R v Snow

No judgment structure available for this case.

256 HIGH COURT

fl917.

H . C. OF A.

plaintiff, it cannot be said the matter was not bond fide open to argu

1017..-^ment. Tire Commonwealtli, as the employer, is free to frame its

T a y l o r

regulations in its own way, and as in this case the provision might

V.

T he

have been framed so as to exclude all possible doubt, and as this is a

(.’OMMON-

^V E A L T H .ruling which enures for the benefit of the Commonwealth in cases

other than the present, I think justice will be met by leaving both

Isaacs J.

sides to bear their own costs.

Judfpnent for the defendants.

FoilSolicitors for the plaintiff,

Louqhretj & Douglas.

R V Weaver

Solicitor for the defendants, Gordon H. Castle, Crown Solicitor for the Commonwealth.

0931145

CLR fcl

B. L.

[HIGH COURT OF A U STRALIA .]

HJS MAJESTY THE KING . . .

A p p e l l a n t ;

.4ND

SNOW

R e s p o n d e n t .

ON A l’REAL FROM T H E SU PR E M E COURT OF

SOUTH AUSTRALIA.

H.

C. OF A.

1917.

—'Trading %vUh the Enemy— Meaning at common law— Commercial intercourse—(Join-

munications upon busities.s matters— Trading with the Enemy Acts 1914 (rVo..

9 and No. 17 of 1914), secs. 2, 3— Imperial Proclamations of ~>th August 1914

M a y

28-31.

and t)th September, 1914.

M f.l u o u r n e ,

Ju n e

7.

The term trad ing w ith the enem y " a t common law and as used in the

llarton A.C.J.,

Trading with the Enemy Acts 1914 includes all commercial intercourse with the

leaac-ij,

enemj'.

Gavan Unify, Powers and Rich J.T.

The Panariellos, 84 L .J. P., 140; 85 L .J. P., 112, considered and followed.

23(:.lv.R.] OF AUSTRALIA.

257

Held, therefore, th a t a person who took p a rt in correspondenee which

H . C. OF A.

was intended to conserve existing or prom ote fu ture business relations w ith a 1917.

])crson carrying on business in (lerm any m ight i)roperly be convicted of the

offence of trading with the enemy under sec. 3 of the Trriditig with the Enemy

T hk K in g

V.

Acts 1914.

S n o w .

Deei.sion of the Suprem e Court of South Australia reversed.

A p p e a l from the Supreme Court of South Australia.

On the trial at the Criminal Sittings of the Supreme Court of South Australia, before Murray C.J., of Francis Hugh Snow on an information charging him with trading with the enemy, the learned (^hief Justice stated the following case under sec. 72 of the Judiciarii Act 1903-1915 for the consideration of the Full Court of the Supreme Court

At the Criminal Sittings of this Court beginning on 2nd November 1915 the defendant was charged and tried before me upon an infor mation by the Attorney-General of the State of South Australia, the person appointed by His Excellency the Governor-General to ])iosecute by indictment for indictable offences against the laws of the Commonwealth, alleging as follows :—

First Count.—That Francis Hugh Snow late of Adelaide in the State of South Australia merchant during the continuance of the jiresent state of war on 5th, 11th, 18th, 20tli, 24th, 25th, 27th and 31st August 1914 and on 2nd, 8th, 10th, 24th, 25th, 26th and 29th September 1914 and on 1st, 7th, 8th, 12th and 29th October 1914 and on 2nd and 3rd November 1914 and on divers other days between 5th August 1914 and 7th November 1914 at Adelaide in the said State did unlawfully trade with the enemy to wit Aron Hirsch & Sohn then carrying on business at Halberstadt in Germany by entering by means of certain letters telegrams and cablegrams mitten sent and received to by and from the said Aron Hirsch & Sohn, A. S. Winter of Rotterdam in Holland, Naylor Benzon & Co. Ltd. of London, England, and Messrs. George Smith & Son of London, England, into a commercial contract with relation to pyrites for the benefit of the saitl Aron Hirsch k Sohn contrary to the Statute in such case made and provided and against the Peace of our Sovereign Lord the King His Crown and Dignity.

Second Count.—That he the said Francis Hugh Snow during the

258 HIGH COURT

11917.

H. c. OF A. cojitinuance of the present state of war on 5th, 6th, 7th, lOth, n th , 13th, 14th, 15th, 17th, 18th, 19th, 20th, 21st, 22nd, 24th,

T h e K in g26th, 27th, 29th and 31st August 1914, and on 1st, 2nd, 3rd, 4th,

V.

S n o w .5th, 7th, 8th, 9th, 10th, 11th, 14th, 15th, T7th, 18th, 19th, 21st,

23rd, 24th, 25th, 26th, 28th, 29th and 30th September 1914 and on 1st, 2nd, 3rd, 5th, 6th, 7th, 8th, 10th, 12th, 13th, 15th, 16th, 17th, 19th, 20th, 21st, 22nd, 23rd, 26th, 27th, 28th, 29th and 30th October 1914 and on 2nd, 3rd, 4th, 5th and 6th November 1914 and on divers other days between 5th August 1914 and 8th November 1914 at Adelaide aforesaid did unlawfully trade with tiie enemy to wit the said Aron Hirsch & Sohn then carrnng on business at Halberstadt in Germany by taking part in acts or transactions which at common law constitute trading with the enemy namely having commercial intercourse with the enemy the said Aron Hirsch & Sohn by means of certain letters telegrams and cablegrams written sent and received to by and from the said Aron Hirsch & Sohn, A. S. Winter of Rotterdam in Holland, George Smith k Son of London, England, L. Vogelstein & Company of New York in the United States of America, E. G. Hothorn of Rotterdam in Holland, and Naylor Benzon & Co. Ltd. of London, England, contrary to the Statute in such case made and provided and against the Peace of Our Sovereign Lord the King His Crown and Dignity.

There was evidence for the prosecution that prior and up to the commencement of the present war the defendant was an agent in South Australia for Messrs. Aron Hirsch & Sohn of Halberstadt in Germany in respect of that firm’s dealing in metals and minerals, and that on or about days mentioned in the said second count the defendant sent letters on business matters in which the defendant and Aron Hirsch & Sohn were interested at the time the War broke out, and subsequently during the War addressed to one or other of the persons named in the said count, except Hothorn, and also cable grams of a like nature to one or other of the said persons, except Naylor Benzon & Co. Ltd. and Aron Hirsch & Sohn, and received letters of a like nature from one or other of the said persons or firms, except Hothorn, and cablegrams of a like nature from one or other of the persons, except Naylor Benzon & Co. Ltd. and .Ai’on Hirsch & Sohn.

2:5 C.L.R.] OF AUSTRALIA.

259

H . C. OF A.

There was no evidence that the letters appearing to be addressed to Messrs. Aron Hirsch & Sohn or to A. S. Winter were sent to them

1917.

respectively or otherwise than to Messrs. George Smith & Son in

T h e K in g

V.

Jjondon, England. There was evidence that Vogelstein & Co.,

Sn o w .

Winter and Hothorn were or acted as agents for or channels of communication with Aron Hirscn & Sohn after the commencement of the VV'̂ ar, but there was no evidence that either Messrs. George Smith & Son or Messrs. Naylor Benzon Sc Co. Ltd. were or acted as such agents or channels of communication at any time after the commencement of the War.

There was no evidence that the defendant replied to any of the letters from Messrs. Aron Hirsch & Sohn.

The Commonwealth Government Gazettes of 7th August 1914, 12th September 1914 and 12th October 1914 were put in evidence; a copy of each accompanies the case.

Respecting the second count in the information it was contended on behalf of the defendant (inter alia) as follows :—

1. That sec. 3 of the Trading with the Enemy Aci 1914 is not within the powers of the Commonwealth Parliament.

2. That the said section if and so far as it purports to be retrospec tive or retroactive is not within the powers of the said Parliament. 3. That upon the true construction of the said Act the Act is

not retrospective or retroactive.

4» That the second count did not disclose or allege any act or transaction or offence within the meaning of the said Act.

5. That there was no evidence to go to the jury of any act or transaction within the meaning of the said Act.

6. That the intercourse by correspondence appearing upon the evidence was not an act or transaction which at common law con stitutes trading with the enemy.

