existed does not really bear upon the problem of value (Johnston Fear &Kingham &The Offset Printing Co. Pty. Ltd. v. The Common- wealth 3 ). Prices Regulation Order No. 1015 is not relevant for there is no evidence that wheat was "declared goods." Wheat does not come within the general declaration of goods as in Victorian Chamber of Manufactures v. The Commonwealth (Prices Regula- tions) 4 being "perishable primary produce" within the meaning of par, (b) of the general declaration. Only goods in esse and actually under the control of someone in Australia became declared goods. For the order to regulate the whole of the wheat available for sale it would be necessary to assume that all the growers were identical-a new grower would not fall within the first part of the order, not being a person who dealt with wheat on substantially identical terms and conditions on or before the prescribed date (Fraser Henleins Pty. Ltd. v. Cody 5 ). "Cost " would provide no certain standard at all, and par. 4 of the order would be inopera- tive if not invalid so far as a new grower was concerned. The summation of the judge of first instance of 1938 legislation is inaccurate. The judge wrongly assumed that if the wheat had not been acquired only half could have been exported. The tax, since it does not touch value, should not have been deducted, but allow-

1(1942) 66 C.L.R. 77. 2(1946) 72 C.L.R. 269. 3(1943) 67 C.L.R. 314. 4(1943) 67 C.L.R. 335, at pp. 338, 5(1945) 70 C.L.R. 100. 75 CLR 520

520

HIGH COURT

OF A. ance made in the judgment by way of set-off. The order acquiring

the wheat was invalid and was not validated. Under these regu- lations if the order was good the grower was automatically dis- possessed; it was not a case of the property passing when he delivered it.

[McTIERNAN J. referred to McClintock v. The Commonwealth 1 ]. The Wheat Tax Act 1946 only imposes a tax on acquired wheat, therefore if the subject wheat was not acquired wheat it would not be liable to tax. Regulation 15 makes it clear beyond question that reg. 14 refers only to wheat in existence at the date of the order: see also reg. 16. Victorian Chamber of Manufactures V. The Commonwealth (Prices Regulations) 2 shows that it was because the Prices Regulations did not require any description that the general declaration was permissible.

[McTIERNAN J. referred to Peanut Board v. Rockhampton Harbour Board 3 ].

A reference to " all wheat which is harvested in Australia on or after the date of the publication of this order in the Gazette does not describe anything. The area covered by the order must be shown therein. Section 11 of the Wheat Industry Stabilization Act (No. 2) 1946 is not an amendment of reg. 14 and does no more than purport to enforce a construction of the regulation which would make the order good. This is the essence of judicial power (Cooley's Constitutional Limitations, 8th ed. (1927), vol. 1, pp. 188-194) and is an attempt to prevent the Court from deciding the true meaning of reg. 14. It was not within the defence power in December 1946 to take away rights of action in tort that had accrued as far back as 1939. No question of power arose in Werrin v. The Common- wealth 4. Under the order the wheat is divested from the grower on harvesting. When he delivers the wheat he does not intend to pass the property therein but merely delivers the Board's wheat to the receiver as required. That distinguishes this case from McClin- tock v. The Commonwealth (1). Thus the taking may be tortious and the matter is outside the Tax Act. The Wheat Tax Act 1946 is invalid because it imposes taxation on wheat acquired because it was acquired. Compensation should be determined upon the basis that the appellant's wheat and his wheat only had been acquired. Payment of compensation having been delayed the appellant is entitled to interest. Views of the members of the Court as to interest are summarized in Grace Bros. Pty. Ltd. v. The Common- wealth 5.

1(1947) 75 C.L.R. 1. 2(1943) 67 C.L.R., at p. 340. 3(1933) 48 C.L.R. 266. 4(1938) 59 C.L.R. 150. 5(1946) 72 C.L.R., at pp. 281-283. 75 CLR 521

Macfarlan. Section 6 of the Wheat Tax Act 1946 offends 8. 55 of the Constitution since it deals with matters other than the imposition of taxation. Section 6 deals with the collection of tax and the detailed procedure necessary therefor and SO does not deal with the imposition of taxation. The imposition is complete before S. 6 operates. Cadbury-Fry-Pascull Pty. Ltd. v. Federal Commis- sioner of Taxation 1 decided only that the Income Tax Assessment Act 1936-1939 was not an Act imposing taxation. Sections 53 and 55 of the Constitution show that the framers of the Constitution had in mind the parliamentary system in the United Kingdom, that is, that the lower house should have control over the actual imposi- tion of the taxation or the voting of money. If a law imposing taxation did correctly include matters relating to collection the Senate could not amend even a minor provision of an Assessment Act (Federal Commissioner of Taxation v. Munro 2 ). The dis- tinction between the position under the Constitution and the Finance Acts of the United Kingdom is shown in Osborne v. The Commonwealth 3.

Mason K.C. and A. R. Taylor K.C. (with them R. Else Mitchell), for the respondents.

Mason K.C. A free market can exist only in normal times. During war, limitations must be imposed upon the marketing of, inter alia, wheat. During the war shipping was very short and was conducted by governments and governmental bodies. A grower was, as a prudent person, compelled to put his wheat into the Govern- ment's wheat pool to obtain the best price. Under the Customs Act the Commonwealth could at any time forbid the exportation of wheat which was required for local consumption. The price of wheat on the local market was controlled by the price of bread which in its turn was fixed from time to time under statute. The mere fact that the acquisition was by the Government does not entitle the grower to a price higher than the price he would have obtained from an ordinary purchaser. A price fixed by law becomes the market price, and it is also a fair price. It may be different where the fixation of the price is ad hoc for the purpose of determining just terms.

