Victorian Chamber of Manufactures v The Commonwealth

[1943] HCA 19

67 CLR 335

THE VICTORIAN CHAMBER OF MANUFAC-

TURES AND OTHERS

THE COMMONWEALTH AND OTHERS

DEFENDANTS. (PRICES REGULATIONS.) Constitutional Law - Defence - National security - Prices control- Regulations

Validity-Power of Minister to declare any goods to be declared goods," "any service to be a declared service "-Declaration of "all goods" and " all services" in Australia-The Constitution (63 &64 Vict. c. 12), S. 51 (vi.)-National MELBOURNE, Security Act 1939-1940 (No. 15 of 1939-No. 44 of 1940), S. 5 (1)-National June 23, 24 Security (Prices) Regulations (S.R. 1940 No. 176-1942 No. 513), regs. 22, 23.

The provisions of reg. 22 (1) and (2) of the National Security (Prices) Regula- tions empowering the Minister to "declare any goods to be declared goods " and "any service to be a declared service," for the purpose of the Regulations, are authorized by S. 5 (1) of the National Security Act 1939-1940 and are a valid exercise of the defence power of the Commonwealth.

Declarations by the Minister of "all goods in the possession or under the control of any person in Australia" and of ' all services supplied or carried on in Australia " (subject in each case to certain exceptions) are authorized by reg. 22 (1) and (2) respectively.

Per Latham C.J. and McTiernan J. Regs. 22 and 23 of the National Security (Prices) Regulations are valid. DEMURRER.

The Victorian Chamber of Manufactures (which was incorporated in Victoria as a company limited by guarantee and the members of which included upwards of 200 manufacturers of women's and girls' outer wear) and several manufacturers of women's and girls' outer wear brought an action in the High Court against the Commonwealth, the Minister for Trade and Customs and the Commonwealth Prices Commissioner.

67 CLR 336

In their statement of claim the plaintiffs referred to the National Security (Prices) Regulations (Statutory Rules 1940 No. 176 as amended by Statutory Rules 1940 Nos. 219 and 294, 1941 Nos. 54 and 251, and 1942 No. 513), to Prices Declarations Nos. 96 and 108, and to Prices Regulation Orders Nos. 991 and 992, which declared maximum prices in respect of women's and girls' wear. The Prices Declarations referred to were made by the Minister in pursuance of the powers conferred on him by reg. 22 of the Prices Regulations; he declared (by No. 96) " all goods in the possession or under the (PRICES

control of any person in Australia" to be "declared goods' " and TIONS).

(by No. 108) all services supplied or carried on in Australia' to be "declared services" for the purpose of the Regulations, subject in each case to certain exceptions which are not here material. The plaintiffs alleged in pars. 11 and 12 of their statement of claim that the Prices Declarations were not valid declarations of any goods or of any service and were not within the powers conferred on the Minister by the Regulations, that there was no valid declara- tion by the Minister of women's or girls' outer wear or of the service of making up material into such garments and the Prices Commis- sioner had not been validly authorized to fix maximum prices in respect thereof. The plaintiffs claimed declarations that the Prices Declarations were not authorized by the Regulations, that the Prices Regulation Orders above mentioned were void and that the Regula- tions as a whole or, alternatively, regs. 22 and/or 23 and/or 24 and/or 26 were beyond the powers conferred upon the Governor- General by the National Security Act 1939-1940.

The defendants demurred to pars. 11 and 12 of the statement of claim.

Ham K.C. (with him P. D. Phillips), for the defendants. The Prices Declarations are not, because they do not specify particular goods or services by name, beyond the power conferred by reg. 22. In earlier declarations an attempt was made to specify particular goods, but it was found to be impracticable, and it is not required by the Regulations. The power is to declare "any goods " or "any service." The word any " does not mean any particular" or " any specific" it simply means ' all or any ": See Liddy V. Kennedy 1; Isle of Wight Railway Co. v. Tahourdin 2.

