Cody v J H Nelson Pty Ltd
(1947) 74 CLR 629(Judgment by: STARKE J)
Between: CODY
And: J H NELSON PTY LTD
Judges:
LATHAM CJ
RICH J
STARKE JDIXON J
McTIERNAN J
Subject References:
National Security
Judgment date: 9 June 1947
Melbourne
Judgment by:
STARKE J
The respondent was charged on information in Petty Sessions before a police magistrate exercising Federal jurisdiction that it did an act which constituted black marketing within the meaning of the Black Marketing Act 1942 in that it failed to keep proper books of account as required by reg. 49 of the National Security (Prices) Regulations which had been declared by Statutory Rules 1945 No. 114, to be black marketing.
2. Seven other informations were laid against the respondent charging that the respondent had been guilty of black marketing in that it sold meat by wholesale to divers persons at a price in excess of that fixed by the National Security (Prices) Regulations. These seven informations were dismissed on a finding that the respondent had not sold meat wholesale but bought it as an agent for and on behalf of certain customers.
3. And these decisions have not been challenged.
4. The information for failing to keep proper books was also dismissed.
5. Regulation 49 provides that
"every person who in the course of, or for the purposes of, or in connection with, or as incidental to, any business carried on by him -
- (a)
- produces, manufactures, sells or supplies any goods whatsoever; or
- (b)
- supplies or carries on any service whatsoever, shall, for the purposes of these Regulations, keep proper books and accounts."
The regulation refers to any goods and services whatever but I take this to mean any declared goods and services whatever: See regs. 22 and 23. It was not really disputed that all goods and services with some exceptions, immaterial to this case, had been declared (See Victorian Chamber of Manufactures v. The Commonwealth (Prices Regulations) (1943) 67 CLR 335 , at pp 338, 339), though it was said that the declarations had not been formally proved but as I think that the information should go back to the police magistrate the defect, if it be one, is not fatal. Pursuant to the provisions of the Black Marketing Act 1942 failure to keep proper books and accounts had been declared by Statutory Rules 1945 No. 114, to be black marketing.
6. The police magistrate in dismissing the information said:
"Now that I have held the defendant company acted as agent... and that he was not selling or supplying his own goods in the course of his business as a wholesaler, this charge must also fail. He only has to keep books in connection with his own business as a wholesaler, and not if he is acting, as I have held he was acting, as agent."
An appeal by means of an order to review is brought to this Court against this decision.
7. Shortly, the ground of the order to review is that the magistrate was wrong in holding that the defendant was bound under the regulations to keep books only in connection with its own business as a wholesaler, and that it was required by the regulations to keep books in connection with the services which it rendered as agent.
8. During the argument it was contended that the respondent was in any case bound to keep proper books of the business carried on by it as a wholesaler butcher and had failed to do so. But this contention does not seem to have been brought to the attention of the police magistrate and it is not, I think, covered by the grounds stated in the order to review. The appellant should not, therefore, be allowed to advance it as a ground of this appeal.
9. But there is evidence that the wholesale butchery carried on by the respondent and the agency transactions were all part and parcel of the same business carried on by the respondent and that the books of account kept by the respondent were not proper books of account for a business of that character. The view of the police magistrate that the respondent was only bound to keep books in connection with its business as a wholesale butcher and not as an agent for customers cannot in terms be supported for there is evidence that the business carried on by the respondent consisted of its wholesale and agency dealings and that the books were not proper in that business. Owing to the course the case took before the magistrate the respondent has not had an opportunity of meeting that case or the further contention made for the first time on this appeal. So the case should go back to the police magistrate for reconsideration if nothing else appears. (at p638)
10. But the respondent contends that Statutory Rules 1945 No. 114 is ultra vires the Black Marketing Act 1942. The regulation provides:-
"It is hereby declared to be black marketing for any person, in contravention of regulation 49 of the National Security (Prices) Regulations, to omit to do any act which the person is required by that regulation to do or to fail to comply with any direction given under that regulation."
Regulation 49 requires, as already set forth, the keeping of proper books and accounts. And Statutory Rules 1945 No. 114 purports to have been made under the Black Marketing Act 1942. That Act defines black marketing in s. 3, pars. (a) to (i) inclusive,
"and includes any other act or thing done, or omitted to be done, or any conduct, in contravention of the Regulations, which is declared, by regulations made under this Act, to be black marketing; and 'the Regulations' means any regulations made (whether before or after the commencement of this Act) under the National Security Act 1939 or under that Act as subsequently amended."
And the Governor-General is authorized (s. 17) to make regulations (inter alia) for declaring any act or thing done or omitted to be done in contravention of the Regulations to be black marketing.
11. The contention is that acts or omissions which the Governor-General may declare to be black marketing should be construed according to the rule or canon of construction called "ejusdem generis" or "noscitur a sociis." It is not a rule of law. But where there are general words following particular or specific words the general words should be confined to things of the same kind as those specified. This "rule of construction is subordinate to the real intention of the parties, and does not control it; that is to say, that the canon of construction is but the instrument for getting at the meaning of the parties, and that the parties, if they use language intimating such intention, may exclude the operation of this or, I suppose, any other canon of construction" (Thorman v. Dowgate Steamship Co. Ltd. [1910] 1 KB 410 , at p 419). And Hamilton J. in that case also said that he saw "no reason why either the nature of the instrument or the language used might not cause the general words to be referred to the specific words either collectively or in groups or individually according to the intention of the parties" (1910) 1 KB, at p 422.