"Just terms " give the grower the market price. The question of price fixing was considered in Johnston Fear &Kingham &The Offset Printing Co. Pty. Ltd. v. The Commonwealth 4. Decisions by courts of the United States of America, conveniently

1(1944) 70 C.L.R. 362. 2(1926) 38 C.L.R. 153, at p. 190. 3(1911) 12 C.L.R. 321, at p. 336. 4(1943) 67 C.L.R. 314. 75 CLR 522

collected in the Harvard Law Review, (1946) vol. 60, p. 132, all turn on the distinction drawn in Johnston Fear &Kingham &The Offset Printing Co. Pty. Ltd. v. The Commonwealth 1 between an ordinary article of commerce and an article that has certain special value to the owner himself. The export price obtained by the Board was the best obtainable. The appellant as to half of its wheat in the pool was credited with the export price actually realized which was higher than the price at the date of acquisition. According to Australian Apple and Pear Marketing Board v. Tonking 2 the appellant would only be entitled to the price realized on its wheat, that is, if it could be identified; but the appellant's wheat could not be identified after having been put into the pool. The appellant delivered its wheat to the Board in accordance with the regulations-it was a voluntary act (McClintock v. The Common- wealth 3 ). But more significant still, the appellant then lodged its claim for compensation under reg. 19 it received advances which were payable as compensation under the regulations and now seeks to retreat from that position. If a grower lodges his claim for com- pensation under the regulations and if he accepts payment of an advance under the regulations he cannot afterwards change his mind and stand outside the regulations. Regulation 19 is valid qua acquisi- tion. The onus of proving that the appellant got other than a fair price is upon the appellant. The fixing of the price of wheat and bread has nothing to do with the Commonwealth's acquiring any- thing, but was a war-time measure under the defence power for the feeding of the public. Prices Regulation Order No. 1015 was an omnibus price-fixing order to prevent increases in prices under war- time conditions. The arrangement by the Board that each grower would receive payment on the basis that at least fifty per cent of his wheat was exported was fair and reasonable. From 1st January 1942 the price of wheat for local consumption has consistently been 3s. 111d. per bushel, plus tax. The appellant has not at any time made any complaint with regard to handling charges or any other item of expenses. A convenient summary of the effect of the relevant 1938 legislation appears in Deputy Federal Commissioner of Taxation (N.S.W.) v. W. R. Moran Pty. Ltd. 4; and, on appeal W. R. Moran Pty. Ltd. v. Deputy Federal Commissioner of Taxation (N.S.W.) 5 The scheme was to stabilize the price of wheat, irrespective of whether the wheat was for local consumption or export, at 5s. 2d. per bushel. The relevant legislation passed in 1946 provides for

1(1943) 67 C.L.R., at pp. 322, 323, 2(1942) 66 C.L.R. 77. at pp. 344, 345. 3(1947) 75 C.L.R. 1. 4(1939) 61 C.L.R., at pp. 753-757. 325, 327, 328, 330, 334. 5(1940) A.C., at p. 853 ; 63 C.L.R., 75 CLR 523

the stabilization of wheat prices over a period of years. The tax under the Wheat Tax Act 1946 is paid into the stabilization fund to ensure to the growers a guaranteed price. The tax is a tax on the growers but it is in respect of wheat acquired by the Board. It is not taxation on the compensation as such. The effect of the Act is to impose a tax only upon wheat exported, but the incidence of the charge is spread over all the growers. The effect of the decision in Australian Apple and Pear Marketing Board v. Tonking 1 is that growers of wheat have alternative claims under reg. 14 and reg. 19. A choice must be made at the inception and having made his choice a grower is bound thereby. Compensation under reg. 14, referred to on behalf of the appellant as common law compensation, is compensation on just terms. Even if the method of compensation under reg. 19 were exclusive and bad, reg. 14 would still be available. It is therefore immaterial whether reg. 19 is exclusive or alternative. The appellant was bound by the election that it made when it lodged its claim and received advances. Advances SO made under reg. 19 are an integral part of the pooling scheme. Regulation 19 is not bad because it is not exclusive and is alternative to reg. 14. Under reg. 14 the grower is entitled to the cash value of his wheat as at the date of acquisition, but under reg. 19 there is an alternative method by which the grower takes the benefit of the realizations, that is to say the rise or fall in the market. The decisions in Andrews v. Howell 2 and Australian Apple and Pear Marketing Board v. Tonking (1) mean that compensation can be obtained under reg. 14, or a claimant may voluntarily accept his compensa- tion under reg. 19, but that compensation cannot be obtained by a grower under both reg. 14 and reg. 19. The appellant has received compensation under reg. 19 and cannot, therefore, have compensa- tion under reg. 14. It is immaterial for the purposes of Prices Regulation Order No. 1015 whether the wheat was or was not in existence at the date of the promulgation of that order. The order made in November 1939 has, since its promulgation, been consis- tently acted upon by all persons and bodies concerned. If a doubt as to construction subsequently arises it is competent for the Parliament to say, as it has done by S. 11 of the Wheat Industry Stabilization Act (No. 2) 1946, that that which everybody thought to be valid shall be valid. It has not been disputed that the Com- monwealth did have power under the defence power to acquire wheat coming into existence, when it came into existence, and if the machinery to acquire was defective because the order made in

1(1942) 66 C.L.R. 77. 2(1941) 65 C.L.R. 255. 75 CLR 524

November 1939 did not properly describe the crop, then that defect was removed by S. 11 of the 1946 Act.

A. R. Taylor K.C. [He referred to and discussed at length the following Acts :-Flour Tax (Wheat Industry Assistance) Assessment Act 1938; Flour Tax Act 1938; Flour Tax (Stocks) Act 1938 Flour Tax (Imports and Exports) Act 1938; Wheat Tax Act 1938 Wheat Industry Assistance Act 1938; Wheat Industry (War-time Control) Act 1939; Wheat Tax (War-time Assessment) Act 1940; Wheat Tax (War-time) Act 1940 Wheat Industry (War-time Control) Act 1940; Wheat Subsidy Act 1944; Wheat Tax (War-time) Repeal Act 1944; Wheat Industry (War-time Control) Act 1944 Wheat Industry Stabilization Act 1946; Wheat Export Charge Act 1946; Wheat Industry Assistance Act 1946 Wheat Tax Act 1946; Wheat Export Charge Act (No. 2) 1946; and Wheat Industry Stabilization Act (No. 2) 1946.]

So far only S. 31 of the Wheat Industry Stabilization Act 1946 has been proclaimed. The Wheat Tax Act 1946 is not a law with respect to compensation, but is merely part of a plan to impose a tax on wheat which is exported by the Board or by any other person. It is purely a taxing Act. The tax levied under the Wheat Export Charge Act is not imposed in relation to compensation or in relation to the acquisition of property as part of the means of determining the price to be paid, but is merely part of a scheme for levying taxes in relation to the export of wheat where the price being paid is far in excess of the domestic price. The amount of compensation paid for the acquisition of property might be affected by other Commonwealth legislative powers and that would not affect the justness of the compensation.

