Casual or transient supply agreements arising from individual orders do not constitute disqualifying agreements under s 44(v), and the provision requires a continuing agreement through which Crown influence is at least conceivable; mere shareholding in a company with government transactions may not constitute a pecuniary interest.
Later decisions that cite Re Webster
In Re WEBSTER [1975] HCA 22; (1975) 132 CLR 270
Constitutional Law (Cth) - Parliamentary Elections (Cth)
High Court of Australia
Barwick C.J.(1),
CATCHWORDS
Constitutional Law (Cth) - Parliamentary elections - Disqualification from being chosen or of sitting as senator - Person who has direct or indirect pecuniary interest in agreement with Public Service of Commonwealth - "Agreement" - "Pecuniary interest" - The Constitution (63 & 64 Vict. c. 12), s. 44 (v.) Parliamentary Elections (Cth) - Disqualification from being chosen or of sitting as senator - Person who has direct or indirect pecuniary interest in agreement with Public Service of Commonwealth - Senator a shareholder and director of timber company - Submission by company of quotation to Commonwealth Department for supply of timber - Whether offer or invitation to treat - Agreement by Department to order such quantities as may be required - Whether a standing or continuing agreement - Placement of individual orders - Agreement - Pecuniary interest in agreement - Whether shareholder has interest in company's agreements - Commonwealth Electoral Act 1918-1973
HEARING
Sydney, 1975, June 2,3,24. 24:6:1975DECISION
June 24.
2. In conformity with s. 204 of the Commonwealth Electoral Act, the President
of the Senate sent to the Principal Registrar of this
Court a statement of the
questions upon which the determination
of the Court was desired together with
papers, proceedings, and documents
relating to the questions. The questions
posed by the Senate
are: (a) Whether Senator Webster was incapable of being
chosen or of
sitting as a senator; and (b) Whether Senator Webster has become
incapable of sitting as a senator. The papers, etc. are:
Journals of the Senate -Senate -
No. 64 of 15th April 1975 - Entry 4, at p. 597.
No. 65 of 16th April 1975 - Entry 13, at p. 605.
No. 67 of 21st April 1975 - Entry 14, at p. 618. Notice Papers of the
No. 64 of 16th April 1975, p. 2045.
No. 65 of 17th April 1975, p. 2075.
No. 66 of 21st April 1975, p. 2107.
No. 67 of 22nd April 1975, p. 2139. Extracts from Senate Debates -
16th April 1975.
21st April 1975.
22nd April 1975. (at p275)
3. But these papers and documents do not contain any material upon which the
questions could be decided: there were no relevant
facts found or properly
evidenced. This was not due to any default on the part of the President who
had fully complied with his obligation
under the Commonwealth Electoral Act.
The deficiency resulted from the manner in which the question had arisen in
the Senate. A Joint
Committee on Pecuniary Interests
of Members of Parliament,
inquiring into arrangements to be made relative to the declaration of
the
interests of the members of the
parliament and the registration therof, was
attended by witnesses whose evidence was not really
relevant to the task the
committee
had to perform. However, the committee heard what these witnesses
had to say and, without finding
facts relevant to the questions
now raised,
sent the record of those statements to the Senate. (at p275)
4. After receipt of the papers from the President, I appointed a sitting of
the Court as the Court of Disputed Returns to be held
at the Court House,
Darlinghurst, at 10.15 on Monday, 19th May 1975. That sitting was duly
advertised in the press. At that sitting
Mr. T.E. F. Hughes Q.C., instructed
by the Crown Solicitor, sought leave to appear on behalf of the
Attorney-General of Australia
to assist the Court, and Mr. W.P. Deane Q.C.,
sought leave to appear for Senator Webster, the Senator to whom the questions
of eligibility
related. I gave leave to both these counsel. A Mr. P.C. Brown
also sought leave to appear with a view to seeking the extension of
the
inquiry before the Court to include earlier elections than the most recent
election for the Senate. I declined to give Mr. Brown
leave to appear. There
was also an application by a Mr. P. Soegemeier who by his own statements in
Court clearly had no interest
in the matter entitling him to leave: I refused
him leave to appear. Mr. J.D. Traill appearing on behalf of Mr. Francis
McManus also
sought leave on the footing that if the Court decided that
Senator Webster's seat was vacant, it would be necessary to decide what
order,
if any, the Court should make for filling the vacancy, a matter in which Mr.
