HIGH COURT OF AUSTRALIA
GIBBS CJ, MASON, MURPHY, AICKIN AND WILSON JJ Administrative Law - Price fixing - Prices Commission - Public inquiry - Private studies by Commission - "Whether duty to disclose Consulation with Minister - Ascertainment of ministerial policy - Effect on validity of order - Revocation of order - Effect of invalidity of intended new order - Discretionary power - Ministerial order dispensing with public inquiry - Whether duty to give opportunity for submissions - Prices Regulation Act 1948 (N. S.W.), ss. 8B-8F, 9, 13, 15, 20, 58.
BREAD MANUFACTURERS OF NEW SOUTH WALES AND OTHERS v EVANS AND OTHERS
(1994) 180 CLR 404
16 December 1981
Decisions
GIBBS CJ The appellants, the plaintiffs in the action in the Supreme Court, are a trade association representing bread manufacturers in New South Wales ("the Association") and five individual bread manufacturers. The object of the appellants in bringing the action was to establish that the maximum price at which bread or bread products might be sold within New South Wales was not, at the time when the proceedings were commenced, the subject of any valid order made by the Prices Commission pursuant to the Prices Regulation Act 1948 (N.S.W.), as amended ("the Act"). For that purpose the appellants sought to show that each of three orders made by the Commission for the purpose of fixing the maximum prices at which bread and bread products might be sold by retail in New South Wales was void, in so far as that order purported to fix and declare the maximum price of the goods specified in it. The orders thus challenged were Prices Regulation Order No. 787 gazetted on 19 November 1979, Prices Regulation Order No. 792 gazetted on 3 March 1980 and Prices Regulation Order No. 798 gazetted on 14 July 1980. Each of these orders commenced by revoking the order which had previously been made by the Commission and was thought to be still in force, and then proceeded to fix the maximum price of the bread and bread products which it described. The argument submitted on behalf of the appellants was that in each case the revocation of the previous order was valid and effective, although the order fixing the price was not.
2. Bread and bread products were at all material times "declared goods" for the purposes of the Act. The Commission therefore had power, under s. 20(1), by order published in the Gazette to fix and declare the maximum price at which those goods might be sold. That power had been exercised by Prices Regulation Order No. 782, made on 30 July 1979 - an order whose validity is not challenged. On 31 July 1979 the Association on behalf of all its members made application to the Commission for an increase in the price of bread. The Commission, by an advertisement published in the Gazette on 17 August 1979, gave notice of its intention to hold an inquiry to determine whether it should exercise any of the powers conferred on it by s. 20 in respect of bread, and advised that it would be " giving particular consideration to an application from the Bread Manufacturers of New South Wales". Further applications were made to the Commission by the Association on 3 September 1979 and 2 October 1979. The inquiry commenced on 2 October 1979, and continued until 18 October 1979. There is no doubt that the Association was treated as a party to the inquiry. On 16 November 1979 the Commission stated its findings which were given effect by Order No. 787. It stated that a full report of the findings would be issued at a later date. No full report was ever published, but the Association later received an extract from the report. The extract stated that the submission of the Bread Manufacturers suggested that the price should be fixed at an amount which would allow a rate of return of 21.5 per cent on the value of their assets, and went on to say that a special study was undertaken by the research officers of the Commission to measure the return on assets achieved by twelve listed public companies engaged in food manufacturing. In this study, the mean percentage return on investment and the standard deviation were calculated, and the report stated that the sum of the mean and the standard deviation, namely 15.88 per cent, was taken by the Commission as the appropriate percentage return to toe in pricing. The study was not tendered in evidence in the course of the inquiry and the Association was not made aware of its existence or given any opportunity to call evidence or make submission in respect of its contents. The appellants contended that the failure to inform them (through the Association) of the commissioning and result of the study and to give them an opportunity to be heard in relation to it rendered invalid the inquiry held by the Commission and the order based on it. They further complained that the statement by the Commission that 15.88 per cent was an appropriate return was misleading, in that the Commission in fact allowed a lesser percentage of return when it came to fix the price.
3. The increased price given by Order No. 787 did not satisfy the Association or its members, and in December and January the Association made a number of requests to the Commission for a further increase, which was sought urgently. The Minister dispensed with the holding of an inquiry on 3 March 1980 the Commission made Order No. 792. The challenge to Order No. 792 before us rested on two grounds. The first line of attack, which was also mounted against Order No. 798, was based on the assertion that in considering whether an order should be made the Commission started with the assumption that the existing order gave to the sellers of bread all they were entitled to, and required the Association, when it applied for a new order, to show that there had been an increase in the cost of production since the price was last fixed. Therefore, it was said, if Order No. 787 was invalid, or failed to fix an adequate price, Order No. 792 rested on an unsound basis, namely that Order No. 787 was a proper starting point. Similarly, it was submitted that if Order No. 792 was invalid, the invalidity brought down Order No. 798. In other words, it was submitted that the invalidity of any order infected each order that succeeded it. It is convenient to deal immediately with this argument. The power given to the Commission by s. 20(1) of the Act is to fix and determine the maximum price at which declared goods may be sold. In terms that power is unfettered. The provisions of s. 58 of the Act, which require that the Act shall be administered with a view to (a) "the prevention of undue increases in prices and rates for goods and services", and (b) "the regulation so far as is necessary of prices and rates for goods and services which are essential to the life of the community", do not restrict the discretion in any way relevant for present purposes. It was clearly within the discretion of the Commission to proceed by granting an increase in price sufficient only to cover the increase in the cost of production since the last order. The fact that the earlier order was made was a matter to which the Commission was entitled to have regard. Even if the earlier order was invalid, the Commission might properly regard it as in fact stating a price which could appropriately be taken as the starting point for the new determination. If it could be proved that the price fixed by the earlier order was inadequate, that would mean only that the Commission had made an error of fact in thinking that it provided a sound starting point, and would not vitiate the exercise by the Commission of its discretion. None of the orders in question is expressed to depend on the validity of its predecessor - each order is self-contained. Even if one order was invalid and the Commission believed it to be valid, that would not affect the validity of a succeeding order.
4. The second ground of attack on Order No. 792 was that by that order the Commission reduced the price of hamburger buns without giving the appellants any opportunity to place before the Commission their case as to why the reduction should not be made, thereby denying natural justice to the appellants. By Order No. 792 the Commission made a general increase in the price of bread. However it extended to the case of bread rolls a revision of the classification of the products whose prices were fixed which had Arcady been naade by Order No. 787. That order had specifically fixed at 12c the price for hamburger buns exceeding 50 grams but not exceeding 100 grams. Order No. 792 did not expressly fix a price for hamburger buns but fixed prices for three categories of bread rolls. The result was said to be that hamburger buns which could formerly be sold for 12c could be sold only at the price fixed for medium sized bread rolls, namely 11c, so that there was a reduction in the price of 1c. It is common ground that the appellants were not informed that the reclassification of the bread products covered by the order would have this result. This submission raises a question of law with which it will be necessary to deal later in this judgment.
5. As soon as the Commission announced, on 29 February 1980, the decision which was to be given effect as Order No. 792, the Association lodged with the Commission an application for a further increase in the price of bread. A further application was made on 21 March 1980. On 24 April 1980 a meeting was held between the chairman of the Commission, some of the officers of the Commission and some representatives of the Association. In reply to a request for information as to when a decision would be made on the Association's application for an increase in price, which was claimed to be desperately needed, the chairman said: "Because bread prices were increased on 29 February (that is, by Order No. 792) we decided that it was politically impossible to make a recommendation to the Minister so soon and we have decided to have a meeting next month (May) on the application." The chairman said that he would send a report to the Minister on the meeting and would try to arrange for the manufacturers to meet with the other Commissioners. On 28 May 1980 the chairman of the Commission made a written report to the Minister which referred to the fact that an application for an increase had been received from the Association and stated that the Commission was of opinion that a further increase should be granted, but that it should take effect simultaneously with the announcement in New South Wales of any wage increases flowing from the National Wage Hearings, which was expected in a few weeks. The report continued: "Would you please inform me if you desire a meeting with the Commission before any formal recommendation is forwarded to you." The report went on to say that the officers of the Commission recommended an increase in the price of 3c, which did not include an allowance for the effect on costs of wage increases expected to result from the National Wage Case and that the two members of the Commission other than the chairman believed that the best course would be to grant an increase of 3c plus an allowance for the National Wage Case estimated at being more than 1c. The chairman said that he himself disagreed with the final amount of 4c; he favoured an increase of 2c, or 3c if the effects of a national wage decision were to be included. On this report the Minister made an indorsement "Please make no announcement. Discussion with me is needed". A meeting was arranged between the chairman and the Minister but it did not take place because on 5 June the present proceedings were begun. When the proceedings commenced, the appellants stated in court that they wished the Commission to proceed to deal with the matters the subject of the applications. On 2 July the chairman wrote to the Minister seeking an interview for the purpose of ascertaining whether the Minister would consent to dispense with the holding of an inquiry. The letter had attached to it a copy of the submission which had been sent to the Minister on 28 May, and a copy of a document, also dated 28 May 1980, which had been prepared for the Commission by one of its officers, Mr. Fleet, and which expressed the opinion that a rise of 3c per unit could be sustained - as had been mentioned, that 3c did not make allowance for the effect of the National Wage Case. There is no evidence as to whether the Commission did see the Minister but on 10 July 1980 it was publicly announced that the Commission had received the Minister's consent to announce an increase in price without holding a public inquiry and that there would be an increase of 3c on all loaves of bread. Prices Regulation Order No. 798, which was gazetted on 14 July 1980, gave effect to that decision. It was signed by all three members of the Commission. It is apparent that one at least of the members of the Commission must have changed his or her mind as to the amount of the increase between 28 May, when a disagreement amongst the members of the Commission was made known to the Minister, and 10 July, when the public announcement was made. Woodward J, at first instance inferred that the Commission had conceived that its obligation was to fix a price and to delay the effect of it so as to bring about a result "politically palatable to the Government". In the Court of Appeal, Hope and Glass JJA drew the inference that the members of the Commission had had the interview with the Minister that had been sought by the letter of 2 July, and that at least one of them had changed his or her mind as to the amount of the increase because of something compelling that was said by the Minister. In drawing this inference their Honours were influenced by the absence of any evidence that a decision in favour of a 3c increase was made before the Commissioners saw the Minister. They held that the inference should be drawn that the Commission did not come to its own independent decision that it should recommend an increase of 3c but came to that conclusion because the Minister, in a way not permitted by the Act, had constrained it to do so, either by telling it what he wanted, or by indicating that he would veto a 4c increase. Hutley JA agreed, but expressed his conclusion more bluntly; he held that the Commission made an order which the Minister improperly dictated to it. The Court held that Order No. 798 was liable to be quashed but that the effect of quashing it would be to reinstate Order No. 792, and that this result would be unjust. The Court set aside the orders which Woodward J had made quashing Orders Nos 787, 792 and 798 in so far as those Orders purported to fix and declare the maximum price for the goods specified therein, and instead ordered the Commission to reconsider according to law the applications made on 29 February 1980 and 21 March 1980.