Barwick K.C., in reply. The appellant does not support the view that Australian Apple and Pear Marketing Board v. Tonking 1 was well decided, but, of course, cannot in this Court re-open the matter. The decision was that reg. 14 was compulsory and binding on the Commonwealth, and that reg. 19 was voluntary. If a person has access to a court for the determination of compensation on common law principles, that person has just terms. Such com- pensation may even be greater than just terms. The particular scheme was not a pool such as might satisfy just terms. The 1938 legislation contemplated that the price of wheat would rise above 5s. 2d. per bushel. The Wheat Tax Act 1938 contemplated that the price of wheat might rise beyond 9s. per bushel. On the legislation,

1(1942) 66 C.L.R. 77. 75 CLR 525

if the price of wheat exceeded 9s. per bushel, a tax of one shilling per bushel would be the maximum contribution of the grower for the home economy. The tax is a tax on the purchaser, the wheat merchant, and is not a tax on the grower, and it goes to enhance the price that the miller would pay to the grower. The legislation was designed to stabilize the cost of wheat to the miller at 5s. 2d. per bushel and to enable the miller to compete with the shipper in the open market.

[DIXON J. referred to Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands 1 ].

A somewhat similar case is Cedars Rapids Manufacturing and Power Co. v. Lacoste 2. The chance in war-time of Common- wealth acquisition could never have diminished the value of wheat because of 8. 51 (xxxi.) of the Constitution. "Compensation" is the pecuniary equivalent of that which is taken, as and when taken.

[DIXON J. referred to Fraser v. City of Fraserville 3 ]. Dealing with land, Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam 4 holds that the value is what a willing purchaser would pay and not what a purchaser would pay under compulsion. What has been referred to as " election" is really accord and satisfaction, and the parties never entered the path of accord and satisfaction. The wheat was not delivered voluntarily by the appellant because the regulations were presumed to be good and the Board could not have been misled by the fact that the appellant was, in a sense, consenting to some activity of the Minister in relation to the wheat. The moneys paid to the appellant are advances of compensation, not dividends (Australian Apple and Pear Marketing Board v. Tonking 5 ).

Cur. adv. vult. The following written judgments were delivered :-

LATHAM C.J. This is an appeal in an action which raises the question of the rights of wheat growers whose wheat was acquired by the Commonwealth under the National Security (Wheat Acquisi- tion) Regulations and was dealt with by the Australian Wheat Board under the regulations in what is described in the relevant documents as Wheat Pool No. 9. The regulations provide for the payment of compensation for wheat acquired. The Board has paid certain dividends or advances to the plaintiff company in respect of

1(1947) A.C. 565. 2(1914) A.C. 569. 3(1917) A.C. 187, at p. 194. 4(1939) A.C., at p. 316. 5(1942) 66 C.L.R., at pp. 102, 105. 75 CLR 526

526

HIGH COURT wheat acquired from the company and is willing to make further payments. The plaintiff contends that the amounts SO paid or payable do not constitute fair compensation and claims a further LTD. sum. The learned trial judge, Williams J., dismissed the action

and the plaintiff has appealed.

The Wheat Acquisition Regulations, made under the National Security Act 1939, and continued in operation under the Defence (Transitional Provisions) Act 1946, came into operation after the adoption of a wheat industry stabilization scheme in 1938. The Wheat Industry Assistance Act 1938, No. 53, provided for financial assistance to the wheat industry by the Commonwealth through the States. It provided for the payment of moneys to the States (s. 6) to be applied by the States in financial assistance of wheat growers (ss. 6 and 7). The moneys were to be raised by taxes on flour and wheat under Acts Nos. 48, 49, 50, 51 and 52 of 1938. The rates of tax depended upon the price of wheat. It was a condition of the scheme, which depended upon State as well as Federal legis- lation, that consumers of wheat products, e.g. bread, should be protected against excessive prices (Act No. 53, S. 10). The object of this legislation was to provide a payable price for wheat. The price of 5s 2d. per bushel (for bagged wheat) and 4s. 11d. (for bulk wheat) free on rails at the port of Williamstown, Victoria, was adopted by the legislation as a payable price and the rates and incidence of the taxes were to be adjusted accordingly. As long as the export price of bagged wheat was less than 5s. 2d. f.o.r. Williamstown the flour tax would have been in force Acts Nos. 49, 50. If the price exceeded 5s. 2d. the Flour Tax (Imports and Exports) Act 1938, No. 51 would have been brought into operation by proclamation and a tax would then have been payable upon wheat exported from Australia. The proceeds of the tax would have been available to keep down the cost of wheat used locally. The effect of this legislation is stated in Deputy Federal Commis- sioner of Taxation (N.S.W.) v. W. R. Moran Pty. Ltd. 1. Williams J. in the present case summarized the legislation in the following words It is clear from this legislation that in 1938 the Govern- ments of the Commonwealth and the States took the broad view that, while the export value of wheat was below 5s. 2d. per bushel f.o.r. Australian ports, the Australian public as consumers of bread should be taxed indirectly to provide a subsidy for wheat growers, but that, if and when the export value of wheat exceeded 5s. 2d., the price which the wheat growers would otherwise have received for their wheat should be reduced by the wheat merchant or exporter

This legislation supplements legislation of a uniform type passed by all the State Parliaments and is designed to enable the operation of a home consumption price scheme for the wheat industry on a Commonwealth basis. The legislation is based on a home con- sumption price of 5s. 2d. a bushel, free on rail, Williamstown, equivalent to 4s. 8d. at country sidings. When the price of wheat falls below that level the returns of growers will be supplemented by payments from a fund established from the proceeds of a flour tax which varies inversely with the price of wheat. When the export price rises above that level provision is made for a tax on wheat sold, the proceeds of which are to be applied to ensure that the cost of wheat gristed for home consumption shall not exceed 5s. 2d. per bushel. Out of the general fund a sum not exceeding £500,000 per year will be reserved for special purposes including

75 CLR 574

A. the transfer of producers growing wheat on marginal lands to other

areas where they will be able to engage in mixed farming or to enable them to increase the size of their holdings to make wheat growing worth while. A Wheat Stabilization Advisory Committee has been established to determine the appropriate times for a variation in the rate of tax which will be fixed on the basis of a rigid formula. The State legislation undertakes to ensure that prices charged to con- sumers are reasonable and the Commonwealth legislation contains provision that no State shall be entitled to receive payments where that undertaking is not carried out."