McManus claimed to have an interest. I gave Mr.
Traill leave to appear if and
when that question arose. (at p276)
5. The relevant facts relating to the eligibility of Senator Webster were
proved by affidavits, some tendered on behalf of the Attorney-General
in order
to assist the Court and some tendered on behalf of Senator Webster. The
affidavits were as follows: Simon Gaunt sworn on
29th May 1975; Warren Ernest
James Butler sworn on 29th May 1975; Leslie George Clapperton sworn on 29th
May 1975; Francis Patrick
McManus sworn on 29th May 1975; James Joseph Webster
sworn on 2nd June 1975; Reginald Keith Brown sworn on 30th May 1975; Laurence
John Abbott sworn on 30th May 1975; James Joseph Webster sworn on 3rd June
1975. (at p276)
6. The poll for the Senate, held on 18th May 1974, was declared on 25th June
1974. Senator Webster was then elected to the Senate
and has sat in the Senate
as a senator since 9th July 1974, which was the first sitting day of the
Senate following that election.
Having regard to the views I have formed,
there is no need to correlate any of the transactions to which I shall refer
with days
on which the senator sat. (at p276)
7. The facts are not in doubt but the proper legal inferences to be drawn
from them is a matter of difficulty. But it is quite certain
that the facts
lend no colour whatever to any suggestion of any lack of integrity on the part
of Senator Webster, or of any intention
on his part to allow the Crown to
influence him in the performance of his obligations as a member of the Senate.
There was at no
time any agreement of any kind between Senator Webster and the
Public Service of the Commonwealth. The question of eligibility is
only
suggested to arise because he was a shareholder in a family company which is
said to have had a relevant agreement, or relevant
agreements, with that
Public Service. (at p276)
8. It is beyond doubt that if that company did relevantly have any such
agreement, neither Senator Webster nor the company obtained
any benefit
whatever, or intended to obtain any benefit whatever, from the fact that
Senator Webster was either a candidate for the
Senate or a member of that
House. As will appear, whatever transactions took place between the company
and the Public Service of
the Commonwealth were the consequence of open and
competitive quotation in which the attitude of the Public Service towards
those
quotations or tenders was uninfluenced by the fact that Senator Webster
was a member of the company. The Public Service found the
quotations of the
company, to which I later refer, offered in competition with other quotations
by members of the trade, satisfactory
for the purposes of the Department and
was prepared to act on them for the benefit of the Public Service in the
ordinary course of
its administration. Nothing in the facts in the least
suggests any realization on the part of the senator that any arrangements or
transactions of the company fell or might fall within s. 44 (v.) of the
Constitution. (at p277)
9. As will appear from my discussion of the matter, the questions turn
largely on technical concepts of the law of contracts. It
is indeed, in my
opinion, a matter for great regret that the composition of a House of the
Parliament should depend upon such highly
technical differentia as I shall
need to consider in order to resolve the questions submitted by the Senate to
the Court on this
occasion. (at p277)
10. At all material times Senator Webster was a shareholder in J.J. Webster
Pty. Ltd. (the company) which was incorporated in the
State of Victoria in
1920 in order to carry on a timber, hardware and plumbing business then being,
and since 1890 having been, carried
on in the suburb of Elsternwick,
Melbourne, by Joseph John Webster, the grandfather of Senator Webster. Until
his death in August
1948, Joseph John Webster was the principal shareholder in
the company. At the present time the Public Trustee of Victoria, who is
the
executor of the will of Joseph John Webster and the trustee of his estate, is
the majority shareholder in the company. The issued
capital of the company at
relevant times was $80,000 made up of 7,000 cumulative preference shares of
$2.00 each and 33,000 ordinary
shares of $2.00 each. The Public Trustee held
4,700 preference shares and 16,209 ordinary shares. The balance of the issued
capital
was spread amongst eight other shareholders. Senator Webster at
relevant times held 1,000 preference shares and 7,858 ordinary shares.
