The Dairy Farmers Co-operative Milk Company Ltd v Commonwealth

The Dairy Farmers' Co-operative Milk Company Ltd. and another company brought an action against the Commonwealth of Australia and its Prices Commissioner and Assistant Prices Commissioner. The dispute concerned the validity of certain Prices Regulation Orders made under the National Security (Prices) Regulations, which prescribed maximum prices for milk. The plaintiffs sought declarations that these orders were invalid as being beyond the powers conferred by the Regulations or the Commonwealth Constitution, particularly in relation to sales to the State Contracts Control Board. The defendants demurred to the statement of claim, arguing that the Orders were valid and that the plaintiffs' action disclosed no cause of action.

The High Court was required to determine whether the differentiations made in the Prices Regulation Orders, which distinguished between various types of sales and purchasers, were within the scope of the defence power and the National Security (Prices) Regulations. Specifically, the court had to consider if the fixing of prices in relation to particular purchasers, such as the State Contracts Control Board, required a prior declaration by the Minister under regulation 22(3). The court also had to address the contention that the Orders, by purporting to bind sales to the State Contracts Control Board, were invalid because the Crown in right of a State is not bound by such regulations.

The Court found that the differentiations in the Orders, relating to factors such as time, place, circumstance, and the character of the purchaser, were proper elements to consider in a scheme of price control as part of economic organisation, and thus fell within the defence power. The Court also held that it was not necessary for the Minister to make a specific declaration in respect of each individual purchaser before the Prices Commissioner could fix prices in relation to them, as the powers under regulation 23(1)(a) and 23(1A)(h) were sufficiently broad to authorise such variations. Furthermore, the Court determined that even if the Crown in right of a State were not bound by the Regulations, this would not invalidate the plaintiffs' obligation to comply with the Orders in their sales to all purchasers, including State Government agencies.

The demurrer was allowed with costs, and the action was dismissed. The Court noted that the Orders had been revoked after the action was instituted, and that the State of New South Wales, a party with a significant interest in the matter, was not before the Court. In light of these circumstances, and the lack of a live issue between the existing parties beyond costs, the Court indicated it would have hesitated to grant declarations even if it had found substance in the plaintiffs' objections.