Practitioners seeking to recover payments made to the Crown should note that where the payer participated in an arrangement contrary to law for its own advantage, and the alternative was compliance with the law under which the same charges would have been payable, the payments will be treated as voluntary and irrecoverable.
Later decisions that cite Cam & Sons Pty Ltd v Ramsay
Decisions cited by Cam & Sons Pty Ltd v Ramsay
CAM AND SONS PTY. LTD. v. RAMSAY [1960] HCA 82; (1960) 104 CLR 247
Money Had and Received
High Court of Australia
Dixon C.J.(1), McTiernan(2), Kitto(3), Menzies(4) and Windeyer(5) JJ.
CATCHWORDS
Money Had and Received - Control of sale of fish - Sales of fish outside market contrary to law - Arranged between Crown and vendor as notional sale in market - Payment of commission to Crown - Voluntary - Rebate - Action to recover commission paid - Fisheries and Oyster Farms Act, 1935-1949 (N.S.W.), ss. 4, 25, 40B.
HEARING
Sydney, 1960, May 18, 19, 20; November 23. 23:11:1960DECISION
November 23.2. The business of selling the fish fell into two parts. Under contracts with some large institutions or establishments such as hospitals, hostels, immigration camps, camps of the armed services and big suppliers or consumers of fish like large city hotels, cafes and retail stores the company delivered gutted and filleted fish directly from their premises at Pyrmont. This part of the trade the company described as its providoring business. The remainder of the fish caught was sent to the Fish Market in Sydney where it was sold at auction by the market authorities who accounted for the proceeds after deducting a commission. The market authorities also charged a commission calculated upon the value of the fish supplied from Pyrmont by the company directly to its customers in its providoring business. The company's claim in the present proceedings is to recover back from the Crown moneys paid in respect of commission upon fish sent not to the market but to customers in its providoring business. Among other pleas the Crown has set up the Statute of Limitations and it is conceded that we are concerned only with the moneys paid within six years before the issue of the writ: that means within the period from 6th October 1949 to 6th October 1955. In fact the company relinquished its business somewhat earlier than the date of the issue of the writ. On this footing the sum involved is 29,590 pounds 13s. 0d. (at p251)
3. Prima facie the law contained in the Fisheries and Oyster Farms Act, 1935-1949 (N.S.W.) laid upon the company an obligation to send all the fish landed to the Fish Market for sale there by auction and during the period of six years in question there is great difficulty in finding any lawful justification for the course adopted by the company in supplying the customers of its providoring business directly from its establishment at Pyrmont and under contracts. The market authorities and indeed the responsible officers of the Chief Secretary's Department were fully cognizant of the course pursued and allowed it to continue. The statutory provisions governing the situation are perhaps not in all respects clear in their application and it will be later necessary to refer to them a little more fully. But it may be taken that neither on the side of the company nor on the side of the officials was there any want of realization that the course pursued could not readily be reconciled with the legislation; to say the least of it certain provisions were being somewhat overstrained. The company, however, persisted that it could not conduct its business except by supplying its large customers from its premises, and that it would be absurd to require it to do it indirectly through the market. One may suppose that the officials were impressed with the reasonableness of this contention. During the period of six years with which the appeal is concerned the commission chargeable in the Fish Market was governed by a regulation which provided that the owner of fish sold by the Minister should pay to the Minister commission at such rate not exceeding 11 1/4 per cent as might be fixed by the Minister from time to time on the purchase price of such fish: the regulation goes on to say that such commission and any other prescribed charges may be deducted from any moneys payable by the Minister to the owner of the fish upon any account whatever. The maximum percentage had been raised from 10 per cent to 11 1/4 per cent only six months before the opening of the period of six years here in question. (The reference is to reg. 4 of the Regulations in Connexion with the Sale of Fish by the Chief Secretary etc. 27th December 1946, as amended by a regulation of 11th March 1949.) What in fact was charged was the maximum rate (that is 11 1/4 per cent and earlier 10 per cent) less a discount of 5 per cent. The basal theory or hypothesis upon which the officers of the Chief Secretary reconciled or attempted to reconcile the levy of the charge upon the fish disposed of in the providoring business with the regulation and the legislation was adopted before or at latest at or about the beginning of the period to which the appeal is in effect confined. The theory or hypothesis rested upon the conception of a notional delivery of the fish from the wharf at Pyrmont to the market, equivalent to an actual delivery, and a sale of the fish by the market to the company in the capacity of an ordinary customer buying from the market at current rates. In that notional capacity the company paid the market authorities the purchase price of the fish by cheque. The market authorities on their side accounted to the company as a supplier to the market by sending an account sales and a cheque representing the price of the fish less commission at 6 1/4 per cent, that is 11 1/4 per cent discounted by 5 per cent. This theory of the matter was formulated in letters to the company dated 22nd and 27th March 1950 from the Under Secretary of the Department; it was formulated as part of arrangements with the company that had been made. It is enough to set out the following paragraph: "The arrangements made regarding the operations of your Company are distinct from those abovementioned." (A reference to arrangements with co-operatives.) "The whole of the fish taken is 'delivered' to the market. The fish is all received and weighed under supervision of the market management at your premises. To avoid double handling and the cost that would be involved to your Company by physically delivering to the market, the proportion of the fish required by your providoring business is allowed to remain at your premises after receiving and weighing. The position is that this fish is actually 'delivered' to the Market on consignment and sold back to a trading section of your own company." In his evidence this officer, who by the time of the trial had retired, said that a representative of the manager of the markets attended the wharf of the company each time a trawler arrived and checked over the fish as it was discharged from the vessel; he continued, "the quantity that was required to conform with the company's needs under the consent was permitted to be retained at the wharf without physical delivery to the market." A list was prepared by the checking officer and on the basis of that list a voucher of some kind was issued on the part of the market authorities for the quantity delivered to the market and that delivered to the wharf. The witness said that the total quantity of fish including the fish left at the wharf was treated at the market as a receival and an account sales was issued to the company covering the whole of the fish discharged from the vessel and payment was made in accordance with that account sales after deducting the commission at the uniform rate on the total: that is the market rate of 10 per cent, later 11 1/4 per cent, less 5 per cent allowance. It will be noticed that the witness speaks of a "consent." This consent which originally had been given in purported pursuance of s. 40B (3) of the Act, a provision presently to be mentioned, had been cancelled by a notification dated 23rd October 1947 from the Under Secretary informing the company that a review had been made of all ministerial consents enabling fishermen to dispose of their catch otherwise than through a market and that the Minister had approved of the cancellation of all such consents. The witness however said in evidence that despite the cancellation the arrangement was continued under the terms of the consent: that in effect the cancellation was not made effective. This evidence of course implies that there was a much earlier inception of what in another part of his evidence he called the "practice of invoicing and receiving the fish technically, notionally at the market, though it was only received at the wharf." (at p253)
