Attorney-General (NSW) v Homebush Flour Mills Ltd
56 CLR 390(Judgment by: STARKE J)
Between: Attorney-General (NSW)
And: Homebush Flour Mills Ltd
Judges:
Latham CJ
Rich J
Starke JDixon J
Evatt J
McTiernan J
Subject References:
Constitutional law
State statute
Validity
Conflict with Constitution (Cth)
Duty of excise
Compulsory acquisition of flour
Proceeds of sale received by Minister
Payment of compensation and administrative expenses
Balance for governmental purpose
Legislative References:
Constitution (Cth) - s 90
Flour Acquisition Act 1931 (NSW) No 10 - s 1(3); s 3(2); s 3(3); s 3(8); s 4(1); s (4); s (7); s 5(1); s 5(2); s 6
Judgment date: 1 May 1937
MELBOURNE (HEARD IN SYDNEY)
Judgment by:
STARKE J
An information was filed in the Supreme Court of New South Wales by the Attorney-General for the State of New South Wales against the Homebush Flour Mills Ltd (called the company). It claimed nearly PD8,500 against the company, under and pursuant to the provisions of the Flour Acquisition Act 1931 of New South Wales and its amendments. The company demurred to the information, and the demurrer was removed into this court pursuant to s. 40 of the Judiciary Act 1903-1934.
On the argument of the demurrer before this court, the company contended that the Flour Acquisition Act 1931 and its subsequent amendments imposed a duty of excise which, since the imposition of uniform duties of customs by the Federal Parliament, was beyond the legislative power of New South Wales. By s. 90 of the Constitution, it is enacted: "On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive." The Chief Justice has stated in detail the relevant provisions of the Flour Acquisition Act 1931 and its amendments, and their repetition is undesirable. It is enough for me to say that the Act compulsorily acquires all flour (other than self-raising flour) coming into existence in New South Wales after the commencement of the Act and the commencement of the Flour Acquisition (Amendment) Act 1933, and converts the rights of every person in the flour into a claim for compensation, which is not the market value of the flour but "the fair and reasonable price of flour" as fixed by a committee under the Act, consisting of the Minister, two of his officers, and two representatives of the Flour Mills Owners' Association of New South Wales and the Master Bakers' Association. The owner of the flour so acquired, however, is given a first right to purchase the flour, and its sale or disposition by such owner is deemed an exercise of such right. The price which the owner must pay for the flour in the case of flour for human consumption is what is called the "standard price" fixed from time to time by the Governor in Council. But the compensation is set off against the "standard price," and any balance is payable under penalty to the Minister of Agriculture, one of His Majesty's Ministers in New South Wales. If the owner does not choose to exercise his right to purchase the flour acquired from him, the Minister may sell it, and the owner then gets his compensation, or the amount realized less expenses, whichever is the lesser amount. The proceeds of any sale received by the Minister are payable into the Treasury, and are applicable for payment of compensation, and of the expenses of realization and administration, and any balance, after such payments, for the relief of necessitous farmers, in such manner as may be prescribed. It is in this last provision that the purpose of the Act is disclosed-the creation of a fund for the relief of necessitous farmers. It can only be achieved if "the fair and reasonable price"-the compensation fixed by the committee for flour for human consumption- is less than the "standard price." Thus in the present case, the information alleges that "the fair and reasonable price" was fixed at PD8 10s. per ton, and the "standard price" fixed by the Governor in Council was PD10, or a difference of PD1 10s. per ton. The owner is compelled to pay this difference if he wants his flour, or else he gets "the fair and reasonable price," or less. The difference between "the fair and reasonable price" and the "standard price," or its equivalent in value, is levied upon or extorted from the owners of flour. The intention of the legislature can only be gathered from its language and the effect in law of that language. Here the effect and operation of the Act is to levy upon or extort from the owners of flour a sum of money or its equivalent in value, not in exchange for any service rendered to them but for a government purpose, namely, the relief of necessitous farmers. Such a charge is properly described as a tax or duty (See Attorney-General v Wilts United Dairies Ltd, [F24] per Bankes L.J.; The Commonwealth v Colonial Combing, Spinning and Weaving Co Ltd [F25] ). But is it a tax or duty of excise? Excise duties have often been described as inland imposts levied upon articles of manufacture or sale, and also upon licences to pursue certain trades or deal in certain commodities. But this court, in Peterswald v Bartley, [F26] denied that the words were used in this extended sense in the Constitution: the Constitution limited the words to duties charged upon goods produced or manufactured in Australia itself or upon a sale of such commodities. Thus Griffith C.J. [F27] said of the term "excise duty": "It is intended to mean a duty analogous to a customs duty imposed upon goods either in relation to quantity or value when produced or manufactured, and not in the sense of a direct tax or personal tax." (See also The Commonwealth and Commonwealth Oil Refineries Ltd v South Australia [F28] .) Crothers v Sheil [F29] was relied upon during the argument. But upon the true construction of the legislation there involved, the court held that it did not impose any liability in respect of ownership, transfer, sale or production of goods, but merely carried into effect a scheme for the compulsory acquisition of milk and the payment of the price or compensation out of the proceeds arising from its resale by the milk board. But the Flour Acquisition Act 1931 and its amendments levy a charge upon flour coming into existence in New South Wales, amounting to the difference between "the fair and reasonable price" and the "standard price" or its equivalent in value. In my judgment such an imposition is properly described, and operates, as an excise duty.
The demurrer should be allowed.