Re Webster

[1975] HCA 22

HIGH COURT OF AUSTRALIA

Barwick C.J.,

In Re WEBSTER

(1975) 132 CLR 270

24 June 1975

Constitutional Law (Cth)—Parliamentary Elections (Cth)

Constitutional Law (Cth)—Parliamentary elections—Disqualification from being chosen or of sitting as senator—Person who has direct or indirect pecuniary interest in agreement with Public Service of Commonwealth—"Agreement"—"Pecuniary interest"—The Constitution (63 &64 Vict. c. 12), s. 44 (v.) Parliamentary Elections (Cth)—Disqualification from being chosen or of sitting as senator—Person who has direct or indirect pecuniary interest in agreement with Public Service of Commonwealth—Senator a shareholder and director of timber company—Submission by company of quotation to Commonwealth Department for supply of timber—Whether offer or invitation to treat—Agreement by Department to order such quantities as may be required—Whether a standing or continuing agreement—Placement of individual orders—Agreement—Pecuniary interest in agreement—Whether shareholder has interest in company's agreements—Commonwealth Electoral Act 1918-1973

Decision

June 24.
BARWICK C.J. delivered the following written judgment:-
Questions as to the eligibility of a senator to be chosen and to sit in the Senate having arisen in that House of the Parliament, the Senate resolved that the questions be referred to the High Court of Australia for its decision as the Court of Disputed Returns, so constituted under s. 184 of the Commonwealth Electoral Act, 1918-1973. That provision is authorized by ss. 47 and 51 (xxxvi.) of the Constitution. The question is whether the senator at the relevant time had any direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth otherwise than as a member and in common with the other members of an incorporated company consisting of more than twenty-five persons, contrary to the provisions of s. 44 (v) of the Constitution. (at p274)

2. In conformity with s. 204 of the Commonwealth Electoral Act, the President of the Senate sent to the Principal Registrar of this Court a statement of the questions upon which the determination of the Court was desired together with papers, proceedings, and documents relating to the questions. The questions posed by the Senate are: (a) Whether Senator Webster was incapable of being chosen or of sitting as a senator; and (b) Whether Senator Webster has become incapable of sitting as a senator. The papers, etc. are:

Journals of the Senate -
No. 64 of 15th April 1975 - Entry 4, at p. 597.
No. 65 of 16th April 1975 - Entry 13, at p. 605. No. 67 of 21st April 1975 - Entry 14, at p. 618. Notice Papers of the Senate - No. 64 of 16th April 1975, p. 2045. No. 65 of 17th April 1975, p. 2075. No. 66 of 21st April 1975, p. 2107. No. 67 of 22nd April 1975, p. 2139. Extracts from Senate Debates - 16th April 1975. 21st April 1975. 22nd April 1975. (at p275)

3. But these papers and documents do not contain any material upon which the questions could be decided: there were no relevant facts found or properly evidenced. This was not due to any default on the part of the President who had fully complied with his obligation under the Commonwealth Electoral Act. The deficiency resulted from the manner in which the question had arisen in the Senate. A Joint Committee on Pecuniary Interests of Members of Parliament, inquiring into arrangements to be made relative to the declaration of the interests of the members of the parliament and the registration therof, was attended by witnesses whose evidence was not really relevant to the task the committee had to perform. However, the committee heard what these witnesses had to say and, without finding facts relevant to the questions now raised, sent the record of those statements to the Senate. (at p275)