7. That there was no evidence of any intercourse or attempt at intercourse with Ai’on Hirsch & Sohn by means of letters, telegrams orjcablegrams, written, sent or received to, by or from George Smith Sc Son or Naylor Benzon Sc Co. Ltd., and that without this the defendant could not be convicted of the offence alleged.

I^held and directed the jury as follows :—

2B0 HIGH COURT

[1917.

H . C. OF A.

1, 2 and 3. That sec. 3 of the said Act is within the powers of the

1917.Commonwealth Parliament and is retrospective and retroactive.

4. That the second count did in the allegation of having commercial

T h e K in g

V.

S n o w .interconrse with the enemy by means of certain letters, telegrams

and cablegrams, written, sent and received to, by and from the firms and ])ersons named, disclose and allege an act or transaction and offence within the meaning of the said Act.

5 and (i. That “ under the first Proclamation, which was published in Australia on 7th August, intercourse was not merely not prohibited but it was expressly permitted; that Proclamation remained in force until 12th September: so you must not find the defendant guilty of having commercial intercourse with the enemy between 7th August and 12th September. You may look at those letters, gentlemen, just as you may look at telegrams, cablegrams and letters written before 5th August (when the War broke out), to judge wdiether the persons named in the second coTmt were the agents of Aron Hirsch & Sohn who could be used as channels of communica tion. You must judge whether the communications sent between 5th ATigust and 7th August were of a commercial nature, and whether the communications between 12th Sejjtember and 8th November were of a commercial nature. The only communications you can find unlawful are those between 5th August and 7th August and those between 12th September and 8th November.”

And that trading with the enemy means “ having commercial intercourse rvith the enemy in or carrying on business in an enemy country, and this may consist of either sending or receiving goods or specie to or from an enemy country or sending letters, telegrams and cablegrams of a commercial nature to an enemy country either independently or in reply to letters, telegrams and cablegrams received from an enemy country. . . . You will have to be satisfied that the intercourse charged under the second count is of a commercial nature. You may find that, if any of the communica tions sent were on business matters in which the defendant and Aron Hirsch & Sohn were interested either a t the time the War broke out, or subsequently during the War, You will have the letters before you to judge.”

7. That for conviction under the count it was not necessary that

23 (J.LR.] OF AUSTRALIA.

261

all the persona and firms named should be proved to be channels

H . C. O F A.

1917.

of communication with Aron Hirscli & Sohn in Germany, but it

—'

would be enough if the jury were satisfied that any of them were and TH t: K in g

V.

that the defendant made use of those in order to communicate on Sxow .

commercial matters with Aron Hirsch & Sohn.

The jury found defendant not guilty on the first count and guilty on the second count, and pursuant to the JudicAary Act I reserved for the consideration of the Full Court the question whether my said holdings and directions respectively were right in law.

The Full Court held that Snow ought not to have been found guilty or to be convicted on the information, and ordered that the verdict should be set aside and a veidict of not guilty entered.

From that decision the Crown now, l)v special leave, appealed to the High Court.

(Jlcland K.C. (with him F. VUleneuve Smith and C. //. Parsons), for the appellant. The direction given to the jury as to what con stitutes trading with the enemy at common law is substantially correct. 3’rading witli tlie enemy means all intercourse whicli is inconsistent with actual hostility (The Rapid (1)), and it is not neces sary that there should be any contemplated transit of goods to an

enemy country. ‘

.

[Barton A.C.,1. referred to Robson v. Premie-r Oil and Pipe Line

Co. Ltd. (2).

The Panariellos (5) ; The Julia (6) ; Zinc Corjwration Ltd. V. Hirsch (7) ; Daimler Co. Ltd. v . Continental Tyre and Rubber

(Isaacs .1. referred to Coppell v. Hall (3).J intercourse independent of goods or whether goods are the subject matter of the intercourse. The term “ trading with the enemy ” is synonymous with “ commercial intercourse with the enemy,” and commercial intercourse does not imply trading in the technical sense. Sec

'Prade and commerce consists of acts (Nexv South Wales v. The

(1) S Cianoh. ISo.(5) 84 L .J. !>., 140; 85 L .J. P .. 112.

(2) (lom ) 2 Cli., 124.(()) 8 (Vanch, 181. a t pp. 193-194.

(3) 7 Wall., .542. a t pp. 557-.558.(7) (1916) 1 K .B., 541, a t p. 556.

( 4) 20 C.L.K., .54, a t p. 100.

voi.. xxm.

18

262 HIGH COURT

[1917.

H.C. OF A.Co. {Great Britain) Ltd. (1) ; Esposito v. Bowden (2); The Jonge

1917.

Pieter (3) ; Moss v. Donohoe (4); The Kildonan Castle~v/h.ich was

T u f K in odecided on 10th July 1916, in the Admiralty Division (in Prize), by

V.

Sir Samuel Evans P. ; Kent’s Commentaries, 9th ed., vol. i., p. 66;

S n o w .

Wheaton’s International Law, p. 434.

[ I s a a c s J. referred to British and Foreiejn Marine Insurame Co. Ltd. V. Samuel Sunday <& Co. (5); Chalmers' Opinions, p. 575; The Ahby (6).]

I t is unnecessary to decide whether at common law intercourse which falls short of commercial intercourse constitutes trading with the enem}^ Although, if the policy of the law is to prohibit unregulated intercourse altogether by reason of its danger, there is no reason for limiting the definition of commercial intercourse. Commercial intercourse constitutes the offence whether or not it falls short of technical or individual trading or technical or individual commerce. Comniercial intercourse includes intercourse by means of the transmission of commercial correspondence, and corres pondence is commercial if its subject matter is or may be the subject of business, trade or commerce. Trading with the enemy is a phrase used to describe that species of intercourse with the enemy which is prohibited a t common law. That being so, the direction was right. .

Sir Josiah Symon K.C. and Piper K.C. (with them Norman), for the respondent. Trading with the enemy at common law is only one form of commercial intercourse with the enemy. There is no case in which the two terms have been used synonymously or have been said to be synonymous. In order to constitute trading with the enemy, there must be a transmission of goods. The direc tion to the jury was based on the case of The Rapid (7), but that case decided that, although negotiation or contract was not essential to constitute trading with the enemy, the transmission of goods was essential. Murray C.J. recognized that there might be com mercial intercourse which was not trading with the enemy, but he directed the jury that mere correspondence about business matters

(1) (1916) 2 A.C., 307, a t p. 344.(5) (1916) 1 A.C., 650, a t p. 671.

(2) 7 E1..& B l., 763, a t p. 779.(6) 5 Rob. Adm., 251, a t pp. 253-254.

(3) 4 Bob. Adm., 79, a t p. 83.(7) 8 Cranch, 155.

(4) 20 C .L.R., 615, a t p. 618.

28 C.L.R.l OF AUSTRALIA.

263

was trading with the enemy. If there had been anything more H- C- of a.

than correspondence about business matters, it should have been

stated in the information. That the transmission of goods is essential

T h e K in g

V.

to constitute trading with the enemy is shown by Kershaw v. Kelsey ■

S n o w .

(\) and Zinc Corporation TM. v. Hirsch (2). In The Panariellos

(3) and Esposito v. Boivden (4) there was a transmission of goods.

[Barton A.C.J. referred to United States v. Lane (5).

[Isaacs J. referred to Janson v. Driefontein Consolidated Mines

Ltd. (6); Halsey v. Tjowenfeld (7). |

The Proclamations of 5th August and 9th September 1914 draw a distinction between trading with the enemy and having commercial relations with the enemy. The definition of trading with the enemy in sec. 2 (2) of the Tradiny with the Enemy Act 1914 makes an “ act or transaction. ” necessary to constitute the offence. The act or transaction referred to is something which is forbidden to be done, and not the mere writing about commercial topics. The jury may have decided upon a letter which negatived any trading. [Counsel referred to The Hoop (8) ; The Jonge Pieter (!)); Gist v. Masoyi (10); Potts V. Bell (11) ; Reid, v. Hoskins (12) ; Batey and Morganon War, its Conduct and Legal Results, pj). xii., xiii., 204 ; Tudor's Leading Cases on Mercantile Law, 2nd ed., p. 802.] Assuming that the terms trading with the enemy and commercial intercourse with the enemy are synonymous, there must be some act done which has the effect of changing the legal relations of the ])arties (Robson v. Premier Oil and Pipe Line Co. Ltd. (13)). There is a variance between the averments in the information and the evidence with regard to the persons with whom the correspondence was carried on. As the information has not been amended in that respect, the respondent should have been acquitted (Russell on Crimes, 4th ed., vol. in., p. 307 ; Wright's Case (14) ; R. v. Hewins (15) ; Gray v. Palmers (16); R. V. Owen (17) ).