4. Unfortunately for the whole of this theory or notional justification of the course of dealing it is quite irreconcilable with the governing legislation to which it is now necessary to turn. That legislation is contained in the Fisheries and Oyster Farms Act, 1935, as amended. In the first place s. 40B (1) of the statute provides that subject to the provisions of the Act no person shall sell any fish for human consumption unless such fish have first been brought to and sold in the market. Clearly enough the company in its providoring business sold the fish for human consumption and clearly enough the fish had not been first brought to and sold in the market. What other provisions could the transaction be brought within to which the operation of s. 40B would be subject? There is one provision only that might conceivably serve the purpose, namely s. 40B (3); but to come within it the company must be a "licensed fisherman" and be "the holder of a consent given by the Minister under" the provision. Sub-section (3) of s. 40B provides that sub-s. (1) shall not apply to and in respect of any sale of fish made by a licensed fisherman who is the holder of a consent given by the Minister under this sub-section which consent the Minister is hereby authorized to give. The sub-section proceeds as follows: "Any such consent shall be subject to the terms and conditions specified therein. The terms and conditions specified in any such consent shall include the following: (i) the fish sold shall be fish taken by the licensed fisherman; (ii) the sale shall be made direct to consumers; (iii) the sale shall be made in the locality from which the licensed fisherman operates; and may also include such other terms and conditions as may be prescribed or as the Minister may determine." A "fisherman" means a person who is licensed under the Act to take fish for the purposes of sale: s. 4 (1). But it seems that only those taking fish for sale from territorial waters are licensed: s. 25. How far trawling was done in territorial waters if at all does not appear. The managing director of the company said in evidence that the company did not hold a fisherman's licence, but it was shown that for the year ended 31st December 1948 a licence issued to A. J. Cam, who in fact acted as manager and as secretary of the company. Although perhaps it is expressed as a licence to him and not to the company it is issued subject to the condition that unless the fish taken or landed under the authority of the licence within the boundaries of a Fish Supply District . . . are sold by A. J. Cam (Cam & Sons Pty. Ltd.) under and in accordance with the terms of a consent given by the Minister under sub-s. (3) of s. 40B of the Act all such fish shall be consigned or delivered by A. J. Cam (Cam & Sons Pty. Ltd.) or his servants or agents to the market established under such Act. It appears further that a licence had been granted for the previous year and that an application (this time in the name of the company) was made in the following year and presumably granted. It may well be that the company was a licensed fisherman, that is of course assuming, as seems probable, that upon a proper interpretation of the Act a corporation can hold such a licence. On the other hand it seems impossible to treat the company as holding a consent of the Minister under sub-s. (3) of s. 40B. A purported consent in writing had been given under the date 4th February 1946 but it cannot be doubted that it had been effectively cancelled. It was expressed to be subject to cancellation by notice addressed to the company and the notice of cancellation of 23rd October 1947 could not but be effective. The view expressed in evidence by the former Under Secretary that, in substance, there was an implied continuance of the consent notwithstanding the express cancellation cannot be supported. The Minister did not intend to give such a consent and the course of dealing cannot be regarded as making the company "a holder of a consent given by the Minister". The consent that was issued on 4th February 1946 did not in itself contain conditions at variance with s. 40B, but it was accompanied by a letter to the company which explained among other things the terms with respect to commission which must be observed. To justify the terms a formula was adopted of a very different kind from that afterwards expounded. For fish sold in the market 10 per cent was to be charged but from this a rebate was "to be allowed equivalent to the difference between the prescribed rate of 10 per cent on the purchase price of such fish and an overall rate of 5 per cent on all fish sold at the market or in pursuance of any consent operating under section 40B". Ingenious as this formula was it meant only that 5 per cent commission was to be levied on all sales of fish whether from the premises at Pyrmont in the providoring business or in the market subject to a limit ascertained by calculating 10 per cent on the proceeds of the fish sold in the market, a limit unlikely to be reached. It would not be in accordance with principle to construe sub-s. (3) of s. 40B as authorizing any levy as a condition of the consent. See Attorney-General v. Wilts United Dairies Ltd. (1922) 127 LT 822 (for further facts cf (1921) 124 LT 319) ; cf. The Commonwealth v. Colonial Combing, Spinning and Weaving Co. Ltd. [1922] HCA 61; (1922) 31 CLR 421 , per Higgins J. (1922) 31 CLR, at pp 470, 471 . It is necessary to recall reg. 4 of the Regulations already cited: it is the only express authorization of a charge and of course that charge is for sales by the Minister and cannot justify a charge calculated on fish sold by the company; hence the device of treating the charge actually made as nothing but the residue after a deduction from the commission of 10 per cent on the fish so sold. (at p256)
5. It follows from the foregoing that, at all events during the period with which the appeal is concerned, the sale of fish outside the market in the course of the company's providoring business and the payment of commission calculated thereon were not sanctioned by the legislation. (at p256)