The
terms of the will of Joseph John Webster were proved before me as well as the
present situation of the beneficiaries thereunder.
From this evidence it is
clear that Senator Webster is not presently entitled in possession to any
shares under his grandfather's
will. (at p277)
11. As at 18th May 1974, Senator Webster was managing director, secretary and
manager of the company as well as being a shareholder.
He remained in this
situation in the company until 14th April 1975. Senator Webster was not
entitled to, nor has he received, any
fee, remuneration or reward as managing
director or as director. He received a fixed salary as manager of the company
unrelated to
the turnover or profits of the company. He received no
remuneration of any kind in relation to the negotiation or management of
business
for the company. As manager he had the use of a company car. (at
p277)
12. It is fundamental to the decision of the questions posed by the Senate to
bear in mind the purposes which s. 44 (v.) of the Constitution is designed to
achieve. The paragraph derives ultimately from the provisions of the statute 7
& 8 Wm. III c.25 passed in the
year
1696 to secure the freedom and
independence of the Parliament from the Crown and its influence. The precise
progenitor of s. 44 (v.) is s. 1. of 22 Geo. III c.45 passed in the year 1782.
The substance of those provisions, repeated in 41 Geo. III c.52 passed in the
year 1801,
persisted until 1957 when they finally disappeared from British
Parliamentary life. During times when Parliament was establishing
its
independence of the Crown it was thought that there was a real likelihood of a
government contractor, that is to say, one who
had a binding term contract
with the Crown to supply government stores, and from whom the Crown was bound
to take its requirements,
being influenced by the Crown in matters not limited
to the subject matter of the contract. Lord Haldane when Lord Chancellor said
in In re Sir Stuart Samuel (1913) AC 514, at p 524 with respect to the
statute 22 Geo. III c.45, "This Act of Parliament itself
declares that it was
made to preserve the freedom and independence of Parliament; and the mischief
guarded against is the sapping
of that freedom and independence by members
being admitted to profitable contracts", Willes J. in Royse v. Birley (1869)
LR 4 CP
296, at pp 311-312 , speaking of the same statute, said: "I think the
enactment refers to the case of a man having a contract under
which he is to
derive some future benefit from dealing with the government, in respect of
which they might control him; as, for instance,
by directing their officers
not to look too closely to the sort of goods he sent in, or the like." That
was said in 1869, but it
might be remarked in passing that even as of that
time, Montague Smith J. in that case said (1869) LR 4 CP, at p 319 : "I cannot
help thinking that it would be very desirable that this Act should be revised,
because it certainly appears to me to be totally inapplicable
to the present
state of commerce, and that it really provides a pit-fall into which men who
wish to walk uprightly and according
to law may unwittingly tumble." (at
p278)
13. However, the provision is part of the Constitution and, however
vestigial, must be enforced. But in its construction and application, the
purpose it seeks to attain must always be
kept in mind. That purpose has no
real analogy in the purpose sought to be achieved by disqualification
provisions under local government
and comparable legislation. In the case of
mayors, councillors and aldermen and persons holding statutory offices, the
object of
the disqualification is to prevent a possible conflict of interest
and duty and the possible misapplication of shire, municipal or
statutory
funds for the personal gain of the mayor, councillors, aldermen or officers to
"preserve purity in local government administration"
(see Ex parte Elliot; re
Mowle (1936) 53 WN (NSW) 88, at p 90 ). The protection of the independence of
the parliament is a completely
different purpose which is not directly
concerned with possible conflicts of interest and duty, though of course, to
yield for personal
gain to the pressure of the Crown in the performance of the
parliamentary function could be said to indicate a preference of interest
over
duty. But the obligations of a member of parliament cannot be compared to the
duties of local government or statutory officials.