6. The ground on which the Court of Appeal held Order No. 798 to be invalid was not raised by the pleadings, or, it appears, at the trial. The Minister was not a party to the proceedings.
7. In these circumstances five questions fall to be determined: (1) Was Order No. 787 rendered invalid by the failure of the Commission to make known to the Association that it had commissioned a study as to the return on assets derived by twelve listed public companies, and to afford the Association an opportunity to make submissions in relation to the study; (2) Was Order No. 792 rendered invalid by the failure of the Commission to inform the appellants that it was proposed to reduce the price of hamburger buns, and to give the appellants an opportunity to present their case against such reduction; (3) Was Order No. 798 properly held to be invalid by reason of the alleged dictation or undue influence of the Minister, or by reason of the fact that the Commission misconceived its functions and considered matters which it ought not to have considered; (4) Was the price fixed by any Order so unreasonably low as to indicate that the Commission did not properly exercise its discretion; and (5) If any Order was invalid in so far as it fixed prices, was the provision revoking the previous Order also invalid.
8. The first of these questions depends upon the proper construction of a number of provisions of the Act that were inserted or amended by the Prices Regulation (Amendment) Act 1976 (N.S.W.). The effect of those provisions, so far as they are material, may be shortly stated as follows. The Commission, for the purpose of deciding whether it should exercise any power conferred on it under s. 20 (including of course the power to make an order fixing the price of goods) must hold an inquiry unless it obtains the consent of the Minister to dispense with the holding of an inquiry: s. 8B. A seller of goods may make application in the prescribed manner to the Commission for an order under s. 20 (s. 8(1)), and on receipt of such an application the Commission may decide to refuse the application or to hold an inquiry: s. 8c(2). The combined effect of those sections is that the Commission cannot make an order fixing a price without first holding an inquiry, unless the Minister has consented to dispense with the holding of an inquiry, but the Commission can, without first holding an inquiry, refuse an application to make such an order. If an application is made under s. 8c(1), and the Commission decides to hold an inquiry, the person who made that application shall be a party to the inquiry: s. 8c(4). At an inquiry, any person may apply to the Commission to be made a party to the inquiry, and if (but only if) the Commission is of opinion that the applicant has a substantial interest in the subject matter of the inquiry the Commission shall grant the application: s. 8E(1), (2). A party to an inquiry, whether or no he was an applicant under s. 8c, is entitled to appear, personally or by agent, counsel or solicitor, and to give evidence and call witnesses and to make submissions: s. 8E(3), (4). Section 8F is important and should be set out in full. It provides as follows:
"(1) An inquiry shall be held in public and, subject to this section -
(a) evidence in the inquiry shall be taken in public on oath or affirmation; and
(b) submissions in the inquiry shall be made in public.
(2) If any witness objects to giving any evidence in public that the Commission is satisfied is of a confidential nature, the Commission may take that evidence in private if it considers it desirable to do so.
(3) In an inquiry, the Commission may, if it thinks fit, permit a person appearing as a witness at the inquiry to give evidence by tendering, and verifying by oath or affirmation, a written statement and, where evidence is so given, the Commission shall make available to the public in such manner as the Commission thinks fit the contents of the statement other than any matter that the person who gave the evidence objects to being made public and that the Commission is satisfied is of a confidential nature.
(4) In an inquiry, the Commission may, if it thinks fit, require or permit a party to the inquiry desiring to make submissions to the Commission to make those submissions in writing and, where submissions are so made, the Commission shall make available to the public in such manner as it thinks fit the contents of the submissions.
(5) The Commission is not bound by the rules of evidence."
9. By s. 9, "for the purposes of an inquiry", the Commission may summon witnesses, take evidence on oath and require the production of documents, books and papers. By s. 13, "for the purposes of an inquiry", the Commission or an authorized officer may require any person to furnish information and answer questions. By s. 15, "for the purposes of an inquiry", an authorized officer may enter upon and search premises and inspect, inter alia, documents, books and papers. By ss. 14 and 17 the Commission is given further powers to obtain information, but these powers are not expressed to be exercisable only "for the purposes of an inquiry". It was submitted on behalf of the Commission in the present case that the only rights which a party to an inquiry has in relation to the conduct of the inquiry are those specifically conferred by s. 8E, and that they do not include the right to see all the material which the Commission obtains for the purpose of the inquiry, to test by cross-examination the accuracy of such material, or to adduce further evidence in answer to it. This is too narrow a view. Section 8F makes it clear that if an inquiry is held, it must be a public inquiry. The fact that the Commission is given, by s. 9, the power, for the purposes of the inquiry, to summon witnesses, take evidence on oath, and require the production of documents does not mean that the Commission can take evidence in private, or, in making its inquiry, have regard to documents which are never made public. The powers are given for the purposes of an inquiry, and the inquiry is to be held in public, subject only to s. 8F(2). The same is true of the powers given by ss. 13 and 15. The powers under ss. 14 and 17 are not limited to the purposes of an inquiry, and so could be used by the Commission to obtain information for use in fixing a price in a case in which the Minister had consented to dispense with the holding of an inquiry, or for the purpose of functions conferred on the Commission by other sections of the Act. But if the Commission obtains material under s. 14 or s. 17 which it wishes to use for the purposes of the inquiry, that too must be publicly adduced, unless it is confidential and falls within s. 8F(2). It is not clear why the powers of the Commission under ss. 13 and 15 are limited, when those conferred by ss. 14 and 17 are not, for the purposes of an inquiry, but the distinction does not assist the argument of the Commission. All four sections enable the Commission to obtain information, but they do not enable the Commission to use it for the purposes of an inquiry unless it is publicly presented or is confidential and comes within s. 8F(2). The holding of a public inquiry would be illusory if the Commission, after solemnly taking evidence in public, could, without notice to the parties, base its decision on material that it had obtained in secret and never disclosed.
10. I do not intend to suggest that the Commission is bound to make public any workings that may be produced by itself or its officers for the purpose of considering the effect of the evidence given or submissions made at an inquiry. In the present case, however, the officers of the Commission did more than make calculations based on the evidence; they obtained evidence, and neither the subject matter nor the result of their study was made known at the inquiry. The significance of the additional material thus privately obtained is seen by the fact that the Commission said that it took the resulting figure of 15.88 per cent as the appropriate percentage return on investment to use in pricing. The Commission did not allow 15.88 per cent, but that does not detract from the importance of the material. If the study had been made known at the inquiry, the parties to the inquiry would have been entitled to lead evidence to show that it was based on errors of fact, or to make submissions that the study was irrelevant or misconceived. I have already mentioned that the Association was treated as a party to the inquiry. It was of course acting in a representative capacity, on behalf of the manufacturers who, it appears, were also sellers of bread.
11. It follows that a proper public inquiry was not held. The effect of S. 8B is andat the holding of an inquiry (that is, a public inquiry) is a condition precedent to the exercise by the Commission of any power conferred by s. 20, unless the Minister consents to dispense with the holding of an inquiry. The Minister did not so consent in the case of Order No. 787. That Order was therefore invalid.
12. The conclusion which I have reached on this question depends entirely on the construction of the Act, and not on the application of the rules of natural justice. A different question arises in relation to Order No. 792. Before that Order was made, the Minister had dispensed with an inquiry. The argument that the Commission was bound to disclose to the Association the fact that it proposed to make an order which would have the incidental effect of reducing the price of hamburger buns can only succeed if the Commission, although not bound to hold an inquiry, was bound to observe the rules of natural justice, or at least the rule expressed in the maxim audi alteram partem.
13. In Twist v. Randwick Municipal Council (1), Barwick CJ said:
"The common law rule that a statutory authority having power to affect the rights of a person is bound to hear him before exercising the power is both fundamental and universal ... But the legislature may displace the rule and provide for the exercise of such a power without any opportunity being afforded the affected person to oppose its exercise. However, if that is the legislative intention it must be made unambiguously clear."