6. But can the company recover from the Crown the amounts representing the commission so calculated? These amounts form part of the cheques paid by the company on the footing that it was a customer of the market purchasing what in fact were its own fish "notionally delivered" to the market. They are the amounts not covered by the cheques paid to the company by the market authorities with the account sales representing the corresponding notional sale in the market of the fish less commission. We were informed by counsel for the Crown that the cheques received from the company in respect of the fish retained for the supply of their providoring business were deposited in an account called the Sydney Fish Market Public Revenue Account and that from that account there was a weekly transfer to the Sydney Fish Market Drawing Account upon which the cheques paid to the company were drawn. By which provisions of the Audit Act, 1902-1953 (N.S.W.) these accounts are governed does not clearly appear but there is no doubt that they formed government accounts so that the moneys placed to the credit of the first are to be considered moneys of the Crown. The first ground upon which the company supported its claim for the recovery of the moneys representing the commission deducted in respect of the fish withheld from the market and sold in its providoring business was simply that they constituted involuntary payments made to meet an unlawful exaction. The second ground was that the moneys were paid in pursuance of a contract the consideration for which had entirely failed. It is convenient to dispose at once of this second ground. The ground is disposed of indeed simply by the facts that have been stated. The Crown made no contractual promise, certainly none of which it committed any essential breach. With the exception of a short interval of time it took no steps to impede the company in the delivery of the fish from the Pyrmont premises to its customers in the course of its providoring business. It is not material that no lawful right was conferred upon the company of pursuing such a course of business. The Crown neither could not did promise to confer such a lawful right. There was a short interval in September 1950 when by seizures the duty of the company to send its fish to market was enforced. It was that which caused the litigation the subject of the report in Cam & Sons Pty. Ltd. v. Chief Secretary of New South Wales [1951] HCA 59; (1951) 84 CLR 442 where the facts sufficiently appear. This incident had however no real bearing on either of the two grounds put forward in support of the company's cause of action. It formed but an interruption of the course followed up to the time when the company relinquished its business before the issue of the writ. In any case it is clear enough that there was no contract binding the Crown. (at p257)
7. It is necessary to return to the first ground assigned as the basis of the company's claim. That ground needs closer consideration. On the facts it is difficult to agree with much of the argument by which it was supported. Although the company constantly protested against the amount of the charge and often sought a more liberal discount, it cannot be said that there was ever any distinct protest against the requirement of some payment. What is more important, there was never any threat on the part of the market authorities or the Minister or his officers of any unlawful action if the charge was resisted. What lay behind the requirement that a percentage be paid in respect of the fish sold in the providoring business of the company was simply the alternative of sending the fish to the market according to law, an alternative that meant the payment of the same or a greater percentage by way of commission. The fact is that the whole case comes back to the question whether the moneys are recoverable from the Crown, though freely paid, because in the conditions which were allowed to obtain the law did not authorize the Crown to collect the moneys notwithstanding that the conditions were allowed to obtain by the assent of the Crown and were for the benefit of the company, though contrary to law. It is important to notice what is not included in this question. It does not cover a case where an officer or agency of the Crown is entrusted with a discretion or an authority and annexes to its exercise a demand that a money payment be made to a fund administered by or under the Crown or that a money contribution be made to a purpose which is under the care of government. It is therefore in that respect unlike Attorney-General v. Wilts United Dairies Ltd. (1922) 127 LT 822; 124 LT 319 , Marshall Shipping Co. v. Board of Trade (1923) 2 KB 343 , Brocklebank Ltd. v. The King (1924) 1 KB 647; (1925) 1 KB 52 , Bristol Channel Steamers v. The King (1924) 131 LT 608 , and The Commonwealth v. Colonial Combing, Spinning and Weaving Co. Ltd. [1922] HCA 62; (1922) 31 CLR 421 . It is not the case of a demand made as a condition of conceding a right or in order to avoid the unlawful exercise of authority. There is not an exaction under a threat of some consequence not sanctioned by law; cf. Mason v. New South Wales [1959] HCA 5; (1959) 102 CLR 108 . Properly considered the moneys in question are moneys which would have been receivable by the fund to which they were carried, had the law been observed: that is to say, had the fish been delivered to the market and sold through the market at the same prices, whether for the purpose of supplying the company's customers in its providoring business or otherwise. Moreover a freedom of choice existed in the company unfettered by any other consideration than the undesirability of carrying on its business in strict accordance with law and thereby incurring the like charges. (at p258)
8. There cannot of course be any taxation of the subject without Act of Parliament and that constitutional principle has been treated as settled by the fourth declaration contained in the Bill of Rights: 1 W. & M. (sess. 2) Ch. 2: cf. per Parker J. in Bowles v. Bank of England (1913) 1 Ch 57, at p 84 . That declaration is often invoked in questions arising out of some deviation from the course of law in the receipt by government of payments of money. But it is to be remembered that the declaration was directed against the "levying of money for the use of the Crown by pretence of prerogative, without grant of Parliament". No one denies the general constitutional principle that no moneys can be exacted by government without legislative authority and without such authority no moneys can be demanded or raised by government as a condition of exercising a power or discretion to the exercise of which the subject is entitled or giving effect to a right with which he is invested by law. But as the foregoing account of the present case shows it does not fall under such a description. It is of a description which in truth is covered by no decided case. But the feature of the case which stands out is that the deviation from what the law prescribed was by the company itself and for its own advantage and it was only for that reason that the moneys can be said not to have been due and payable to the market authorities. (at p258)
9. On a consideration of the whole case the moneys it is sought to recover appear to fall within the same category as voluntary payments to the Crown which are not regarded as held to the use of the subject making them. (at p258)
10. Accordingly the appeal should be dismissed. (at p259)
McTIERNAN J. I would dismiss the appeal. (at p259)
2. In the Supreme Court of New South Wales the plaintiff company brought an action for money had and received to its use and alternatively for money paid under a contract the consideration of which had entirely failed. The suit was against a nominal defendant representing the State of New South Wales appointed pursuant to the Claims against the Government and Crown Suits Act, 1912 as amended. The action was commenced on 6th October 1955. The plaintiff company claimed the sum of 40,743 pounds 9s. 8d., but in final argument before the trial judge its counsel admitted that this amount would have to be reduced by an amount of 11,152 pounds 16s. 8d. which represented commission paid before 6th October 1949, as the Statute of Limitations operated to prevent this latter sum from being recovered. (at p259)