4. After receipt of the papers from the President, I appointed a sitting of the Court as the Court of Disputed Returns to be held at the Court House, Darlinghurst, at 10.15 on Monday, 19th May 1975. That sitting was duly advertised in the press. At that sitting Mr. T.E. F. Hughes Q.C., instructed by the Crown Solicitor, sought leave to appear on behalf of the Attorney-General of Australia to assist the Court, and Mr. W.P. Deane Q.C., sought leave to appear for Senator Webster, the Senator to whom the questions of eligibility related. I gave leave to both these counsel. A Mr. P.C. Brown also sought leave to appear with a view to seeking the extension of the inquiry before the Court to include earlier elections than the most recent election for the Senate. I declined to give Mr. Brown leave to appear. There was also an application by a Mr. P. Soegemeier who by his own statements in Court clearly had no interest in the matter entitling him to leave: I refused him leave to appear. Mr. J.D. Traill appearing on behalf of Mr. Francis McManus also sought leave on the footing that if the Court decided that Senator Webster's seat was vacant, it would be necessary to decide what order, if any, the Court should make for filling the vacancy, a matter in which Mr. McManus claimed to have an interest. I gave Mr. Traill leave to appear if and when that question arose. (at p276)

5. The relevant facts relating to the eligibility of Senator Webster were proved by affidavits, some tendered on behalf of the Attorney-General in order to assist the Court and some tendered on behalf of Senator Webster. The affidavits were as follows: Simon Gaunt sworn on 29th May 1975; Warren Ernest James Butler sworn on 29th May 1975; Leslie George Clapperton sworn on 29th May 1975; Francis Patrick McManus sworn on 29th May 1975; James Joseph Webster sworn on 2nd June 1975; Reginald Keith Brown sworn on 30th May 1975; Laurence John Abbott sworn on 30th May 1975; James Joseph Webster sworn on 3rd June 1975. (at p276)

6. The poll for the Senate, held on 18th May 1974, was declared on 25th June 1974. Senator Webster was then elected to the Senate and has sat in the Senate as a senator since 9th July 1974, which was the first sitting day of the Senate following that election. Having regard to the views I have formed, there is no need to correlate any of the transactions to which I shall refer with days on which the senator sat. (at p276)

7. The facts are not in doubt but the proper legal inferences to be drawn from them is a matter of difficulty. But it is quite certain that the facts lend no colour whatever to any suggestion of any lack of integrity on the part of Senator Webster, or of any intention on his part to allow the Crown to influence him in the performance of his obligations as a member of the Senate. There was at no time any agreement of any kind between Senator Webster and the Public Service of the Commonwealth. The question of eligibility is only suggested to arise because he was a shareholder in a family company which is said to have had a relevant agreement, or relevant agreements, with that Public Service. (at p276)

8. It is beyond doubt that if that company did relevantly have any such agreement, neither Senator Webster nor the company obtained any benefit whatever, or intended to obtain any benefit whatever, from the fact that Senator Webster was either a candidate for the Senate or a member of that House. As will appear, whatever transactions took place between the company and the Public Service of the Commonwealth were the consequence of open and competitive quotation in which the attitude of the Public Service towards those quotations or tenders was uninfluenced by the fact that Senator Webster was a member of the company. The Public Service found the quotations of the company, to which I later refer, offered in competition with other quotations by members of the trade, satisfactory for the purposes of the Department and was prepared to act on them for the benefit of the Public Service in the ordinary course of its administration. Nothing in the facts in the least suggests any realization on the part of the senator that any arrangements or transactions of the company fell or might fall within s. 44 (v.) of the Constitution. (at p277)

9. As will appear from my discussion of the matter, the questions turn largely on technical concepts of the law of contracts. It is indeed, in my opinion, a matter for great regret that the composition of a House of the Parliament should depend upon such highly technical differentia as I shall need to consider in order to resolve the questions submitted by the Senate to the Court on this occasion. (at p277)

10. At all material times Senator Webster was a shareholder in J.J. Webster Pty. Ltd. (the company) which was incorporated in the State of Victoria in 1920 in order to carry on a timber, hardware and plumbing business then being, and since 1890 having been, carried on in the suburb of Elsternwick, Melbourne, by Joseph John Webster, the grandfather of Senator Webster. Until his death in August 1948, Joseph John Webster was the principal shareholder in the company. At the present time the Public Trustee of Victoria, who is the executor of the will of Joseph John Webster and the trustee of his estate, is the majority shareholder in the company. The issued capital of the company at relevant times was $80,000 made up of 7,000 cumulative preference shares of $2.00 each and 33,000 ordinary shares of $2.00 each. The Public Trustee held 4,700 preference shares and 16,209 ordinary shares. The balance of the issued capital was spread amongst eight other shareholders. Senator Webster at relevant times held 1,000 preference shares and 7,858 ordinary shares. The terms of the will of Joseph John Webster were proved before me as well as the present situation of the beneficiaries thereunder. From this evidence it is clear that Senator Webster is not presently entitled in possession to any shares under his grandfather's will. (at p277)