(1) lOO Mass., 5()1.(10) 1 T .R ., 88.

(2) (Htl(i) 1 K.H., .->41.(11) 8 T .R ., 548.

(3) 85 L.J. !>., 112.(12) 6 El. & Bl., 953.

(4) 7 El. .t HI., 763, a t p. 779.(13) (1915) 2 Ch., 124.

(5) 8 Wall., 185, a t p. 195.(14) 1 Low. C.C., 268.

(6) (1902) A.O., 484, a t pp. 493, 509.(15) 9 C. & P., 786.

(7) (1916) 2 K.B., 707.(16) 1 Esp., 135.

(8) 1 Rol). Adm., 196.(17) 1 Mood., 118.

(9) 4 Kol). .\(lm ., 79.

264 HIGH

COURT

H.C. OF A.Barton A.C.J. We are all agreed that neither transportation of

1917.goods nor contract is essential to the commission of the offence of trading with the enemy at common law, and that commuuicatiom

T h e K in g

V.

S n o w .for the purpose of conserving existing, or promoting future, business

relations constitute that offence. This statement is not made as an exhaustive one, but it is sufficient for the present purpose. Under those circumstances we desire to know whether either party desires the inclusion in the special case of the communications admitted in evidence at the trial, or any part of them.

Ckland K.C. The appellant desires the inclusion of them or some portion of them.

Sir Josiah Symon K.C. If any of the communications are in cluded, all of them should be.

Cur. adv. milt.

The following judgments were read :—

June 7.

Barton A.C.J. In this case the Supreme Court of South Aus tralia has pronounced the direction to the jury of the learned Chief Justice of the State to be erroneous, and on that ground has quashed the conviction of the respondent. I t has also refused to remit the case reserved to the learned Chief Justice for amendment or re statement by the inclusion, in the case, of copies of certain letters, telegrams and cablegrams put in evidence on the tried.

The main grounds of the appeal to this Court are that the jury were correctly directed at the trial, and that at any rate the Supreme Court ought not to have come to the conclusion that they were erroneously directed before seeing whether the communications put in evidence were commercial, in the sense that they were for the maintenance or furtherance of business relations between the re spondent and the alien enemy firm of Aron Hirsch & Sohn.

Before entering upon an examination of his Honor’s direction to the jury, it is necessary to point out the terms of the Trading v;ith the Enemy Act, and also the nature of the inquiry involved in the trial. The Act is, in the particulars relevant to this inquiry, identical in substance with the Imperial Statute on the same subject passed

C.L.R.] OF AUSTRALIA.

2(>5

soon after the outbreak of the present war. Tlie tJiircI section is

H. C. o r A.

retroactive in relation to the commission of the offence, and con

1917.

sequently the prohibition of the offence and the ])unishment pre

'I’liE K in g

V.

scribed apply to things done at any time since the outbreak of war

Sxow .

(/? . V. Kidman (1 ) ) . The second section of the Act provides in sub-sec.

Barton A.C.J.

2 that “ a person shall be deemed to trade with the enemy if he performs or takes part in . . . (c) any act or transaction wliich at common law or by Statute constitutes trading with the enemy.” The first count of the information, on which the respondent was acquitted, chai’ged him with having tiaded with the enemy, to wit, Aron Hirsch & Sohn, then carrying on busine.ss at Halberstadt in Oermany, l)y entering by means of letters, telegrams and cablegrams into a commercial contract with relation to pyi ites for the benefit of the enemy. 'Phat charge was founded on the terms of the King’s Pioelamation of !)th Se.])tember 1914 : so the case reservaal informs us. The second count, under which the lespondent was convicted, charges that on numerous si)ccified dates during the ])resent state of war the respondent “ did unlawfully trade with the enemy to wit the said Aron Hirsch & Sohn their carrying on business at Hallier- stadt in frermany by taking ])art in acts or transactions which at common law constitute trading with the enemy namely having commercial intercourse with the enemy the said Aron Hirsch & Sohn by means of certain letters telegrams and cablegrams,” &c.

'Phe terms of the several Proclamations arc material only as to the sense in whiclr the Jjcgislature has used the term trading with the enemy,” and wilt be referred to later on.

'Phe case reserved sets out the direction very fully. His Honor refers therein to “ commercial intercourse,” “ communications of a commercial nature,” and “ communications on busine.ss matters in which the defeiulant and A ion Hirsch & Sohn were interested,” and leaves it to the jury to say whether the communications were “ of a commercial nature,” intimating that if the}" were, they con stituted evidence of the offence charged in the second count. 1 think that the essence of the direction is to be found in the following })assage :—“ You will have to be .satisfied that the intercourse charged under the second count is of a commercial nature. You may find

(I)

20 ( ’.L .H ., 42.5.

266 HIGH COURT

[1917.

H . C. OF A. tjiat, if any of tlie communications sent were on business matters

in which the defendant and Aron Hirsch & Solin were interested,

T h e K jN fieither at the time the War broke out, or subsequently during the SNÔ ■̂.War. You will have the letters before you to judge.” It was

i'.

B?rton A.C..T.intimated to the jury, in effect, that the intercourse would constitute

the offence of trading with the enemy if it were commercial in the sense of being on business in which the respondent and Aron Hirsch & Sohn were interested. But it seems to me probable that his Honor in using the terms in question was really designating the class of letters, &c., to which the correspondence in question belongs, and was assuming that as writings of that class their tendency towards the continuance or promotion of business relations would manifest itself to the jury on inspection.

A more precise explanation of the kind of commercial intercourse that would be evidence of the offence was not given to the jury.

On the argument of the case reserved the learned Chief Justice concurred with his brother Justices in holding that his direction to the jury was too wide. He held that the “ act or transaction ” contemplated by sec. 2 (2) (e) of the Trading with the Etierny Ad 1914 is not committed unless it amounts to the entry into a commercial or financial “ transaction ” or unless property is shipped for transport ation from one enemy country to the other. His Honor here used the term “ commercial or financial transaction ” as equivalent to a commercial or financial contract, if I am not mistaken ; otherwise a set of negotiations by correspondence not resulting in an actual contract would be in his Honor’s view a “ trading with the enemy ” at common law, a view which would be inconsistent with the tenor of the several judgments below and with the order quashing this conviction. I should like to make and discuss longer extracts from the able judgments which were delivered, but I must beware of making my owm judgment unduly long.

It is well settled that after the breaking out of war any inter course of any kind between subjects of the belligerents is unlawful if it be inconsistent with the existing hostility of their States. There is, of course, an exemption where the sovereign power of a State has expressly licensed the intercourse. But bare intercourse, where

23 C.L.R.] OF AUSTRALIA.

267

not commercial in its nature, is not pronounced to amount to “ trad- R- F- o r A.

ing with the enemy,” although it is unlawful if not licensed.

Actual

unlicensed exchange, sale or transportation of goods with or to an

T he K ing

enemy subject, on the other hand, of course amounts to “ trading

.snow

with the enemy,” and is not only forbidden but is a misdemeanour

Barton A»C.J.

at common law, and also included in the prohibitions of the Aus tralian Act. Between these two extremes lies the very extensive field which consists of that unlicensed intercourse with the enemy whicJi is conducted for the purpose of keeping up or facilitating commercial transactions between parties whose countries are at war, and which may thus advantage the enemy or injure our own country. Is this intercourse merely forbidden, or is it included by the common law in the term “ trading with the enemy ” ? That is the point to be determined, and 1 have come to the conclusion that such intercourse constitutes the offence named.