3. The facts are as follows. The plaintiff company carried on the business of trawling and of the sale and provision of fish. In 1942 the Fisheries and Oyster Farms Act, 1935 was amended so as to allow the establishment of a State marketing scheme. It was provided that subject to the provisions of the Act no person should sell fish for human consumption unless such fish should have first been brought to and sold in the market in a district or, under an amendment introduced in 1949, in a market established by a trading society under s. 10A of the Co-operation Act, 1923-1949. The Governor was empowered to constitute a fish supply district by proclamation. The Chief Secretary was given power to carry on the business of sale supply and distribution of fish and to collect such commission as should be prescribed in respect of the use of property or services performed under the Act in connexion with the business of the supply and sale of fish. This section was to come into force on a day to be proclaimed: when proclaimed the licences to act as fish agents originally in force would be cancelled. When the Minister sold fish for consumption at the market in any district, the sale was to be by public auction. It was further provided that the owner or person in possession of the fish should not allow them to be sold at the market in any district otherwise than by public auction by an officer appointed by the Chief Secretary, or pursuant to the terms of a consent to conduct the sale otherwise than by public auction. The terms of the consent were to include the following: (1) the fish sold should be fish taken by a licensed fisherman, (2) the sale should be made direct to consumers, (3) the sale should be made in the locality from which the licensed fisherman operated. (at p259)
4. In 1945 the marketing scheme came into operation and the Chief Secretary took over the Municipal Fish Markets. As from March 1946 the Metropolitan Fish District comprised the eastern part of New South Wales. The plaintiff company had for a long period of time prior to the scheme coming into force operated its business by making direct sales to customers in wholesale quantities from its providoring section. When the scheme came into force it continued to sell its fish in this way and the surplus fish was sold at the Fish Market. (at p260)
5. In 1946 certain fish consignments which were made direct to a customer were seized by the Chief Secretary's Department. A conference took place between Mr. Cam and the Department. It appears that at this conference it was suggested by the Department that the plaintiff should apply for permission to sell fish direct to regular customers. It also seems that at this conference it was suggested by the Department that an application be made for a reduction in the commission payable, the ruling rate of which at the time was 10 per cent. Subsequently the plaintiff wrote to the Chief Secretary applying for these concessions. The Department in its reply consented to direct sales to a number of customers and allowed a rebate of commission on fish sold in pursuance of this consent. The plaintiff was not satisfied with the rebate allowed and pressed for a reduction but to no avail. At a later stage the Department wrote to the plaintiff cancelling the consent which it had given to sell otherwise than through the market but, notwithstanding this, the plaintiff was allowed to continue to operate as before for a period of three years. In 1950 the Under Secretary wrote to the plaintiff requiring the plaintiff to deliver to the market all his fish intended for sale. The plaintiff declined, whereupon a consignment of fish awaiting transport direct to a Sydney cafe was seized. The plaintiff instituted a suit alleging that the seizure was illegal. In the lower court the suit was dismissed: Cam & Sons Pty. Ltd. v. Chief Secretary of New South Wales (1950) 51 SR (NSW) 46; 68 WN 27 . An appeal was taken to the High Court on the ground that the Fisheries and Oyster Farms Act contravened s. 92 of the Constitution and this Court varied the decree and declared that the provisions of the Act did not apply to the sale of fish as part of or for the purpose of inter-State trade (Cam & Sons Pty. Ltd. v. Chief Secretary of New South Wales [1951] HCA 59; (1951) 84 CLR 442 . However this decision does not affect the present matter as the sales made direct to customers are intra-State transactions. After this suit the plaintiff for a short time sent all its catch to the market but then reverted to its practice of selling direct with the surplus going to the market. This practice continued until 1954 when it again tried to obtain a reduction in the commission. This attempt was unsuccessful and at the end of the year it closed down its trawling operations. (at p261)
6. The plaintiff claims the return of the money which was paid as commission to the Chief Secretary. The claim then is for moneys paid to the Crown in the right of New South Wales. The first basis of the claim is that these moneys were paid under compulsion and that the plaintiff is entitled to recover them in an action for money had and received. It has been laid down that in the absence of mala fides the plaintiff must show fully and satisfactorily that the payment made was compulsory. (See Elliott v. Swartwout [1836] USSC 25; (1836) 10 Pet 137 (9 Law Ed 373) , Brisbane v. Dacres [1813] EngR 486; (1813) 5 Taunt 143, at p 152 [1813] EngR 486; (128 ER 641, at p 645) , Whitely Ltd. v. The King (1909) 101 LT 741 . On the point whether the plaintiff had made out his case as to compulsion, Manning J. said: "Although Mr. Cam asserted that his belief from time to time was that if he did not pay the commission charged that his fish would be seized and that otherwise he would not have paid the commission, I find myself quite unable to accept this statement unless it is that he meant by so saying that he recognized that the scheme required him to send all his fish to market and that a flat defiance of the terms of the Act would result in his fish being seized. I have no doubt that Mr. Cam drove the hardest possible bargain with the Chief Secretary's Department and that throughout his resentment has been directed to the fact of there being a marketing scheme in the first place, and his complaint that the rate of commission charged was too high in the second place, but that otherwise he was entirely happy to proceed upon the basis which operated for substantially the whole of the period in question." His Honour had the opportunity of evaluating the circumstances which surrounded the making of the payments and I am not willing to disturb his finding that they were not made under compulsion. I think that the finding is right. (at p261)
7. In the course of his argument, counsel for the plaintiff referred to the cases of Attorney-General v. Wilts United Dairies Ltd. (1921) 37 TLR 884 and Brocklebank Ltd. v. The King (1925) 1 KB 52 in support of the claim. These cases support the proposition that a person who has paid money under compulsion to the Crown, the payment not being authorized by Act of Parliament, can recover such money. There are dicta to the effect that compulsion is presumed where the money is demanded by the Crown or its representative from the subject even though no protest is made by the subject. However, it seems to me that these cases are distinguishable from the present one. The plaintiff was not in the position of a person who made a payment because of the superior authority of the Crown or its agents. Rather, a certain equality existed between the Chief Secretary's Department and the plaintiff in the negotiations with regard to the method of the sale of fish and the rate of commission. The plaintiff could at any time have withdrawn from the arrangement. No doubt he kept it on foot as long as he did because he considered it an advantageous alternative to his full submission to the new statutory scheme, and the Department considered a temporary modus vivendi with him expedient in the fact of his intransigence. (at p262)