Fullagar K.C. (with him Barry K.C., Dean and Dr. Coppel), for the plaintiffs. The Declaration as to goods is ambiguous because it declares " all goods in the possession or under the control of any

1(1871) L.R. 5 H.L. 134, at p. 148. 2(1883) 25 Ch. D. 320, at p. 332. 67 CLR 337

with the exception of &. This may mean in person the possession or under the control" &. at the time of the Declara- tion, or it may extend to goods which "may hereafter be in the possession" &. In the latter meaning, if not in the former, the Declaration would be beyond power. The Minister must exercise a discretion as to the particular goods to be declared. The declara- tion is a preliminary step towards the fixation of prices under reg. 23, and the Minister does not exercise a discretion by merely declaring

'all goods" and leaving it to the Prices Commissioner to fix prices or not for particular goods. Before making a declaration the Minister must determine whether it is desirable for defence purposes that a particular article should be declared. The criterion on which a declaration should be made is the character or nature of the goods, and the Declaration fails because it has not adopted this criterion. The same considerations apply in relation to services. If the Regulations authorize the declaration of all goods and services, they are not within the defence power. Farey v. Burvett 1 does not go

SO far as to say that all prices of all goods may be fixed, and it cannot be said that the control of prices of all goods and all services is necessary in time of war.

Ham K.C., in reply.

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

LATHAM C.J. In this action the plaintiffs claim that a declaration made under the National Security (Prices) Regulations on 13th April 1942 declaring certain goods to be "declared goods" for the purpose of the Regulations, and a declaration made on 30th November 1942 under the same Regulations declaring certain services to be 'declared services," are beyond the powers conferred upon the Minister of State for Trade and Customs by the Regulations and are accordingly void and of no effect. The plaintiffs further claim similar declarations with respect to certain prices orders, and a declaration that all the Regulations, or alternatively, the regulations under which the Declarations and Orders were made, were beyond the powers conferred upon the Governor-General by the National Security Act. Finally, the plaintiffs claim a declaration that the Act, or alternatively S. 5 thereof, to the extent to which it purports to confer power to make the Regulations or the Declarations or the Orders, is beyond the powers of the Commonwealth Parliament. The defendants demur to the statement of claim on the ground that the Declarations are valid.

1(1916) 21 C.L.R. 433. 67 CLR 338

The National Security (Prices) Regulations, Statutory Rules 1940 No. 176 (subsequently amended from time to time), were made under the National Security Act 1939-1940. Reg. 22 provides as follows :-

" (1) The Minister may, by notice in the Gazette, declare any goods to be declared goods for the purposes of these Regulations.

(2) The Minister may, by notice in the Gazette, declare any service to be a declared service for the purpose of these Regulations:

Provided that the Minister shall not make any declaration under this sub-regulation with respect to any service supplied or carried (PRICES

on by the Government of any State except with the concurrence of TIONS).

the Executive Government of that State" (Statutory Rules 1940 C.J. No. 176, reg. 22, as amended by Statutory Rules 1940 No. 219,

reg. 2, and 1942 No. 513).

When goods or services have been declared to be declared goods or services under reg. 22, the Prices Commissioner may, under reg. 23 as amended by Statutory Rules 1941 No. 54, reg. 2, fix the prices at which such goods may be sold, or the rates which may be charged in respect of such services. Under reg. 29 as amended by Statutory Rules 1942 No. 513, reg. 8 (a), it is an offence to sell or offer for sale declared goods at a greater price than the maximum fixed. Reg. 35 gives effect to the fixing of rates for the supply of declared services.

On 13th April 1942 the Minister of State for Trade and Customs, Richard Valentine Keane, made the following declaration :-

"I, Richard Valentine Keane, Minister of State for Trade and Customs, in pursuance of the powers conferred by Regulation 22 of the National Security (Prices) Regulations, do hereby declare the following goods to be declared goods for the purpose of the said Regulations, namely :-

All goods in the possession or under the control of any person in Australia with the exception of-

(a) goods in the possession or under the control of any State of the Commonwealth or any authority constituted by or under any State Act; and

(b) live stock, poultry and perishable primary produce not being declared goods for the purposes of the said Regulations on the day immediately preceding the date of this Order."