What is the basic principle on which it is forbidden to hold inter course with the enemy, whether (1) in terms or by channels uncon nected with commerce, or (2) by way of commercial correspondence, or (3) by way of sale, purchase, or transport of goods, or of contract with any such objects ? The whole ]U'ohibition rests on the theory that any communication of either character, not licensed by the head of the State, may be advantageous to the enemy country, or detrimental to one’s own country. But as war is directed to the destruction, of the material resources of the enemy as well as to the protection of our own—the pursuit of the former object often being a means of attaining the latter—it follows that the more nearly the intercourse is connected with the commerce of the enemy tfie greater the danger of benefit to him or of injury to ourselves. Thus, though bare non-commercial intercourse is unlawful, it is not looked on with such severity as that which has either matured or is likely to mature into his getting the money that he wants for his goods or the goods that he needs for his money. But as any commercial intercourse is likely to lead to s\ich sale or purchase, it should be classed with the actual sale or purchase rather than with the bare intercourse : for the j)lain reason that it may at any moment result in that, the most harmful way. Hence the more natural conclusion is rather that commercial intercourse is ranged with enemy trading, and as such

2()8 HIGH COURT

[1917.

H. C. OF A.

is not only illegal but punishable, than that it is allied to bare non

1917.commercial intercourse, merely unlawful.

T hk K i .nc;Such .seems to me the manner in which public policy, which is

V.

Sn o w .generally common sen.se, would view the matter d 'priori. Let us then see whether it is the way in which legal authority regards it.

Barton A.C..1,

Recent deci.sions of the Courts in England have been arrived at after such full investigation and review of prior authorities new and old, and are themselves of such high authority, that I conceive that the purpose of this inquiry will be best served by confining my attention to some of the more recent cases. But it is well to observe at the outset that the majority of the cases, and nearly all the old ones, are cases in Prize. As they by their nature arise from the naval right of search of cargo and its seizure and condemnation for due cause, they relate to the transportation of goods and not to mere correspondence on the subject. But it will be found that expressions in modern reviews of these cases carry the doctrine much further than is required to justify the seizure of cargo.

The oldest case from which I shall read a passage was not, however, a Prize case. Esposito v. Botvden is a decision of the Court of Exchequer Chamber (1). The gist of it is that perform ance of a contract cannot be insisted on wlrei'e between its making and the time for its ]Aerforniance a state of war has arisen which would involve the ]5arty sued in a trading and dealing with the enemy if he carried out his promise. In sucli cases the contract is dissolved by law. In a very learned judgment delivered for the Court, WillesJ. said (2): “ Jt is now fully e.stabli.shed that, the pre sumed object of Avar being as much to cripple the enemifs cx>rmnerce as to capture his property, a declaration of war imports a prohibition of commercial intercourse and correspondence with the inhabitants of the enemy’s country, and that such intercourse, except with the licence of the Crown, is illegal.” Although the contract in that case involved only that the plaintiff’s ship chartered by the defendant should proceed to Odessa and there load a complete cargo of specified goods and proceed therewith to a port of discharge, the ports of loading and of intended discharge being respectively in countries Avhich after the contract came to Avar, yet the decision of the Court

(1) 7 E t & B t, 763. (2)

7 E t & B t, a t p. 779,

23 C.L.R.J OF AUSTRALIA.

269

was rested by the judgment on the proposition stated in the Ijroad

C. o f a .

' '

1917.

terms I have quoted.

The authority of the judgment is the greater

because in addition to Willes J. the Court consisted of Jervis L.C.J.,

i’h e K in o

V.

Pollock C.B., Alderson B., and Cresswell and Croivder

That

S n o w .

proposition is much wider than was essential to sustain tlie con

Hai*ton A.C.J,

clusion that the operation of war upon contracts of affreightment made before, but remaining unexecuted at, the time it is declared, and of which war makes the further execution unlawful or impossible, is to dissolve the contract and to absolve both parties from further ])erformance of it. The proposition was stated in 1868 in terms as broad in the case of the United States v. Lane (1).

Next in the order of time I take the case of The Panariellos (2), decided on 22nd March 1915. There Sir Samuel Evans P. reviewed the authorities very closely and at great length. He cited The Hoop (3) ; Storifs Notes on Prize Courts; Wheaton's International Lav, 8th ed., pars. 309-315 ; The Cosmopolite (-1) ; The Rapid (5) ; The Julia (6) ; The Jomje ILeter (7), and other authorities. He lays down four general propositions (8), only two of which need be given here ;—“ First, when war breaks out between States, all commercial intercourse between citizens of the belligerents ipso facto becomes illegal, except in so far as it may be expressly allowed or licensed by the head of the State. Where the intercourse is of a comm,errinl nature it is iisualli/ denominated ‘ tradimj with the enemy.' This proposition is true also, 1 think, in all essentials with legard to intercourse which cannot fitly be described as commercial.” (Obviously the last sentence refers to the illegality of certain inter course, and not to the name “ trading with the enemy ” applied to commercial intercourse.) “ Fourthly, when such intercourse in fact takes place, the propertv of the jiersons engaged in it is con fiscable, whether they were acting honestly and with bona fides or not.” (The last proposition of course applies to the cases where, e.ij., the claimant seeks the restitution of goods which were actually in transit, and does not diminish the generality of the first proposi tion.)

(1) 8 Wall., 18.'), a t p. 195.(5) 8 ( ’ranch, 155.

(2) 84 L..J. !>., 140.(()) 8 ( ’ranch, 181.

(n) I Kol). A(lm., 19().(7) 4 Rob. Adm., 79.

(4) 4 Rol). .-tclm., 8.

(8) 84 L .J. P., a t p. 142.

270 HIGH COURT

[1917.

H. C. O F A.

Tlieir Honors of the Supreme Court seem to me, witli all deference, to have taken a more restricted view of the term “ commercial inter

1917.

T h e K in cconrse ” than the learned President’s words imply. In my belief

i ' .

S n o w .they were intended to mean what they say, and to lay down a broad Barton A.C.J.proposition, similar to that in Esposito v. Bowden, within which the case then in question fell as (I use again his Lordship’s words) a commercial intercourse between the claimants and the enemy which amounted to a “ trading with the enemy.” I think the term “ commercial intercourse ” must have included in such “ trade ” any intercourse on commercial matters ; at any rate for the maintenance or furtherance of business relations between belligerent subjects. Otherwise such intercourse would be omitted from his Lordship’s classification, which is hardly likely. 1 think he can scarcely have intended to leave out so highly important a class of prohibited inter course. Plis Lordship was dealing with a case in which there was no trading with the enemy in the sense of actual exchange or actual sale of cargo, for the property admittedly remained in the original owners. This appears both from the head-note and from the fuller statement of the case.

On 6th May in the same year the Court of Appeal decided the case of Robson v. Premier Oil and Pipe Line Co. lid. (1). There it was decided that an alien enemy was not entitled to exercise by proxy or otherwise a right of voting in respect of shares in an English company, though the alien was a company which had a branch in England as well as a head office in Berlin. Sargdnt J. having decided against the alleged right of the alien enemy, an appeal was taken on two grounds ; (1) that the prohibition at common law of intercourse with an alien enemy is limited to commercial intercourse or trading, and (2) that the transaction in this case did not come within the definition of commercial intercourse. The Court of Appeal negatived both of these contentions. The judgment was delivered by PieJeford L.J. on behalf of Lord Cozens-Hardy M.R., WarrBigton L.J. and himself. The Court emphasized the unlawfulness of all intercourse during war as laid down by Lord Stowell in The Hoop {2 j and The Cosmopolite (3) ; by English Courts in several other

(1) (191.5) 2 Ch., 124.

(2) 1 Rob. Adm., 190.

(3) 4 Rob. A dm ., 8.

2\i C.L.H.]

OF AUSTRALIA.

ca«t*s ; in America by decided cases and by great authorities such as

t-’- o f a.

^Umf and Kent \ and again affirmed by Sir Samuel Evans in The

Panariellos {\ ).