In October 1946 a declaration was made resulting in a flour tax of £2 8s. 10d. and this has been maintained notwithstanding the rise in the export prices of wheat to SQ much more than the 5s. 2d.

The Board has kept its selling price of wheat for milling into flour for local consumption at 3s. 111d. and the Board has received as part of the pool the proceeds of the flour tax (after the deduction of the amount, now increased by Act No. 71 of 1946 to £843,000, credited to the special account for use in reference to SO called marginal lands). This has not brought the Board's return from wheat for flour for home consumption up to more than 4s. 5d. For stock feed the Board sold wheat at still lower prices until the end of November 1945, when the price was increased to 4s. 3d. and a government subsidy of 8d. a bushel was granted to bring up the return to 4s. 11d. The return from wheat sold for breakfast foods in the 1945-1946 season was also 4s. 11d. Meanwhile bread and flour prices were fixed from time to time under State legislation for various areas. But as the Commonwealth Prices Commissioner fixed prices for bread in the metropolitan areas, Perth SO far as appears excepted, and many other urban areas in Australia, the State orders do not appear to have much significance except in Western Australia. The prices fixed varied with locality and conditions between 51d. and 61d. a 2 lb. loaf. With wheat prices of 3s. 111d. plus flour tax, millers were, it appears, in a position to supply bakers with flour at prices enabling bakers to sell bread at the fixed maximum prices.

The power which the Executive possesses under S. 52 of the Customs Act of prohibiting export without licence was exercised in relation to wheat shortly after the period with which we are con- cerned, viz., on 22nd May 1946 (Statutory Rules 1946 No. 90). But clearly enough the purpose was not to conserve supplies of wheat for Australian consumption but to strengthen the Board's control, perhaps in view of rising prices abroad. I do not think that this exercise of the power has any bearing upon the question

75 CLR 575

what assumption should be made as to the controlling effect of H. C. OF export prices upon the value of wheat to the grower.

It is quite clear that without the intervention of government authority the value would depend upon those prices as much in the season 1945-1946 as before the beginning of the war in 1939. appears to me to be equally clear that, whatever might have been done in lieu of acquisition by or through the Wheat Board, the amount of the actual payments to the grower in respect of his wheat could not have been made to vary according to the fate of his wheat, that is whether it was exported or used for home con- sumption.

The prices or values payable from time to time for f.a.q. wheat could not but be uniform without any distinction based on the purpose of the purchase, unless some public authority were estab- lished to control the distribution of the wheat and to equalize the return to the grower. If the wheat was not acquired or pooled, it would, at all events, be necessary to pool the money, if differential prices to the purchasers were established. It is impossible to imagine a system of sales by growers at two prices at the same time, depending on purpose, and I know of no legal mechanism by which the Commonwealth could enforce it. Of course many devices can be imagined for maintaining a lower home consumption cost to millers without compulsory acquisition of the wheat. The most obvious course is to pay a bounty or subsidy on flour for home consumption. As has been already stated to provide such a bounty is the purpose of the Wheat Tax Act 1938, when the price of wheat exceeds 5s. 2d. As the price of wheat in 1945-1946 exceeded that figure, it is legitimate to assess the price or value to the grower of his wheat as if, by the prescribed method of proclamation and declaration, the tax had been put in operation, because that would fulfil the already expressed intention of the legislature. But the intention so expressed includes a definite limit upon the amount of the tax to 1s. a bushel.

Is it for a court of law to examine the question whether the legislature would or would not have removed or enlarged this limitation and, upon the hypothetical result of that examination, to determine how much of the f.o.b. parity a grower would have been permitted to receive Whether, if a subsidy or bounty were paid upon the production of the flour in order to keep down the price of bread, it should be charged upon general revenue or raised wholly or in part by an increased or new wheat tax is wholly a question of policy, quite outside the consideration of a court attempt- ing to find what monetary prejudice the course actually taken by

75 CLR 576

or under statute inflicted upon the subject as owner of the eom- modity. It means the notional substitution of another prejudice for that for which the legislature has decreed that the owner must LTD. be compensated. It involves a process of thought which, if pursued

with complete logic, requires the Court to say whether, one way or another, the grower would, or ought to, have suffered enough interference to reduce his return to what is considered commensurate with the deserts of wheat growers when compared with consumers of bread and with poultry and pig farmers.

I think that the truth is that, once the view is accepted that full compensation is to be awarded to growers for being deprived of their wheat, no further assumptions are made except that the plan involving the acquisition of the wheat had not been adopted. It is on that basis compensation is assessed. The Court does not proceed on the additional supposition that the legislature or the Executive, either as a subordinate legislature or exercising other statutory powers, would in that event adopt some other plan to effect the same ends or some of them and SO produce an answerable reduction in the money value of the same commodity. Other such plans might, of course, have been adopted. A limitation of export and fixing of maximum domestic prices for wheat can be imagined. But, as I have said, that course would in practice require some organization to equalize the return to the grower, in other words, some thing like a pool of the proceeds of the wheat.

An increase in the maximum price of bread has not been unknown and that might have been allowed as one part of a plan which with subsidies, wheat tax at 1s. and perhaps some other economies would make it unnecessary to seek to establish a home consumption price for wheat lower than export parity. Of one thing there can be some certainty and that is that not without strong political resistance from the growers would further measures have been taken to reduce the price of their wheat below export parity. But these matters are all speculations to be excluded on the ground that the Court should adopt no hypothesis beyond that involved in supposing that growers have not been deprived of their wheat under the plan in fact embodied in the regulations. I, therefore, see no reason, if otherwise the wheat could have been sold at a parity with export prices, why it should be assumed for the purpose of assessing com- pensation that the prices would have been reduced in the interests of the home consumer to any greater extent than the 1s. wheat tax already authorized by statute.

