The Commonwealth v Huon Transport Pty Ltd - [1945] HCA 5

THE COMMONWEALTH

HUON TRANSPORT PROPRIETARY LIMITED RESPONDENT.

ON APPEAL FROM THE SUPREME COURT OF Defence-Requisitioning of ships-Statute giving power to officer authorized by H. C. OF

regulations-No regulations enacted-Whether requisitioning on basis of compul- sory taking or taking by agreement-Assessment of compensation for period of possession-Whether interest allowable-The Constitution (63 &64 Vict. c. 12), 8. 51 (xxxi.)-Defence Act 1903-1939 (No. 20 of 1903-No. 13 of 1939), ss. 67, 124.

Section 67 of the Defence Act 1903-1939 provides that " the owner of any

required for naval or military purposes, shall, when required to do SO by an officer authorized in that behalf by the regula- tions, furnish it for those purposes, and shall be recompensed therefor in the manner prescribed."

Although no regulations had been made with reference to S. 67 of the Defence Act, the Commonwealth, purporting to act in pursuance of that section, requisitioned and took possession of two steamers of the H. company.

Held :-By Latham C.J. and McTiernan J., that the taking of the steamers was upon an implied promise by the Commonwealth to pay a fair hire for them, since S. 67 of the Defence Act does not operate until authority is given by regulations to an officer to act thereunder. By Rich, Starke, Dixon and Williams JJ., that the steamers were lawfully requisitioned under S. 67 of the Defence Act, and that, in the absence of regulations prescribing the method of recompense, the compensation payable must be worked out on general legal principles.

Held :-By Latham C.J., Starke, Dixon and McTiernan JJ. (Rich and Williams JJ. dissenting), that the H. company was not entitled to interest

70 CLR 294

on the balances for the time being unpaid in respect of the compensation payable to it from the time the Commonwealth took possession of the steamers. Per Latham C.J. and McTiernan J.: In respect of the implied contract to pay a fair hire, no liability arose under the Supreme Court Civil Procedure Act 1932 (Tas.), SS. 34 or 35 (Lord Tenterden's Act). Per Starke J.: No interest can be allowed in respect of the requisition of goods unless the statute or regulation authorizing the requisition itself authorizes the allowance of interest. Swift and Co. v. Board of Trade, (1925) A.C. 520, followed. Per Dixon J.

Just terms " in the Constitution, S. 51 (xxxi), do not include more than compensation" as that term is understood in English law, and therefore do not necessarily include interest. Swift and Co. v. Board of Trade, (1925) A.C. 520, followed. By Rich and Williams JJ., that S. 67 of the Defence Act, construed in the light of S. 51 (xxxi.) of the Constitution, authorized the Court to allow interest where it considered that such an allowance was necessary to make compensation adequate.

Decision of the Supreme Court of Tasmania (Hutchins J.) varied.

APPEAL from the Supreme Court of Tasmania.

On 4th September 1939 and 2nd September 1939 respectively, the Commonwealth, purporting to act under S.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1945] HCA 5
Decision Date: 10 May 1945

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of Tasmania concerning the requisitioning of two steamers, the *Marana* and the *Mongana*, by the Commonwealth. Huon Transport Pty Ltd, the respondent, claimed that the compensation paid by the Commonwealth was insufficient and sought additional payment, including interest. The dispute arose from the Commonwealth's purported use of section 67 of the *Defence Act 1903-1939*, which allowed for the requisitioning of vessels for naval or military purposes, with recompense to be provided as prescribed. However, at the time of the requisitioning, no regulations had been enacted under this section.

The central legal issues before the High Court were twofold: first, the proper assessment of compensation for the period the steamers were in the Commonwealth's possession, and second, whether interest was payable on the outstanding compensation. The court had to determine whether the requisitioning was a compulsory taking under the *Defence Act* or an implied agreement to pay hire, and how compensation should be calculated in the absence of prescribed regulations. Furthermore, the court considered the constitutional requirement of "just terms" for the acquisition of property and whether this encompassed the payment of interest.

A majority of the Court, comprising Latham C.J., Starke, Dixon, and McTiernan JJ., held that the steamers were requisitioned on the basis of an implied promise to pay fair hire, as section 67 of the *Defence Act* was inoperative without the necessary regulations. They further held that the respondent was not entitled to interest on the unpaid compensation. Rich and Williams JJ. dissented on the issue of interest, finding that the *Defence Act*, read in light of section 51(xxxi) of the Constitution, permitted the allowance of interest to ensure adequate compensation. The majority reasoned that "just terms" under the Constitution did not necessarily include interest, and that in the absence of statutory or regulatory provision for interest, it was not payable, following *Swift and Co. v. Board of Trade*.

The High Court varied the decision of the Supreme Court of Tasmania. While the exact amount of compensation was subject to further calculation and disagreement among the judges, the majority found the trial judge's assessment of compensation to be excessive. Crucially, the majority ruled against the claim for interest, reducing the overall award significantly.

Orders