On 30th November 1942 the Minister made the following declara- tion: -

" I, Richard Valentine Keane, Minister of State for Trade and Customs, in pursuance of the powers conferred by regulation No. 22 of the National Security (Prices) Regulations, do hereby declare the following services to be declared services for the purpose of the said Regulations, namely :-

67 CLR 339

All services supplied or carried on in Australia with the exception of services supplied or carried on-

(a) by any State of the Commonwealth or any Authority con- stituted by or under any State Act;

(b) by any Local Government Authority established for any locality by or under any State Act relating to local government;

(c) by any company, society or body of persons supplying or carrying on-

(i) that class of insurance business which involves the issue of, or the undertaking of liability under, life policies and any business in relation thereto and

(ii) the general business of banking." The contentions for the plaintiffs are that the Declarations are not authorized by the Regulations, that the Regulations are not authorized by the National Security Act, and that the Act is not authorized by the Constitution. I propose to deal with these contentions in reverse order.

It has already been decided that the National Security Act is valid-Wishart v. Fraser 1 and many subsequent cases in which the validity of the Act has been recognized by the Court.

The Act, S. 5, authorizes the making of regulations for (inter alia) all matters which are necessary or convenient to be prescribed for the more effectual prosecution of any war in which His Majesty is or may be engaged. It is argued that the Regulations have no relation to the prosecution of the war.

The prosecution of the war involves the withdrawal of many men from the manufacture and distribution of goods and from the supply of services SO that they may serve in the fighting forces, or work in manufacturing munitions. The result is a reduction in the supply of goods and services which they had formerly provided, with a natural tendency to increases in the prices of goods and in the charges for services. This tendency is aggravated by a great increase in the amount of money in circulation, that increase being due to war conditions. Though there is a general increase in the amount of money available for expenditure, that increase has been brought about, at least to a material extent, by reducing the incomes of many members of the community. Uncontrolled increase of prices produces grave economic and social effects and may result in a complete dislocation of the organization of the community. In modern times all countries in time of war have found it necessary to deal with profiteering and inflation. In my opinion the legis- lature is validly exercising the defence power when it legislates for

1(1941) 64 C.L.R. 470. 67 CLR 340

the purpose of protecting the people against such results of the war. In my opinion the Commonwealth Parliament may, under the defence power, validly control prices of commodities and charges for services. In particular, regs. 22 and 23 of the Regulations are, in my opinion, valid.

It is further contended that the Declarations are void for several reasons. In the first instance it is said that the Minister is required by the Regulations to exercise a discretion because the power is specifically reposed in him to be exercised as thought proper by him, (PRICES

and that the generality of the terms of the Declarations shows that TIONS).

he has not exercised any discretion. No argument was adduced to support the suggestion that no discretion had been exercised. The declarations may be as wide or as narrow as the Minister chooses to make them, provided that he does not exceed the limits of the Regulations. In the second place it was contended that the Minister has declared nearly all goods and nearly all services to be declared goods or services for the purpose of the Regulations, and that such declarations were too wide. I find difficulty in appreciating this argument. Under the regulation the Minister has the power to declare any goods or any services to be declared goods or services. It appears to me to be obvious that under such a power he may declare some or all goods or services. In Doe d. Gardner v. Kennard

67 CLR 341

not to the validity of the Declarations, but as it was submitted it may be of advantage to deal with it. A parallel argument would make the declaration as to services apply only to services which were actually being supplied or carried on at the time when the Declaration as to services was made. Neither the words of the Regulations, nor the words of the Declarations, require such a limited interpretation. The suggested view attributes to the legislative authority an intention to fix the prices only of such goods as happen to exist at the moment when the declaration was made, and to leave the prices of all other goods uncontrolled, SO that, in order to obtain any general regulation of the price of goods, it would be necessary to make new declarations every day, or possibly every hour. A similar position would exist with respect to services. Such an absurd intention should not be attributed to the legislative authority without most clear and convincing words. Not only is there nothing in the language of the Declarations or of the Regulations which jus- tifies this view of their meaning, but other regulations show that it was not intended that the Regulations should apply only in the manner suggested. For example, reg. 23 (5) shows that orders may be made as to declared goods which are not orders 'in respect of specific goods "that is, orders may relate to future goods.