11. As at 18th May 1974, Senator Webster was managing director, secretary and manager of the company as well as being a shareholder. He remained in this situation in the company until 14th April 1975. Senator Webster was not entitled to, nor has he received, any fee, remuneration or reward as managing director or as director. He received a fixed salary as manager of the company unrelated to the turnover or profits of the company. He received no remuneration of any kind in relation to the negotiation or management of business for the company. As manager he had the use of a company car. (at p277)

12. It is fundamental to the decision of the questions posed by the Senate to bear in mind the purposes which s. 44 (v.) of the Constitution is designed to achieve. The paragraph derives ultimately from the provisions of the statute 7 &8 Wm. III c.25 passed in the year 1696 to secure the freedom and independence of the Parliament from the Crown and its influence. The precise progenitor of s. 44 (v.) is s. 1. of 22 Geo. III c.45 passed in the year 1782. The substance of those provisions, repeated in 41 Geo. III c.52 passed in the year 1801, persisted until 1957 when they finally disappeared from British Parliamentary life. During times when Parliament was establishing its independence of the Crown it was thought that there was a real likelihood of a government contractor, that is to say, one who had a binding term contract with the Crown to supply government stores, and from whom the Crown was bound to take its requirements, being influenced by the Crown in matters not limited to the subject matter of the contract. Lord Haldane when Lord Chancellor said in In re Sir Stuart Samuel (1913) AC 514, at p 524 with respect to the statute 22 Geo. III c.45, "This Act of Parliament itself declares that it was made to preserve the freedom and independence of Parliament; and the mischief guarded against is the sapping of that freedom and independence by members being admitted to profitable contracts", Willes J. in Royse v. Birley (1869) LR 4 CP 296, at pp 311-312 , speaking of the same statute, said: "I think the enactment refers to the case of a man having a contract under which he is to derive some future benefit from dealing with the government, in respect of which they might control him; as, for instance, by directing their officers not to look too closely to the sort of goods he sent in, or the like." That was said in 1869, but it might be remarked in passing that even as of that time, Montague Smith J. in that case said (1869) LR 4 CP, at p 319 : "I cannot help thinking that it would be very desirable that this Act should be revised, because it certainly appears to me to be totally inapplicable to the present state of commerce, and that it really provides a pit-fall into which men who wish to walk uprightly and according to law may unwittingly tumble." (at p278)

13. However, the provision is part of the Constitution and, however vestigial, must be enforced. But in its construction and application, the purpose it seeks to attain must always be kept in mind. That purpose has no real analogy in the purpose sought to be achieved by disqualification provisions under local government and comparable legislation. In the case of mayors, councillors and aldermen and persons holding statutory offices, the object of the disqualification is to prevent a possible conflict of interest and duty and the possible misapplication of shire, municipal or statutory funds for the personal gain of the mayor, councillors, aldermen or officers to "preserve purity in local government administration" (see Ex parte Elliot; re Mowle (1936) 53 WN (NSW) 88, at p 90 ). The protection of the independence of the parliament is a completely different purpose which is not directly concerned with possible conflicts of interest and duty, though of course, to yield for personal gain to the pressure of the Crown in the performance of the parliamentary function could be said to indicate a preference of interest over duty. But the obligations of a member of parliament cannot be compared to the duties of local government or statutory officials. The member is in a significantly different situation. It might also be mentioned that the parliamentary disqualification provision was neither initially devised nor inserted in the Constitution in order to protect the public against fraudulent conduct of members of the House, carried out perhaps behind the shield of a corporation of small membership. In this connexion, I may remark, however, that in the Convention debates, some of its members were seemingly concerned, when speaking on the insertion in the provision which became s. 44 (v.) of a minimum number of shareholders, with the possibility of members of the parliament defrauding the community under the cloak of what we have come to call a "private" company. (See "National Australasian Convention Debates", Adelaide, 1897, pp. 736-738, "Australasian Federal Convention Debate", Sydney, 1897, pp. 1022-1028.) (at p279)