The member is in a
significantly different situation. It might also be mentioned that the
parliamentary disqualification provision
was neither initially devised nor
inserted in the Constitution in order to protect the public against fraudulent
conduct of members of the House, carried out perhaps behind the shield of a
corporation
of small membership. In this connexion, I may remark, however,
that in the Convention debates, some of its members were seemingly
concerned,
when speaking on the insertion in the provision which became s. 44 (v.) of a
minimum number of shareholders, with the possibility of members of the
parliament defrauding the community under the cloak
of what we have come to
call a "private" company. (See "National Australasian Convention Debates",
Adelaide, 1897, pp. 736-738, "Australasian
Federal Convention Debate", Sydney,
1897, pp. 1022-1028.) (at p279)
14. The disqualification under s. 44 (v.) as effected by s. 45 of the
Constitution, is automatic and does not depend upon a decision of the House or
of the Court of Disputed Returns, though means are there provided
of resolving
the facts and their legal consequences. There being penal consequences of its
breach, the paragraph should receive a
strict construction. (at p279)
15. Because of the evident purpose of the disqualification provision, it
applies only to executory contracts, that is to say, to
contracts under which
at the relevant time something remains to be done by the contractor in
performance of the contract: see Royse
v. Birley (1869) LR 4 CP 296 . An
illustration of the principle may be seen in the case of George Eric Leyland
Laforest (Clerk of
the House of Representatives) v. Morris Cargill (1959) 1
West Indian Reports 178 . For the same reason, it has been said that "What
are
meant to be covered" (i.e., by 22 Geo. III c.45) "are contracts of a more
permanent or continuing and lasting character, the
holding and enjoying of
which might improperly influence the action both of legislators and the
Government": per Low J. in Tranton
v. Astor (1917) 33 TLR 383, at p 386 . In
somewhat the same vein, Montague Smith J. in Royse v. Birley (1869) LR 4 CP,
at p 317
thought that what was contemplated was "a contract which would
endure for some period of time" during which something remained to
be done by
the contractor. True it is that both these judges were influenced to some
extent by the presence in the statutes with
which they were concerned of a
disqualification which was "during the time" that the contractor held the
contract. But, in my opinion,
this requirement of something more than a
"casual or transient" contract in order to found a disqualification, springs
out of the
purpose of the statute, in this case the Constitution, creating the
disqualification. (at p280)
16. It seems to me that, upon the proper construction of the paragraph,
bearing in mind the purpose of its presence in the Constitution, the agreement
to fall within the scope of s. 44 (v.) must have a currency for a substantial
period of time, and must be one under which the Crown could conceivably
influence the
contractor in relation to parliamentary affairs by the very
existence of the agreement, or by something done or refrained from being
done
in relation to the contract or to its subject matter, whether or not that act
or omission is within the terms of the contract.
In the climate of the
eighteenth century, the likelihood of such influence upon a government
contractor could well be thought to
be high. Accordingly, the mere existence
of a supply contract justified the disqualification. But in modern business
and departmental
conditions the possibility of influence by the Crown is not
so apparent: whilst it need not be certain, at least it must be conceivable,
and in any case the possibility will arise from the continuing nature of the
agreement. Further, it seems to me that the interest
in the agreement of the
person said to be disqualified must be pecuniary in the sense that through the
possibility of financial gain
by the existence or the performance of the
agreement, that person could conceivably be influenced by the Crown in
relation to Parliamentary
affairs. (at p280)
17. Whilst I am bound to say that I can point to no authoritative decision
interpreting this section or its progenitors in this
particular sense, I can
say that, having carefully examined the decisions which have been given, I do
not find any which would deny
that interpretation. But, in my opinion, what I
have said expresses the proper meaning and scope of s. 44 (v.). No doubt a
similar construction could not be placed upon a local government
disqualification because of its different purpose.
(See City of London
Electric Lighting Co. Ltd. v. London Corporation (1903) AC 434 .) (at p280)
18. I turn now to examine the particular facts of this matter in the light of
the purpose of the disqualification provision. (at
p280)
19. The first question of fact will be whether the company had any agreement
at all with the Public Service of the Commonwealth
at the relevant time in
relation to Senator Webster's eligibility to be chosen, i.e., 18th May 1974,
or at any time thereafter in
relation to his capacity to sit as a senator. No
question arises whether the subject matter of any transactions the company had
with
the government were for the Public Service of the Commonwealth. The
transactions were for the supply of material for use by the government.