In my opinion the objections to the validity of the Declarations fail and the demurrer should accordingly be upheld. No separate argument was addressed to the Court upon the validity of the Prices Regulation Orders which were made in pursuance of the Declarations. But the demurrer did not relate to these Orders. If the plaintiffs desire to continue the action, there should be liberty to amend. If not, the action should be dismissed with costs. Upon these proceedings no question arises as to the right of the respective plaintiffs to sue. The decision upon demurrer should not be taken as involving a decision that the Chamber of Manufactures is a com- petent plaintiff.

RICH J. The demurrer in this matter lies within a small compass. The National Security (Prices) Regulations, Statutory Rules 1940 No. 176, reg. 22 (amended by Statutory Rules 1940 No. 219, reg. 2, and Statutory Rules 1941 No. 54, reg. 1), empower the Minister by notice in the Gazette to declare any goods or any service to be declared goods or a declared service for the purposes of these Regulations.

Pursuant to the powers conferred by reg. 22 of the Prices Regula- tions the Minister on 13th April 1942, by Declaration No. 96, declared

'the following goods to be declared goods for the purpose of the said Regulations, namely :-

67 CLR 342

All goods in the possession or under the control of any person in Australia with the exception of-

(a) goods in the possession or under the control of any State of the Commonwealth or any authority constituted by or under any State Act; and

(b) live-stock, poultry and perishable primary produce not being declared goods for the purposes of the said Regulations on the day immediately preceding the date of this Order."

And by Declaration No. 108, dated 30th November 1942, the (PRICES

Minister declared, with certain exceptions therein mentioned not material to this case, all services supplied or carried on in Australia to be declared services for the purpose of the said Regulations.

The plaintiffs in pars. 11 and 12 of the statement of claim allege that neither Declaration 96 nor Declaration 108 is valid or within the powers conferred upon the Minister by the Regulations. The defendants demurred to these allegations. The main question for determination is whether the Regulations in question are authorized by the National Security Act 1939-1940. This Act, which has sur- vived the attacks made upon it, by S. 5 authorizes the making of regulations for all matters which are necessary or convenient to be prescribed for the more effectual prosecution of any war in which His Majesty is or may be engaged. Such an averment as this may be a mere draftsman's flourish and does not conclusively determine the character of the measure, the substance of which must be examined in order to ascertain whether what is enacted is reasonably capable of aiding the defence power. Profiteering and inflation tend to disorganize the internal economy of a community and paralyse the effective prosecution of war. And it becomes essential that the supply of goods and their prices or the rates to be charged for services should be controlled in time of war. Even in peace-time fairs-the forerunners of markets-were regulated and controlled and in these abnormal days of crisis and emergency, regulation, restriction and control are obviously necessary.

The subsidiary question as to the validity of the Declarations should also, I think, be answered in the affirmative. The Regula- tions are expressed in wide terms and the generality of expression not being limited or qualified (except as to services-Statutory Rules 1940 No. 219, reg. 2) the Minister's discretion is not fettered or trammelled in any way SO as to oblige him to condescend to particu- larity in the description of the goods or services proposed to be regulated.

In my opinion the Declarations are valid and the demurrer should be upheld.

67 CLR 343

STARKE J. In this action the plaintiffs claimed declarations that Prices Declarations numbered 96 and 108 are beyond the powers conferred upon the Minister of State for Trade and Customs by the National Security (Prices) Regulations and are void and of no effect. Other declarations were also claimed, but they do not at present concern the Court. The defendants have regarded the plaintiffs' pleading and claims as to the Prices Declarations already mentioned as raising a distinct cause or causes of action and have demurred to that cause or those causes of action. No objection was taken to the form of pleading, though the Court required an amendment.