14. The disqualification under s. 44 (v.) as effected by s. 45 of the Constitution, is automatic and does not depend upon a decision of the House or of the Court of Disputed Returns, though means are there provided of resolving the facts and their legal consequences. There being penal consequences of its breach, the paragraph should receive a strict construction. (at p279)

15. Because of the evident purpose of the disqualification provision, it applies only to executory contracts, that is to say, to contracts under which at the relevant time something remains to be done by the contractor in performance of the contract: see Royse v. Birley (1869) LR 4 CP 296 . An illustration of the principle may be seen in the case of George Eric Leyland Laforest (Clerk of the House of Representatives) v. Morris Cargill (1959) 1 West Indian Reports 178 . For the same reason, it has been said that "What are meant to be covered" (i.e., by 22 Geo. III c.45) "are contracts of a more permanent or continuing and lasting character, the holding and enjoying of which might improperly influence the action both of legislators and the Government": per Low J. in Tranton v. Astor (1917) 33 TLR 383, at p 386 . In somewhat the same vein, Montague Smith J. in Royse v. Birley (1869) LR 4 CP, at p 317 thought that what was contemplated was "a contract which would endure for some period of time" during which something remained to be done by the contractor. True it is that both these judges were influenced to some extent by the presence in the statutes with which they were concerned of a disqualification which was "during the time" that the contractor held the contract. But, in my opinion, this requirement of something more than a "casual or transient" contract in order to found a disqualification, springs out of the purpose of the statute, in this case the Constitution, creating the disqualification. (at p280)

16. It seems to me that, upon the proper construction of the paragraph, bearing in mind the purpose of its presence in the Constitution, the agreement to fall within the scope of s. 44 (v.) must have a currency for a substantial period of time, and must be one under which the Crown could conceivably influence the contractor in relation to parliamentary affairs by the very existence of the agreement, or by something done or refrained from being done in relation to the contract or to its subject matter, whether or not that act or omission is within the terms of the contract. In the climate of the eighteenth century, the likelihood of such influence upon a government contractor could well be thought to be high. Accordingly, the mere existence of a supply contract justified the disqualification. But in modern business and departmental conditions the possibility of influence by the Crown is not so apparent: whilst it need not be certain, at least it must be conceivable, and in any case the possibility will arise from the continuing nature of the agreement. Further, it seems to me that the interest in the agreement of the person said to be disqualified must be pecuniary in the sense that through the possibility of financial gain by the existence or the performance of the agreement, that person could conceivably be influenced by the Crown in relation to Parliamentary affairs. (at p280)

17. Whilst I am bound to say that I can point to no authoritative decision interpreting this section or its progenitors in this particular sense, I can say that, having carefully examined the decisions which have been given, I do not find any which would deny that interpretation. But, in my opinion, what I have said expresses the proper meaning and scope of s. 44 (v.). No doubt a similar construction could not be placed upon a local government disqualification because of its different purpose. (See City of London Electric Lighting Co. Ltd. v. London Corporation (1903) AC 434 .) (at p280)

18. I turn now to examine the particular facts of this matter in the light of the purpose of the disqualification provision. (at p280)

19. The first question of fact will be whether the company had any agreement at all with the Public Service of the Commonwealth at the relevant time in relation to Senator Webster's eligibility to be chosen, i.e., 18th May 1974, or at any time thereafter in relation to his capacity to sit as a senator. No question arises whether the subject matter of any transactions the company had with the government were for the Public Service of the Commonwealth. The transactions were for the supply of material for use by the government. Nor is there any question that the transactions were with the Public Service of the Commonwealth. The transactions were with the Department of Housing and Construction and with the Postmaster-General's Department. (at p281)