8. I think that it is right to conclude that both the plaintiff and the Chief Secretary's Department considered that the arrangement was not contrary to law and that it was lawful for the plaintiff to pay and for the Department to receive the moneys now sought to be recovered back. If this is correct, it would follow that the Department demanded the moneys on the basis that they were lawfully payable and the plaintiff paid them on that basis and voluntarily. Even though the terms of the Act might not have justified either the payment or receipt of the moneys this is not sufficient in itself to entitle the plaintiff to recover back any of the moneys in question. I think that the principle enunciated in a passage in the judgment of Gibbs J. in Brisbane v. Dacres [1813] EngR 486; (1813) 5 Taunt 143 (128 ER 641) applies to the present case: "We must take this payment to have been made under a demand of right, and I think that where a man demands money of another as a matter of right, and that other, with a full knowledge of the facts upon which the demand is founded, has paid a sum, he never can recover back the sum he has so voluntarily paid. It may be, that upon a further view he may form a different opinion of the law, and it may be, his subsequent opinion may be the correct one. If we were to hold otherwise, I think many inconveniences may arise; there are many doubtful questions of law: when they arise, the Defendant has an option, either to litigate the question, or to submit to the demand, and pay the money. I think, that by submitting to the demand, he that pays the money gives it to the person to whom he pays it, and makes it his, and closes the transaction between them. He who receives it has a right to consider it as his without dispute: he spends it in confidence that it is his; and it would be most mischievous and unjust, if he who has acquiesced in the right by such voluntary payment, should be at liberty, at any time within the statute of limitations, to rip up the matter, and recover back the money. He who received it is not in the same condition; he has spent it in the confidence it was his, and perhaps has no means of repayment" (1813) 5 Taunt, at pp 152, 153 (128 ER, at p 645) . (at p262)
9. On the alternative argument that the plaintiff could recover for money paid under a contract the consideration of which had entirely failed I am of the opinion that the arrangement made between the plaintiff and the Minister did not amount to a binding contract. The arrangement made between the parties was of an administrative nature the continued existence of which depended on the willingness of them to abide by it. There was no reciprocity of promises or acts sufficient to constitute what amounts in law to consideration. (See Australian Woollen Mills Pty. Ltd. v. The Commonwealth [1954] HCA 20; (1954) 92 CLR 424 .) (at p263)
KITTO J. I agree in the judgment of the Chief Justice. (at p263)
MENZIES J. This is an appeal against a judgment of Manning J. dismissing an action brought in the Supreme Court of New South Wales by the appellant against the respondent as nominal defendant representing the State of New South Wales for moneys which the appellant paid to the Chief Secretary of New South Wales for commissions which it says, although claimed under the Fisheries and Oyster Farms Act, as amended, were not authorized thereby and were accordingly recoverable as moneys had and received. It is necessary in the first place to indicate in a general way the relevant provisions of the Act. (at p263)
2. Its scheme, so far as it is material, is to provide for the licensing of fishing boats for the taking of fish for sale from the territorial waters of New South Wales and, where the fish are sold in New South Wales, from the waters adjacent thereto (ss. 23 and 24) and for the licensing of fishermen to take fish in those territorial waters (s. 25). Fishing without the requisite licences is prohibited. The Act contains a number of provisions regulating the consignment and sale of fish, including (1) the prohibiting of persons other than the original owner of fish or licensed fish agents from selling fish in fish markets (s. 40 (1)); (2) the prohibiting of the sale of fish for human consumption in a fish district unless they have been brought to and sold in a market of that district (s. 40B (1)); and (3) a prohibition against selling fish for human consumption until they have been inspected and certified as fit for that purpose (s. 40B (2)). Section 40B (3) is a relaxation of the prohibition in s. 40B (1) against selling fish not having first been brought to and sold in the market and is in the following terms: "Subsection one of this section shall not apply to and in respect of any sale of fish made by a licensed fisherman who is the holder of a consent given by the Minister under this subsection, which consent the Minister is hereby authorized to give. Any such consent shall be subject to the terms and conditions specified therin. The terms and conditions specified in any such consent shall include the following: (i) the fish sold shall be fish taken by the licensed fisherman; (ii) the sale shall be made direct to consumers; (iii) the sale shall be made in the locality from which the licensed fisherman operates; and may also include such other terms and conditions as may be prescribed or as the Minister may determine". In summary, the foregoing provisions amount to this: that fish may not be taken for sale except by a licensed fisherman in a licensed boat, and when taken they must be brought to market for sale unless the fisherman holds a consent under s. 40B (3); and the only persons authorized to sell fish in a fish market are the original owner or a licensed fish agent or salesman. (at p264)
3. I come now to Div. 6A of Pt. III of the Act, which was added to the Act in 1942. This Division constitutes the Minister a corporation sole under the name "The Chief Secretary of New South Wales" - curiously enough, in the remaining provisions, although there are many references to the Minister, there is no reference to "The Chief Secretary of New South Wales" - and the Minister is empowered, in very comprehensive terms, to carry on the business of buying, selling and marketing fish (s. 41B). On 17th September 1945, by proclamation s. 41E was brought into operation, which section cancelled all licences under s. 40 to act as a fish agent or salesman and required all sales at fish markets to be by public auction by an officer appointed for that purpose by the Minister. This is subject to a power vested in the Minister to consent to sales of fish being conducted at a market otherwise than by public auction. Upon the coming into operation of s. 41E, therefore, the selling of fish for human consumption became, subject to s. 40B (3), the monopoly of the Minister, who could, it seems, either buy fish from fishermen or sell fish on behalf of fishermen. One power of the Minister in carrying on the business authorized by s. 41B is to charge for the use of any property or for any service in connexion with the sale of fish, etc., and at this stage it is convenient to refer to regulations made under the Act on 27th December 1946, which by cl. 4 provide as follows: "The owner of any fish sold by the Minister shall pay to the Minister commission at such rate not exceeding ten per centum as may be fixed by the Minister from time to time on the purchase price of such fish. Such commission and any other prescribed charges may be deducted from any moneys payable by the Minister to the owner of the fish upon any account whatsoever." Although it seems clear that the Minister would normally sell fish for a fisherman, it will be observed that I have reached the conclusion that the Minister may also buy fish from a fisherman. In doing this I have construed s. 41B (1) (a) widely, and have regarded a sale by a fisherman to the Minister for the purposes of sale in the market as not being a sale for human consumption so that such a sale to the Minister is outside the prohibitions of ss. 40B (1) and 41E (4). This brings me to the financial arrangements made in Div. 6A. (at p265)
