Cody v J H Nelson Pty Ltd

(1947) 74 CLR 629

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(Judgment by: DIXON J)

Between: CODY
And: J H NELSON PTY LTD

Court:

Judges: LATHAM CJ
RICH J
STARKE J

DIXON JMcTIERNAN J

Subject References:
National Security

Hearing date: May 13, 14 1947
Judgment date: 9 June 1947

Melbourne

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Judgment by:
DIXON J

This is an appeal under s. 39(2)(b) of the Judiciary Act 1903-1946 from a decision of a Court of Petty Sessions exercising federal jurisdiction. It is a full appeal on law and fact like appeals from other courts falling under our appellate jurisdiction and is subject to the same limitations of power, for instance as to the reception of fresh evidence. By reason of Section IV. of the Appeal Rules the appeal is brought, not by notice of appeal, but by order nisi, in the manner of an order nisi to review.

2. It has been repeatedly pointed out that the use of State procedure to institute the appeal does not alter the nature of the appeal or transfer to us the powers of the State Court: See Wishart v. Fraser (1941) 64 CLR 470 , at p 480, and the cases there collected: Harrison v. Goodland (1944) 69 CLR 509 , at pp 521, 522; Grosglik v. Grant (No. 2) (1947) 74 CLR 355 . But, as so often happens, there was at the hearing some confusion about the application of State law to the proceeding, and we were asked to receive further evidence, which we cannot do. It was sought to put in a Gazette to prove formally what has been brought to our attention in other cases several times, namely that under reg. 22(2) of the National Security (Prices) Regulations the Minister made a general declaration that all services, with certain immaterial exceptions, should be "declared services." I do not know whether a stage is ever reached when a court should take judicial notice of a public fact of this kind, so often proved before it. But the omission to establish it before the magistrate is not, in the view I take of the case, decisive of the appeal. (at p642)

3. The appeal is from a decision of a magistrate dismissing an information under s. 4 of the Black Marketing Act 1942-1946 based on reg. 49(1) of the Prices Regulations. An omission in contravention of reg. 49 to do any act which that regulation requires is declared to be black marketing by Statutory Rules 1945 No. 114. Regulation 49 requires that in two descriptions of business the person carrying on the business shall keep proper books and accounts. The first description of business is the production, manufacture, sale or supply of goods. The second is the supply or carrying on of any service. The defendant respondent is a company which carried on business as wholesale butchers. The information in question charged that the company did an act constituting black marketing by failing to keep proper books and accounts.

4. Seven other informations against the company for black marketing were heard at the same time as that with which we are concerned. They, however, charged sales of meat by wholesale at prices greater than the fixed maximum prices. Each of the seven informations named a retail butcher as the buyer, three retail butchers in all. These men, customers of the company, were called for the informant, but they gave evidence that the transactions, though recorded as sales in the invoices and books of the company, were in fact of another character. According to them, after a certain date the company ceased to supply them by way of sale with their requirements of meat but by arrangement bought beasts on the hoof on their behalf and had them slaughtered, delivering the carcases or meat to them and receiving by way of reimbursement and of recompense the amounts shown in the invoices or statements rendered by the company together with certain further amounts shown on separate slips. The magistrate adopted the version of their transactions with the company which these witnesses gave, and at the conclusion of the informant's case dismissed all the informations. As to the seven charging sales, he considered that there were no sales established. The appellant has not appealed from the dismissal of these informations. Upon the charge of failing to keep proper books and accounts evidence was given showing the impropriety of the books kept, but the magistrate dismissed that information because, in the language of the magistrate, the company only had to keep books in connection with its own business as a wholesaler, and not if it was acting as agent, as the magistrate held it was acting.