20. There was only one transaction with the Postmaster-General's Department. I can describe and dispose of it quite briefly. In August 1973 the company made a written tender to the Postmaster-General's Department on a form provided by it, for the supply throughout the ensuing year of timber of a specified kind. The conditions of the tender and of the so-called acceptance of it on behalf of the Postmaster-General's Department make it quite plain to my mind that the company did no more than purport to bind itself to accept orders placed with it during the year and conformable to the terms and conditions of the tender. The Postmaster-General's Department was not bound to place any orders with the company. No relevant agreement arose until an order was given. In fact, one order was given and executed during 1973. No other orders were given. Clearly, no agreement of any kind subsisted between the company and the Postmaster-General's Department at any relevant time. (at p281)

21. The transactions of the company with the Department of Housing and Construction fall into three broad groups. Two distinct types of subject matter appeared in the first group of transactions: (1) Hardwood of specific dimensions and (2) Red Gum of various dimensions to be priced at per 100 linear feet. The second group of transactions related to the supply of selected and described items of hardware and specialised timber. (at p281)

22. The third group of transactions was made up of orders given without prior quotation. They clearly did not give rise to any relevant agreement. No further reference need be made to them. (at p281)

23. With one exception, I can treat together all the transactions within both the first and second of these groups. (at p281)

24. The Department of Housing and Construction, when obtaining quotations from the timber merchants of Melbourne for the supply of hardwood and of red gum for delivery in and around that city, supplied timber merchants in Victoria with printed forms on which they could specify the prices at which they would supply timber of a stated specification for delivery within the metropolitan area of Melbourne including Laverton. (at p281)

25. A question immediately arises as to the effect of the signature by the company and delivery to the Department of this form setting out a quotation of prices for the timber. This form and the conditions it contained or to which its terms were subject is common to all transactions in the first and second groups between the company and the Department. (at p282)

26. The document supplied to the company and filled in by it speaks of a quotation subject to indorsed conditions. Of these, conditions 2, 6 and 8 are significant for present purposes:

"2. Quotations may be submitted for the whole or part or parts of the item(s) listed, and the Department of Works (hereinafter called 'the Department') reserves the right to accept separate offers for the whole or part or parts thereof. 6. No quotation shall be deemed to have been accepted until an official order has been received by the tenderer. 8. If the supplier fails to deliver the goods within the period specified, or intimates that he is unwilling or unable to supply the goods, the Department may, by notice in writing, cancel the order."

Further conditions, headed Conditions of Tendering and Specification, are imported into the quotations made within the first group of transactions. Amongst these, condition 1.2 (e) should be noted:

"1.2. Special Conditions of Contract: . . . (e) The Department shall not be bound to order the whole of the quantities listed herein which are given as a guide to tenderers. Orders will be placed as and when required by the Department during the currency of the contract. The successful tenderer will, however, be required to supply, in full all orders placed during the currency of the contract."

The form at its foot contained the statement addressed to the Director of Works: "We hereby agree to supply the abovementioned articles at the prices quoted above and subject to the conditions", i.e. indorsed conditions. The company in relation to each of the two groups of transactions signed the form below this statement. (at p282)

27. There is a radical distinction drawn in the law of contracts between the mere quotation of a price and an offer to sell and deliver. If a person merely inquires of a man what price he is either selling or willing to sell a commodity and the inquisitor is informed of that price, this quotation may not, and in general will not, constitute an offer which is capable of acceptance so as to form a binding contract upon the person making the quotation to sell and deliver, or upon the inquisitor to accept what is delivered. The quotation will be no more than an offer to treat. (Harvey v. Facey (1893) AC 552 ). This will be so even if the inquisitor treated the quotation as an offer and purported to accept it. (at p282)

28. In the present case, it has been submitted on behalf of Senator Webster that the company in filling in and signing these forms did no more than make a quotation which was in the nature of an offer to treat and not an offer susceptible of acceptance so as to form a binding agreement. (at p283)