Tlie Court of Appeal not only held that the transac-

Thk King

V.

tion then in (piestiou came within the prohibition of intercourse with

S n o w .

enemies, holdiirg it enough for their existing purpose to say that in

Barton

their opinion ail intercourse which could tend to the detriment of one’s own country or the advantage of the enemy country was forbidden as inconsistent with the state of war. It went further, and it is in this respect that the decision is more peculiarly in point in the present case. The Court said (2):—“ We think also that the rejection of these votes may be justified on the narrower ground that this mis a commercial transaction. Commercial intercourse is not confined to makimj contracts between an alien enemy and a British subject, and such a transaction as this directed to obtaining the control of a trading company is in our opinion commercial.” This passage may well be comj)ared with that on p. 19.b of the United States v. Lane. (3), already mentioned. It contains no qualification of the vie\v ex pressed by Sir Samuel Evans that “ where the intercourse is of a com mercial nature it is usually denominated ‘ trading with the enemy.’ ” Less than seven wrecks elapsed between the two decisions.

On 27th January 191 (i came the judgment in the case of British aiul Forei(jn Marine Insurance. Co. Ltd. v. Samuel Sunday and Co. (4), in which, after saying that “ the declaration of war amounts to an order to every subject of the Crown to conduct himself in such a way as he is bound to conduct himself in a state of war,” Lord Wrenbury said (5) :—“ It is an order to every militant subject to fight as he shall be directed, and an order to every civilian subject to cease to trade with the enemy. There is ‘ a general rule in the maritime jurispiudence of this country by which all sidjjects ti'ading with the public enemy, unless w'ith the permission of the Sovereign, is interdicted ’ : The Hoop (6). ’ A declaration of war imports a prohibition of commercial intercourse and corre spondence with the inhabitants of the enemy’s country, and that such intercourse, except with the licence of the Crowui, is illegal ’ :

(1) 84

(4) (191(i) 1 A.C.. (ioO.

1*., u o .

(2) (HU.')) 2 Ch.. a t i>, i:n;. (5) (191(i) A.C., a t p. ()71.

(n) 8 Wall., ISf).

(()) 1 Rol). Adm., a t p. 19.S.

272 HIGH COURT

[1017.

H.C. OF A. Esposito V. Boivden (1).immediately tlie royal prerogative's

1!>17exercised and war is declared against another nation every subject of

—'

His Majesty is bound to regard every subject of that nation as an

T h e

K in o

S n o w .enemy, and the consequences ensue which I have mentioned.” Here

again is an absence of any qualification of the breadth of the pro

B<irton A.C.J.

position laid down in previous cases, some of them so recent, that commercial intercourse with an enemy after the declaration of war amounts to trading with the enemy.

A few weeks after the last cited case, namely on idth April 1916, came the judgment of the Privy tbuncil in The Pananellos, on appeal from the learned President. That case is reported in 85 L.J. P., 112. The Judicial Committee, whose judgment was delivered by Lord Sumner, fully confirmed the decision appealed from and also its grounds. It was laid down (2) that “ the general princijiles upon which trading with the enemy is forbidden to the subjects, or those who stand in the place of subjects, of His Majesty and of his allies, are well settled and need not be restated. Ample citations from the authorities are to be found in the learned and elaborate judgment in the Court below.” Goods had been des patched from a foreign port after the outbreak of war, and with knowledge of it, by a British subject or a subject of an allied State for delivery as directed bv an enemy firm and for their benefit; and the judgment proceeded thus :—“ The despatch of the ore from Ergasteria, for delivery as directed by Beer, Sondheimer & Co., of Frankfort, and for their benefit, engaged the goods in for bidden intercourse with the enemy. Consignment of goods to an enemy port and vesting of them in an enemy while on passage, though common features in the reported cases, are not essential to the imputatioii of forbidden trading. Geographical destination alone is not the test. Intercourse with an enemy subject, resident in the enemy country, is forbidden even though it takes place through his agent in the United Kingdom. The development of communica tions, the increased complexity of commercial intercourse, and the multiplication of facilities for enemy dealings with goods, though at a distance from the enemy country, are incidents in the growth of modern commerce to which in its application the rule of law must

(1) 7 El. & HI., a t p. 779.

(2) 85 L .J. F., a t p. 1 Hi.

2:} C.L.R.] OF AUSTRALIA.

273

h«! adapted. They do not in themselves operate to defeat the

H . C. O F A.

1017.

application of an established principle.” 1 am clearly of opinion

--'

that the rule of law is adaptable, and indeed that it already extends, T hf, K i .sg

t'.

to correspondence instituted or continued for the protection or

•Sn o w .

advancement of commercial relations between a British and an Barton A.CJ .̂

enemy subject.

Only three months after the Privy Council’s decision Sir Samuel Emns pronounced judgment in the case of The Kildonan Castle. This case is not in any report yet received here, but I quote from the transcript of the notes of the official shorthand writer. I t was a case in which the original shipper of goods was given an oppor tunity of showing what, if anything, he had done to prevent the goods from reaching the enemy or to put an end to a commercial intercourse which his Lordship thought was taking place between him and tlie intended receiver of the goods. The goods were destined for Cermany, but the property in them had not passed. The expressions of the learned President are in unison generally with those of which he made use in The Panariellos (1), and also show in what sense that high authority understood the judgment just previously delivered on the appeal; and 1 quote merely for that purpose. He said: “ If it be true that the goods were engaged in a commercial and forbidden intercourse, and if it be true also that he did nothing to bring that intercourse to an end, I think there was a trading with the enemy which is amply sufficient to render these goods confiscable ” : and, with relation to the facts which he had recited, he went on to say : “ On these grounds I am clearly of opinion that the proper order for me to make is that the goods be condemned as goods which were engaged after the outbreak of ho.stilities in a commercial intercourse with the enemv.” Having regard to his pronouncement in The Panariellos (1) that all unlicensed intercourse between citizens of the belligerents is illegal even when not fitly to be described as commercial, in collocation with the additional pronouncement in that case, evidently made with the 8ubsec[uent approval of the Judicial Committee, that where the intercourse is of a commercial nature it is usually denominated “ trading \vith the enemy,” it is clear that his Lordship intended

(1) 84 L .J. P ., 140.

274 HIGH COURT

[1917,

H. C. OF A. h is proposition to cover commercial intercourse at any stage at

which, if not commercial, it would still have been forbidden, that

T h e K in g is, at any stage short of the actual transit of goods as well as at

V.

and after that stage.

Endorsed by the Judicial Committee and in

Snow.

Barton A.C.J.full consistence with his remarks in The Kildonan Castle, it can only be concluded that the proposition covers the commercial intercourse even where that intercourse has not ripened into its natural and probable fruits.

Reverting, then, to my classification early in this judgment, of the two forbidden extremes of mere intercourse on the one hand and the exchange, sale or transportation of goods on the other hand, and of the extensive field of commercial intercourse which lies between them, I come to the conclusion that the commercial inter course, tending as it must tend towards trade, must be placed in the same category with the sale or purchase or transport of goods to or from an enemy country, and is properly classed therewith by the common law as “ trading with the enemy.” “ The presumed object of war being,” in the words of the Exchequer Chamber (1), “ as much to cripple the enemy’s commerce as to capture his pro perty,” the doctrine strikes a t all commerce or dealings with him even before the point of the sale, &c., of goods or of a bargain to traffic in them. Surely, it would tend to disaster if the law were otherwise. Surely, when transactions of that nature are defeated before they cair fructify in actual contract or even sale or purchase, they do not at that point fall into the same category as mere non commercial correspondence. In my view the “ trading with the enemy ” begins when the intercourse begins to further the forbidden commerce.

I cannot help thinking that if their Honors of the Supreme Court, whose judgment was anterior to that of the Judicial Committee in The Panariellos appeal (2), had had the advantage of considering what that tribunal said by the mouth of Lord Sumner, as well as the President’s still later judgment in The Kildonan Castle, they would probably have come to a different conclusion.

I t is of interest to glance at two of the Proclamations of the King relating to this subject. The first is that of 5th August 1914,

(1) 7 El. & Bl., a t p. 779.

(2) 85 L .J. P., 112.

23 C.L.R.J OF AUSTRALIA.

275

notified liere on the 7th of that month. This Proclamation deal.s

H . C. OF A.

with the supply and transmission of goods, the movements of ships,

1917.

the making of contracts of insurance, the entry into new comT h e K in g

V.

mercial, financial or other contracts or obligations, and cognate

S.vow .

subjects, and warns all persons against committing aiding or abetting

Barton A.C.J.

any of the acts forbidden under these heads. This Proclamation declares the state of war, and recites that it is “ contrary to law for any person resident, carrying on business, or being in Our dominions to trade or have any commercial intercourse wuth au) ̂ person resident, carrying on business, or being in the German Empire without Our permission.” This Proclamation is headed

thus;—“ By the King.