5. Whatever this may precisely mean, it is pretty clearly based on the hypothesis that the charge of failing to keep proper books and accounts could not be supported unless the relevant business of the company fell within the first of the two descriptions to which reg. 49(1) is expressed to apply. If the company acted as agents for the three retail butchers and bought beasts for them and caused the animals to be slaughtered on their behalf it is not hard to understand the magistrate's thinking that, so far as concerned those three customers at all events, the company could not be said to have produced, manufactured, sold or supplied any goods, within the meaning of the earlier limb of reg. 49(1). But what of the other limb? Why in these three cases should the company not be regarded as supplying or carrying on a service in the course of its business? To this question the magistrate does not seem to have addressed himself. But the informant appellant takes the point as his first ground of appeal. It is here that the fact becomes relevant that all services are declared services, and the want of formal evidence of the Minister's declaration is laid hold by the defendant respondent as a defect of proof enuring to its advantage. However that may be the respondent also takes the objection that the first ground of appeal is not open to the informant appellant because the magistrate's attention was not directed on the part of the informant to the bearing upon the case of so much of reg. 49(1) as refers to services, and, independently of the supposed defect of proof being or not being fatal to the first ground of appeal, reliance is placed by the defendant respondent upon the non-production of the Gazette as a further indication that the point taken by that ground was not made at the hearing of the information.

6. In this view of the proceedings I am disposed to agree, and if the appeal depended upon the first ground only we would, in my opinion, be justified in refusing to entertain it. But there is a second ground of appeal. It is not very clearly expressed, but it takes the concluding statement of the magistrate and denies its correctness. The ground says 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.

7. I have some doubt whether this ground covers the view I take of the case made on the charge of failing to keep proper books and accounts and of the magistrate's decision. That view I can express shortly without any discussion of the evidence. I think that the magistrate was wrong in dismissing the information without calling on the defendant, and was wrong in the reason he gave. He was wrong because there was evidence that the company had carried on a wholesale butcher's business and supplied a number of customers, there is a presumption of continuance and there was no satisfactory evidence that the company had ceased to be wholesale butchers. The business was a unit, and even if it included some agency transactions the duty under the earlier limb of reg. 49(1) to keep proper books and accounts would make it necessary to include those transactions. Three customers had, according to the magistrate's findings, ceased to be buyers of meat from the company and employed the company as an agent to buy live stock for them and to cause the beasts to be slaughtered. But even if this were so with three customers, the business still would fall within the earlier limb of the regulation. It would not pass from the description contained in that part of the regulation until, looked at as a whole, substantially the business was no longer that of wholesale butchers selling or supplying meat to customers.

8. The few references contained in the evidence to the relations of the company with other customers would not entitle the magistrate to find that the whole business had changed its character. Besides the presumption of continuity, the documentation and the book-keeping and the general circumstances gave prima-facie proof of its still being a wholesale meat business. In these circumstances the magistrate's reason was wrong because he concentrated on the agency character of the transactions with the three customers, held it unnecessary to enter transactions with them in the books and treated the charge as relating only to them. As I have said, I have some misgivings whether the second ground of the appeal provides room for this view of the case, particularly having regard to the way in which the appeal was opened. But the ground does attack the finding or reason of the magistrate, and after all it is upon that the case hinges. A strong prima-facie case was made against the propriety of the books, and I think that a sufficient prima-facie case was made of a duty to keep proper books, independently of any resort to the alternative that the business consisted of supplying services. The case should therefore not have been stopped.

9. So far I have discussed the matter on the hypothesis that Statutory Rules 1945 No. 114 is valid and effectively places an omission in contravention of Prices reg. 49(1) among the things constituting the offence of black marketing. But the correctness of that hypothesis is contested. The respondent contends that Statutory Rule 1945 No. 114, which introduced reg. 3 of the Black Marketing Regulations, contained in the Manual of National Security Legislation, 6th ed., at p. 116, is invalid. By reg. 3 it is declared to be black marketing for any person, in contravention of reg. 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.

10. In adopting the regulation the Governor-General in Council purported to exercise the power which the latter part of s. 3 and s. 17(a) of the Black Marketing Act 1942 confer. The argument for the respondent is that the power must be restrictively interpreted and that so restricted it does not extend to authorize a regulation which makes it black marketing to commit an offence against Prices reg. 49, or perhaps it would be more correct, in view of s. 46(b) of the Acts Interpretation Act, to say which makes it black marketing to commit an offence against so much of Prices reg. 49(1) as relates to keeping books and accounts. Section 17 provides that the Governor-General may make regulations which are required or permitted to be prescribed or which are necessary or convenient to be prescribed for giving effect to the Act and, in particular, for (a) declaring any act or thing done or omitted to be done or any conduct in contravention of the Regulations to be black marketing. (at p645)

11. At the time that the challenged regulation was adopted the expression "the Regulations" was defined by s. 3 of the Black Marketing Act to mean any regulations made under the National Security Act 1939 or under that Act as subsequently amended, and to include any orders made under any such regulations. Now, the expression means any regulations in force by virtue of the Defence (Transitional Provisions) Act 1946 and includes any order in force by virtue of that Act or made under any such regulations: See Act No. 77 of 1946, s. 10 and Third Schedule.