The Commonwealth, however, suggests reasons, in part of fact and in part of law, independently altogether of the foregoing con-

75 CLR 577

siderations for saying that the plaintiffs' wheat could not have been sold at a parity with export prices, if there had been no expropriation of the plaintiffs. First, it is said that by the well- known Prices Regulation Order No. 1015 of 13th April 1943, the validity of which was sustained by this Court in Fraser Henleins Pty. Ltd. v. Cody 1, wheat is included in the general restriction of prices to prices which the seller charged on or last prior to 12th April 1943 for substantially identical goods sold on substantially identical terms and conditions or, if he had not before sold sub- stantially identical goods, then to the cost of the goods to him. Accordingly, so it was argued, the prices could not have gone beyond the price of wheat sold by the plaintiffs before 12th April 1943, or beyond the cost of production, as the case might be. I think that this order was never intended to include wheat and does not do SO, For commercial purposes f.a.q. wheat of one season has not been considered the same thing as f.a.q. wheat of another season. Cost of the goods to the seller" would be ridiculous as a definition of maximum price if applied to the agricultural production of wheat delivered to the siding. At the time when the order was made the sale of wheat was a government function carried on by the Board, except seed wheat, and that was not beyond the control of the Board. It is evident that the order did not contemplate the com- modity. Moreover, the exclusion of perishable products is in itself enough to put wheat outside its operation. Perishable product is not an exact expression, but I notice that the Oxford English Dictionary gives the word "perishable" as meaning especially, naturally subject to speedy decay, as organic substances, minerals which rapidly weaken or become decomposed, and the like. Unpro- tected wheat would qualify under this definition. It is noteworthy that some authorities give as the reason why at common law wheat was not liable to distress that it is of a perishable nature, although others put it on the ground that like money wheat is not identifiable. The latter reason, however, could not apply to a sack of corn, just as it did not apply to a bag of money.

Secondly, it is said that, in assessing the compensation, it is to be assumed that the plaintiffs' wheat was not compulsorily acquired and that all other wheat in Australia was acquired by the Board. The witnesses who were called agreed that on this hypothesis the plaintiffs would have great difficulty in disposing of their wheat at higher prices than the Board sold at locally. The hypothesis would make it difficult for the plaintiffs to obtain bags, bulk storage, transportation by railway and handling facilities. Under the

1(1945) 70 C.L.R. 100. 75 CLR 578

assumed conditions to find a purchaser for export of SO small a quantity would be impossible during a period when the United Kingdom Ministry of Food was the agency by or under whose authority all purchases were made and when the Ministry of Shipping directed sea carrying.

In my opinion the argument is fundamentally wrong. You do not assume against each grower in turn that the whole plan embodied in the regulations was carried out except that he was excluded from it, SO that he was obliged to dispose of his wheat when all means of doing SO had been taken over by the Board and when he stood helpless except for some exercise of their mercy. The Acquisition Order relates to all wheat and you judge the value of wheat on the supposition that the order had not been made or that it was not operating at the time when the plaintiffs' wheat in fact passed to the Board. On that footing the Australian wheat crop would need to be sold and it cannot be imagined that there would be any greater difficulties in moving it to the seaboard than confronted the Australian Wheat Board itself. To suppose that the Ministry of Food would have failed to purchase the wheat from or through the merchants and the ordinary agencies appears to me an unreason- able hypothesis. I can see no ground for thinking that in such a case shipping would not have been directed here to lift the wheat.

The standard of reference for the valuation of the plaintiffs' wheat for the purpose of assessing compensation at large appears, therefore, to me to be parity with export prices of wheat at the time of its acquisition.

The Commonwealth, however, relies upon a contention that the plaintiffs are precluded from claiming compensation at large under reg. 14, because, it is said, they have chosen to come into the pool and claim and participate under reg. 19.

This contention must begin with some construction of reg. 19 which provides the expropriated grower with a choice by his exercise of which he is excluded from the right which otherwise reg. 14 is understood to give him. All the plaintiffs have in fact done is in respect of each delivery of wheat to sign a form of claim for compensation and accept the first two payments described as advances.

As I read the relevant passages in the judgments in Tonking's Case 1 the decision was that under reg. 12 of the Apple and Pear Acquisition Regulations (corresponding to reg. 14 of the Wheat Regulations) the grower obtained a right to compensation which might be satisfied by his acceptance of the amount upon which the

1(1942) 66 C.L.R., at pp. 89, 99, 102, 105, 110. 75 CLR 579

Minister determined under reg. 17 (corresponding to reg. 19 of the Wheat Regulations), that is if the grower accepted the amount in satisfaction. It does not appear to me that until there was a determination by the Minister and a payment thereunder, the principle of the decision could be brought into play. I cannot see any room in the language of the regulations for the view that the grower is presented with an initial election between alternate remedies or claims and I do not understand any member of the Court so to have read the regulations. It is not without significance that Tonking received advances, though it is true that he had not lodged a formal claim for compensation.

In my opinion this point taken by the Commonwealth fails. So far I have dealt with the case on the footing that the Acquisi- tion Order of 16th November 1939 is valid or must be so considered. If it is void, compensation would not be the basis of the claim made by the plaintiffs, who suggest that they could, in that event, recover in tort, or failing that in contract.

I am inclined to think that, when the order was made, the form in which reg. 14 stood did not authorize SO much of the order as purported to acquire future wheat. The wheat of the plaintiffs of the 1945-1946 season was, of course, at that time future wheat. But S. 11 of the Wheat Industry Stabilization Act (No. 2) 1946 (No. 80) provides that the order "shall be deemed to be, and at all times to have been, fully authorized by " reg. 14 and shall have and be deemed to have had, full force and effect according to its tenor in respect of wheat harvested in any wheat season up to and including the 1946-47 season."

The validity of this section is impugned by the plaintiffs on the ground that it amounts to a usurpation of judicial power.

The theory is that it undertakes the decision of a question of validity or an issue in the present litigation as to the description and source of the plaintiffs' rights or as to the legal basis or conse- quence of the Commonwealth's administrative acts. This action was pending when the statute was passed.