14. As a general statement this is correct. There is no doubt that, in the absence of a clearly expressed legislative intention, no one can be dismissed from office, penalized, or deprived of or prejudiced in relation to his property without being afforded an adequate opportunity to be heard. It may be said that an order fixing the maximum price at which goods may be sold affects the existing right of the seller to sell them at whatever price he chooses. Such an assertion seems rather artificial when the price of the goods is already fixed, and the order that is challenged increases the maximum price. But the question whether a seller who will be affected by an order under s. 20 of the Act must be given an opportunity to put his case against the making of the order before it is made should not be answered in the negative only for the reason that an order increasing the price does not adversely affect his
(1) (1976) 136 CLR 106, at pp. 109-110.
rights. It is necessary to examine the nature of the power in question in deciding whether the observance of the principle audi alteram partem is a condition of its exercise. It is sometimes said that the question whether the rules of natural justice are applicable is one of statutory interpretation. That is only partly true. The words of a statute may of course reveal an intention to exclude the rules of natural justice. But, in order that those rules should apply, it is not necessary that the statute in question should, on its proper construction, render them applicable. I have already referred, in Salemi v. MacKellar (No. 2) (2), to Cooper v. Wandsworth Board of Works (3), where Byles J said that "although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature". In the present case, it was submitted on behalf of the Commission that the rules of natural justice do not govern the exercise of a power of a legislative kind. Jordan CJ, in In re Gosling (4), evidently took that view. The actual decision in that case was that a regulation was not invalid because it permitted the Milk Board, before fixing the price of milk, to hold a private inquiry at which persons affected by the exercise of the power had no right to be heard. Jordan CJ was of opinion that the power to fix the price was a delegated legislative power, and that the rules of natural justice were not applicable to such a power. Further support for the Commission's contention is provided by Bates v. Lord Hailsham of St. Marylebone (5), where Megarry J held that a committee set up under a statutory provision and given power to prescribe and regulate the remuneration of solicitors was not bound to consult with, or afford opportunities for representations to be made by, bodies (other than the Law Society) representing solicitors before making an order which would affect solicitors generally. Megarry J expressed the opinion that the rules of natural justice do not affect the process of legislation, whether primary or delegated (6). 1 do not doubt the correctness of the decisions in those cases. But I am not persuaded that the question whether the rules of natural justice apply should be answered by deciding whether or not the power in question should be classified as legislative.
15. Statements will be found in many authorities that appear to support the view that the rules of natural justice apply to
(2) (1977) 137 CLR 396, at p. 419.
(3) (1863) 14 CB (NS) 180, at p. 194 (143 ER 414, at p. 420).
(4) (1943) 43 SR (NSW) 312, at p. 318.
(5) (1972) 1 WLR 1373; (1972) 3 All ER 1019.
(6) ibid., at p. 1378; p. 1024.
proceedings only if they are judicial or quasi-judicial in nature. Although, in England, Cooper v. Wandsworth Board of Works, and, in Australia, Sydney Municipal Council v. Harris (7), long ago showed that view to be untenable, it enjoyed something of a revival until Ridge v. Baldwin (8) gave it its quietus. It is now clear that the obligation to observe the principles of natural justice attaches whether the authority is judicial or administrative (9). Equally, it does not seem to be useful to decide the question whether the rules of natural justice apply by deciding whether the power in question should be classified as executive or legislative. The distinction between powers of an executive and those of a legislative nature is a fine one and opinions may easily differ on the question. Although, in In re Gosling, Jordan CJ held that a power to fix prices was of a legislative nature, and in Arnold v. Hunt (10) McTiernan J took the same view, two Justices (Rich and Williams JJ) in the latter case were of the opinion that such a power was of an executive rather than a legislative kind. To make the question whether the rules of natural justice apply depend on the classification of the power seems only to introduce a distracting complication into the process of decision.
16. I return to consider the nature of the power which the Commission exercises under s. 20(1). Except in a case where an inquiry is required to be held, the Commission does not follow a procedure similar to that of a court. It is not called upon to adjudicate upon a controversy between contending parties. The exercise of its discretion does not depend upon the formation of an opinion as to any particular fact or circumstance. It is no doubt required, by s. 58, to consider such general matters as whether an increase in price would be "undue" and to what extent the regulation of the price of bread (an essential commodity) is "necessary", but its discretion is virtually unfettered. Its function, at least in the present case, was to make a general decision of a discretionary character which affected all consumers and sellers of bread. In Salemi v. MacKellar (No. 2) (11), Jacobs J drew a distinction between an act which directly affects a person individually, and one which affects him simply as a member of the public or
(7) (1912) 14 CLR 1.
(8) (1964) AC 40
(9) See Twist v. Randwick Municipal Council (1976), 136 CLR, at pp 112-123 and Heatley v. Tasmanian Racing and Gaming Commission (1977), 137 CLR 487, at pp 498-499.
(10) (1943) 67 CLR 429.
(11) (1977) 137 CLR, at p. 452.
a class of the public, and said that an executive or administrative decision of the latter kind is truly a "policy" or "political" decision and is not subject to judicial review. Although it is unsafe to generalize, I respectfully agree with the significance of the distinction. I do not suggest that the presence (A any one of these features by itself would necessarily mean that an authority exercising a statutory power would not be required to observe the audi alteram partem rule, but the presence of all of them in the instant case does in my opinion lead to that result, particularly in the light of the fact that the Act makes detailed provision for We holding of an inquiry in certain cases, with the concomitant obligation to hear parties to the inquiry. The provisions of the Act support the view, which the nature of the power suggests, that the audi alteram partem principle has no application to the exercise by the Commission of its powers in a case in which no inquiry is required to be held.
17. On behalf of the appellants, some reliance was placed on New Zealand United Licensed Victuallers Association of Employers v. Price Tribunal (12). It was there held by the Court of Appeal of New Zealand that when an application was made to the Price Tribunal under the Control of Prices Act 1947 (N.Z.) for a special approval fixing a maximum price the Tribunal was under a duty to act judicially before reaching its decision, in the sense that it was obliged to hear the applicant. In Reg. v. Whalley; Ex parte Bordin and Co. (13), Gowans J cited the comment made on this case by Professor Wade (14): "What swayed the Court of Appeal in New Zealand was the language of the Control of Prices Act", and the judgments of the members of the Court of Appeal (15) show that the decision depended very much on the language of the statute, which is different from that of the Act in the present case.
18. Even if the audi alteram partem rule did apply, it would not be clear that the Commission had failed to observe it. The operation of the rule depends on the circumstances of the case in which it is applicable. In the present case the Commission had received and no doubt considered the submissions of the Association that prices should be increased, and did make an increase in prices generally.
19. The fact that the Association was not told that it was proposed to make an alteration to the classification of bread products which would entail a reduction in the price of one product (hamburger buns) would hardly seem to amount to a failure to hear the affected
(12) (1957) NZLR 167.
(13) (1972) VR 748, at p. 755,
(14) (1957) Cambridge Law Journal, at p. 120.
(15) esp. (1957) NZLR, at pp. 205, 210.
parties on a matter sufficiently material to amount to a failure to observe this rule of natural justice. However, I need express no final conclusion on that point.
20. For these reasons this challenge to Order No. 792 must fail.
21. The attack on likes Regulation Order No. 798 commences with the proposition that a statutory authority must not, in the purported exercise of its discretion, act under the dictation of some other person. This proposition is plainly correct. The Commission is the body entrusted with power to fix the price, and its decision must be its own. If it acted under pressure exerted by the Minister, or simply gave automatic effect to a decision of the Minister, the decision would not then really be that of the Commission but would be that of the Minister (16). It does not follow that it was impermissible for the Commission to consider the views of the Minister in coming to its decision. For the Commission to take ministerial policy into account in making a decision of its own is a different thing from automatically following ministerial policy (17). In that case the whole Court accepted that when a discretion is vested in the head of a government department, the policy of the government is not necessarily an extraneous matter which he must not consider (18). Although the members of the Commission are not all public servants and the Commission is an independent body, the Commission is required to give effect to views of public policy, with which the Minister also has a legitimate concern: see s. 58. Further, the Minister is given important powers in connexion with the making of price-fixing orders, by s. 20(1A) which provides as follows:
"Notwithstanding subsection (1), the Commission shall, before causing an order referred to in subsection (1) to be published in the Gazette, serve a copy of the proposed order on the Minister and shall not cause the proposed order to be so published -
(a) unless the Minister has informed the Commission that he does not propose to give it a direction under paragraph (b); or (b) if the Minister, in the public interest, has directed the Commission not to publish the proposed order."
22. Since the Commission can fix a price only by order published in
(16) See such cases as Evans v. Donaldson (1909), 9 CLR 140, at pp 153, 155; Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965), 113 CLR 177, at pp 192, 200, 202 and Lavender and Son v. Minister of Housing and Local Government, (1970) 1 WLR 1231, at p 1241; (1970)3 All ER 871, at p 880.
(17) See Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965), 113 CLR, at pp 193, 201-202.
(18) ibid., at pp. 192, 200, 202-203, 204, See also Ansett Transport Industries (operations) Pty. Ltd. v. The Commonwealth (1977), 139 CLR 54, at pp 82, 114-115.
the Gazette (s. 20(1)), the effect of s. 20(1A) is that the Minister has complete power to prevent the Commission from fixing prices in any case. It would be a futility for the Commission to make an order which it knew that the Minister would veto, and it would therefore not be wrong for the Commission, in considering what price it should fix, to take into account the Minister's views, provided that in the end the decision reached by the Commission was its own. If the Commission can consider the Minister's views, it can treat them as decisive. There is obviously a fine line between a case in which the Commission automatically obeys a ministerial pronouncement, and that in which it decides for itself to grant the largest increase in price that the Minister will not veto. The fact that the Minister has a statutory power of veto makes the case an exceptional one.
23. In the present case the evidence does not in my opinion support a finding that the Commission acted under the dictation of the Minister, or that the Minister exercised undue influence on the Commission. The failure to call either the Minister or the members of the Commission to give evidence on this point loses its significance when it is remembered that the issue was not raised by the pleadings or at the trial. A further matter, relied on by Hutley JA, was that in response to a subpoena requiring the production of all proposed orders served on the Minister under s. 20(1A), no proposed orders were produced. It may be inferred that the Commission ascertained from the Minister whether he would agree to a particular order and did not simply serve a copy of a proposed order on the Minister without knowing whether he would veto it or not. It may further be inferred that the reason for the change of mind on the part of one or more members of the Commission was that it was known or believed that the Minister would not consent to an increase greater than 3c. If it was right to conclude that the Minister expressed his views to the Commission, and that the Commission took those views into account in reaching its conclusion, that does not mean that either the Minister exerted improper pressure or that the Commission considered anything that was not a proper matter for its consideration. To say that the Commission considered that it should bring about a result "politically palatable" to the Government is, with all respect, to move into the realm of speculation. It is consistent with the evidence that the Commission decided for itself that it was better to allow an increase in price of 3c which would become effective, than to determine upon an increase of 4c which the Minister would veto, with the result that there would be no increase at all.