Nor is
there any question that the transactions were with the Public Service of the
Commonwealth. The transactions were with the
Department of Housing and
Construction and with the Postmaster-General's Department. (at p281)
20. There was only one transaction with the Postmaster-General's Department.
I can describe and dispose of it quite briefly. In
August 1973 the company
made a written tender to the Postmaster-General's Department on a form
provided by it, for the supply throughout
the ensuing year of timber of a
specified kind. The conditions of the tender and of the so-called acceptance
of it on behalf of the
Postmaster-General's Department make it quite plain to
my mind that the company did no more than purport to bind itself to accept
orders placed with it during the year and conformable to the terms and
conditions of the tender. The Postmaster-General's Department
was not bound to
place any orders with the company. No relevant agreement arose until an order
was given. In fact, one order was
given and executed during 1973. No other
orders were given. Clearly, no agreement of any kind subsisted between the
company and the
Postmaster-General's Department at any relevant time. (at
p281)
21. The transactions of the company with the Department of Housing and
Construction fall into three broad groups. Two distinct types
of subject
matter appeared in the first group of transactions: (1) Hardwood of specific
dimensions and (2) Red Gum of various dimensions
to be priced at per 100
linear feet. The second group of transactions related to the supply of
selected and described items of hardware
and specialised timber. (at p281)
22. The third group of transactions was made up of orders given without prior
quotation. They clearly did not give rise to any relevant
agreement. No
further reference need be made to them. (at p281)
23. With one exception, I can treat together all the transactions within both
the first and second of these groups. (at p281)
24. The Department of Housing and Construction, when obtaining quotations
from the timber merchants of Melbourne for the supply
of hardwood and of red
gum for delivery in and around that city, supplied timber merchants in
Victoria with printed forms on which
they could specify the prices at which
they would supply timber of a stated specification for delivery within the
metropolitan area
of Melbourne including Laverton. (at p281)
25. A question immediately arises as to the effect of the signature by the
company and delivery to the Department of this form setting
out a quotation of
prices for the timber. This form and the conditions it contained or to which
its terms were subject is common
to all transactions in the first and second
groups between the company and the Department. (at p282)
26. The document supplied to the company and filled in by it speaks of a
quotation subject to indorsed conditions. Of these, conditions
2, 6 and 8 are
significant for present purposes:
"2. Quotations may be submitted for the whole or part orFurther conditions, headed Conditions of Tendering and Specification, are imported into the quotations made within the first group of transactions. Amongst these, condition 1.2 (e) should be noted:
parts of the item(s) listed, and the Department of Works
(hereinafter called 'the Department') reserves the right to accept
separate offers for the whole or part or parts thereof.
6. No quotation shall be deemed to have been accepted until
an official order has been received by the tenderer.
8. If the supplier fails to deliver the goods within the period
specified, or intimates that he is unwilling or unable to supply
the goods, the Department may, by notice in writing, cancel the
order."
"1.2. Special Conditions of Contract:The form at its foot contained the statement addressed to the Director of Works: "We hereby agree to supply the abovementioned articles at the prices quoted above and subject to the conditions", i.e. indorsed conditions. The company in relation to each of the two groups of transactions signed the form below this statement. (at p282)
. . .
(e) The Department shall not be bound to order the whole of
the quantities listed herein which are given as a guide to
tenderers. Orders will be placed as and when required by the
Department during the currency of the contract. The successful
tenderer will, however, be required to supply, in full all orders
placed during the currency of the contract."
27. There is a radical distinction drawn in the law of contracts between the
mere quotation of a price and an offer to sell and
deliver. If a person merely
inquires of a man what price he is either selling or willing to sell a
commodity and the inquisitor is
informed of that price, this quotation may
not, and in general will not, constitute an offer which is capable of
acceptance so as
to form a binding contract upon the person making the
quotation to sell and deliver, or upon the inquisitor to accept what is
delivered.
The quotation will be no more than an offer to treat. (Harvey v.
