The Court held that State price control legislation expressed in general terms applies to all sales within the State, including export sales, unless the statute expressly limits its scope; and that a contract made in breach of a statutory price prohibition is void and unenforceable notwithstanding a statutory provision for refund of the excess.
Later decisions that cite Bradshaw v Gilbert's (Australasian) Agency (Vic) Pty Ltd
Decisions cited by Bradshaw v Gilbert's (Australasian) Agency (Vic) Pty Ltd
BRADSHAW v. GILBERT'S (AUSTRALASIAN) AGENCY (VIC.) PTY. LTD. [1952] HCA 58; (1952) 86 CLR
209
Price Control
High Court of Australia
Dixon C.J.(1), McTiernan(2) and Taylor(1) JJ.
CATCHWORDS
Price Control - Sale of goods - State statute - Continuance in operation of orders made under Commonwealth Prices Regulations - Validity - Applicability to sale of goods destined for export - Consistency with Commonwealth regulations relating to exports and foreign exchange - Validity of transactions in contravention of a statute - Prices Regulation Act 1948 (Vict.) (No. 5310), ss. 4 (1), 8 (2), 9 (1) (a), 25 - Banking (Foreign Exchange Control) Regulations (S.R. 1946, No. 191 - S.R. 1952, No. 80) - Customs (Prohibited Exports) Regulations (S.R. 1935, No. 2 - S.R. 1951, No. 122).
HEARING
Melbourne, 1952, October 13, 14; November 3. 3:11:1952DECISION
November 3.2. The first relevant step in the fixation of a maximum selling price for scrap battery lead was taken under the National Security (Prices) Regulations. In the exercise of the powers conferred upon him by those regulations the Commonwealth Prices Commissioner purported on 2nd February 1948 to fix and declare the maximum price at which scrap battery lead might be sold at 22 pounds per ton. But prices for the sale of goods in the State of Victoria ceased to be controlled under those regulations on 20th September 1948, and, on that date, the Prices Regulation Act of that State came into operation. The contract sued upon was made after this date and before any specific fixation under that Act of a maximum selling price for scrap battery lead. General provision had, however, been made by s. 4 (1) of the Act and, subsequently, by the first prices regulation order made thereunder, for keeping in operation in Victoria formerly existing prices regulation orders made under the Commonwealth regulations, but the respondent argued on this appeal that these general provisions were not appropriate to effect their apparent purpose. (at p214)
3. Section 4 (1) of the Act is in the following terms: "All declarations orders requirements determinations delegations authorities notices notifications applications and consents made published or given under the corresponding previous Commonwealth Regulations which are in force at the commencement of this Act shall, for the purposes of this Act and except so far as they are inconsistent with this Act be deemed to have been made published or given under this Act and, subject to this Act, until repealed amended or revoked under this Act shall be deemed to have force and effect accordingly as if made published or given under this Act; and any reference in any such declaration order requirement determination delegation authority notice notification application or consent to any provision of the corresponding previous Commonwealth Regulations shall accordingly with such adaptations as are necessary be construed as a reference to the corresponding provision of this Act." Two questions in relation to the operation of this sub-section arose on the appeal. The first proposition was that it did not accomplish the adoption of any prices regulation orders made under the corresponding previous Commonwealth regulations since, in view of the extent of the contraction of the Commonwealth legislative power with respect to defence at the relevant time, neither the regulations nor any orders thereunder could be said to be "in force". The second proposition was concerned with the form of the relevant Commonwealth prices regulation order and it was argued firstly, that it was not competent to the Parliament of the State of Victoria to provide that orders having a Commonwealth-wide operation should "be deemed to have been made published or given under" the Act, and "deemed to have force and effect accordingly as if made published or given under" the Act and, secondly, that assuming, in accordance with the provisions of s. 4 (1), that the Commonwealth order was made under s. 9 (1) (a) of the Victorian Act, it could not be valid because it was an order fixing the maximum price of scrap battery lead for the whole of the Commonwealth, a thing which s. 9 (1) (a) does not contemplate. The order, it is said, cannot be read down because it intended a uniform price throughout the Commonwealth and it is therefore incapable of being confined within the limits of s. 9 (1) (a). (at p215)
4. The first point, which is substantially the same as that which arose in Brown v. Green [1951] HCA 76; (1951) 84 CLR 285 , is conclusively determined against the respondent by the decision of the majority of the Court in that case, and we have nothing to add to the views then expressed. (at p215)
5. The first aspect of the second point raises questions which did not arise in that case but, upon consideration, we do not think that the respondent's contentions on this aspect of the matter are sound. We see no reason why a prices regulation order which is not, in express terms, given a Commonwealth-wide operation should not "be deemed to have been made published or given under the Act". Nor, do we see any reason why it should not "be deemed to have force and effect accordingly as if made published or given under the Act". In our view, s. 4 (1) merely takes the previous Commonwealth orders in the form in which it finds them and gives to them, according to their tenor, such force and effect as if they had been made under the Act. Accordingly, we are of the opinion that at all material times there was, by reason of the operation of s. 4 (1) a lawfully fixed maximum selling price for the commodity in which the parties dealt, and it is, therefore, unnecessary to consider the somewhat doubtful questions which arise with respect to the validity of the relevant portion of the first general prices regulation order made under the Act. (at p215)