24. The challenge to Order No. 798 on this ground therefore fails.
25. The next question is whether either Order No. 792 or Order No. 798 fixed a price that was so unreasonably low as to indicate that the Commission had not properly exercised its discretion. The evidence shows that the prices fixed by the Commission by those orders were lower than was recommended by the Commission's own officers. One can understand the feeling of the appellants that the prices fixed were inadequate. But there is no right of appeal from the Commission's orders to the Supreme Court or to this Court. If it is open to challenge an order made under s. 20(1) on the ground of unreasonableness, the challenge can only be successful if it is shown that the price fixed was so unreasonably low that no reasonable body, properly understanding its duties, could have made the order. The evidence does not disclose what material the Commission had before it when it made these orders, and the Court of Appeal rightly concluded that the appellants failed to discharge the onus of showing that either order suffered front unreasonableness of the kind which (d a challenge on that ground is open) would lead to invalidity.
26. Finally, the question arises, although it is perhaps of no importance, whether cl. 2 of Order No. 787, which revoked Order No. 782, was valid and effective notwithstanding the fact that Order No. 787 was invalid in so far as it fixed new prices. By s. 20(13), of the Act, the Commission is empowered at any time by order published in the Gazette to amend, vary or revoke any order made under s. 20. However, s. 8B requires the Commission to hold an inquiry for the purpose of determining whether it should exercise any power conferred on it by s. 20 - not merely the power to fix a price - unless it obtains the consent of the Minister to dispense with the holding of an inquiry. Since no valid inquiry was held and the Minister did not consent to dispense with an inquiry, the order made under s. 20(13) was equally as bad as that made under s. 20(1); in other words, Order No. 787 was entirely invalid. In any case, it would be difficult to conclude that the Commission would intend that a provision contained in a price-fixing order would be effective to revoke a previous order unless the new provisions intended to replace the previous order were valid and effective. Order No. 787 therefore did not revoke Order No. 782. But Order No. 792, although expressly revoking Order No. 787, plainly revealed an intention to revoke earlier orders inconsistent with it, and by implication revoked Order No. 782.
27. In substance the appeal must fail, and the cross-appeal should succeed. A declaration should be made that Prices Regulation Order No. 787, in so far as it purported to fix and declare the maximum price for the goods specified in the order, was invalid, but the appellants' action should otherwise be dismissed.
MASON AND WILSON JJ This is an appeal and cross-appeal by special leave from the decision of the Court of Appeal of the Supreme Court of New South Wales. The appellants are companies which manufacture and sell bread and bread products in New South Wales and a trade association described as Bread Manufacturers of New South Wales ("the Association") which acts on behalf of bread manufacturers generally. The respondents are and were at all material times the members of the Prices Commission (the Commission) constituted by the Prices Regulation Act 1948 (N.S.W.), as amended ("the Act").
1. History of the case
2. Bread and bread products are "declared goods" within the meaning of the Act. The effect of a declaration to that effect is that the Commission may inter alia, from time to time, by order published in the Gazette, fix and declare the maximum price at which any such goods may be sold (s. 20). This power has been exercised in relation to bread from time to time for many years, with the result that all sales of bread by retail with specified districts have been subject to the fixation of a maximum price.
3. In essence, the appellants attack the validity of each of three successive price fixations. These fixations were contained in Prices Regulation Order No. 787 published on 19 November 1979, P.R.O. No. 792 published on 3 March 1980, and P.R.O. No. 798 published on 14 July 1980. The grounds of attack in each case may be summarized as follows:
(1) P.R.O. No. 787 was alleged to be invalid because: (a) the appellants were denied natural justice in that the contents of a study initiated by the Commission were not disclosed to them in the course of an inquiry held prior to the making of the order; (b) further, or alternatively, the Commission misdirected itself as to the question for consideration in the inquiry and with a view to the fixation of a maximum price, and (c) further, or alternatively, the fixation was unreasonable.
(2) P.R.O. No. 792 was alleged to be invalid because: (a) the appellants were denied natural justice in that they were not given an opportunity to be heard, prior to the order being made, on a proposal which would have the effect of reducing the price of hamburger buns; (b) further, or alternatively, the whole fixation was unreasonable; and (c) in any event, it proceeded from the basis established by P.R.O. No. 787 which was itself invalid (this was described in the course of argument as "the infection argument").
(3) P.R.O. No. 798 was alleged to be invalid because: (a) the Commission made a decision which was dictated to it by the Minister; (b) further, or alternatively, it failed to act in accordance with the Act; (c) further, or alternatively, the fixation was unreasonable: and (d) the fixation was infected by the invalidity of the proceeding Orders Nos 792 and 787.
4. In addition to these issues, there was another question which has assumed importance in the case. It has been described as the severability issue. Each of the orders which was under attack included a clause which revoked the previous order. The appellants argued that this clause represented the exercise by the Commission of the power to revoke an order which was quite independent of the power to fix a price, and that it was valid and effective notwithstanding that the new fixation was invalid. The proper conclusion was that there was no present control over the maximum price at which bread may be sold.
5. At the trial before Woodward J the appellants succeeded handsomely. His Honour made findings adverse to the Commission on all issues. He quashed the three orders that were under challenge save with respect to the revocation clause, and declared that there was then no presently operative order fixing the maximum price of bread. We should add that in relation to P.R.O. No. 798 there was no suggestion either in the pleadings or in the course of the trial unless perhaps during the final address of counsel that the Minister had acted improperly in his relations with the Commission. The emphasis at the trial was rather directed to the alleged misunderstanding by the Commission of its role which led it to have regard to the views of the Minister and to matters of political expediency in the hope of Ring a price which would escape a veto by the Minister.
6. The Commission appealed to the Court of Appeal, which unanimously reversed the trial judge on a number of grounds. In summary, their Honours (Hope, Hutley and Glass JJA) upheld the finding that P.R.O. No. 787 was invalid by reason of a denial to the appellants of natural justice, and rejected wholly the attack on P.R.O. No. 792. With regard to P.R.O. No. 798, they held that it was invalid by reason of ministerial intrusion in that the Minister acted contrary to the Act in exerting pressure on the Commission to fix the price it did. Notwithstanding this finding, their Honours recognized a dilemma that confronted them in that a quashing of the order would in their view revive P.R.O. No. 792 and a price which could no longer be supported as a reasonable price. This involved the rejection of the appellants' argument on the severability issue. In the result, the Court adopted a course which had the merit of expediency. It declined to quash P.R.O. No. 798, but ordered the Commission to exercise afresh its power to fix the maximum price of bread and to submit a proposed order to the Minister within fourteen days or such extended time as the Court may allow.
7. So much for the history of the case. It will be seen that although the parties are in contention over many events relating to bread in the recent history of the Commission, the solution to most of the issues lies in the proper construction of the Act, with particular reference to the powers and duties of the Commission in relation to the Minister, the appellants and the public generally. We therefore address ourselves to that general question.
2. The Act
8. As we have already indicated, the Act constitutes a Prices Commission, consisting of one full-time commissioner and two parttime Commissioners appointed by the Governor (ss. 4, 4A(1)), Of the part-time Commissioners, one shall be a person who is appointed to represent consumers, and the other shall be a person who is experienced in business or commerce (s. 4A(2)). A Commissioner shall, subject to the Act, hold office for a period of three years and be eligible for reappointment subject to compulsory retirement on attaining the age of seventy years (ss. 4D, 4F). The Governor may for any cause which to him seems sufficient remove any Commissioner from office (s. 4c,(1)) and he shall be deemed to have cause if -
"(a) a commissioner has any direct or indirect pecuniary interest in any declared goods or declared service or any goods or service the subject of investigation or inquiry by the Commission, other than an interest which he has in the like manner applicable, and subject to the like conditions applicable, in the case of persons who are not commissioners; or
(b) a commissioner, by virtue of his office as a commissioner, accepts or acquires any personal profit or advantage other than under this Act." (s. 4G,(2)).
9. All three commissioners must be present in order to establish a quorum for the transaction of any business of the Commission (s. 4L(3)).
10. Prior to 1976, prices were fixed under the Act by a single Commissioner, who had extensive powers of private investigation to aid him in his task. He could also call in the aid of advisers possessing expert or business knowledge. The timing of a new fixation of a maximum price in respect of declared goods was entirely in his discretion, there being no provision for any person to apply for an exercise of the power. Consistently with the notion of privacy that surrounded the activities of the Commissioner leading up to the making of an order fixing a price, there was no provision for any kind of public inquiry.
11. Much of this was changed by the amending Act No. 65 of 1976. A number of new provisions were inserted in the principal Act, including the following:
"3.(1) In this Act, unless the contrary intention appears -
'inquiry', in relation to the Commission, means an inquiry held by the Commission pursuant to -
(a) a direction of the Minister under section 8A(l)(b);
(b) section 8B or
(c) a decision of the Commission under section 8c(2);
8A.(1) The Minister, for the purpose of determining whether he should exercise any power conferred on him under section 19, may direct -
(a) the Chairman to furnish a report to him; or
(6) the Commission to hold an inquiry and furnish a report to him, with respect to such goods or services or goods and services as are specified in the direction.
8B. The Commission for the purpose of determining whether it should exercise any power conferred on it under section 20, shall hold an inquiry unless it obtains the consent of the Minister to dispense with the holding of an inquiry.
8c.(1) A person -
(a) who is a seller of goods; or
(b) who supplies or carries on a service,
to which an order made under section 20 relates, may make application to the Commission, in the prescribed manner, for an order under that section in relation to those goods or that service, as the case may be.
(2) On receipt of an application made under subsection (1), the Commission may decide to refuse the application or to hold an inquiry.
(3) The Commission shall notify a person who makes an application under subsection (1) of its decision with respect to that application.
(4) Where the Commission decides to hold an inquiry pursuant to an application made under subsection (1), the person who made the application shall be a party to the inquiry.
8D. The Commission shall, before commencing to hold an inquiry, by advertisement published, on such day or days as the Commission determines, in the Gazette and in a daily newspaper circulating throughout the State, give notice of the inquiry, the matter that is to be the subject of the inquiry and the time and place at which the inquiry is to be commenced.