4. By s. 41D the Fish Marketing Fund is established at the Treasury, into which must be paid "all fees or sums of money received under the provisions of this Division." This does, I think, require that if the Minister sells fish which he has bought, the purchase price must go into the Fund, although where the Minister sells fish for a fisherman I am disposed to think that the price received by the Minister for the fisherman would not have to go into the Fund. In short, it is the Minister's money that must go into the Fund. Out of the Fund is to be defrayed a number of specified items including "the expenses and other charges incurred by the Minister . . . in the course of the business carried on by him. . . ." This, in my view, would cover the purchase price payable by the Minister to a fisherman for any fish bought by the Minister. (at p265)
5. I turn now to the facts of this case. The plaintiff company had since 1934 been a "fisherman" carrying on its business with deepsea trawlers operating over an area from the Clarence River down to Tasmania and on occasions as far east as New Zealand. All the fish that were taken were brought to its premises at 1 Banks Street, Pyrmont, where it had wharves, gear for discharging fish, and a factory for the cleaning, filleting and storage of fish, as well as other installations. From the factory it delivered fish to customers throughout Sydney, and this part of its business was called the providoring section. Fish taken in excess of what was required for the providoring section were up to 1945 sold in the Sydney Fish Market through a licensed agent, Cam & Sons, which was a partnership of associates of the plaintiff company and which sold fish in the metropolitan fish supply district as defined by s. 40A (2) pursuant to a licence issued under s. 40. There appears to be no difficulty about the plaintiff company's fish sold through Cam & Sons. These sales were in accordance with ss. 40 (1) and 40B (1). It is otherwise, however, with the fish sold through the plaintiff company's providoring section because except as provided by s. 40B (3), first sales otherwise than at a market were prohibited and the plaintiff's premises at Banks Street were not a market. Accordingly, for these sales to be lawful a consent under s. 40B (3) was requisite. No question as to these sales seems to have arisen until s. 41E was brought into operation on 17th September 1945, after which it appears steps were taken for the stricter enforcement of the Act. On that day Mr. R. E. Cam, the managing director of the plaintiff, took about four hundred boxes of fish that were in excess of the plaintiff's requirements for its providoring section, to the fish market for sale through Cam & Sons. There he was met by Mr. Buttsworth, who was at that time chief clerk in the Department of the Chief Secretary. Mr. Buttsworth told Mr. Cam that the Government had taken over the market and that Cam & Sons could no longer sell fish there. Mr. Cam, as one of the partners of Cam & Sons, at the request of Mr. Buttsworth, gave him an order authorizing the Chief Secretary to pick up all fish consigned to the partnership by rail. The fish of the plaintiff, however, he took back to its premises at Banks Street and thereafter for some time the plaintiff sold all its fish directly through its providoring section at those premises. Early in January 1946, however, when the plaintiff delivered one hundred boxes of fish to the Redfern depot of A. A. Murrell, the proprietor of a number of fish shops in Sydney, they were seized because the fish had not been sold through the market and so were forfeited by reason of s. 94 of the Act. The next demonstration of authority took place later in January when some six or eight inspectors visited the plaintiff company's premises at Banks Street when fish were being discharged from trawlers. Although no seizure was made, this action was soon followed by a conference at the Chief Secretary's Department. There were present Mr. Buttsworth and other officers of the Department, representatives of the plaintiff and representatives of Red Funnel Trawlers, which, it seems, had been carrying on its business in much the same way as had the plaintiff. Although the evidence leaves it uncertain just what did occur at this conference beyond Mr. Buttsworth's intimating that the plaintiff company and Red Funnel Trawlers would have to put all their fish through the market, this uncertainty is not of great importance because a letter from the company to the Chief Secretary's Department on 22nd January shows clearly enough that the conference had been inconclusive. This letter covered four matters: (1) It acknowledged an obligation of the plaintiff company "to market all its trawled fish and to pay the present market charge." (2) It applied for a reduction in the rate of commission on fish delivered to the market for sale by the Minister to a rate not exceeding 2 1/2 per cent on sales. (3) It applied "for exemption from market on all fish intended for delivery, for use of hospitals, hotels and cafes supplied by us" - this was an application for a consent under s. 40B (3). (4) It forwarded a list of the customers in respect of which the consent referred to in (3) was sought. (at p267)
6. On 4th February 1946 a reply was made to this letter which forwarded the Minister's consent under s. 40B enabling the plaintiff to distribute fish from its depot subject to the conditions specified in the consent. In reply to the request for a reduction in commission, it contained the following stipulation: "A rebate of commission chargeable for sale of fish at the market is to be allowed equivalent to the difference between the prescribed rate of 10% on the purchase price of such fish and an overall rate of 5% on all fish sold at the market or in pursuance of any consent operating under section 40B." This rebate was subject to certain conditions which are not material. Two matters are to be observed arising out of this letter. In the first place, the consent under s. 40B must have been given on the footing that the plaintiff company was a licensed fisherman, and although the only evidence is that it was so licensed in the years 1947, 1948 and 1949, it is a proper inference in all the circumstances that it was also licensed in the year 1946, so that the consent which was given could lawfully be given. In the second place, in strictness what was offered as a rebate of commission chargeable for sale of fish at the market was the difference between ten per cent on the purchase price of the fish sold at the market and five per cent on all fish sold both at the market and in pursuance of the consent. Following upon this letter, there was further correspondence in which the company put forward