6. The answer to the remaining aspect arising under s. 4 (1) is rather indicated by what we have already said. Section 4 (1) contains, by implication, a modification relevant to the application of Commonwealth-wide federal orders best expressed by some such words as "in so far as they apply to Victoria". (at p215)
7. The contract between the parties is evidenced by two letters of 7th and 8th January 1949. In the first of these, the appellant confirmed his acceptance of the offer of 127 tons of lead battery plates at 98 pounds per ton f.o.b. Melbourne, and in the second, the respondent acknowledged receipt of the appellant's letter and advised that, although it had a licence (i.e. an export licence), for the particular parcel of 127 tons, it would be "to both our interests to have it shipped with as little delay as possible, owing to the embargo introduced by the Federal Government this day". Within a matter of a few days, it became evident to the appellant that the overseas market for this commodity was deteriorating and thereupon he intimated to the respondent that as the transaction was illegal it could not "proceed further". (at p216)
8. In these circumstances, three questions arose before the learned trial judge: - (1) Whether the Prices Regulation Act on its true construction applies to the sale of goods which are destined for export; (2) If so, whether any relevant portion of the Act is inconsistent with the Banking (Foreign Exchange Control) Regulations made under the Banking Act 1945 (Cth.) or with the Customs (Prohibited Exports) Regulations made under the Customs Act 1901-1951; and (3) Whether the effect of the Prices Regulation Act 1948 operates to avoid transactions of sale made in breach of its provisions. (at p216)
9. The argument on the first of these questions was, in the main, based upon general considerations of policy. It was contended that it was apparent that the object of the Act was to safeguard consumers in Victoria and that the court should reject any construction which, proceeding beyond this point, would give to the representatives in Victoria of overseas purchasers the benefit of what was intended to be a home consumption price. It was sought to strengthen this argument by reference to the purposes served by the Banking (Foreign Exchange Control) Regulations and the Customs (Prohibited Exports) Regulations, and our attention was drawn to reg. 25 of the National Security (Prices) Regulations which expressly authorised the Commonwealth Prices Commissioner, on application by an exporter of declared goods, to approve of the sale of such goods for export at a price exceeding the maximum price fixed in pursuance of the regulations. These considerations found favour with the learned trial judge, who said: "The primary purpose of the Prices Regulation Act was the protection of the people of Victoria from excessive prices, and its main concern was the fixing of prices of goods for use or consumption within Victoria. It is true that the adequacy of the supply of a commodity ordinarily would have an effect upon the price of that commodity, but the Victorian Parliament has not, for reasons that need no ingenuity to surmise, legislated specifically in respect of the retention of commodities within Victoria. As has been pointed out, there was in existence at the time when the Act was passed effective Commonwealth control over exports, resting upon Commonwealth laws, the validity of which has not been impugned, and the Act omitted the provision of the prototypal National Security (Prices) Regulations that enabled the prices of exports to be fixed by the price-fixing authority. These considerations lead me to the conclusion that the Act should be construed as not embracing within its ambit a contract with respect to goods that were genuinely intended for, and appropriated to, export, and in respect of which the necessary licences and permits were obtained from the relevant Commonwealth authorities". There could be no doubt upon the evidence that the scrap battery lead in question in this case was intended for export and, finding that this was so, the learned judge went on to express the view that the transaction was thus outside the ambit of the Prices Regulations and that the contention that it was "unenforceable for illegality created by the provisions of that Act must be rejected". (at p217)
10. We regret that we are unable to share this view. Although couched in general terms the relevant provisions of the Act are too clear to be restrained by general considerations of this nature, and, indeed, we should feel, at the very least, a great difficulty in finding any basis upon which the Act could be construed so as to limit its operation in the manner indicated by his Honour. It seems to us quite clear that the only limit to the operation of s. 25 is that it must be taken to deal with sales or offers for sale in Victoria; but it must be taken to apply to all sales in Victoria of declared goods in respect of which a maximum price is fixed. Section 8 (2) which provides that the Governor-in-Council may, by notice in the Government Gazette, declare any goods to be declared goods for the purposes of Part II. of the Act, clearly extends to all existing or future