8E.(1) At an inquiry, any person may apply to the Commission to be made a party to the inquiry.
(2) If, on the making of an application referred to in subsection (1), the Commission is of the opinion that the applicant has a substantial interest in the matter that is the subject of the inquiry, the Commission shall grant the application but, if the Commission is not so satisfied, it shall refuse the application.
(3) A party to an inquiry may appear in person or by his agent, counsel or solicitor.
(4) A party to an inquiry is entitled to give evidence, or call witnesses. to give evidence, and to make submissions to, the Commission, in relation to the matter that is the subject of the inquiry.
8F.(1) An inquiry shall be held in public and, subject to this section -
(a) evidence in the inquiry shall be taken in public on oath or affirmation; and
(b) submissions in the inquiry shall be made in public.
(2) If any witness objects to giving any evidence in public that the Commission is satisfied is of a confidential nature, the Commission may take that evidence in private if it considers it desirable to do so.
(3) In an inquiry, the Commission may, if it thinks fit, permit a person appearing as a witness at the inquiry to give evidence by tendering, and verifying by oath or affirmation, a written statement and, where evidence is so given, the Commission shall make available to the public in such manner as the Commission thinks fit the contents of the statement other than any matter that the person who gave the evidence objects to being made public and that the Commission is satisfied is of a confidential nature.
(4) In an inquiry, the Commission may, if it thinks fit, require or permit a party to the inquiry desiring to make submissions to the Commission to make those submissions in writing and, where submissions are so made, the Commission shall make available to the public in such manner as it thinks fit the contents of the submissions.
(5) The Commission is not bound by the rules of evidence."
12. It will be noted that certain of these sections refer to s. 19 and s. 20 of the Act. The former is a provision which empowers the Minister to declare, inter alia, any goods to be "declared goods". Section 20 is the keystone of the Act. It empowers the Commission to determine the maximum price at which declared goods may be sold. It was amended in 1976 by the deletion from sub-s. (1) of the words "in his absolute discretion", and by the insertion of a new sub-section numbered (LA). This sub-section and the material part of sub-s. (1) now read as follows:
"20.(1) The Commission may, with respect to any declared goods, from time to time, by order published in the Gazette -
(a) fix and declare the maximum price at which any such goods may be sold generally or in any part of the State or in any proclaimed area; or
20.(1A) Notwithstanding subsection (1), the Commission shall, before causing an order referred to in subsection (1) to be published in the Gazette, serve a copy of the proposed order on the Minister and shall not cause the proposed order to be so published -
(a) unless the Minister has informed the Commission that he does not propose to give it a direction under paragraph (b); or (b) if the Minister, in the public interest, has directed the Commission not to publish the proposed order."
13. The investigative powers of the Commission are contained within a group of sections numbered from 9-17. They include the power to summon witnesses and take evidence on oath (s. 9), require information to be given and questions answered (s. 13), require the production of balance sheets and other accounts (s. 14), enter upon and search any premises and inspect any documents or goods taking copies or samples thereof as the case may be (s. 15), and require a return to be furnished by any person or class of persons containing particulars of the quantity and cost of any goods in possession and of prices charged or proposed to be charged in respect of them (s. 17). Some but not all of these sections were amended in 1976 by the addition of the words "For the purposes of an inquiry" at the beginning of the section. This was done in the case of ss. 9, 13 and 15, but no such change was made to ss. 14 and 17. The reason for this differential treatment does not readily appear.
14. Finally, in this citation of those provisions which appear to bear most directly on the problem of the scope of the powers of the Commission and the nature of its role, it is necessary to notice s. 58, which reads:
"58. This Act shall be administered with a view to -
(a) the prevention of undue increases in prices and rates for goods and services; and
(b) the regulation so far as is necessary of prices and rates for goods and services which are essential to the life of the community."
15. We now propose to identify the features of this legislation which in our opinion are most relevant to the central issue that divides the parties.
3. The nature of the power
16. Section 20 invests the Commission with a discretionary power to fix a maximum price in respect of declared goods. In terms, that discretion is absolutely unfettered, although no doubt there is an obligation on both the Commission and the Minister, each of whom has explicit responsibilities in the administration of the Act, to observe the administrative policy declared in s. 58. Although, as we have already mentioned, the amending Act of 1976 deleted from s. 20(1) the phrase "in his absolute discretion", we are unable to interpret that amendment as having the slightest effect on the scope of the discretion as it existed before 1976. Whilst removing an express declaration of the existence of an unfettered discretion, the amending Act did nothing to limit the scope of the discretion as it had previously existed. It may be noted that while the phrase in question was deleted from sub-s. (1) of s. 20, it was allowed to remain in sub-s. (5) of the same section. This is a provision empowering the Commission to fix the maximum rate at which any declared service may be carried on. For all practical purposes, the Act treats these two powers, namely, the power to fix the maximum price of declared goods and the power to fix the maximum rate for a declared service, as of precisely the same character. The disparate treatment in this one respect tends to confirm our conclusion that the deletion of words from s. 20(1) was without any practical effect.
4. The scope of the power
17. The discretion to fix the price of declared goods is not merely unfettered in terms, but its exercise is clearly intended to be broadly based in terms of the public interest. In support of this conclusion, we point, first, to the composition of the Commission. It is to consist of a full-time chairman and two part-time Commissioners. One is appointed to represent consumers. The other is to be experienced in business and commerce. It follows that the Commission is intended to provide by reason of its membership the assurance of a specialized regard to the interests of both consumers and traders. Secondly, we refer to s. 58, the provisions of which have already been set out. Mr. McHugh QC, for the appellants, sought support from this section for the proposition that any adjustment to the maximum price for bread which failed to reflect with some precision proven increases in the costs of manufacture must be unreasonable. It was urged that the mandate given to the Commission is to prevent undue increases in price, and that this objective will be secured so long as it ensures that the ]creases applied kg by We appellants are no more than can be justified by reference to increased costs. We are unable to accept the argument. The Shorter Oxford Dictionary definition of the term "undue" which appears in s. 58(a) includes-
"2. Not appropriate or suitable; improper
3. Not in accordance with what is just and right; unjustifiable;
4. Going beyond what is appropriate, warranted or natural; excessive."
(Compact Edition, Vol. 2, p. 3498.) The word cannot be read, as the appellants seek to read it, as if it referred only to economic considerations from the point of view of the manufacturer or retailer. It must be read as referring to what is appropriate or warranted having regard to the interests, not only of manufacturers and traders, but of consumers and the community generally. The policy declared by s. 58(a) is that the Commission will so exercise its discretion as to fix prices which are appropriate or warranted in this sense. For example, the Commission may conclude that it is appropriate to deny to manufacturers the full re coupment of increased costs because it considers that existing prices yield too high a margin of profit or because it is of opinion that costs could be reduced by more efficient management or manufacture or because the increase sought is so large that it will reduce public demand. It is to act in accordance with As view of what is just and right in the circumstances. In doing so, it will prevent undue increases in the price of declared goods. We do not think it helpful to attempt a more specific definition of the policy in par. (a).
18. In any event, even if it were thought that our reading of the word "undue" in s. 58(a) was too wide, the terms of par. (b) must be regarded. It was not disputed that bread is a product which is essential to the life of the community. If that is so, then par. (b) declares the policy of the Act to be that the price of bread be regulated "so far as is necessary". What is "necessary" lies, in the first instance, in the unfettered discretion of the Commission. When a proposed order is served on the Minister, then his independent discretion comes into play, guided by the same declaration of policy, but of course unfettered by any view that may have been taken by the Commission. The Act expressly requires that the Minister will only direct the Commission not to publish a proposed fixation of a maximum price by reference to "the public interest" (s. 20(1A)), but it will already be clear that we do not find this consideration to furnish any element not already implicit in s. 58. Of course, his view of what the public interest requires in a particular situation may differ from that of the Commission.
5. The Commission and the Minister
19. We turn now to examine the relationship between the Minister and the Commission. It may be said at once that the Act does not subject the Commission to the control of the Minister. Its independence and the detailed provisions which provide security of tenure to its members are significant features of the Act. The powers of the Minister in relation to the price-fixing process are clearly defined. He may direct the chairman or Commission to furnish him with a report with respect to any named goods or services to assist him in determining whether to "declare" such goods or services pursuant to s. 19 (s. 8A). The Commission, for the purpose of determining whether it should exercise any power conferred on it under s 20, must hold a public inquiry unless it obtains the consent of the Minister to dispense with such an inquiry (s. 8B). Reference has already been made to the power of veto conferred on the Minister by s. 20(1A). Mr. McHugh pointed to evidence in the case that suggested a degree of consultation between the Minister and the chairman of the Commission which went beyond the strict necessities of the provisions we have mentioned, and argued that this was improper and not in accordance with the Act. A similar argument found some favour both at first instance with Woodward J and with the Court of Appeal. With respect, we think the submission is based on a misconception of the Act. All that can be said is that the Act requires the Commission to make up its own mind, to come to a decision of its own, in fixing the maximum price of bread, without dictation from the Minister and without merely deferring to the Minister so that the decision ceases to be that of the Commission and becomes that of the Minister.
20. The extent to which a tribunal or public official required by statute to make decisions which affect the rights of the citizen can take into account and act upon the views of the Government or a minister has been, and no doubt will continue to be, a vexed question. See e.g., the differences in approach and emphasis expressed in the judgments of this Court in Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (19); and Ansett Transport Industries (Operations) Pty. Ltd. v. The Commonwealth (20). As these judgments tend to show, the problem is not one which admits of an answer having a universal application. So much depends on a variety of considerations, for there are few cases in which the statute explicitly provides that the tribunal is bound to give effect to, or to give weight to, a ministerial direction. One must take into account the particular statutory function, the nature of the question to be decided, the character of the tribunal and the general drift of the statutory provisions in so far as they bear on the relationship between the tribunal and the responsible Minister, as well as the nature of the views expressed on behalf of the Government. What is permitted to one organization may be prohibited to another. What will be an extraneous consideration to a tribunal applying the law to
(19) (1965) 113 CLR 177.