Facey (1893) AC 552 ). This will be so even if the inquisitor treated
the
quotation as an offer and purported to accept it. (at p282)
28. In the present case, it has been submitted on behalf of Senator Webster
that the company in filling in and signing these forms
did no more than make a
quotation which was in the nature of an offer to treat and not an offer
susceptible of acceptance so as to
form a binding agreement. (at p283)
29. If the quotation is nothing more, an order for the goods at the quoted
price subsequently given would be itself an offer which
would be accepted by
delivery of the ordered goods. In that case, no relevant agreement would
result. This situation is comparable
to over-the-counter transactions in the
ordinary course of trade in commodities. See Royse v. Birley (1869) LR 4 CP
296 . If counsel's
submissions were accepted as to the effect of the document
containing the quotation, there would be an end of this matter because
no
executory agreement would have resulted at any time, no matter how the
departmental officers may have treated the quotation. The
resolution of this
question is obscured by the language used by the departmental officers in
their documents. They appeared to treat
the quotation as a tender and refer in
their correspondence to an agreement as having sprung out of the acceptance of
the quotation
prior to the giving of any order: but, in my opinion, the matter
cannot be decided by what the departmental officers thought to be
the
position. (at p283)
30. There is much to be said for acceptance of the proposition that the
company did not at any time in relation to the various transactions
with the
Department which have been evidenced before me, do more than provide the
Department with a quotation. There would be nothing
strange or impractical in
that situation. Lord Atkin, in delivering judgment in Percival Ltd. v. London
County Council Asylums and
Mental Deficiency Committee (1918) 87 LJKB 677, at
p 678 , refers to different methods employed by Departments in setting out to
obtain supplies of goods for the Public Service. In connexion with the present
matter I have seen at least three different approaches
made by Departments in
seeking supplies of commodities for government use. (at p283)
31. After consideration, however, I have reached the conclusion that I should
not accept this submission on behalf of Senator Webster
because, but only
because, of the express offer to supply signed by the company on the form. In
my opinion, by signing and returning
the forms the company did make an offer
capable of acceptance, as distinct from merely quoting a price. The
distinction is a nice
one, and as I have said, it is more than unfortunate
that the answer to the Senate's questions could turn upon it. In my opinion,
where a price was named on the form there was an offer to sell and deliver at
that price subject to the conditions in and imported
into the printed form.
The offer to supply was, in my opinion, a standing offer intended to expire,
in any case, within a stated
time, but because it was not supported by
consideration, capable of being revoked before acceptance by the placement of
a specific
order. There was clearly no contract or agreement having currency
for any term. Though it may have been thought to be conditioned
on the promise
of the Department to order at least some, if not all, of its requirements, the
company's offer, in my opinion, was
unsupported by consideration and therefore
capable of revocation at any time before an order within its terms was
received. (at p284)
32. The nature of the offer which was made I shall consider when considering
the next question to arise. However, I should first
mention the exception in
the first group of transactions with which I need separately to deal. (at
p284)
33. In the case of the hardwood included in the first group of transactions,
the company did not quote any price in the form provided
by the Department or
at all. It placed an indorsement on the form to the following effect:
"Owing to conditions in trade at present, we are unable to
quote as you have listed, but would be glad to assist with
material from our stocks at ruling rates at time of order. 15%
trade discount from T.M.A. List rate." (at p284)
34. The company signed the form below the statement: "We hereby offer to
supply etc.". The Department purported to accept the quotation
and appeared to
treat the matter as if there was a contract with a year's duration. But
plainly there was not. Without a price named
or calculable by some disclosed
formula there could be no agreement to sell: nor could there be an offer to
sell. In this instance,
the completed form did no more than provide an offer
to treat. Therefore, quite plainly and apart from the other considerations to
which I later refer, there was no contract or agreement between the company
and the Department arising out of the quotation for the
supply of hardwood and
the purported acceptance by the Department of that company's response to the
request for a quotation. (at
p284)
35. The next question is whether there was an offer to supply the red gum
which was accepted by the Department so as to form a standing
contract binding
the Commonwealth to take its, or at any rate some of its, requirements from
the company and the company to supply
them. For the resolution of this
question, I shall need to refer to other documents as well as the forms of
quotation to which I
have already referred. (at p284)
36. On receipt of the quotations, the Acting Superintendent of Stores, being
duly authorized by the Minister for Housing and Construction,
wrote to the
company as follows:
"Your quotation as set out in Departmental quotation form
dated 22 November, 1973, submitted in accordance with the
conditions of advertised quotation schedule V1310, is hereby
accepted for the supply and delivery of Red Gum Scantlings
(excluding soles and struts) at TMA list prices, less 15%
discount less a further settlement discount of 2% - 10 days.