In my opinion that is an erroneous complexion to place upon the enactment. It is simply a retrospective validation of an administrative act and should be treated in the same way as if it said that the rights and duties of the growers and of the Common- wealth should be the same as they would be, if the order was valid. If such an enactment is a law with respect to the subject of defence,

I can see no objection to its validity (see Werrin v. The Common- wealth 1 ). I do not understand why a law to validate an order

1(1938) 59 C.L.R. 150, at pp. 165-168. 75 CLR 580

OF A. bona fide made and acted upon in the administration of a matter

clearly falling within defence and arising in the course of the prosecu- tion of the war should be considered to be beyond the defence power.

It remains to reduce to figures the consequences of the views I have expressed concerning the valuation of the plaintiffs' wheat for the purpose of determining 'compensation" at large under reg. 14, as it has been construed.

Williams J. said in the course of his judgment that the prices at which the Board sold wheat of the 1945-1946 crop for export indicated that, if there had been a free market at the date of the acquisition, the plaintiffs would have been able to sell their wheat from 9s. 3d. to 9s. 9d. for bulk wheat and from 9s. 6d. to 10s. for bagged wheat. At a later part of his reasons his Honour fixed the price of bulk wheat more precisely by saying that the export value of Australian wheat f.o.b. Australian ports was about 9s. 6d. a bushel. This view is supported by the evidence and I take 9s. 6d. a bushel f.o.b. as the proper starting point. From that there would be deducted the railage and handling charges to obtain the price at the siding. His Honour said "I think that the estimate made by the plaintiff of 9d. per bushel for rail and handling charges amounting to £539 13s. 9d. may be slightly on the low side but it can be accepted" 1. That would reduce the value of bulk wheat to 8s. 9d. From that 1s. for the wheat tax must be deducted, leaving 7s. 9d. bulk. Bagged wheat would be 8s. a bushel.

But there is yet another possible deduction to consider and that is the tax imposed by the Wheat Tax Act 1946 (No. 78). That Act was assented to on 14th December 1946, that is to say while this action was pending. By S. 4 a tax is imposed and shall be levied and paid in respect of all wheat which has been acquired by the Commonwealth and the tax shall be payable by the grower of the wheat. By S. 6 (1) the Commonwealth or the Australian Wheat Board may deduct any amount of the tax payable by any grower from any moneys payable by the Commonwealth or the Board to that grower on any account whatever and the amount deducted is to be applied in payment of the tax.

This latter provision is attacked by the plaintiffs as dealing with a matter other than the imposition of taxation and, therefore, void and of no effect by reason of S. 55 of the Constitution.

But also the validity of the imposition of the tax is attacked. The ground is that it is an attempt to take back part of the compen- sation payable in respect of the compulsory acquisition and, there- fore, contrary to the requirement of just terms.

1Ante, p. 513. 75 CLR 581

Section 5 prescribes the method of fixing the rate of tax. In effect it is by a formula that cannot be finally calculated until the end of the season. The Board is first to make the estimate or computation provisionally and report it to the Minister who is to confirm or vary it and notify the rate SO fixed in the Gazette as the provisional rate. As soon as practicable after the Board has com- pleted its export or disposal for export of the season's wheat, it makes the final calculation and reports it to the Minister who notifies it in the Gazette. Under S. 6 (2) in the meantime until the provisional rate is fixed the Board withholds from the wheat growers what the Minister thinks is enough to pay the tax. To calculate the rate, it is necessary to ascertain the average price per bushel f.o.r. at the seaboard of f.a.q. bagged wheat of all the wheat of that season which the Board has exported. Fifty per cent of the excess of this average over 5s. 2d. is then multiplied by the number of bushels of wheat of that season exported by the Board in the form of wheat or wheat produce or sold by the Board for such export. The sum thus produced is to represent the total amount of the tax and the rate is obtained by dividing the sum by the total amount of wheat of that season in respect of which the tax is imposed, that is to say, by the total amount of the wheat of that season acquired by the Commonwealth.

By a notification in the Gazette, dated 30th January 1947, the Minister fixed the provisional rate of tax in respect of the season commencing on 1st October 1945 at 1s. lgd. per bushel.

The question, in effect, is whether that amount is to be deducted from the 7s. 9d. bulk and 8s. bagged which otherwise this judgment would award.

There is authority under S. 5 to prescribe a lower average price as a basis for the computation of the total tax, but that does not affect the present question.

The tax collected is to go into a Wheat Prices Stabilization Fund established by S. 31 of the Wheat Industry Stabilization Act 1946 (No. 24). The moneys of the fund are to be applied under other provisions of the Act in support of a plan to make up to growers a return of 5s. 2d. a bushel on their wheat should prices fall below that level. But the operation of the several sections of the Act is to commence on such dates as are fixed by proclamation and SO far only S. 31 has been proclaimed. It commenced on 13th March 1947 (Gazette 1947, p. 828).

It will be seen that wheat tax of 1946 is imposed on the grower of wheat in respect of his wheat acquired by the Commonwealth. The only wheat which under the operation of the order of 16th

75 CLR 582

H. November 1939 has not been compulsorily acquired is wheat which 1947-1948.

falls under one or other of the exceptions specified in the order, NELUNGALOO

of which that covering seed wheat may be the most important. PTY. LTD.

The question is whether a tax which has such an incidence can be reconciled with S. 51 (xxxi.) of the Constitution, which makes it imperative that the compulsory acquisition of property by the Commonwealth shall be upon just terms. If it be assumed that the assessment of compensation affords the just terms and SO fulfils the requirement, how can acquisition be chosen as the basis of a tax which must diminish the compensation ? It will be noticed that this question SO framed assumes that compensation is to be assessed at large and not by pooling, but, if the dividend in a pool was similarly to be diminished by a tax based on the acquisition, a closely analogous question would arise, namely whether the pooling could any longer be considered to constitute just terms. The answer made in argument on behalf of the Commonwealth is that, properly understood, the tax is not based on the acquisition, not directed at diminishing or taking part of the compensation, but that it forms part of a plan for imposing a levy on all wheat that is designed to take into the fund part of the high export parity.