(20) (1977) 139 CLR 54.
the facts, e.g., the Court Martials Appeal Tribunal, may be a relevant consideration to a tribunal such as the Commonwealth Conciliation and Arbitration Commission which takes into account government economic policy.
21. As so often happens the statute in the present case gives no explicit guidance. We are left then to spell out what is appropriate from the framework of the relationship which the statute has sketched in. We have the initial complication that arises from the split personality of the Commission - the quasi-judicial character which it is required to assume in conducting public inquiries and the executive style role which it plays in making other determinations.
22. In making such determinations the Commission is not expected to operate in a vacuum, giving vent to arbitrary or capricious decisions. One would expect it to engage in gathering, from a wide variety of sources, information which has relevance to declared goods and services, information which will provide the basis for the consideration of the Commission in preparing a proposed order. There is nothing in the Act to exclude the Minister from the category of those who may be able to contribute information that is relevant to the Commission's task.
23. In some contexts it may be important to draw a distinction between the gathering of information and the gathering of what is merely opinion. But we do not think that this distinction is material in relation to the function of the Commission in determining a maximum price, when it is not conducting a public inquiry, having regard to s. 58(a) and the relationship that exists under the statute between the Commission and the Minister. As we have already said, s. 58(a) requires the Commission to take account of the interests of consumers and of the community generally, as well as those of manufacturers and traders. In the absence of a statutory prohibition, the Commission is free to take into consideration the opinion or view of the Minister as to the impact on consumer or community interests of a proposed increase in the maximum price.
24. No doubt there is some ground for apprehension that if the members of a statutory body are entitled to take into account the views of a Minister they will merely defer to them or give too much weight to them. However the remarks of Menzies J in Ipec (21) provide a reassuring answer.
25. It is evident that the operation of s. 88 requires that there will be consultation between the Commission and the Minister. The Minister, in deciding whether he will dispense with a public inquiry,
(21) (1965) 113 at p. 202.
is entitled to ask the Commission what is the likely outcome of their deliberations in the event that no public inquiry is held and what are the perceived advantages and disadvantages of proceeding without such an inquiry. It is only to be expected that the Commission will respond to such a request. Further, it would not be unreasonable for the Commission to ascertain the views of the Minister before making a final determination under s. 20. The Commission will, in the nature of things, wish to avoid an exercise by the Minister of his power of veto under s. 20 if it can be avoided consistently with the Commission making a determination of its own.
26. It is impossible to suppose that the legislature intended that the only avenue whereby the Minister can express a view concerning the fixation of a maximum price under the Act which it is his task as a Minister of the Crown to administer is by way of a public rejection of a formal decision of the Commission in the form of a veto of a proposed order. This would be an extraordinary intention to impute to the legislature in any circumstances, but particularly in the light of the many situations where the Act cannot operate without consultation between the two bodies who between them are responsible for the administration of the Act. Apart from the provisions already mentioned there is provision for a report, and we think a consequential need for consultation concerning the report, in connexion with extension of the range of declared goods or services (s. 8A). The need for close involvement between the Commission and the Minister is apparent from other sections (see ss. 4H, 4K, 4M, 8, 43, 49 and esp. s. 24).
6. The Commission and the public
27. The final feature of the Act which, in this general review, it is necessary to examine is the relationship of the Commission to other persons. It is to this feature that the arguments of counsel on the question of natural justice are most relevant. We do not think that any question of natural justice could have arisen under the Act as it was prior to the substantial revision in 1976. The Commissioner acted entirely of his own motion. There was no provision for any person to apply to him for a price-fixing order. There was no provision for any kind of formal inquiry, whether public or private. Consequently, there was no person capable of standing in such a relationship to the Commissioner as would provide any sort of a foothold for a natural justice claim.
28. However, as has already been noted, the 1976 amendment provided for three types of public inquiry. We are not concerned with the first, which relates to the possible exercise by the Minister of his powers under s. 19 to make a declaration subjecting goods or services to the price-fixing procedures of the Act. The second type of inquiry is that referred to in s. 8B. It shall be held for the purpose of enabling the Commission to determine whether it should exercise is powers under s.20, unless the Minister consents to its being dispensed with. The third form of inquiry is envisaged by s. 8c. An essential condition precedent to the holding of such an inquiry is an application to the Commission, in the form prescribed by the regulations by a person who is either a seller of goods or supplier of a service, for an order under s. 20 (s. 8c). On receipt of such an application, the Commission may decide to refuse the application or to hold an inquiry. The same general rules (ss. 8D, 8E and 8F) apply to each of these inquiries. Notice of the inquiry must be published. Any person may apply to be made a party, and the application shall be granted if the Commission is of the opinion that the applicant has a substantial interest in the subject matter of the inquiry. A party may appear in person or by his agent, counsel or solicitor. He is entitled to give evidence, or call witnesses and make submissions. An inquiry shall be held in public and, subject to an exception in respect of material of a confidential nature, all evidence and submissions shall be given or made in public. Evidence is to be given on oath or affirmation.
29. Mr. Porter QC, for the respondents, advanced two answers in the alternative to the appellants' claim in respect of a denial of natural justice. The first submission was that the Commission was exercising delegated legislative power, there was no lis, the whole community was liable to be affected by any order which the Commission made, and therefore there could be no obligation to extend natural justice to a favoured few. In our view, we doubt whether in the context of this legislation the task of the Commission is properly described as a legislative one rather than as an administrative one; but whether this be so or not, we are quite sure that whatever may have been the law in earlier times, the question of the application of the rules of natural justice is not to be determined merely by affixing a label to describe the character of the task which is under consideration.
30. The principles of law touching the question are now well established, and have been expounded more than once recently in this Court (22). The application of the rules is flexible, varying in
(22) Heatley v. Tasmanian Racing and Gaming Commission (1977), 137 CLR 487; Salemi v. MacKellar (No. 2) (1977), 137 CLR 396; Twist v. Randwick Municipal Council (1976), 136 CLR 106.
extent from case to case, and falls to be determined in the case of a statutory body exercising statutory powers by reference to the proper construction of the statute. In the present case, while there may not be a lis, there are certainly parties to an inquiry, and, subject to Mr. Porter's alternative submission, we see no difficulty in applying the rules in this case.
31. Mr. Porter's second argument was that the legislature has exhaustively enumerated the rights which parties to an inquiry shall have, and that further rights should not be implied. Again, in this respect, the principles are clear:
"The court will approach the construction of the statute with a presumption that the legislature does not intend to deny natural justice to the citizen." (23)
"But the rule is subject to a sufficient indication of an intention of the legislature to the contrary. Such an intention is not to be assumed nor is it to be spelled out from indirect references, uncertain inferences or equivocal considerations." (24)
32. The twin pillars of natural justice are that a tribunal will act without bias, and that a party is entitled to be heard. The question of bias is not a relevant consideration in the present case. Here the appellants complain:
(a) with respect to P.R.O. No. 787, that in the course of an inquiry to which the Association was a party, the Commission gathered research material relevant to the subject matter of the inquiry which it failed to disclose in the inquiry, whereby the Association was denied an opportunity to be heard upon it; and
(b) with respect to P.R.O. No. 792, the Commission failed to give an opportunity to the Association to make submissions on a proposal which, if published as a Prices Regulation Order, would have the effect of reducing the price at which hamburger buns could be sold notwithstanding that the Association had applied for an increase in the price.
33. Mr. Porter argues that on the proper construction of the Act there was no obligation to disclose the research material. The Act says nothing about the Commission giving evidence, and in any event the rights of the parties are expressly stated to extend to giving evidence, calling witnesses, and making submissions. There is no right to cross-examine witnesses called by other parties, nor to
(23) Twist (1976), 136 CLR, at p. 110.
(24) Commissioner of Police v. Tanos (1958), 98 CLR 383, at p 396. See also Heatley (1977), 137 CLR, at pp 499, 500, per Aickin J.
attack that evidence in any other way. The purpose of the Act is to ensure that any interested groups in the community will be obliged to put all their material to the Commission in public, in order that everything will be open and above board; it is not to require the Commission to expose its own material to public scrutiny and debate. But there is a fatal flaw in the argument. It ignores the fact that ss. 9, 13 and 15, sections which furnish the Commission with most of its investigative powers, were each amended in 1976 by adding at the commencement of the section the words "For the purposes of an inquiry". It may be curious that the same words were not inserted in ss. 14 and 17. But perhaps there is a greater curiosity, namely, that the investigative powers of the Commission were limited in this manner at all. If the legislature wanted to ensure that in the event of an inquiry the Commission would disclose the fruits of its own investigations it could easily have said so. The serious consequence, as it seems to us, of the course that has been adopted is that the Commission has been deprived of the bulk of its coercive powers except where those powers are invoked "for the purposes of an inquiry". It is apparent that there are many occasions when it is expedient that prices be revised or fixed without the delays and expense necessarily attendant upon the holding of an inquiry. This is a course which can be adopted by the simple method of seeking from the Minister a dispensation from the holding of an inquiry pursuant to s. 8B. But in such a case the Commission cannot use any of the powers contained in ss. 9, 13 and 15.
34. Nevertheless, however intriguing these questions may be with respect to legislative purpose, the fact remains that the 1976 amendments reflect a clear intention that the powers contained in the sections in question were henceforth to be employed only for the purposes of an inquiry. It must therefore be taken to have been in contemplation that the Commission would itself summon witnesses and adduce evidence and that the requirement that evidence be taken in public on oath or affirmation would extend to that evidence. This conclusion may be directly ascribed to the statutory provisions, as we construe them, in their application to a public inquiry, rather than to the audi alteram partem rule as such.
35. The complaint in respect of P.R.O. No. 792 attracts different considerations. It is conceded by the appellants that although the Association had made three applications for price increases subsequent to the publication of P.R.O. No. 787 and before the publication of P.R.O. No. 792, the Commission acted of its own motion in making the order pursuant to s. 20, it having obtained the consent of the Minister, in accordance with s. 8B, to dispense with be holding of an inquiry. In these circumstances therefore a very different picture emerges from that which we have discussed in relation to P.R.O. No. 787. There was no inquiry, and there were no parties. Furthermore, the non-disclosure complained of by the appellants does not relate to material gathered from persons in the course of investigation, but rather to the result of the Commission's own deliberations or the recommendations of its officers.