Delivery to Laverton would be an extra $5.00 per load.
The contract will operate from the date of this Notice ofThereafter, orders for specific quantities of timber for delivery at stated times and places were given to the company, each order being referable to the general quotation. (at p285)
Acceptance to 31 January, 1975. The Department does not undertake
to purchase any specific quantities but will place firm orders for
such quantities as may be required from time to time. Such
orders will be endoresed 'To be supplied in accordance with the
terms and conditions of contract No. V1310'."
37. Having examined the documents, and particularly having regard to the
several conditions they contain, I am clearly of opinion
that no standing or
continuing agreement was created by them. The offer, in my opinion, was no
more than an offer to accept and fulfil
orders given during the period
contemplated and within the specification of the quotation, assuming it not to
have been revoked before
the order was received. It is evident from the terms
of the documents that the offer to supply made by the company was not accepted
by the Department until a specific order for timber was given. The documents
are express on that point. The indorsed conditions also
make it plain to my
mind that the Department could choose to order any part of its requirements
from other suppliers. It did not
become bound to order. There was therefore no
continuing contract between the company and the Department created by the
documents:
there was no contract with currency for an agreed period of time:
there was no "overall" agreement between the company and the Department
with
respect to the supply of red gum timber or of the selected items. (at p285)
38. But, on my analysis of the documents, until its revocation there was a
standing offer by the company to supply such quantity
of timber within the
specification of the quotation as the Department from time to time might
order. Once an order was received,
that order would constitute an acceptance
of the offer to supply and a binding agreement would result limited to the
timber or item
ordered; an agreement binding the company to supply the timber
or item and the Department to accept delivery. That agreement until
such
delivery would be an executory agreement. It would be an agreement with and
for the Public Service of the Commonwealth. The
order when given was for
prompt delivery, though delivery in parcels over a period of time was on some
occasions contemplated. There
were such agreements on foot as at 18th May 1974
and subsequently. (at p286)
39. But is such an agreement within the contemplation or the purview of the
disqualification? How far different, really, is such
a transaction from
over-the-counter transactions which clearly are not within the condition of
disqualification? No doubt the legal
analysis is different: in the one case
the contract is executed, though payment may not have been made: in the other,
it is executory,
delivery has yet to take place. But what relevant difference
is there in substance? In the first case, theoretically, the Department
might
delay payment as a measure of influence upon or coercion of the member: and,
equally theoretically, in the second case the
Department might accept
unacceptable goods as a means of persuasion. But, in my opinion, as of this
day, neither theoretical possibility
is really conceivable in relation to
isolated orders for prompt or immediate delivery of such commodities as were
here ordered. (at
p286)
40. In considering whether there is a relevant agreement, it must be
remembered that there being no standing agreement, each order
creates a
separate and distinct agreement. Thus, the possibility of influence by the
Crown must be considered in relation to the
single instance of a specific
order for specific and described goods, a single instance uncontrolled and
unregulated by any overall
standing agreement. For that reason, I have
referred to "isolated orders" (at p286)
41. After a good deal of consideration, I have come to the conclusion that
the agreement so formed does not come within the operation
of s. 44 (v.). The
agreement really has no term. It is not continuing: it is really casual and
transient. I cannot conceive that, in these
days, the Crown could exert any
influence in Parliamentary affairs by anything it could do, properly or
improperly, in relation to
such an agreement. There are but bare theoretical
possibilities unrelated to the practical affairs of business and departmental
life,
but these are not really conceivable. (at p286)
42. The conclusion that the agreements springing out of the individual orders
are not within the scope of s. 44 (v.) is enough to dispose of this matter.
However, there are further considerations to which I can properly advert.
Clearly enough,
the Crown could exert no relevant influence on the company.
But could it exert such influence on the Senator through the company?
It is
only through the Senator's shareholding that this could possibly take place.