goods in Victoria (cf. Victorian Chamber of Manufactures v. The Commonwealth [1943] HCA 19; (1943) 67 CLR 335 ) and the power of the commissioner under s. 9 equally clearly extends to all declared goods. That the National Security (Prices) Regulations, the relevant provisions of which were in identical terms, applied to sales within the Commonwealth of goods intended for export is emphasised by the terms of reg. 25 itself, and we are unable to see that the omission of such a provision from the Victorian Act can in any way assist the respondent. The reason for its omission may well have been that the word "export" was thought to be an inappropriate term in State legislation of this nature. But the omission of such a provision does not tend to support a more limited construction of the sections to which we have referred. We should add that, whilst we appreciate to the full the reasonableness of the general argument which was addressed to the court on this question it is clear that it is concerned with matters which might well have been thought by the Legislature to be appropriate for the special consideration of the commissioner. There is no doubt that in the exercise of his general powers the commissioner might refrain from fixing maximum prices for goods destined for export, or fix special prices for such goods, or deal with them in some other appropriate way. But we do not think that the considerations which have been advanced can operate to effect a limitation of the powers conferred upon him by the Act in clear and unambiguous language. (at p218)
11. With respect to the second question, we think it is sufficient to say that an examination of the regulations in question fails to establish any ground for the suggestion that any relevant section of the Prices Regulation Act is repugnant to any of their provisions. No doubt, transactions of sale immediately antecedent to export, or sales in Victoria of goods for export, might well be discouraged by the promulgation of fixed prices applying to goods intended for export. But this does not arise from any conflict of legislative provisions, and we are unable to see in the terms of the regulations any support for the respondent's contention. (at p218)
12. In support of the argument on the third question, we were referred to the observations of Jordan C.J. in Bassin v. Standen (1945) 46 SR (NSW) 16; 62 WN 238 . After referring to the general rule that if a particular class of sale is prohibited by statute a purported sale in breach of the prohibition is void, his Honour referred to sub-reg. (1A) of reg. 29 of the National Security (Prices) Regulations which, in terms, corresponds to s. 25 (2) of the Prices Regulation Act. Sub-section (1) expressly provides that no person shall sell any declared goods at a greater price than the maximum price fixed in relation thereto whilst sub-s. (2) provides that, in addition to any other penalty that may be imposed for a contravention of sub-s. (1), the court may order the defendant to refund to the purchaser of the goods the difference between the maximum price so fixed and the price at which the goods were sold. Jordan C.J. in referring to reg. 29 (1A) said that: "It may be that this should be regarded as sufficiently indicating an intention that a breach of the regulation shall not avoid the sale, but shall merely subject the vendor to a penalty and to the risk of being ordered to refund to the purchaser the unlawful excess or some part of it" (1945) 46 SR (NSW), at p 19; 62 WN, at p 239 . His Honour's observations were, of course, not intended as the expression of a concluded opinion on this point and, indeed, he expressly made this clear. That his Honour correctly stated the prima-facie rule, is quite clear from decisions such as In re Mahmoud and Ispahani (1921) 2 KB 716 , Anderson Ltd. v. Daniel (1924) 1 KB 138 , and Montreal Trust Co. v. Canadian National Railway (1939) AC 613 . The prohibition imposed by s. 25 is in express terms and the purpose of the prohibition is quite clear, and we have no doubt that, apart from any special problem which may arise because of the terms of sub-s. (2), a sale or contract of sale made in breach of s. 25 must be regarded as void and as being incapable of giving rise to an action for damages in the present form. Further, we are satisfied that sub-s. (2) does not affect this conclusion. It does not seem to us that its provisions operate to displace the presumption that transactions in breach of sub-s. (1) should be treated as void. On the contrary, it seems to have been intended, merely, as an additional penalty upon a seller and as a means of reimbursing an innocent purchaser in appropriate circumstances. The very terms of the sub-section itself indicates that it was an obligation which might be imposed upon a vendor as an additional penalty, and they afford a means of relief to a purchaser which would not be available either upon the view that a sale, in contravention of the section is quite valid or upon the view that it is illegal and void. Consequently, it cannot be assumed, from the presence of the sub-section, that it was not intended that sales in contravention of the sub-section should be treated as valid and subsisting. But whatever the effect of the section with respect to completed sales of goods, it is beyond doubt that the terms of the section preclude a party to an agreement for the sale of declared goods at a price in excess of the maximum price from seeking in a court of law to enforce his contract, or to recover damages for a breach thereof. (at p219)
13. Accordingly, we are of the opinion that the appeal should be allowed, the judgment for the plaintiff set aside and judgment entered for the defendant in the action. (at p219)