And I desire also to call attention to the parties. The Victorian Chamber of Manufactures is an incorporated company limited by guarantee, the members of which include upwards of two hundred manufacturers of women's and girls' outer wear. It seems to be an association of manufacturers which does not manufacture or deal in any articles affected by the Prices Declarations. But I fail to understand what interest it has in maintaining this action or in seek- ing declarations that the Prices Declarations are void and of no effect. Only those whose rights are infringed and not strangers are entitled to challenge the validity of legislation or of regulations or declarations or orders made pursuant to regulations See Cooley, Constitutional Limitations, 8th ed., pp. 339-340. However, the other plaintiffs have sufficient interest to maintain the action. And I pass therefore to the matter of substance argued before us.

The National Security (Prices) Regulations (Statutory Rules 1940 No. 176 and amendments) made pursuant to the National Security Act 1939-1940 provided :-(reg. 22) The Minister may, by notice in the Gazette, declare any goods or any service to be declared goods or a declared service for the purpose of the Regulations. And the Prices Commissioner (Statutory Rules 1941 No. 54) may with respect to any declared goods fix and declare the maximum price at which such goods may be sold generally or in any part of Australia or in any proclaimed area, and, similarly, the Commissioner may with respect to any declared service fix and declare the maximum rate at which any declared service may be supplied or carried on generally or in any part of Australia or in any proclaimed area. The Minister administering the Act (Acts Interpretation Act 1901-1941, S. 17) in pursuance of these powers declared all goods in the possession or under the control of any person in Australia, with certain exceptions, to be declared goods for the purposes of the Regulations (Declaration No. 96) and likewise all services supplied or carried on in Australia, with certain exceptions, to be declared services for the purposes of the Regulations (Declaration No. 108).

67 CLR 344

The learned counsel for the plaintiffs did not contend that the words any goods" " or "any service" in the Regulations were as a matter of English subject to any qualification or restriction, but he did contend that in their context the words should be qualified and restricted to some specified goods or service, because the declara- tion was but a preliminary step to the fixing of a price for some specified goods or service. But it is for this very reason, I think, that the words should not be qualified or restricted. The Commis- sioner is given an absolute discretion to select the particular goods (PRICES

and services in respect of which maximum prices or rates should be TIONS).

fixed SO long as the declaration made by the Minister is sufficiently wide or descriptive of the class of goods or services which he selects.

A narrower interpretation of the regulation is possible, but it would not only be inconvenient but difficult in administration. But then the learned counsel insisted that, if SO wide an interpretation were given to it, the regulation necessarily transcended the Constitution and the National Security Act 1939-1940 under which it was made, because prices could then be fixed for all goods and services through- out Australia without any regard to the public safety or defence of the Commonwealth.

The regulation or control of prices in time of war is a measure of war economy, as was held by this Court in Farey v. Burvett 1. And a regulation which authorizes a Minister of State to bring any goods' or "any service" as a precautionary or preliminary step within the scope of a price control by means of a declaration does not transcend the constitutional power of the Commonwealth. The ministerial declaration is a basis for the exercise of the Commis- sioner's discretion. But it is no more, and I am not prepared to accede to the view that it enables the Commissioner to fix prices or rates for all goods and services without regard to the public safety or defence of the Commonwealth. The Commissioner can no more transcend constitutional power because of the regulation than could the Governor-General in Council in making it. The validity of the Commissioner's orders, though dependent upon the declaration as a precautionary or preliminary step, must nevertheless be related to and in substance secure or aid or tend to secure or aid, the public safety and defence of the Commonwealth. And their validity can only be ascertained from an examination of their scope and operation in law. That problem does not arise in this case at present, for the demurrer is only directed, as I have said, to the Declarations numbered 96 and 108 themselves.

The demurrer, SO understood, should be allowed.

1(1916) 21 C.L.R. 433. 67 CLR 345

McTIERNAN J. In my opinion the demurrer should be allowed.