(at p286)
43. Here it should be reiterated that the Senator's interest in the agreement
between the company and the Department must be pecuniary:
and it must be a
pecuniary interest in the particular agreement. As I see the position, it must
be a pecuniary interest in the specific
agreement resulting from an order
placed with the company for delivery of specified timber or some specified
item. I think it must
be accepted that for the purposes of s. 44 (v.) a
shareholder may have a pecuniary interest in some agreements made by and with
the company of which he is a member. Shareholders
have been so treated in
relation to disqualification provisions. However, under the general law it is
well established that a shareholder
does not have any legal or equitable
interest in the assets, including agreements, of the company. Even where a
shareholder owned
almost all the shares of a company, he had no legal or
equitable right or interest in the company's assets: see Macaura v. Northern
Assurance Co. Ltd., per Lord Buckmaster L.C. (1925) AC 619, at p 629 ; per
Lord Sumner (1925) AC, at p 630 . But of course, it may
be that due to
particular circumstances the shareholder may have such an interest. But in
that case that pecuniary interest will
arise out of those circumstances. The
purpose of the exception clause in s. 44 (v.) is, in my opinion, on the one
hand, to ensure that shareholders in "public" companies, who are Senators or
members, are not
within the disqualification provision: and, on the other, to
ensure that shareholders in a company of small membership are not included
in
the exception. The terms of the paragraph do not amend the general law: and
the presence of the exception does not mean that even
for the purposes of the
paragraph shareholders in public companies would otherwise have a pecuniary
interest in the agreements made
by those companies. If the Senator or member
be a shareholder in a "private" company such as is described, which has a
relevant agreement
with the Government, there is a real question in my mind
whether that fact of itself brings him within the disqualification.
Consequently,
it may be said that a person who is no more than a shareholder
in a company does not, by reason of that circumstance alone, have
a pecuniary
interest in any agreement the company may have with the Public Service. (at
p287)
44. But, however that may be, it is in my opinion more than difficult to
conclude that the shareholder does have a pecuniary interest
in each and every
of the day to day transactions of the company, whether they be strictly "over
the counter" transactions or arise
out of orders given for the immediate
supply of goods pursuant to a standing offer of supply. Under the general law,
plainly he does
not: in my opinion, there is good reason to conclude that the
same is true in relation to s. 44 (v.). It may possibly be that other
circumstances may combine with his shareholding to create such an interest:
but no such circumstances
exist in this case. (at p287)
45. Further, bearing in mind the purpose of the disqualification, it is
difficult to see that the shareholder in this instance has
any such pecuniary
interest in the particular agreement arising from the giving of a specific
order as would conceivably place him
in any respect under the influence of the
Crown in relation to Parliamentary activities, or in any wise enable the Crown
through
him to "sap" the freedom and independence of Parliament. However, I
have no reason to decide that further point. It suffices that,
in my opinion,
neither on 18th May 1974, nor at any date subsequent thereto, did: (1)
Senator Webster have any agreement with the
Public Service of the
Commonwealth. (2) J.J. Webster Pty. Ltd. have any standing or continuing
agreement with the Public Service
of the Commonwealth (at p288)
46. But, in my opinion, on 18th May 1974 and on divers dates subsequent
thereto, J.J. Webster Pty. Ltd. had on foot an offer or
offers to the Public
Service of the Commonwealth which that Public Service accepted both before and
after 18th May 1974 by giving
specific individual orders for goods to be
supplied for immediate or early delivery within the terms of the offers, and
upon the
receipt of such an order an executory agreement existed between the
company and that Public Service for the period elapsing from
the date of the
receipt of the order until delivery of the goods. Agreements of that kind did
exist between the company and the Public
Service of the Commonwealth, both as
at 18th May 1974 and subsequently thereto. (at p288)
47. In my opinion, such an agreement is not within the scope of the terms of
s. 44 (v.), and did not constitute a relevant agreement with the Public
Service of the Commonwealth. Further, in my opinion, it is at least
doubtful
whether Senator Webster had any relevant, pecuniary interest in any such
agreement. (at p288)
48. I conclude that Senator Webster was not ineligible to be chosen on 18th
May 1974 as a Senator, and did not at any time become
incapable of sitting as
a Senator. Both questions posed by the Senate are answered in the negative.
(at p288)
ORDER
Questions referred to the Court of Disputed Returns answered as follows:(a) Whether Senator Webster was incapable of being chosen or of sitting as a Senator.