29. If the quotation is nothing more, an order for the goods at the quoted price subsequently given would be itself an offer which would be accepted by delivery of the ordered goods. In that case, no relevant agreement would result. This situation is comparable to over-the-counter transactions in the ordinary course of trade in commodities. See Royse v. Birley (1869) LR 4 CP 296 . If counsel's submissions were accepted as to the effect of the document containing the quotation, there would be an end of this matter because no executory agreement would have resulted at any time, no matter how the departmental officers may have treated the quotation. The resolution of this question is obscured by the language used by the departmental officers in their documents. They appeared to treat the quotation as a tender and refer in their correspondence to an agreement as having sprung out of the acceptance of the quotation prior to the giving of any order: but, in my opinion, the matter cannot be decided by what the departmental officers thought to be the position. (at p283)

30. There is much to be said for acceptance of the proposition that the company did not at any time in relation to the various transactions with the Department which have been evidenced before me, do more than provide the Department with a quotation. There would be nothing strange or impractical in that situation. Lord Atkin, in delivering judgment in Percival Ltd. v. London County Council Asylums and Mental Deficiency Committee (1918) 87 LJKB 677, at p 678 , refers to different methods employed by Departments in setting out to obtain supplies of goods for the Public Service. In connexion with the present matter I have seen at least three different approaches made by Departments in seeking supplies of commodities for government use. (at p283)

31. After consideration, however, I have reached the conclusion that I should not accept this submission on behalf of Senator Webster because, but only because, of the express offer to supply signed by the company on the form. In my opinion, by signing and returning the forms the company did make an offer capable of acceptance, as distinct from merely quoting a price. The distinction is a nice one, and as I have said, it is more than unfortunate that the answer to the Senate's questions could turn upon it. In my opinion, where a price was named on the form there was an offer to sell and deliver at that price subject to the conditions in and imported into the printed form. The offer to supply was, in my opinion, a standing offer intended to expire, in any case, within a stated time, but because it was not supported by consideration, capable of being revoked before acceptance by the placement of a specific order. There was clearly no contract or agreement having currency for any term. Though it may have been thought to be conditioned on the promise of the Department to order at least some, if not all, of its requirements, the company's offer, in my opinion, was unsupported by consideration and therefore capable of revocation at any time before an order within its terms was received. (at p284)

32. The nature of the offer which was made I shall consider when considering the next question to arise. However, I should first mention the exception in the first group of transactions with which I need separately to deal. (at p284)

33. In the case of the hardwood included in the first group of transactions, the company did not quote any price in the form provided by the Department or at all. It placed an indorsement on the form to the following effect:

"Owing to conditions in trade at present, we are unable to quote as you have listed, but would be glad to assist with material from our stocks at ruling rates at time of order. 15% trade discount from T.M.A. List rate." (at p284)

34. The company signed the form below the statement: "We hereby offer to supply etc.". The Department purported to accept the quotation and appeared to treat the matter as if there was a contract with a year's duration. But plainly there was not. Without a price named or calculable by some disclosed formula there could be no agreement to sell: nor could there be an offer to sell. In this instance, the completed form did no more than provide an offer to treat. Therefore, quite plainly and apart from the other considerations to which I later refer, there was no contract or agreement between the company and the Department arising out of the quotation for the supply of hardwood and the purported acceptance by the Department of that company's response to the request for a quotation. (at p284)

35. The next question is whether there was an offer to supply the red gum which was accepted by the Department so as to form a standing contract binding the Commonwealth to take its, or at any rate some of its, requirements from the company and the company to supply them. For the resolution of this question, I shall need to refer to other documents as well as the forms of quotation to which I have already referred. (at p284)

36. On receipt of the quotations, the Acting Superintendent of Stores, being duly authorized by the Minister for Housing and Construction, wrote to the company as follows:

"Your quotation as set out in Departmental quotation form dated 22 November, 1973, submitted in accordance with the conditions of advertised quotation schedule V1310, is hereby accepted for the supply and delivery of Red Gum Scantlings (excluding soles and struts) at TMA list prices, less 15% discount less a further settlement discount of 2% - 10 days. Delivery to Laverton would be an extra $5.00 per load.