12. So far the text suggests little reason for a restrictive reading of the power. Apart from general considerations arising from the number and variety of the National Security Regulations and the almost grotesque irrelevance of many of them to the subjects with which the Black Marketing Act otherwise deals, the foundation of the argument is to be found in the provisions which create and define the offence of black marketing. Section 4(1) makes it an offence to do an act or thing or be guilty of an omission or conduct which constitutes black marketing within the meaning of s. 3. Section 3 begins: "For the purposes of this Act, 'black marketing' means -." Then follow nine paragraphs lettered (a) to (i) describing specific acts and omissions. After this enumeration s. 3 proceeds: "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." Upon this association of words and ideas the contention is based that no act or thing done or omitted or conduct can be declared to constitute black marketing unless it is of the same general kind as the acts, omissions and conduct described in the nine lettered paragraphs. The principle invoked is that explained by Sir Benson Maxwell as follows:-

"It is in the interpretation of general words and phrases that the principle of strictly adapting the meaning to the particular subject matter with reference to which the words are used finds its most frequent application. However wide in the abstract, they are more or less elastic, and admit of restriction or expansion to suit the subject matter. While expressing truly enough all that the Legislature intended, they frequently express more, in their literal meaning and natural force; and it is necessary to give them the meaning which best suits the scope and object of the statute without extending to ground foreign to the intention. It is, therefore, a canon of interpretation that all words, if they be general and not express and precise, are to be restricted to the fitness of the matter. They are to be construed as particular if the intention be particular; that is, they must be understood as used with reference to the subject matter in the mind of the Legislature, and limited to it" (Maxwell, Interpretation of Statutes, 7th ed. (1929), p. 52).

13. The three canons of construction are relied upon: Lord Bacon's verba generalia restringuntur ad habilitatem rei vel personae, to which in the passage just quoted there is a reference; Lord Hale's noscitur a sociis, and that which allows the court to give to general expressions following an enumeration of more particular things or matters an application no larger than to things and matters ejusdem generis. But standing as a caution against a too ready use of these counsels there is yet another Latin canon, generalia verba sunt generaliter intelligenda, which is as much as to say words although general should be understood in their primary and natural signification unless there are sufficient indications of some other meaning. This last maxim or brocard is not to be understood in opposition to the three first mentioned. They relate to the context and subject matter in which indications of a narrower meaning may be seen.

14. The precept allowing of the restraint of a general expression to a class of things ejusdem generis with particular expressions preceding it may be regarded as a subordinate rule forming part of the larger principle stated by Sir Benson Maxwell. In Larsen v. Sylvester & Co. [1908] AC 295 , at p 297, Lord Robertson spoke of the soundness of what is called the ejusdem-generis rule of construction because, as he said, it seemed to him that both in law and also as a matter of literary criticism it is perfectly sound. But, according to Asquith L.J., "the tendency of the more modern authorities is to attenuate the application of the ejusdem generis rule" (Allen v. Emmerson [1944] 1 KB 362, at p 367). If this be so, it is but the result of the greater freedom with which courts now use all rules and admonitions as to the interpretation of written instruments. In the modern search for a real intention covering each particular situation litigated, however much help and guidance may be obtained from the principles and rules of construction, their controlling force in determining the conclusion is likely to be confined to cases where the real meaning is undiscoverable or where the court of construction, sceptical of the foresight of the draftsman or of his appreciation of the situation presented, is better content to supply the meaning by a legal presumption than subjectively. It may be for some such reason that in Thorman v. Dowgate Steamship Co. Ltd. [1910] 1 KB 410 , Lord Sumner left unanswered the question "whether the presumption of law is that general words are general until they can be shown to be particular, or whether general words are ejusdem generis with the particular words until they can be shown to be general without any limitation" (1910) 1 KB, at p 420.