12. In the present case there are nine groups of acts or omissions called black marketing but they relate to four main heads:-
- (1)
- the production and disposal of goods;
- (2)
- the supply of services;
- (3)
- the using or dealing with rationing documents; and
- (4)
- making or uttering counterfeit or forged rationing documents or doing any other act or thing in relation to rationing documents issued under the Regulations or any counterfeit or forged rationing document.
13. But I cannot agree that the provisions of Statutory Rules 1945 No. 114 relate to the same kind of thing as those specified in s. 3 of the Black Marketing Act. The only genus, group or class of thing to which any act or thing done or omitted to be done or any conduct in contravention of the Regulations can be said to belong are acts or omissions relating to genuine or counterfeit rationing documents. And it can only belong to that class because the class, it is suggested, deals with matters incidental to the other groups and keeping proper books and accounts is but another incidental. But keeping proper books and accounts has nothing in common with "any other act or thing done, or omitted to be done, or any conduct" in relation to genuine or counterfeit rationing documents or any other acts or omissions mentioned in s. 3 of the Black Marketing Act 1942. Such books may contain a record of those acts or omissions and be incidental to or consequential upon those acts or omissions. But they are not acts of the same kind or nature. Such an extended application of the "ejusdem-generis" doctrine is not only inapt but erroneous: Cf. National Association of Local Government Officers v. Bolton Corporation [1943] AC 166, at pp 176, 177, 185, 186.
14. Moreover, the Black Marketing Act 1942 itself indicates that a wider meaning is intended. It gives a discretionary authority in s. 17 to the Governor-General to make regulations declaring any act or thing done or omitted to be done or any conduct in contravention of the Regulations (that is, regulations made under the National Security Act and its amendments (See Act, s. 3)) to be black marketing and in s. 3 prescribes that "any other act or thing done, or omitted to be done, or any conduct, in contravention of the Regulations," so declared, shall be included in the expression black marketing. The authority is expressed in the most general terms so that the Governor-General may select the further acts or omissions that should be treated as black marketing. "It is, however, incumbent on those who contend for the limited construction to show that a rational interpretation of the" (document) "requires a departure from that which ordinarily and prima facie is the sense and meaning of the words." "Nothing," said Lord Esher, citing the preceding passage from Knight Bruce V.C. in Parker v. Marchant (1842) 1 Y & CCC 290 (62 ER 893), "can well be plainer than that to show that prima facie general words are to be taken in their larger sense, unless you can find that in the particular case the true construction of the instrument requires you to conclude that they are intended to be used in a sense limited to things ejusdem generis with those which have been specifically mentioned before" (Anderson v. Anderson [1895] 1 QB 749 , at p 753). But this raises the further question whether the provision under which Statutory Rules 1945 No. 114 was made and whether the statutory rule itself is within the constitutional power of the Commonwealth.
15. The authority of the Parliament to make laws committing to the Governor-General general powers of making regulations in the widest terms, including discretionary powers, is supported by the decisions of this Court (Roche v. Kronheimer (1921) 29 CLR 329 ; Victorian Stevedoring and General Contracting Co. Pty. Ltd. v. Dignan (1931) 46 CLR 73 ; Wishart v. Fraser (1941) 64 CLR 470 ; Reid v. Sinderberry (1944) 68 CLR 504 ). Accordingly, the Black Marketing Act 1942 is within constitutional power.
16. The question remains whether Statutory Rules 1945 No. 114 is ultra vires that Act.
17. The keeping of proper books of account is essential for the carrying on of any business and plainly desirable as a method of checking prices and policing any system of price control or rationing of goods or services. Consequently, it is, I think, within the wide powers conferred upon the Governor-General by the Act.
18. But I desire to add, that I cannot think, that the powers conferred upon the Governor-General enable him arbitrarily and capriciously to declare all or any contravention of the provisions or clauses in the National Security Regulations preserved by the Defence (Transitional Provisions) Act 1946 to be black marketing. A number of these provisions or clauses are mere machinery or auxiliary clauses in the regulations in which they are found and in that setting within the defence power. Taken out of that setting, isolated and declared to be black marketing, they may well be beyond the defence power. I should doubt, for instance, whether the Governor-General could declare to be black marketing a breach of reg. 20 of the Enemy Property Regulations requiring persons to furnish information etc. or a breach of reg. 11(3A) of the General Regulations prohibiting the use of any appliance in such a way as to cause interference with wireless telegraphy.
19. And many other instances might be given.
20. If a regulation is not made bona fide or if it be arbitrary and capricious, the regulation may well be beyond the defence power (Arthur Yates & Co. Pty. Ltd. v. Vegetable Seeds Committee (1945) 72 CLR 37 ).
21. And it is important that this Court should not wholly disregard the liberty of the subject under cover of the defence power and subject him to the very grave penalties imposed by the Black Marketing Act without careful and detailed consideration of each declaration under the Act.
22. This appeal should be allowed, for the reasons above stated, the order of the police magistrate set aside and the information remitted to the Court of Petty Sessions for rehearing.