McTIERNAN J. In my opinion the agreement of sale upon which the plaintiff sued was outside the reach of s. 25 (1) of the Prices Regulation Act 1948 (Vict.) and was at all times a valid transaction. (at p220)
2. Barry J. found that at the time the sale was made the lead was appropriated to overseas trade: and that finding is well established by the negotiations between the parties and the facts that in respect of the lead the approval of the Federal Government to the export of the lead had been sought prior to the sale and had been subsequently given. Indeed, the defendant repudiated the contract because the overseas market for lead weakened, and, ultimately, the plaintiff sold the lead overseas on his own account at a lesser price than the contract price. (at p220)
3. It is evident from the terms of s. 25 (1) of the Prices Regulation Act which the defendant contends strikes at the agreement for sale, that some limitation referable to Victoria is necessarily implied in the terms of the sub-section. The parties here both carried on business in Victoria: the lead was in Victoria: the sale was f.o.b. Melbourne: the price was expressed in Australian pounds: the price was greater than what purported to be the "maximum price" within the meaning of the Act. Does s. 25 (1) strike at sales of goods for immediate export? Section 2 provides as follows: - "This Act shall be administered with a view to - (a) the prevention of undue increases in prices and rates for goods services and land in the period of post-war re-adjustment, particularly in relation to food clothing and housing; (b) the regulation so far as is necessary of prices and rates for goods services and properties which are essential to the life of the community and of goods and services in general use which are in short supply; (c) the progressive removal of the control of prices and rates at the earliest possible date consistent with the welfare of the community." (at p220)
4. It seems obvious to me that the community for whose benefit the Act was passed were the people of Victoria. Since some limitation is necessary to be placed upon the general words of s. 25 (1), I think that it is proper to imply the limitation upon the basis that the object of the Act was to control the price of goods sold for consumption in Victoria. Admittedly, this is a reasonable limitation. Barry J. elaborately reviewed the circumstances constituting the setting in which the Act was passed. I should like to adopt his Honour's review, and the reasons which he draws from the setting in which the Act was passed, for implying a limitation upon s. 25 (1) excluding from its operation any sale of goods for export. The Customs (Prohibited Exports) Regulations and the Banking (Foreign Exchange Control) Regulations to which Barry J. refers cannot be left out of account as facts in reference to which the State Legislature devised its own scheme for regulating prices. It may be assumed that it would not have been concerned with the fixing of maximum prices for goods sold for export. The directions which are given by s. 2 as to the administration of the Act show that the Legislature was concerned only with the protection of Victorian users and consumers. The authority given by the Act to fix maximum prices and the declaration of such prices intended to have force under the Act are subject to the policy expressed in those directions. No provision in the Act gives the commissioner power to approve of a price greater than the maximum statutory price for goods sold for export. The Commonwealth Prices Regulations contained such a provision. It is surprising that the Legislature omitted to give any such power to the commissioner if the Act was meant to apply to sales for export. Read with s. 2 declaration made under or given force by the Act should be construed to affect the price of goods sold for export. There is, therefore, no need to give the commissioner power to free sales in the course of the export trade from any declaration of maximum price depending upon the Act. (at p221)
5. In my opinion s. 25 (1) does not apply to the sale of goods where the selling is part of or for purposes of or in the course of foreign trade. This is an implied limitation based upon a clear legal criterion. Compare Cam & Sons Pty. Ltd. v. The Chief Secretary of New South Wales [1951] HCA 59; (1951) 84 CLR 442 ; Reg. v. Wilkinson; Ex parte Brazell, Garlick and Coy [1952] HCA 6; (1952) 85 CLR 467 . There the distinction made was between inter-State and intra-State trade. The question whether the Act upon its true construction applies to sales made in Victoria in the course of or for purposes of inter-State trade does not arise. In my opinion, the agreement of sale upon which the plaintiff sued was not affected by s. 25 (1) or any other provision of the Act and was, therefore, not void. (at p221)
6. The question was raised by the cross appeal whether the amount of damages awarded was insufficient. As I have the misfortune to disagree with the Chief Justice and Taylor J. on the primary question whether the agreement was valid, it seems unnecessary for me to pursue the question of damages. For in the view that the contract was void, no award of damages is possible. It is sufficient for me to say that the contract of sale upon which the plaintiff sued was at all times valid. I must not be taken as dissenting from the opinion of the majority upon any of the questions which it became necessary to discuss in the view that the agreement of sale was struck by the Prices Regulation Act. (at p222)
7. I should dismiss the appeal. (at p222)
ORDER
Appeal allowed with costs; judgment of the Supreme Court discharged; in lieu thereof judgment in the action entered for the defendant with costs, including costs of pleadings, interrogatories, discoveries and shorthand notes.