Originally the fund established by the Wheat Industry Stabilization Act 1946 (No. 24) was to be raised by the charge imposed by the Wheat Export Charge Act 1946 (No. 25). Both Acts were assented to on the same day, 9th August 1946. They were meant to operate for five years at least from the beginning of the 1945-1946 season and then they might be terminated by proclamation see S. 36 of No. 24 and S. 6 of No. 25. But the plan was not then brought into effect and the Australian Wheat Board under the regulations has continued. The export charge as then framed is now to be imposed on wheat exported after 1st December 1947. The charge was to be a levy on all wheat harvested after 1st October 1945 and exported after 1st December of that year by a new Board to be established under the Wheat Industry Stabilization Act 1946, or by any other person. It was feared, however, SO we are informed, that growers sending in their wheat to the new Board might claim to trace their wheat, and, if it could not be shown that it was exported, that they might dispute the liability of their wheat to bear a proportion of the charge paid over to the fund by the Board.

However that may be, the Wheat Tax Act 1946 (No. 78) and the Wheat Export Charge Act (No. 2) 1946 (No. 79) were enacted on the same day, 14th December 1946. The latter Act made the expression the Board " cover both the old and the new Board in succession and postponed the operation of the old charge to wheat

75 CLR 583

exported after 1st December 1947. It imposed a charge, however, on wheat harvested after 1st October 1945 and exported after 1st December 1945 limited in its application to wheat harvested before 1st October 1947 and in its incidence to persons, other than the Board, who exported it. The Wheat Tax Act 1946 (No. 78) which also was assented to on 14th December 1946 is, according to the argument, no more than a revision of SO much of the former charge as applied to wheat exported by the Board, a revision in the interests of administration and of certainty of recovery.

The foregoing explanation of the reasons of the Wheat Tax Act 1946 may remove any criticisms of the motives underlying it, but it does not change its character. Nor is the character of the tax changed by combining it with the Wheat Export Charge Acts 1946 (No. 25 and No. 79). Indeed it is not easy to see how any one but the present Board could export wheat and SO become liable to the charge while that Board continues.

It remains true that the wheat tax is imposed only on growers whose wheat is acquired and that it taxes them in respect of the acquisition. The fact that it is for the purpose of creating a fund to benefit wheat growers cannot be legally material. It is none the less a tax, an involuntary exaction. In any case wheat growers are a changing class, and the fund will not necessarily enure for the benefit of the same persons as are taxed. The basis of the tax is the acquisition under reg. 14 of the Wheat Acquisition Regulations and its operation in reducing the net payment of compensation is clear. Indeed S. 6 insures that the deduction is made.

In these circumstances the matter comes back to the question whether compensation under reg. 14 is not the measure of just terms. The view of the regulations upon the acceptance of which

I am proceeding, means that there is no other measure supplied.

I do not see how the Court can inquire whether compensation reduced by the tax still affords just terms. Ex hypothesi the means adopted of giving just terms was to authorize an award of compensation. I cannot see how an award of compensation less a sum of money withheld by or retained by the Commonwealth can be considered by a Court still to give a recompense sufficient to comply with the requirement of just terms.

I think that the attempt to impose the tax is invalid and that the plaintiffs are not liable to have the amount of the tax deducted from their compensation.

This conclusion makes it unnecessary to discuss the interesting argument addressed to us upon the question whether S. 6 was not rendered of no effect by S. 55 of the Constitution.

75 CLR 584

The plaintiffs claimed interest upon the amount of compensation. But for the reasons I gave in The Commonwealth v. Huon Transport Pty. Ltd. 1 I think that we should apply the decision of the House of Lords in Swift &Co. v. Board of Trade 2 and hold that interest cannot be recovered by the plaintiffs.

The result is that I would award as compensation 7s. 9d. a bushel for the plaintiffs' bulk wheat and 8s. a bushel for their bagged wheat, which totals £5,666 14s. 9d. From that there should be deducted £3,441 10s. 4d. which the plaintiffs have already received, leaving £2,225 4s. 5d.

I repeat that I would award this sum in consequence, not of my personal conception of the operation of the Wheat Acquisition Regu- lations, but as a consequence of that which I think I should accept as by common consent flowing from the Court's decision in Tonking's Case 3.

The result of this opinion would be that the appeal should be allowed with COOLS and judgment entered for the plaintiffs for £2,225 4s. 5d. and costs.

McTIERNAN J. I am of opinion that the appeal should be dismissed.

The various claims which the appellant made in this action have been set out in the preceding judgments, The only claims which it is necessary to consider are the claim for damages for alleged conversion and the alternative claim for compensation. The latter claim is made un on the footing that the wheat the subject of the action was validly expropriated by the Commonwealth. I am of opinion that the appellant is not entitled to succeed upon either of these claims.

If there was any doubt that the appellant's wheat was lawfully expropriated by the Minister's order of 16th November 1939, S. 11 of the Wheat Industry Stabilization Act 1946 effectively extinguished any right of action which the appellant had arising from the taking and disposal of its wheat. Furthermore, the appellant waived by conduct any tort of which the respondents were guilty if they took and sold the appellant's wheat without lawful authority.

The other claim is based upon reg. 14 of the Wheat Acquisition Regulations. It is made upon the assumption that an action lies to enforce the claim for compensation into which the regulation converts the rights of any person in wheat expropriated by means of an order made under the regulation. In such an action the

1(1945) 70 C.L.R., at pp. 323-326. 2(1925) A.C. 520. 3(1942) 66 C.L.R. 77. 75 CLR 585

measure of compensation would be the value of that person's wheat to him at the time of acquisition, and it would be necessary to determine the value upon general principles. But the basis of com- pensation is very clearly stated in reg. 19. That is the measure of compensation which it is the intention of the Regulations to provide. It would not be the criterion of value which could be applied in an action for compensation. The basis of compensation is SO explicitly stated by reg. 19 (2A) that it is, I think, impossible to hold that the remedy provided by reg. 19 is but an alternative remedy to a right of action for compensation. The only remedy which the appellant is entitled to pursue is to forward a claim to the Board in accordance with reg. 19. That conclusion is, I think, required by the express terms of the regulations.