A Proclamation setting forth the Law and

Policy ivith reyard to Tradiny icith the Enemy ” The next Proclama tion is dated on 9th September 1914, and was notified here on the 12th of that month. It makes a siniilar recital and also recites the previous Proclamation “ relating to trading with the enemy,” and it applies its provisions to .'Vustria-Hiingary, restating and extending them. It does that by repealing the previous Proclama tion and making fresh provision. Now, this Proclamation is headed thus;—“ By the King. A Proclamation relating to Trading with the Enemy.” Both these Proclamations, therefore, place under the same head of “ trading with the enemy ” the prohibition to trade or have any commercial or financial transactions with enemy resi dents.

They both precede the Tradiny with the Enemy Act No. 9 of 1914 “ relating to trading with the enemy,” which was assented to on 23rd October in the same year. They are of assistance, if assistance be necessary, in arriving at the sense in which the Parliament of the Commonwealth, following that of the United Kingdom, has used the same phrase.

But the case does not end at this point. I have said that the jury had not the assistance of a precise explanation of the kind of commercial intercourse that would be evidence of the offence. It was not exactly stated to them that such intercourse, when con ducted by communications, means intercourse of such a nature as to indicate that it was intended to conserve existing or promote future business relations between belligerent subjects. If these

27(j HIGH COURT

[1917.

H . C. OF A. exhibits, or any of them, were such as to evidence that intention,

tliey were within the term his Honor used, i t may be that the

T h e K in c letters, telegrams,

&c., themselves, when inspected by the jury,

V.

S n o w . amply showed that they were of this nature, and themselves eluci Barton A.C.J.dated the sense in which his Honor used the words “ commercial

intercourse ” and similar terms. If the writings warrant that interpretation, I think tlie direction may be taken in connection with them. Still, that may not be so, and it is a question which can onlv be cleared up completely by an examination of the writings themselves. It is not, as it stands, a case for a new trial, because they or some of them may show that if taken together with the direction they are conclusive as to the sense in which the term was used. Indeed, there is much to be said for the proposition that the term “ commercial intercourse,” w'hen conducted by corre spondence, would be understood in common acceptation as inter course which tends to, or facilitates, or promotes commercial relations, and even Sir Josiah Symon saw the difficulty of contend ing to the contrary. I find it difficult to see that the term, when used as here to describe correspondence with the enemy, even if it is said to bear a technical sense, has any meaning which differs from that common or colloquial sense. I t is quite probable that the term as used by his Honor was understood by the jury, in considering the correspondence, as conveying just this sense, and if so, it might be regarded as sufficient to safeguard the jury against any condemna tion grounded upon intercourse witlw)ut that tendency. Still, we cannot be sure of all this. AVe cannot be quite certain, until we see the writings, that, wdien his Honor told the jurv that they might find that a commercial intercourse such as was charged under the second count had been proved if any of the letters, &c., were on business matters in which the respondent and Hirsch & Sohn were interested when the present war broke out or subsequently, they might not have applied that expression to perfectly innocuous letters, even discouraging further communication, as Gordon J. jiointed out. I prefer to say nothing a.t present as to the probabilit}' of this. Rut we find that communications which might have made the use of such words as “ commercial intercourse ” clear beyond misapprehension are not before us, and without them we cannot

23 C.L.R.]

OF AUSTRALIA.

judge whether the direction was given in a sense which showed that

H. C. OF A.

1917.

absolute clearness, probable though it be.

I t is therefore open to

some question whether the case reserved is stated with absolute T h e K ix o

V.

sufficiency to enable the Court to deal finally with the matter.

S n o w .

Now the appellant’s counsel have continued to urge that ground of appeal, and the respondent’s counsel intimate that while it is not necessary in their view that the communications should have been appended to the case, still, if the Court thinks that their inclu sion would conduce to the ends of justice, counsel do not resist that course. As we do think that the communications or some of them would if so appended tend to elucidate the matter, we propose to make an order to meet the circumstances. By this means the case reserved will come before the Supreme Court in a form in which the direction will be freed from any possible uncertainty.

Barton A.C.J-

Various points were taken categorically by the respondent; there are seven. The first three were not argued, as it was recog nized that they were covered by the case of R. v. Kidman (1). The fourth, fifth and sixth will be finally decided upon the amended special case. The seventh ground is obviously untenable, and I do not think any authority is necessary for that opinion. However, ] will merely mention R. v. Hill (2).

I sa a c s J. Although the answer to the main question presenting itself for our consideration may be stated in small compass, it is necessary, both for the detachment of that precise question from the rest of the case and for the purpose of stating some other points, which, though subsidiary, arc nevertheless essential, that the position should be briefly stated.

The respondent Snow was charged on two counts, for contra vention of the Commonwealth Act relating to trading with the enemy. He was acquitted on the first, and convicted on the second. The present appeal relates only to the second, as to wduch sec. 72 of the Judiciarif Act empowers the Court to “ reserve any question of law which arises on the trial for the consideration of a Full Court.” The j)ower.s of the Fidl Court are stated in sec. 73. The second count charged the defendant with the statutory offence of “ trading

(1) 20 C.L.R., 42.5. (2) Russ.

R ., 190.

vor,. .xxiii.

19

278 HIGH COURT

[1917.

H . C. OF A. with the enemy to wit . . . Aron Hirsch k Sohn ” of “ Hal- berstadt in Germany by taking part in acts or transactions which The King at common law constitute trading with the enemy namely having

V.

Sn o w . commercial interconrse with the enemy the said Aron Hirsch &

Sohn by means of certain letters telegrams and cablegrams written

Isaacs J.

sent and received to by and from the said Aron Hirsch & Sohn ” and various other persons mentioned. That, if proved, would be an offence, as enacted by sec. 3 of the Act. The case stated by the learned Chief Justice of South Australia, before whom the trial took place, is all the Full Court could, or this Court can, look at to determine the questions reserved.

That case states what the evidence for the prosecution was upon which the jury convicted the respondent. I t showed “ that prior and up to the commencement of the present war the defendant was an agent in South Australia for Messrs. Aron Hirsch & Sohn of Halberstadt in Germany in respect of that firm’s dealing in metals and minerals, and that on or about days mentioned in the said second count the defendant sent letters on business matters in which defendant and Aron Hirsch & Sohn were interested at the time the War broke out, and subsequently during the War ” addressed to and received from one or other of the other persons mentioned, with certain exceptions, communications of a like nature. On the trial an objection was taken that the intercourse by correspondence appearing in evidence was not an act or transaction which at common law constitutes trading with the enemy. Another objection was taken that inasmuch as wdth regard to two of the five persons mentioned in the second count, as intermediaries, the evidence did not show they had acted as such intermediaries since the commencement of the War, the whole charge failed.

The learned Chief Justice in his directions to the jury dealt with these two objections as follows :—As to the first, he gave a general definition of “ trading wdth the enemy ” at common law, and he also gave a specific direction on this subject as to the communications in evidence. His words were :—“ Trading ivith the enemy means having commercial intercourse with the enemy in or carrying on business in an enemy country, and this may consist of either sending or receiving goods or specie to or from an enemy country or sending

23 C.L.R.] OF AUSTRALIA.

279

letters, telegrams and cablegrams of a commercial nature to an

H. C. o r A.

1917.

enemy country either independently or in reply to letters, telegrams

and cablegrams received from an enemy country. . . . You T h e K in g

V.

will have to be satisfied that the intercourse charged under the

S n o w .

second count is of a commercial nature. You may find that, if any

Isaacs J.

of the communications sent were on business matters in which the defendant and Aron Hirsch & Sohn were interested, either at the time the War broke out, or subsequently during the War. You will have the .letters before you to judge.” As to the second objection, he said :—“ That for conviction under the count it was not necessary that all the persons and firms named should be proved to be channels of communication with Aron Hirsch & Sohn in Germany, but it would be enough if the jury were satis fied that any of them were and that the defendant made use of those in order to communicate on commercial matters with Aron Hirscli & Sohn.”