15. In the interpretation of the last part of s. 3 of the Black Marketing Act I think that we should begin with the presumption or assumption that words, even when general, mean what they say. No canon of construction is enshrined in the observation made by Lord Wright in James v. Commonwealth [1936] AC 578 , at p 627, concerning the words "absolutely free" that "the use of the language involves the fallacy that a word completely general and undefined is most effective. A good draftsman would realize that the mere generality of the word must compel limitation in its interpretation." Doubtless the observation embodies a shrewd generalization, not untinged with cynicism, concerning the incredulity which broad and sweeping provisions arouse in the judicial mind, so apt to regard them as legislative hyperbole to be confined in application within moderate and practicable limits.

16. But, beginning with the prima-facie view that words should receive their ordinary meaning, I think that there are considerations arising upon the Black Marketing Act which justify some narrowing of the literal generality of the words in s. 3 "and includes any other act or thing done, or omitted to be done, or any conduct, in contravention of the Regulations, which" etc. In the first place, there is the title of the statute, "An Act to provide for the Prevention of Black Marketing." In the next place there is the absurd incongruity of calling by the word "black marketing" the greater number of the diverse acts and omissions made penal by the multifarious National Security Regulations. Again, there is the injustice of allowing such drastic punishments to be affixed to the greater part of that long and varied catalogue of offences. Then there is the argument from the particular instances contained in the nine specific paragraphs of s. 3.

17. For some distance, therefore, I am prepared to go with the respondent's argument for a restrictive interpretation of s. 3. But the restriction the respondent proposes is much too narrow. Even if the canon for an ejusdem-generis construction were applied in the most mechanical and rigid way it would not justify such a restriction. For the purposes of that canon you must first find in your particular instances which precede the general words some common attributes or characteristics which enable you to formulate a category or description. I shall not go through the nine paragraphs of s. 3 in detail. It is enough to point out that in the first paragraph you have dealings between buyer and seller of goods in contravention of price control; in the second the like dealings between the supplier and recipient of services; in the third unauthorized dealings in rationed goods or services; in the fourth the disposal or acquisition of the property in or possession or custody of goods where that is prohibited, restricted or made subject to conditions; in the fifth delivery of goods upon premises where it is prohibited; in the sixth production, manufacture or treatment of goods contrary to regulations restricting it or imposing conditions and in the seventh the disposal of property in or possession of goods belonging to the Commonwealth.

18. Now, in these seven cases there is some kind of dealing in or transaction or act affecting goods in contravention of wartime controls or prohibitions. In a way the materials for the formulation of a category are here to be found. But when you proceed to the last two paragraphs you find that the connection they have with what precedes consists in providing the means of suppressing descriptions of fraudulent or improper practice which facilitate or cover the kind of thing at which the first seven paragraphs or some of them are aimed. Now, clearly enough, you have here the creation of two additional offences or sets of offences as something which is ancillary or auxiliary to the suppression of the offences provided against in the preceding paragraphs. If you are going to make a category large enough to include all nine paragraphs and to do it in a way which takes into account the real sense of the provision, then, with the chief purpose of suppressing dealings with and with reference to goods in defiance of war-time controls and prohibitions, you must include the further purpose of suppressing improper practices calculated to facilitate and cover such dealings. But the truth is that it is wrong to use the rule for an ejusdem-generis construction as a piece of abstract or mechanical reasoning. It must be applied not simpliciter but secundum quid. It should be used as a guide in a process of interpretation which takes into account the whole instrument and the subject matter. In this way it is proper to consider what is the natural reason why the draftsman should add to his list of more specific offences a power enabling the Executive to constitute other acts and omissions black marketing, provided they contravene the regulations. Surely the most natural reason is in order that without recourse to Parliament the severer punishments of the Black Marketing Act might be affixed to such practices contravening the regulations as experience may show to be in pari materia with those against which the more specific provisions of s. 3 are directed and to such as tend against the detection and suppression of that kind of black marketing.

19. A consideration of all the provisions of s. 3 thus supplies strong reasons for thinking that it would defeat the real purpose of the power given by the latter part of s. 3 to the Executive, if an interpretation were adopted restricting its operation within any narrower limits than would comprise all such acts, omissions and conduct contravening the National Security Regulations as tend against the effectiveness of the control of the supply and disposal of goods and services, whether with respect to price or quantity, and including the acquisition of the one and the receipt or use of the other as well as the use of ration tickets and other matters that are incidental to or consequential upon these subjects or are conducive to the effectiveness of the control.