The contract will operate from the date of this Notice of Acceptance to 31 January, 1975. The Department does not undertake to purchase any specific quantities but will place firm orders for such quantities as may be required from time to time. Such orders will be endoresed 'To be supplied in accordance with the terms and conditions of contract No. V1310'."

Thereafter, orders for specific quantities of timber for delivery at stated times and places were given to the company, each order being referable to the general quotation. (at p285)

37. Having examined the documents, and particularly having regard to the several conditions they contain, I am clearly of opinion that no standing or continuing agreement was created by them. The offer, in my opinion, was no more than an offer to accept and fulfil orders given during the period contemplated and within the specification of the quotation, assuming it not to have been revoked before the order was received. It is evident from the terms of the documents that the offer to supply made by the company was not accepted by the Department until a specific order for timber was given. The documents are express on that point. The indorsed conditions also make it plain to my mind that the Department could choose to order any part of its requirements from other suppliers. It did not become bound to order. There was therefore no continuing contract between the company and the Department created by the documents: there was no contract with currency for an agreed period of time: there was no "overall" agreement between the company and the Department with respect to the supply of red gum timber or of the selected items. (at p285)

38. But, on my analysis of the documents, until its revocation there was a standing offer by the company to supply such quantity of timber within the specification of the quotation as the Department from time to time might order. Once an order was received, that order would constitute an acceptance of the offer to supply and a binding agreement would result limited to the timber or item ordered; an agreement binding the company to supply the timber or item and the Department to accept delivery. That agreement until such delivery would be an executory agreement. It would be an agreement with and for the Public Service of the Commonwealth. The order when given was for prompt delivery, though delivery in parcels over a period of time was on some occasions contemplated. There were such agreements on foot as at 18th May 1974 and subsequently. (at p286)

39. But is such an agreement within the contemplation or the purview of the disqualification? How far different, really, is such a transaction from over-the-counter transactions which clearly are not within the condition of disqualification? No doubt the legal analysis is different: in the one case the contract is executed, though payment may not have been made: in the other, it is executory, delivery has yet to take place. But what relevant difference is there in substance? In the first case, theoretically, the Department might delay payment as a measure of influence upon or coercion of the member: and, equally theoretically, in the second case the Department might accept unacceptable goods as a means of persuasion. But, in my opinion, as of this day, neither theoretical possibility is really conceivable in relation to isolated orders for prompt or immediate delivery of such commodities as were here ordered. (at p286)

40. In considering whether there is a relevant agreement, it must be remembered that there being no standing agreement, each order creates a separate and distinct agreement. Thus, the possibility of influence by the Crown must be considered in relation to the single instance of a specific order for specific and described goods, a single instance uncontrolled and unregulated by any overall standing agreement. For that reason, I have referred to "isolated orders" (at p286)

41. After a good deal of consideration, I have come to the conclusion that the agreement so formed does not come within the operation of s. 44 (v.). The agreement really has no term. It is not continuing: it is really casual and transient. I cannot conceive that, in these days, the Crown could exert any influence in Parliamentary affairs by anything it could do, properly or improperly, in relation to such an agreement. There are but bare theoretical possibilities unrelated to the practical affairs of business and departmental life, but these are not really conceivable. (at p286)

42. The conclusion that the agreements springing out of the individual orders are not within the scope of s. 44 (v.) is enough to dispose of this matter. However, there are further considerations to which I can properly advert. Clearly enough, the Crown could exert no relevant influence on the company. But could it exert such influence on the Senator through the company? It is only through the Senator's shareholding that this could possibly take place. (at p286)