different proposals which the Department rejected. In its letter of 5th March 1946 it was said: "The Department can only adopt the practice of charging commission at the rate of 10% prescribed by the Regulation and make an overall allowance to your Company in respect of work performed on behalf of the Market." It was also said: "The Minister has approved of the continuance of the present arrangements for the marketing and disposal of your Company's fish. The Consent issued will remain in operation but is subject to cancellation or variation at any time." Under the departmental arrangement, which the company accepted, albeit unwillingly, it seems that the company was charged commission at the rate of five per cent on all fish sold, although this was not in strict accord with the departmental letter of 4th February. The company, being dissatisfied with the rate of commission, sought further consideration of the charge it was paying and on 24th April 1946 asked that sales of fish from the factory should not bear commission and that sales of fish through the market should bear commission (less rebate) at 2 1/2 per cent only. This request was rejected, and in a letter dated 20th May 1946, the Department wrote as follows: "A special position has been created by the issue of a Consent to your Company. It would be preferred by the Department that all supplies landed in the Metropolitan Area should pass physically through the Market so as to provide a common pool from which to make an equitable distribution of supplies, both as to quantity and species, to all buyers. Consistent with the policy at the present stage to allow a 5% rebate to Co-operative Depots in consideration of the handling and packing being done at the Depots, it was decided to allow a rebate at this rate to your Company. The arrangement under which a proportion of the supplies is distributed direct from the Company's Depot, subject to Market supervision, was authorized to meet your Company's convenience having regard to special circumstances that existed. . . . It is necessary that the financial basis shall be so fixed as to provide for all suppliers, including steam trawler interests and co-operative establishments, to contribute on a common footing to the general marketing structure." It was under the foregoing arrangements that the plaintiff carried on business for some time and paid commission. On 23rd October 1947 the Department wrote to the plaintiff company as follows: "A review has been made of all Ministerial Consents enabling fisherman to dispose of their catch other than through a Market in the district and the Minister has now approved that all such Consents should be cancelled forthwith." It seems, however, that after this cancellation of the company's consent under s. 40B (3), there was for some time no change in the procedure laid down in the letter of 4th February 1946. It must be recognized, however, that after 23rd October 1947, whatever justification there was for the procedure that was based upon the existence of a consent under s. 40B (3) no longer existed and the plaintiff's legal obligation was to deliver all its fish to the market for sale to or by the Minister in accordance with ss. 40B, 41B, 41C and 41E. (at p268)
7. At this point it is necessary to refer to what was actually done with regard to payments to and from the Chief Secretary and the plaintiff company. The information available to us does not afford any clear picture of what occurred, but it seems that it was based upon a notional delivery by the plaintiff company of all its fish to the market and perhaps a sale to the Minister, and a notional re-sale by the Minister to the company of the fish so delivered. Accounts between the Chief Secretary and the company were made up to show sales by the company to the Chief Secretary and sales by the Chief Secretary to the company, the company charging the Chief Secretary five per cent (and later 6 1/4%) less than the Chief Secretary charged the company, so that in the result the market price was divided between the company and the Chief Secretary in the proportion of ninety-five to five. If X pounds be taken as the market price for a particular catch, the Chief Secretary paid the plaintiff X pounds - 5%, and the plaintiff paid the Chief Secretary X pounds, so that in effect the plaintiff paid to the Minister five per cent upon its catch. Seemingly the cheque for X pounds - 5% was paid out of the Fish Marketing Fund before the cheque for X pounds was paid into the Fund. The only way in which it seems to me that what was done could be reconciled with the provisions of the Act would be to treat the company as selling all its fish to the Minister at the market and buying them back at the sale price less five per cent. The difficulties inherent in what was being done appear clearly enough from two letters from the Department to the plaintiff dated 22nd March 1950 and 27th March 1950. In the earlier letter the following account is given of the arrangement: "The whole of the fish taken is 'delivered' to the market. The fish is all received and weighed by the market management at your premises. To avoid double handling and the cost that would be involved to your Company by physically delivering to the market, the proportion of the fish required by your providoring business is allowed to remain at your premises after receiving and weighing. The position is that this fish is actually purchased by the Market and sold back to your Company." This was "corrected" in the later letter when, after referring to the fish required for the company's providoring business being allowed to remain at its premises, it was said: "The position is that this fish is actually 'delivered' to the Market on consignment and sold back to a trading section of your own company." According to the earlier statement of the arrangement, the Minister bought fish from the company and re-sold part of that fish to the company. According to the later statement, the Minister sold fish on behalf of the company to the company. It is difficult to accept either statement as according with the realities of the situation, and in any event there was no delivery of all fish to the market as required by s. 40B (1), which is not dealing with "notional" deliveries. (at p269)
8. The foregoing examination of the dealings between the Department and the plaintiff leads inevitably to the conclusion that the plaintiff's trading was not in accordance with the Act, but that it paid the Chief Secretary what it would have been obliged to pay had it complied with the Act and been charged a commission of five per cent upon the market price of its fish. (at p269)