20. No further restriction than the foregoing gains any support from the remaining provisions of the Black Marketing Act. Section 4(6) (a) gives no ground for an inference that there must be a dealing in goods in every black-marketing offence. The words "if any" are inconsistent with such an inference. Section 4(7) and (10) and therefore s. 4 (6)(b) only relate to cases where the evidence discloses excessive profits and I take excessive to mean excessive, having regard to price control. A restriction to offences in selling goods or supplying services cannot be deduced from these provisions. Such an inference would in any case be incompatible with so much of s. 3(a), (b), (c), (d), as includes the person occupying the position of the purchaser or recipient or a position analogous thereto and with s. 3(e), (h) and (i). Section 11 is only permissive and founds no inference.

21. Now Prices reg. 49 requires that the trader shall for the purposes of the Prices Regulations keep proper books and accounts together with a number of supporting documents and shall preserve them until their destruction is authorized by the Prices Commissioner. Such a provision is plainly auxiliary to the enforcement of price control and tends to make successful evasion more difficult and therefore less likely. It appears to me exactly the kind of provision which falls within the ambit of the last part of s. 3, notwithstanding that the words may be restrictively construed to the extent I have indicated. In my opinion Statutory Rules 1945 No. 114 is within the power the statute purports to confer. There has been a suggestion, however, that a question of constitutional validity may exist. I do not think that there can be much doubt about the constitutional validity of reg. 49(1), or about that of s. 17(a) and the last part of s. 3 of the Black Marketing Act. I say this on the footing that the continuance of price control into the period we have now reached is not in question and that the continued operation of the Black Marketing Act is not disputed, no doubt having been cast on either of these matters.

22. I feel no difficulty about reg. 49(1) because it appears to me to be fairly incidental to price control, which as an entire subject fell within the defence power at the time during the war when it was adopted. It is true that reg. 49(1) speaks of goods and services without reference to the difference between goods and services generally and declared goods and declared services. Perhaps it goes too far if it covers goods and services not declared, but, if so, s. 46(b) of the Acts Interpretation Act saves it from invalidity in relation to declared goods and services.

23. The validity of the last part of s. 3 and of s. 17(a) of the Black Marketing Act 1942 must be considered too as at the time the Act was passed. When the statute is examined it will be found that it deals with the penal and other consequences to be attached to offences against National Security Regulations. We are only concerned with the Prices Regulations, and nothing outside those regulations and the Rationing Regulations seems to be touched by ss. 3 and 4, except possibly by s. 3(e) and (f), which are plainly severable if they could be questioned. I am unable to see why such an enactment should fall outside the defence power. If any of the National Security Regulations with which it deals were invalid, then to that extent the relative provision of the statute would fail in intended operation. But it would not be invalid. The subject matter of the particular provision would be withdrawn, that is all. The severity of the measure cannot take it outside power. The penal consequences prescribed cannot be said to have no reasonable relation to the purpose of price control and rationing, and however wide a construction may otherwise be given to s. 17(a) and the last part of s. 3, any argument on this ground against their validity would be effectively answered by s. 15A of the Acts Interpretation Act. It remains to refer to the fact that s. 18 of the Black Marketing Act 1942 provides that the Act shall continue in force until a date to be fixed by proclamation and no longer, but in any event not longer than six months after His Majesty ceases to be engaged in war. A like provision, viz., s. 19 of the National Security Act 1939-1943, was considered by this Court in Dawson v. The Commonwealth (1946) 73 CLR 157 , and in Miller v. The Commonwealth (1946) 73 CLR 187 . In those cases I thought that the amendment of s. 19 by the National Security Act 1946 made the meaning of the expression "engaged in war" immaterial, though I did not think that by 2nd September 1945 it could be said that His Majesty had ceased to be engaged in war. The expiration of the Black Marketing Act would, or at all events might, affect pending proceedings, but no point has been taken of this nature, doubtless because the meaning which in those cases a majority of the judges forming the Court gave to s. 19 appears to make the point untenable.

24. In my opinion the appeal should be allowed, the order dismissing the information should be set aside and the information should be remitted to the Court of Petty Sessions for rehearing.