I agree with the reasons for judgment of the Chief Justice and con- sider that it is unnecessary to add anything to his Honour's reasons.

WILLIAMS J. This demurrer raises two points: 1 Whether reg. 22 (1) of the National Security (Prices) Regulations, which pro- vides that the Minister of State for Trade and Customs may, by notice in the Gazette, declare any goods to be declared goods for the purposes of the Regulations, is a valid exercise by the Executive of the powers, delegated to it by the National Security Act 1939-1940, to make laws for the peace, order and good government of the Commonwealth conferred upon the Commonwealth Parliament by the defence power, S. 51 (vi.) of the Constitution. 2 If the regulation is a valid exercise of the defence power, whether it authorized the Minister to make Declaration 96 dated 13th April 1942, published in the Com- monwealth of Australia Gazette on 15th April 1942, whereby the Minister declared the following goods to be declared goods for the purposes of the Regulations, namely " All goods in the possession or under the control of any person in Australia with the exception of-(a) goods in the possession or under the control of any State of the Commonwealth or any authority constituted by or under any State Act; and (b) live-stock, poultry and perishable primary produce not being declared goods for the purposes of the said Regulations on the day immediately preceding the date of this Order."

As to the first point.-The general control of prices at which goods may be sold during war is in my opinion within the ambit of the defence power. It is common knowledge that war creates a scarcity of goods for civil consumption; and that this scarcity, combined with an expanding purchasing power in the general public due to wide employment and high wages, creates a competition for these goods which must cause prices to become inflated unless they are controlled. As it is impossible to postulate that these conditions will apply to some classes of goods and not to others, it is conceivable that any classes of goods may require to be controlled. Indeed, in face of the decisions of this Court in Farey v. Burvett (1), Andrews V. Howell (2) and Silk Bros. Pty. Ltd. v. State Electricity Commission of Victoria (3), it is difficult to, understand how the validity of reg. 22 (1) could be seriously assailed.

As to the second point.-Mr. Fullagar contended that the Minister must specifically describe the goods the price of which he considers

1(1916) L C.L.R. 433. 2(1941) 65 C.L.R. 255. 67 CLR 346

should be controlled. If the regulation required that the classes of goods should be described there would be considerable substance in this contention (Dyer v. Luckett 1 ). But the regulation empowers the Minister to declare any goods to be declared goods for the purposes of the regulation. The authorities to which Mr. Ham referred, Liddy v. Kennedy 2, Isle of Wight Railway Co. V. Tahourdin 3, and other authorities cited in Stroud's Judicial Dictionary, 2nd ed. and supplement, under the word "any", show that " any is a word which ordinarily excludes limitation or qualifi- (PRICES

cation and which should be given as wide a construction as possible. TIONS).

" Any goods" therefore includes all goods except where this wide construction is limited by the subject matter and context of a par- ticular statute (Attorney-General v. Brown 4 (reversed by consent in consequence of the Indemnity Act 1920 see 5 )-See also Hall V. Jones 6 (This Court refused special leave to appeal from this decision). In the present case there is no indication in the subject matter or context of the Regulations to limit or qualify the ordinary wide construction of the word. As the Minister can cause all goods to be declared goods for the purposes of the Regulations, it is a matter for his discretion whether he will declare the goods by a general or a specific description. I agree therefore that Declaration 96 is a valid exercise by the Minister of the powers conferred upon him by reg. 22 (1).

For similar reasons I also agree that reg. 22 (2) is valid and that Declaration 108 is a valid exercise by the Minister of the powers conferred upon him by reg. 22 (2).

The demurrer should be allowed.

Demurrer allowed. Solicitor for the defendants, H. F. E. Whitlam, Crown Solicitor for the Commonwealth.

Solicitors for the plaintiffs, Moule, Hamilton &Derham.

1(1928) 41 C.L.R. 44. 2(1871) L.R. 5 H.L. 134. 3(1883) 25 Ch. D. 320. 4(1920) 1 K.B. 773. 5(1921) 3 K.B. 29. 6(1942) 42 S.R. (N.S.W.) 203