9. I come now to the plaintiff's claim. According to its amended declaration, the plaintiff sought to recover moneys paid between 1st February 1946 and 31st December 1954. What was claimed was the difference between the cheques paid by the company to the Chief Secretary and those paid by the Chief Secretary to the company in the circumstances already stated - that is, an amount equal to five per cent of the market price of the fish which the plaintiff took and sold. This is described as commission. The total was 40,743 pounds 9s. 8d. One defence taken by the defendant was that part of what was claimed did not accrue within six years before the action (i.e., 6th October 1955) and it was not disputed that in any event the moneys paid before 6th October 1949 were irrecoverable. These sums totalled 11,152 pounds 16s. 8d., leaving a balance of 29,590 pounds 13s. 0d., which was sought to be recovered as money received. At this point it is necessary to return to a date mentioned earlier. The consent given by the Minister to the plaintiff under s. 40B (3) was cancelled on 23rd October 1947, so that the whole of the claim in issue in the action was in respect of moneys paid subsequently to the cancellation of the consent, when there can be no doubt that the plaintiff's obligation under the Act was to deliver all its fish to the market for sale either to or by the Minister. This disposes entirely of one ground upon which the claim was supported - that is, that what was paid by the company to the Chief Secretary was exacted as the price of a consent for which the Minister had no power to charge. Had this ground been made out, Brocklebank Ltd. v. The King (1925) 1 KB 52 would have been cogent authority for the proposition that the moneys were recoverable. Putting this on one side, however, the principal question here seems to be whether money is recoverable which would have been payable had the law been complied with according to its terms, but which, though not payable under the Act in the circumstances that, by arrangement, a course outside the Act was followed, was nevertheless paid in the expectation that unless it were paid, actual delivery of fish to the market would be enforced. In stating the question as I have, I have in mind the following findings made by Manning J.: "Although Mr. Cam asserted that his belief from time to time was that if he did not pay the commission charged his fish would be seized and that otherwise he would not have paid the commission, I find myself quite unable to accept this statement unless it is that he meant by so saying that he recognized that the scheme required him to send all his fish to market and that a flat defiance of the terms of the Act would result in his fish being seized. I have no doubt that Mr. Cam drove the hardest possible bargain with the Chief Secretary's Department and that throughout his resentment has been directed to the fact of there being a marketing scheme in the first place, and his complaint that the rate of commission charged was too high in the second place, but that otherwise he was entirely happy to proceed upon the basis which operated for substantially the whole of the period in question . . . I can see nothing in the nature of something other than legal compulsion in the facts of this case, and so far from the payments being unlawfully exacted, I am satisfied that Mr. Cam made such payments with full knowledge of all the circumstances and willingly in the sense that he thought it was much more preferable to pay what he was asked to pay than to accept the consequences which would follow the enforcement of the law which he was determined to defy." (at p271)
10. No authority was cited, and I have found none, which would support the plaintiff's claim thus understood. In the end, however, for the plaintiff to succeed it must, I think, be shown that the payments that it made were not voluntary. Mason v. New South Wales [1959] HCA 5; (1959) 102 CLR 108 and the authorities there cited seem to me to put the State as a defendant to a claim for money received in much the same position as a private person, and the findings which I have just quoted and which I regard as thoroughly justified upon the evidence, are that the plaintiff made the payments that it did voluntarily, notwithstanding that it expected that unless it made the payments, the arrangement would come to an end and the law would take its ordinary course. The plaintiff paid nothing beyond what it would quite lawfully have been called upon to pay had there been strict compliance with the law. I think it would be going too far to regard the moneys in question as having been paid by the plaintiff to procure immunity from the consequences of non-compliance with the law, because it does seem that what the plaintiff and the Department were attempting to do was to make an arrangement that would meet the plaintiff's special circumstances and yet would be within the law - and it may be that it was thought this attempt had been successful, although for my part I am sure that it was not; but even if that were the case, I am by no means satisfied that the moneys paid could be recovered. The moneys would nevertheless have been paid voluntarily and the plaintiff would itself have been a wrongdoer and proof of its wrongdoing would have been a necessary part of its case. But taking the view that I do, it is not necessary to decide here whether the Crown could keep moneys that it deliberately took from a person subject to a law as the price of not enforcing that law against that person. If such a case should ever arise (and it is almost unthinkable that it should) it can be dealt with then, and my decision here does not touch such a case. (at p272)
11. It was also argued that the payments were made pursuant to a contract and there had been a total failure of consideration. I agree with Manning J. that there was no contract and I add that if there were such a contract, I would be far from satisfied that there had been a total failure of consideration. (at p272)
12. Accordingly, I agree with the verdict and judgment of Manning J. and consider that this appeal should be dismissed. (at p272)
WINDEYER J. The arrangement by which the appellant was permitted to sell fish to its customers was illegal. By it the appellant avoided delivering to the market fish that should have been delivered there and which, if so delivered, would normally have been sold under conditions of market competition. The device of a notional delivery to the market and a sale out of the market to the appellant was at best a colourable compliance with the law. The appellant participated in this scheme, and as part of this participation it paid the moneys it now seeks to recover. The case is altogether different from Mason v. New South Wales [1959] HCA 5; (1959) 102 CLR 108 on which the appellant sought to rely. The facts here as set out by Manning J. in his judgment justify his conclusion that "so far from the payments being unlawfully exacted, I am satisfied that Mr. Cam made such payments with full knowledge of all the circumstances and willingly in the sense that he thought it was much more preferable to pay what he was asked to pay than to accept the consequences which would follow the enforcement of the law which he was determined to defy". (at p272)
2. In the background of this case are some matters of great consequence: The Bill of Rights declared: "that the pretended power of suspending of laws by regal authority without consent of Parliament is illegal"; and "that the pretended power of dispensing with laws or execution of laws as it hath been assumed and exercised of late is illegal": and a further declaration, against "levying money for or to the use of the Crown by pretence or prerogative without grant of Parliament", is referred to by the Chief Justice in his judgment. So that, as the Act of Settlement expresses the principle, all officers and ministers ought to serve the Crown according to the laws. It may be desirable that sometimes people be reminded of this and of the fate of James II, as Scrutton L.J. reminded the London County Council: see R. v. The London County Council; Ex parte The Entertainments Protection Association (1931) 2 KB 215, at p 229 . But the appellant here gains nothing by doing so. It does not avail it to contend that those who countenanced the plan, which was evolved apparently in an attempt to keep, or appear to keep, within the law, ought not to have done so. The appellant cannot get back the money that under that plan it paid to the State. (at p273)
3. I need say no more, for I fully agree in the judgment of the Chief Justice that I have had the advantage of reading. The appeal should, I consider, be dismissed. (at p273)
ORDER
Appeal dismissed with costs.