Unaided by authority, I should, in the light of the terms of the regulations and the exposition of them given by my brother Dixon, entertain no doubt that reg. 14 gives no right of action and that this regulation and reg. 19 are interdependent. But Australian Apple and Pear Marketing Board v. Tonking 1 should not, I think, lead to the conclusion that the present regulations give an expro- priated owner alternative remedies. There was no provision similar to reg. 19 (2A) in the Apple and Pear Acquisition Regulations, upon which Tonking's Case (1) was decided. The measure of compensation was less clearly stated in those regulations. I think that the present regulations clearly manifest the intention that the basis of compensation is that provided by reg. 19 (2A) and that it is the sole standard or criterion of value. I think, therefore, that reg. 14 does not imply a right of action to enforce the claim for compensation given by that regulation. In Andrews v. Howell 2 it was decided that the constitutional condition of acquisition upon just terms was met by an expropriation upon the terms that the expropriated grower of fruit could enforce his claim to compensation only in the manner provided by reg. 17 of the regulations in that case. See per Starke J. 3 and Dixon J. 4.

In Tonking's Case 5 the Court declared that it would not reconsider the decision in Andrews v. Howell (2) and the former case was argued and decided upon the basis that reg. 17 satisfied the condition that the grower's fruit must be acquired upon just terms. See the argument (5) and per Latham C.J. 6.

It is not therefore the case that this constitutional condition would not be satisfied by the present regulations unless the remedy

1(1942) 66 C.L.R. 77. 2(1941) 65 C.L.R. 255. 3(1941) 65 C.L.R., at p. 271. 4(1944) 65 C.L.R., at pp. 282, 283. 5(1942) 66 C.L.R., at p. 93. 6(1942) 66 C.L.R., at p. 102. 75 CLR 586

given by reg. 19 is alternative to a right of action which if it exists, could only be implied. There is therefore no warrant in the existing regulations for an action for compensation. But if the regulations should be read as providing alternative remedies, it is clear from the facts (they are set out in the judgment of the Chief Justice) that the appellant unambiguously elected to pursue the remedy provided by reg. 19 to enforce its claim for compensation. I agree with the J. Chief Justice that this election bars the appellant's right to bring

this action for compensation. The appellant is seeking to enforce by the action a claim which is not compatible with the claim which it has already SO unequivocally pursued.

If, contrary to what I have decided, there is a right of action under reg. 14 and it was not barred by an election to pursue the remedy under reg. 19, the question of the value of the appellant's wheat at the time of acquisition would have to be decided upon assumed facts and speculations upon those facts. It would be necessary to assume that the appellant's wheat had not been acquired, and I think that would involve the assumption that there had not been a general acquisition of the wheat of that season. In order to succeed in the action it would be necessary for the appellant to prove that it would have obtained more for its wheat than the sums which it received and is entitled to receive from the Board. The appellant claims that it would have received the export price less expenses at or about the time its wheat was acquired, that is, at the time of harvesting. Whether it would have done SO is a matter of speculation.

I agree with the reasoning of the Chief Justice upon the evidence relating to this issue. I am not satisfied that there was a probability that the appellant would have obtained a better return for its wheat if it had retained the property in it and it had not been acquired by the Commonwealth and put in the pool.

WEBB J. I too think the plaintiff company's wheat was law- fully acquired by the Wheat Board, and I have nothing to add to the reasons for that view given by other members of the Court.

I agree with the Chief Justice that the company delivered its wheat to the Board upon the terms that it was to be dealt with in No. 9 Pool and SO adopted reg. 19, if that regulation provides only an alternative means of payment. As to whether it provides the only means of payment or an alternative means, I am inclined to agree with Dixon J. that it is possible to say that Australian Apple and Pear Marketing Board v. Tonking 1 was decided on regulations

1(1942) 66 C.L.R. 77. 75 CLR 587

providing a different context and that the Wheat Acquisition Regulations should be interpreted independently. But as I think the company adopted reg. 19 as the means of payment for its wheat,

I need not decide the question whether it is the only means; and it is undesirable that I should decide it in the absence of argument.

However, if the company were entitled under reg. 14 to compen- sation measured by what it would get for its wheat if sold in a free market," I agree with the Chief Justice that the amounts paid and still to be paid to the company by the Board have not been shown to be less than the compensation payable under reg. 14. In arriving at such compensation it would not, I think, be proper for the Court to assume that legislation would be enacted or other political action taken. In the private-and perhaps sound-opinion of the judge it might be probable that Parliament would be induced to legislate or that Parliament and the electors would be induced to act to alter the Commonwealth Constitution; or that the voting strength of the wheat growers might be used to effect a change of government. But he could not properly give effect in the judgment to any such opinion.

The Court could, however, properly take into consideration the probability that action would be taken under existing legislation. Even then the Court would not be at liberty to assume there would be, under existing legislation, another form of compulsory acquisi- tion, or even, concerted action short of that by different authorities, to bring about the same result. The Court would be entitled to take into account that there would be an embargo under the Customs Act to keep in Australia sufficient wheat for local require- ments and that such action would be taken without regard to the price that would be paid for such wheat and its products, and without collaboration with the State or Federal price-fixing authori- ties. On the other hand, the Court would be entitled to assume that the price-fixing authorities would not be influenced in fixing the price by the fact that the embargo would prevent the wheat being sent outside Australia at a higher price.

But it is contended that there should be no assumption by the Court that these fixed prices would not be increased. There should, of course, be no assumption that prices would not be increased to meet the cost of production and to allow a fair profit from time to time. However, an assumption should not be made that prices here would be increased merely to bring them into line with high prices overseas due to a great shortage of wheat in foreign countries and a consequent heavy demand for wheat, as any such increase would tend to defeat the very purpose of price fixing, i.e., to protect

75 CLR 588

Australian consumers against excessive prices when there is no 1947-1948.

scarcity here. As such increased prices would not be assumed, NELUNGALOO

subsidies and consequent taxation to meet them need not be con- PTY. LTD. sidered.

Then having assumed an embargo under the Customs Act and the COMMON-

continuance of price fixing in the ordinary way, the Court would be justified in finding that the overseas price or parity would not be obtained for all wheat; and SO that compensation could not be assessed on the basis that each grower could obtain in a "free market " the overseas price or parity for the whole of his wheat.

The appeal should be dismissed with costs.

Appeal dismissed with costs. Solicitors for the appellant, J. W. Maund &Kelynack. Solicitor for the respondents, George A. Watson, Acting Crown Solicitor for the Commonwealth.