43. Here it should be reiterated that the Senator's interest in the agreement between the company and the Department must be pecuniary: and it must be a pecuniary interest in the particular agreement. As I see the position, it must be a pecuniary interest in the specific agreement resulting from an order placed with the company for delivery of specified timber or some specified item. I think it must be accepted that for the purposes of s. 44 (v.) a shareholder may have a pecuniary interest in some agreements made by and with the company of which he is a member. Shareholders have been so treated in relation to disqualification provisions. However, under the general law it is well established that a shareholder does not have any legal or equitable interest in the assets, including agreements, of the company. Even where a shareholder owned almost all the shares of a company, he had no legal or equitable right or interest in the company's assets: see Macaura v. Northern Assurance Co. Ltd., per Lord Buckmaster L.C. (1925) AC 619, at p 629 ; per Lord Sumner (1925) AC, at p 630 . But of course, it may be that due to particular circumstances the shareholder may have such an interest. But in that case that pecuniary interest will arise out of those circumstances. The purpose of the exception clause in s. 44 (v.) is, in my opinion, on the one hand, to ensure that shareholders in "public" companies, who are Senators or members, are not within the disqualification provision: and, on the other, to ensure that shareholders in a company of small membership are not included in the exception. The terms of the paragraph do not amend the general law: and the presence of the exception does not mean that even for the purposes of the paragraph shareholders in public companies would otherwise have a pecuniary interest in the agreements made by those companies. If the Senator or member be a shareholder in a "private" company such as is described, which has a relevant agreement with the Government, there is a real question in my mind whether that fact of itself brings him within the disqualification. Consequently, it may be said that a person who is no more than a shareholder in a company does not, by reason of that circumstance alone, have a pecuniary interest in any agreement the company may have with the Public Service. (at p287)

44. But, however that may be, it is in my opinion more than difficult to conclude that the shareholder does have a pecuniary interest in each and every of the day to day transactions of the company, whether they be strictly "over the counter" transactions or arise out of orders given for the immediate supply of goods pursuant to a standing offer of supply. Under the general law, plainly he does not: in my opinion, there is good reason to conclude that the same is true in relation to s. 44 (v.). It may possibly be that other circumstances may combine with his shareholding to create such an interest: but no such circumstances exist in this case. (at p287)

45. Further, bearing in mind the purpose of the disqualification, it is difficult to see that the shareholder in this instance has any such pecuniary interest in the particular agreement arising from the giving of a specific order as would conceivably place him in any respect under the influence of the Crown in relation to Parliamentary activities, or in any wise enable the Crown through him to "sap" the freedom and independence of Parliament. However, I have no reason to decide that further point. It suffices that, in my opinion, neither on 18th May 1974, nor at any date subsequent thereto, did: (1) Senator Webster have any agreement with the Public Service of the Commonwealth. (2) J.J. Webster Pty. Ltd. have any standing or continuing agreement with the Public Service of the Commonwealth (at p288)

46. But, in my opinion, on 18th May 1974 and on divers dates subsequent thereto, J.J. Webster Pty. Ltd. had on foot an offer or offers to the Public Service of the Commonwealth which that Public Service accepted both before and after 18th May 1974 by giving specific individual orders for goods to be supplied for immediate or early delivery within the terms of the offers, and upon the receipt of such an order an executory agreement existed between the company and that Public Service for the period elapsing from the date of the receipt of the order until delivery of the goods. Agreements of that kind did exist between the company and the Public Service of the Commonwealth, both as at 18th May 1974 and subsequently thereto. (at p288)

47. In my opinion, such an agreement is not within the scope of the terms of s. 44 (v.), and did not constitute a relevant agreement with the Public Service of the Commonwealth. Further, in my opinion, it is at least doubtful whether Senator Webster had any relevant, pecuniary interest in any such agreement. (at p288)

48. I conclude that Senator Webster was not ineligible to be chosen on 18th May 1974 as a Senator, and did not at any time become incapable of sitting as a Senator. Both questions posed by the Senate are answered in the negative. (at p288)

Orders

Questions referred to the Court of Disputed Returns answered as follows:
(a) Whether Senator Webster was incapable of being chosen or of sitting as a Senator.
Answer: No. (b) Whether Senator Webster had become incapable of sitting as a Senator.
Answer: No.