The Full Court dealt with the first objection only, finding it unnecessary in the view their Honors held to deal with the second. Both points, however, were, by force of circumstances, argued before us. With regard to the first objection, it divided itself into two distinct questions, namely, the general definition, and the specific application of the definition to the communications in evidence. I propose to keep these separate.

The first branch raises pointedly the question whether the expres sion “ trading with the enemy ” is synonymous with “ commercial intercourse wuth the enemy.” The Supreme Court held in the nega tive, considering that the latter term was wider than the former. The view taken was that whereas “ commercial intercourse ” includes all forms of commercial negotiation, “ trading with the enemy ” is restricted to some act or transaction of a final nature, that is either the actual transportation of goods, or the conclusion of some binding contract or transaction resulting from the prior negotiations.

The learned Chief Justice stated the question reserved as he understood it, in these words : “ The essential question is whether mere correspondence with an enemy on business matters in which

280 HIGH COURT

[1917.

H. C. o r A. I )o th

sender and receiver are interested without any result ing contract or transaction amounts to ‘ trading with the enemy’

1917.

T h e K in gat common law.” His Honor ultimately answered that question in

V.

S n o w .favour of the respondent, considering that the words of Sir Samuel Isaacs J.Evans in the case of the Panariellos (1), “ where the intercourse is of a commercial nature it is usually denominated ‘ trading with the enemy,’ ” were too wide. His Honor also considered that the learned President did not intend them to convey more than to add transportation to ordinary transactions by which some “ trading ” in the sense of a completed contract w'as effected. His Honor, however, treated thi.s as the only point of law demanding his con sideration, and apparently did not apprehend there was any question as to the applicability of the legal test, whatever it was, to the corre spondence actually in evidence. And the fact that his Honor so treated the question is, or may eventually be, a very material matter in the determination of this case. At the present juncture I say no more regarding it, than to indicate that it is still open.

The rest of the Court took the same view of the general question as the learned Chief Justice, and, in addition, rested their judgments on the possibility that “ communications on business matters in which the defendant and Aron Hirsch & Sohn were interested ” might be taken by the jury to include a communication by the defendant saying that he refused to do any business at all. I should have some difficulty in assenting to that interpretation being reasonably open upon those words alone, and more particularly having regard to the rest of the charge as appearing in the case stated. The observations of the Privy Council in Blue d- Deschamfs

case is returned with such of the correspondence as may be annexed to it. When that occurs, it may be that the conviction should be affirmed or quashed or a new trial granted. We are at present

V.

Red Mountain Raihvay Co. (2) are important in this connection.

unable to say which course should be finally adopted.

,

As to the general question, I am of opinion the limitation placed by the Supreme Court on the legal phrase “ trading with the enemy ” is not well founded. I suggested during the argument, and further

(1) 84 L .J. P ., 140 a t p. 142. (2)

(1909) A.C., 301, a t pp. 307-368.

23CL.R.]

OF AUSTRALIA.

281

consideration has confirmed my impression, that the fallacy of that R- C. oi- A.

vieAv lies in thinking of “ the enemy ” simply as “ an enemy ”—in

other words, in regarding the members of the enemy country as

T h e K in g

V.

separately jirohibited individuals, instead of members of one pro

Sn o w .

hibited political community. The war, so far as Germany is con

Isaacs J.

cerned, is as the Act itself states (sec. 2) betiveen “ His Majesty the King and the German Emperor.” Trading with the enemy means, at common law, trading with the political community occupying the territory of the German Emperor, and all persons adhering to that community. The learned Chief Justice, after quoting from my judgment \\\ Moss and Phillifs v. Donohoc (1), observes : “ Trading with the enemy therefore means trading with a person resident or carrying on business in the enemy country.” Now, my object in that case was to show that enemy character attached to individuals not according to their personal nationality, but according to their territorial character. So far from regarding them as having individual separateness for the purpose, 1 was enforcing the opposite conception, and said (1): “ When h e” (the Sovereign) “ declares war, the whole nation is at war, and is in a state of hostility to the whole of the opposing nation considered territorially.”

That conception lies at the root of the present question. W hatever is “ trade,” not in the nari-ow sense of binding contracts between individuals or the exchange of goods in terms of a given arrange ment, but in the larger sense of prosecuting trade as between the territories at war with each other, is “ trade with the enemy.” If we were bound to inquire whether a contract ensued from negotiations, we might be driven to inquire whether the law of Australia or the law of England or the law of Germany pre vailed. In questions of ])rivate international law% as it is called, when mercantile transactions are interpreted and enforced in times of peace, that might be a very relevant inquiry. But on a question of “ ti ade with the enemy ” no such distinctions can arise. .Vll intercourse is unlawful, either towards the enemy or from the enemy. In either ease, it is “ with ” the enemy. Trading with a particular individual enemy, though the most common form of offending, is

(I) 20 C .L.R ., 580, a t p. 002.

282 HIGH COURT

[1917.

H . C. OF A. after all only an instance of the offence.

Decided cases establish

■this beyond question.

,

Learned counsel for the Crown advanced the contention that all intercourse with the enemy is “ trading,” using “ trading ” iu a rare and practically obsolete sense. He based it on the words in

T h e K in g

V.

S n o w .

Isaacs J.

The Rapid (1), “ intercourse inconsistent with actual hostility,” which were there substituted by the Court for “ trading with the enemy.” The words “ inconsistent with actual hostility ” have reference, apart from recognized military communications, to con tracts for ransom at common law, and so far as I am aware to nothing else. But in the case of The Rapid the word “ intercourse ” read in its surroundings must niea-n commercial intercourse, because it was used with respect to intercourse in relation to the property with w'hich the Court was dealing. J reject on the one hand this suggested universal extension of the term “ trading with the enemy,” and on the other the restricted signification attached to it by the respondent.

“ Trading with the enemy ” means in law “ commercial inter course ” direct or indirect between this country and the enemy country, including in the latter persons adhering to that country. The futility of indirectness to evade the law is conspicuously shown in the Daimler Co.’s Case (2).

The word “ trade,” when used with reference to foreign trade, has always had a wide signification. Without going to any earlier sources, we find in the opinion of the Attorney-General in 1681 this statem ent: “ Your Maiest}'’s subjects ought not to trade or traffic with any infidel country, not in amity with your Majesty, without your licence ” ; and further on he uses the phrase “ to trade into India ”—Chalmers’ Opinions, at p. 582. Similarly, at pp. 590 to 597, in the year 1720.

In The Neptunus (3), in 1807, Sir William Scott said : “ A declara tion of hostility naturally carries with it an interdiction of all com mercial intercourse; it leaves the belligerent countries in a state that is inconsistent with the relations of commerce.” Sir William Scott manifestly used the term “ commercial intercourse ” in the sense

(1) 8 Cranch, 155, a t p. 162.

(2) (1916) 2 A.C., 307.

(3) 6 R ob. A dm ., 403, a t p. 405.

23 C.L.R.l OF AUSTRALIA.

283

of Bi/nkershoek'’s “ commercia ” (QucBst. Jur. Pub., lib. i., c. 3).

He

1917.

had previously so expressed himself in The Hoop (1).

So the Supreme

Court of the United States understood Bijnkershoek\s word in Matthews

T h e K ix g

V.