36. Nonetheless, the case for the appellants on this issue is simply that the Commission was authorized by the statute to make a determination which affected the rights of the bread manufacturers who are members of the Association, and that, in accordance with the principle recognized in Heatley, they should have been given an adequate opportunity of being heard. True it was that on this occasion the Commission acted of its own motion, but, in doing so, it nevertheless dealt with the three applications from the Association.
37. From the history of the matter A appears that the Commission took this course so as to avoid the necessity for a lengthy public inquiry and consequent delay which would have arisen had it acted on the applications pursuant to s. 8c. In substance, therefore, we accept the submission that, although not acting pursuant to s. 8c, the Commission in effect made a determination with respect to applications made by the Association. But in doing so, the Commission had the benefit of material submitted by the Association in support of those applications. One would be entitled to ask whether, in the scheme of this statute, this fact does not represent an adequate recognition of the right to be heard. Indeed, there would seem to be considerable difficulty attending the notion that a body charged with the determination of the maximum price at which an article essential to the life of the community may be sold must invite comment on the particulars of a proposed variation from those who might be thought to be adversely affected by it in the event that it subsequently became effective.
38. Be that as it may, the specific complaint here is that the Commission should have notified the Association of the possibility that the price of hamburger buns would be reduced. However, as the Court of Appeal observed, the reduction of the maximum price in respect of one item was simply a minor incident in a major revision of the price framework covering the whole range of bread products. The effect of that major revision was generally to increase prices. There was, in our opinion, no obligation on the Commission to give advance notice of this development or of the possibility of its occurrence.
7.Application of the act to the facts
39. It is convenient at this point to summarize our view of the effect of the discussion so far on the detailed allegations of the appellants as we have set them out at the commencement of these reasons.
(a) P.R.O. No. 787. The appellants adduced evidence in an inquiry which favoured the fixation of a maximum price which would allow to the manufacturers a return in the vicinity of 21 per cent.
40. Unbeknown to the appellants the Commissioner initiated a survey of the profitability of twelve public companies listed on the Sydney Stock Exchange but which were not engaged in bread manufacture which suggested that an allowance in the vicinity of 15-16 per cent would be appropriate. It did not disclose in the form of evidence in the inquiry either the facts of the survey or the conclusion to be drawn from it. It would appear that the maximum price which was fixed by P.R.O. No. 787 represented a return substantially less than that which would have resulted from the mere application of the result of the survey, but we regard that as immaterial because the survey could well have been only one of the matters which together with the evidence were considered by the Commission. Mr. Porter argued that the sole purpose of the inquiry was to enable the Commission to determine whether it should exercise the power conferred under s. 20, and was not concerned with the question of what the fixation should be in the event of the power being exercised (Cf. s. 8B).
41. We reject the submission, both because the inquiry was held pursuant to s. 8c(2), and because in any event the attempted distinction is unreal. Any inquiry into the propriety of the exercise of the power to fix a price must necessarily in our opinion have regard to the likely result should the power be exercised. In the light of the statutory provisions to which we have referred, we conclude that the Commission should have produced the survey in the course of the inquiry and given the Association the opportunity, not necessarily of cross-examining any witness upon it, but of making submissions in relation to it. We would therefore hold that P.R.O. No. 787 was invalid because the Association was denied the opportunity of being heard in relation to material which should have been disclosed in the inquiry. In this respect, we agree with the decision both of Woodward J and the Court of Appeal.
42. However, apart from the question of non-disclosure, bearing in mind the broad considerations to which the Commission is obliged to have regard pursuant to s. 58, and the scope of its discretion, the evidence does not support a conclusion that it misdirected itself, or that the fixation was so unreasonable that no body acting reasonably could have made it.
(b) P.R.O. No. 792. For the reasons which have already appeared, we do not think that the Commission was obliged to give the Association an opportunity to make representations in relation to a proposed fixation of price, nor would it have been proper to do So' Nor can it be said that the whole fixation was so unreasonable as to be invalid. The appellants also attacked the validity of P.R.O. No. 792 by reference to the "infection argument" It us said that because P.R.O. No. 787 was invalid, and because it was the practice of the Commission to confine its attention in determining the price to be fixed by a fresh order to trends and circumstances which had occurred since the previous fixation, then P.R.O. No. 792 must necessarily be invalid. We are unable to accept the notion that infection is always and necessarily contagious. Every exercise of the power conferred on the Commission by s. 20 is a new and independent exercise of discretion, which is to be evaluated having regard to the circumstances under which, and the considerations by reference to which, it is exercised. The Commission, when it made P.R.O. No. 787, fixed the price of bread by reference to the costs of production up to the date specified. The information as to those costs was made available to the Commission by a firm of accountants on behalf of the Association. The Commission in making P.R.O. No. 792 proceeded on the footing that it was necessary for the manufacturers to show increased costs after that date. The Commission did not give further consideration to the costs prevailing before that date, except in so far as it used those costs for the purpose of determining the difference between them and the new increased costs. The process of reasoning of the Commission is clearly disclosed by two paragraphs in the media release. They are in these terms:
"The Commission's last decision took effect in November, 1979, when increases ranging from 2 cents to 3 cents were granted. The present claim of the manufacturers include increased labour costs (national wage case increases and vendors' awards) and rises in ingredient costs (flour and milk powder).
The Commission has examined this application and recognises that manufacturers have in fact been faced with increased costs of manufacture since the Commission's last decision. In view of these increased costs, the Commission has decided to increase the price of bread generally by 2 cents per loaf. This increase will become effective on Monday, 3rd March, 1980. The new prices for the 680 gram sliced milk loaf and the 450 g special loaf will be 61 cents in the metropolitan area and 63 cents in certain country areas."
43. The appellants' argument on this point was rejected by the Court of Appeal. Hope and Glass JJA having noted that the Commission's procedure was to investigate changes which had taken place since an earlier fixation of prices and to determine what alteration those changes and other relevant circumstances might require in the prices previously fixed, found that it was not the Commission's general practice "to investigate, before making each order, the whole question of price de novo".
44. It is evident that it is a permissible and practical approach to the fixing of maximum prices to ascertain what changes have taken place since the earlier fixation and to decide what alteration to the prices earlier fixed should be made in the light of those changes and other relevant circumstances found to exist. In the circumstances of this case we do not think that the invalidity which affected that determination can be used as a ground for holding the new determination to be invalid. The Association applied for an increase in the prices previously fixed by reference to increased costs incurred since the date on which the previous order was based. The Association did not apply for a determination on the basis of a reconsideration of costs generally or on the footing that the earlier determination was erroneous or invalid. The Commission dealt with the applications accordingly and its determination was a valid exercise of the power conferred by s. 20.
(c) P.R.O. No. 798. We have already examined at some length those provisions of the Act which determine the respective rights and duties of the Commission and the Minister, and which thus establish the proper relationship between them. Woodward J took a view of the Act and of the evidence which led him into strong criticism of the Commission. On the appeal the emphasis shifted markedly, and the Court of Appeal concluded that the Minister had brought duress to bear on the members of the Commission in order that they would propose a fixation with which he agreed.
45. With great respect to all their Honours, we have arrived at a different result. We are unable, on the evidence, to find support for either conclusion. The appellants relied on the evidence relating to a number of events which occurred between the publication of P.R.O. No. 792 on 3 March 1980, and that of P.R.O. No. 798 on 14 July 1980. These events included the failure of the Commission to respond to applications by the Association for an increase in the price of bread, followed by a conference on 24 April 1980 in the course of which the chairman of the Commission informed representatives of the Association that "because bread prices were increased on 29 February (the date of the order, not of its publication) we decided that it was politically impossible to make a recommendation to the Minister so soon, and we have decided to have a meeting next month (May) on the application". Consequent on that foreshadowed meeting, which was held on 26 and 28 May, the Chairman wrote to the Minister on 28 May informing him of the course of events, and indicating a difference of opinion between the members of the Commission as to whether the increase should be 3 or 4c, the two part-time members favouring 4c. The report bears a notation made by the Minister, reading "Please make no announcement. Discussion with me is needed." The meeting was arranged, but not then held because the appellants commenced this litigation in the Supreme Court seeking, inter alia, an order of mandamus directed to the Commission.
46. Subsequently the appellants requested the Commission to proceed with its consideration of an increase in price, and on 2 July the chairman informed the Minister of this request and sought an interview to ascertain whether he would agree to dispense with the holding of an inquiry. The evidence then discloses that on 10 July the Commission announced that the price of bread would rise by 3c per loaf from 14 July. It is apparent that between 28 May and 10 July at least one of the part-time members changed on the question whether the increase should be 4 or 3c. On the basis of the evidence of these events, Woodward J found that the Commission had misconceived its responsibility under the Act while the Court of Appeal attributed the change of mind to ministerial intrusion. In our opinion, the evidence does not sustain either of these approaches. It is clear that as at 28 May the Commission could not proceed to fix a price unless the Minister was prepared to dispense with an inquiry. This he had not done. It is not clear from the terms of the chairman's report whether a meeting was sought merely to discuss that matter, or whether it was intended to seek a more general discussion of the matters on which the members of the Commission were then in disagreement. In view of the terms of the further letter to the Minister dated 2 July, we doubt whether the latter inference can be drawn from the report, but even if it was drawn we would find nothing improper about it.
47. As we have already indicated, our view of the Act is that it is improper for the Commission to accept any direction from the Minister as to the price which should be fixed, but it is not improper for it to seek or to receive an expression of his views. There is no sufficient basis in the evidence for inferring that the Minister had intruded improperly or that any member of the Commission had forsaken his or her independence. The evidence is wholly consistent with the conclusion that between 2 July and 10 July the Commission received the necessary dispensation from the Minister and proceeded to review all the information in its possession and resolved to order an increase of 3c. The fact that in earlier discussions a majority of the Commission had then favoured an increase of 4c loo0des an infirm foundation for a conclusion that the subsequent decision must been arrived at improperly.