V. McStea (2); and so did Story J. understand it in The Julia (3), beSn o w .

cause the reasoning of the Court of Massachusetts was adopted, and

Isaacs J.

as to this point see the report at p. 193. See also per Lord Wrenhury in Sunday & Co.’s Case (1), and per Lord Reading C..T. in Halsey v. Lowenfeld (5). Chitty on the Law of Nations (1817), at p. 1, assumes the identity of meaning of the two expressions ; so does Mannmg on the fyuw of Nations, at p. 167. In VandycL v. Whitmore (6) Lord Kenyon speaks of a “ trading with an enemy’s country.” In Chitty on the Prerogatives of the Crown, published in 1820, we find (p. 171) the expressions “ the general prohibition upon all traffic with the enemv ” and “ a trade with the enemy ” ; and see per Sir Samuel Evans in The Kildonan Castle. The numerous decisions by which property has been condemned without any transaction which would amount to trading Ijetween individuals, in the narrow sense, compel the admission that contract, or quasi-contract, as I may call it, is not the only criterion of “ trading with the enemy.” The decisions include the case where a subject sends for his own goods to enemy territory, not for the purpose of selling them to an eneni}’, but for the purpose of bringing them to his own country {The Rapid (7); The St. Philip (1747), cited in Potts v. Bell (8) ). It includes the case of a ship merely sailing towards an enemy port, with the inten tion of going there {The Abby (9) ). I pressed that case upon the attention of learned counsel, because it seems to me to be of great relevance to the present. Sir William Scott there said (10) : “ If the ship had been taken on a voyage to a colony now become an enemy, the Court would have required it to be shown, that due diligence had been used to alter the voyage, and to exonerate the claimant from the charge of an illegal trading with the enemy’’ It is clear from that passage, the italics being mine, and from the rest of the judgment, that the mere act of sailing would be “ trading wdth

(1) 1 Rob. Adm., 19t5, a t pp. 199-200.(0) 1 E ast, 47u, a t p. 480.

(2) 91 U.S., 7, a t p. 10.(7) 8 Cranch, 15.5.

(H) 8 Cranch, 181.(8) 8 T .R ., 548, a t p. 550.

(4) (1910) 1 A.C., 0.50, a t p. 071.(9) 5 Rob. Adm., 251.

(■)) (1910) 2 K.U., 707, a t p. 712.

(10) 5 Rob. Adm., a t p. 253.

284 HIGH COURT

[1917.

H . C. OF A. the enemy.” The commencement of the voyage, said Sir William Scott, would be “ an act of trading.” Its continuation would be T h e K in o equally SO (see per Lord Parmoor in Sanday & Cods Case (1),

V.

and per Lord Shaw in Horlock v. Beal (2) ; see also EallecPs International Laiv, vol. ii., p. 165). The mere entry into an enemy

Sn o w .

Isaac.? J.

port is trading with the enemy (The Teut07%ia (3) ). See also the Nayade (4), a report which clearly shows the ample meaning of

“ trade with the enemy.” •

An excellent example of the meaning of the word “ trade ” in relation to the enemy is found in the case of The Speculation (5). By Order in Council of 7th January 1807 it was ordered “ that no vessel shall be permitted to trade from one port to another” belonging to France or her allies. (See Edvjards, appendix I), note to p. 17). Sir Willia^n Scott said (6) : “ If this vessel was pro ceeding to Riga to be sold, I am of opinion that this would be in itself a trading in contravention of the Order of 7th January, and there fore the ship would be liable to confiscation.” In the same appendix D, in the case of The Pelican, Sii' William Grant spoke of a ship returning from San Domingo as “ trading ” in the §ense we are considering, and said that if the port from which she sailed had been an enemy port she should have been condemned.

It was urged on behalf of the respondent that Kershaw v. Kelsey (7) was still of importance, notwithstanding all adverse references to that case. I t was relied on as indicating what is meant by

commercial intercourse. I cannot regard that case as a safe guide,

but in this respect it is adverse to the respondent. The Court there said (8) “ every kind of trading or commercial dealing or intercourse, whether by transmission of money or goods, or orders for the delivery of either, between the two countries ” at war,“ directly or indirectly, or through the intervention of third persons or partnerships, or by contracts in any form looking to or involving such transmission,” is prohibited. Indeed, it was laid down in Kent’s Commentaries, /th ed. (1851), vol. i., at p. 74, under the heading “ Trading with the

(1) (1916) 1 A.C., a t pp. 669-670.(5) Edw.,.344.

(2) (1916) 1 A.C., 486, a t p. 507.(6) Edw ., a t p. 346.

(3) 8 Moo. P.C.C. (N.S.), 411, a t pp.

(7) 100 Mass., 561.

421-422.

(8) 100 Mass., a t p. 573.

(4) 4 Rob. Adm., 251.

23 C.L.R.] OF AUSTRALIA.

285

Enemy,” that “ one of the immediate and important consequences R- C. or A.

of the declaration of war is the absolute interruption and inter

diction of all commercial correspondence, intercourse and dealing The King

V.

between the subjects of the two countries.” I would add that in

S n o w .

appendix A and appendix C to the same volume of Edwards^ Reports

Isaacs J .

as 1 have quoted, in two Orders in Council (19th November 1806 and 15th July 1807), the phrase ‘̂ commercial intercourse” is used in precisely the same sense as “ trade ” is used in the Order in Council of January 1807 already referred to. And in the case of The Manilla. (1) they are referred to as if the two expressions were identical in meaning.

Reference to these earlier precedents is rendered necessary because the verbal accuracy of the summation of the learned Presi dent of the Admiralty Court in the case of The Panariellos has been questioned. When the case came before the Privy Council (2), their Lordships (1) referred to the judgment under appeal in terms which indicated they found no fault with i t ; (2) expressly said that the point was unavailing that the intercourse in that case fell short of technical “ trading ” ; (3) held the charge of “ trading with the enemy ” proved because the goods were “ so shipped as to be engaged in commercial intercourse with the enemy.”

'I’he Privy Council obviously used the two expressions as identical in import, and thought the interchange of expression justified by the authorities to wdiich they liad made reference. In the Daimler Cods Case (3) Lord Shaw appeared to have been clearly of opinion that “ negotiation ” might have been regarded as trading. His Lordship is there dealing with trading with the enemy, and in his fourth proposition says : “ No firm or company wheresoever or howsoever directed can so trade ” (that is, by the company itself), “ nor,” continued the learned Lord, “ can anything be negotiated or transacted for it through any person or agency in this country.” If the word “ trading ” be critically examined, it does not neces sarily import a concluded bargain. In Owners of S.S. Edenbridge V. Green (4) Lord Halsbury L.C. said : “ A shopkeeper in London is trading as long as his shop is open, although at the particular

(1) Kdw., 1.

(3) (1916) 2 A.C., a t p. 330.

(2) 85 L .J. P 112.

(4) (1897) A.C., 333, a t pp. 335-336.

286 H IGH COURT

[1917.

H . C. o r A.

moment of time to which you refer there may be no customer in his shop engaged in the act of barter.” So if a man embarks on a trading adventure, he may succeed, or be may fail, or the adventure may be

T h e K in g

V.

S n o w .intercepted, but every act he does in the course of that adventure, is

“ trading.”

And if he is a British subject,and the adventure is one

Isaacs J.

which connects itself in any way with the enemy, lie has committed the act of trading with the enemy. It is impossible, as it would be unwise, to limit by enumeration the acts which would constitute trading with the enemy.

Lord Stowell, in The Neptunus (1), as far back as 1807 said “ the world has grown more commercial,” that is, in comparison with the time of earlier wars. So the Privy Council in The Panariellos (2) referred to the increased complexity of commercial inter course and the multiplication of facilities for enemy dealings with goods. I t is apparent that the mere instance of transportation. wLich was the particular method of effecting trade with the enemy, or the mere instance of a binding relation cannot now be the sole test.

The view, pressed by the respondent, that before the intercourse can amount to “ trading ” there must be a definite result—in the form of contract, or, as I term it, quasi-contract, or transmission or exchange—is inconsistent with the cases of the class of The Rapid and The Abby and The Hoop. A British subject commencing a voyage with his ship and cargo en route to Germany, and captured on the w'ay, may have had no prior communication with that country. He may have had no “ intercourse ” at all in the narrow sense, that is, if actual contact, so to speak, is an essential factor in the intercourse. His transportation is not final, and in fact there has been no transportation to Germany if he is taken on the way. Nevertheless, upon the authorities, he is guilty of “ trading with the enemy ” and his property is confiscable. He has taken the first step, committed the first overt act, to carry out his intention of trading. No individual enemy could be pointed to as the person wuth whom he even intends to trade, he may even intend to retain the goods there for his own use, and yet, in the eye of the law, his

(1) 6 R ob. A dm ., a t p. 408.

(2) 85 L..J. P ., 112.

23 C.L.R.] OF AUSTRALIA.

287

goods ]iave “ adhered to the enemy ” {The Nelly (1) ).

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[1917] HCA 25

7 June 1917

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