48. In support of its proposition that P.R.O. No. 798 was invalid because the Commission had adverted to extraneous considerations which should have found no place in its deliberations, the appellants pointed to the Chairman's reference at the conference on 24 April to "political possibilities" which affected the timing of a fresh fixation of price. Reference was also made to a sentence in the Chairman's report of 28 May which indicated that some members of the Commission felt "that a series of small price rises is destructive of consumer confidence". But these submissions are prompted by a misunderstanding of the scope of the discretion with which the Act invests the Commission. It will be clear from our discussion of the proper construction of s. 58 that the administrative policy of the Act permits considerations of the kind we have indicated to be taken into account. The regulation of the price of goods which are essential to the life of the community is a concept which postulates a need for a price which on the one hand will secure to manufacturers sufficient profitability to ensure an adequate supply of the goods in question, and on the other hand will not be so high as to discourage demand. The frequency and amount of price increases are clearly matters which may affect consumer confidence, and therefore in our view they cannot be said to fall outside the range of matters which the Commission may take into account. As for political considerations, viewed in its entirety the task of the Commission is rightly described as involving the recognition of a blend of economic and political realities. Of course, we use the word "political" in the best sense, that of pertaining to government, divorced from sectional partisanship.
49. P.R.O. No. 798 was also challenged on the ground that the fixation was so unreasonable as to be invalid, and also on the ground that it was infected by the invalidity attaching to P.R.O. No. 787. In our view, neither ground is made out, for the same reasons that we have indicated in relation to the earlier orders.
50. It follows, then, that P.R.O. No. 798 was a valid order.
8. Validity of the revocation orders
51. The conclusion to which we have come makes it unnecessary to consider whether in the event of a fixation of price being held to be invalid that part of the order which revokes the preceding order is nevertheless effective. Woodward J accepted the appellants' argument that the revocation was the exercise of an independent power and remained valid whatever the fate of the new fixation The (Court of Appeal came to a contrary conclusion. It may be desirable to indicate where we stand on the question. In our opinion, the test must be the intention of the maker. We find it inconceivable that the Commission could have intended to revoke an existing fixation regardless of whether their fresh fixation was effective. We would therefore regard the revocation clause as incapable of severance, with the result that the whole order is either good or bad.
9. Conclusion
52. For these reasons, we would dismiss the appeal, and allow the cross-appeal save as respects the validity of P.R.O. No. 787.
MURPHY J The challenged Prices Regulation Orders are presumed to be valid, and in view of the extremely serious consequences (I invalidation, evidence required to rebut the presumption should be compelling. Prices Regulation Orders Nos 792 and 798 are valid and also (although a decision is unnecessary) the revocation clauses are not severable. I agree generally with the reasons given by Mason and Wilson JJ in reaching the conclusions that those orders are valid.
2. State legislation, read in the light of constitutional conventions, may provide the answer to whether a State officer or body is bound to give effect to, or give weight to, a ministerial direction. In Commonwealth legislation the provisions of the Constitution must also be considered, particularly s. 64 which contemplates that the Departments of State will be administered by Ministers (25).
3. In my opinion, Prices Regulation Order No. 787 is also valid. Even if the Commission did not observe a statutory procedural direction in the conduct of its inquiry it does not follow that the order subsequently published in the Gazette, after the Minister has declined to exercise his power under s. 20(1A) to direct the Commission not to publish the proposed order, is invalid. If invalidity were to be the result, it might not become apparent or certain for months or years. Those who charged maximum prices relying upon the order would be in breach of the Prices Regulation Act 1948 (N.S.W.), as amended ("the Act"). In view of the enormous public inconvenience of those consequences such an
(25) See Ansett Transport Industries (Operations) Pty. Ltd. v. The Commonwealth (1977),139 CLR 54.
intention should not be imputed to the legislature in the absence of unambiguous language. There is none here.
4. Further, I am not satisfied that there was a failure to observe a statutory direction. By s. 8B of the Act the Commission was bound to hold an inquiry for the purpose of determining whether it should exercise its powers to fix and declare maximum prices (under s. 20), unless it obtained the Minister's consent to dispense with the holding of an inquiry. It was entitled to undertake the survey or other research. A survey of the profitability of twelve public companies (not bread manufacturers) listed on the stock exchange is the kind of general information which one would expect the Commission to use as background without having to disclose it to those concerned with a public inquiry under the Act. A survey of the interest payable on government or local government bonds would fit into the same category. This kind of information is generally available in business journals, but may require assembling and analysis. Even courts sometimes look at material and arguments other than those dealt with by parties and sometimes arrive at conclusions unanticipated by parties. For a recent example see Pennant Hills Restaurants Pty Ltd v. Barrell Insurances Pty. Ltd. (26). For an earlier example see Starke J in R. v. Bevan; Ex parte Elias and Gordon (27). There is no express statutory requirement that any work done by the Commission before or during an inquiry, must be revealed to those who might be concerned if the Commission decided to exercise its powers under s. 20. To read the Act as impliedly prohibiting the Commission from such an exercise without revealing it to the parties is a very narrow view which would result in an undue hobbling of the Commission. Equally, natural justice does not require the revelation.
Adverse comments on Minister
5. No court or other tribunal should make findings against the honour or reputation of a person where no allegation has been made against the person by any party or witness especially where the person is not a party or a witness.
6. In the Court of Appeal, the judgments contained statements extremely adverse to the Minister for Consumer Affairs, the Honourable S. D. Einfeld. Mr. Einfeld has had a long and distinguished career as a member of the New South Wales and Federal Parliaments and as a Minister in the Government of New
(26) (1981) 145 CLR 625.
(27) (1942) 66 CLR 452, at p. 465.
South Wales, as well as being prominent in other public affairs. He is one of the most respected citizens in the State. Hutley JA said:
"The Commission made an order which the Minister improperly dictated to it and it is in relation to this situation that the court's powers can be invoked. In the language of private law, its operations were affected by undue influence, or by duress on the part of the Minister ...
If an order is made by this court quashing P.R.O. 798 so that it is void ab initio because of the disregard of the law by both the Commission and the Minister, it can only cause harm to the victims of this conduct ...
What the Minister has done is to apply what is analogous to duress or undue influence to the Commission ...
This Court is facing a somewhat unique problem, namely, working out the consequences of a finding of the application of improper pressure upon a public body."
7. Hope and Glass JJA said:
"In all the circumstances the inference should be drawn that the Commission did not come to its own independent decision that it should recommend an increase of three cents, but that it came to that conclusion because the Minister, in a way not permitted by the Act, had constrained them to do so, either by telling them what he wanted, or by indicating that he would veto a four cent increase."
8. These findings, if accepted by the Government or Parliament, were enough to warrant the Minister's dismissal from office. However, there was no foundation for the findings. It is enough to say that a thorough examination of the whole of the record shows that there is no evidence to support them. This is understandable because there was no allegation against the Minister in the pleadings. We were informed that the allegations against the Minister were not advanced by the appellants in the Court of Appeal, but were raised by that Court itself during the respondent's address. The appellants' counsel informed us that he did not ask the Court of Appeal for a finding of impropriety against the Minister, and that the Court of Appeal took it upon itself to make the findings. The Minister has not been a party or a witness in the proceedings at any stage, although he sought unsuccessfully to be joined as a party in this Court to deal with the statements by the Court of Appeal. It is disturbing that the declaratory procedure has been used by the Court of Appeal to make findings adverse to the Minister although no party to the proceedings sought any such finding. Apart from the absence of evidence, the members of the Court of Appeal seem also to have overlooked the presumption of innocence, and the presumption that official acts have been regularly and properly performed.
AICKIN J The material facts and the legislation upon which this appeal and cross-appeal depend are set out in the joint reasons for judgment of Mason and Wilson JJ and I do not need to repeat them. The grounds of attack on the validity of each of the Prices Regulation Orders in question are likewise set out in the joint judgment. In general I agree with the conclusions reached in that judgment but there are some aspects of the reasoning with which I am not in agreement, though that does not affect my agreement with the end result. There are some observations which I wish to add.
2. As to P.R.O. No. 787, I agree with their conclusion that it was invalid, a conclusion which was also reached by Woodward J at first instance and by the Court of Appeal of the Supreme Court of New South Wales, though somewhat different reasons were given for that conclusion.
3. Notwithstanding the deletion in 1976 of the words "in his absolute discretion" from s. 20(1) of the Prices Regulation Act 1948 (N.S.W.) as applied to the former Commissioner, the discretions and powers of the substituted Commission are in most respects as wide as those of the Commissioner. This is made clear by the retention in sub-s. (5) of the words omitted from sub-s. (1). Sub-section (5) deals with the fixing of charges for declared services and sub-s. (1) with fixing the price of declared goods. It is unlikely that the amendments were intended to apply different criteria to the exercise of those two closely related powers. Moreover there is nothing in the form of the other amendments which could be regarded as specifying some limit or restriction on the exercise of the statutory discretion.
4. In some respects however the powers of the Commission differ from those of the former Commissioner. The Commission is bound to hold a public inquiry before making or varying a Prices Regulation Order unless the Minister dispenses with that requirement, whereas the former Commissioner had wide powers of inquiry and investigation but no power to hold a public inquiry. Moreover those extensive powers of inquiry and investigation formerly held by the Commissioner are not given to the Commission except for the limited purpose of the holding of a public inquiry. In my opinion this imposes upon the Commission the obligation to disclose at the public inquiry information so obtained, for otherwise the public inquiry would be pointless. It is the Commission's failure to disclose at the public inquiry the material it had obtained which vitiated P.R.O. No. 787. In the ordinary case that would leave the previous P.R.O. (No. 782) operative until some later P.R.O. repealed it or substituted some other maximum figure.
5. It was contended however that the result of that sequence of events was to leave every person who sold bread during the purported operation of P.R.O. No. 787 at the prices therein specified in the position of having contravened the provisions of P.R.O. No. 782. It was then pointed out that the classification of bread in P.R.O. No. 787 was different from that in P.R.O. No. 782. P.R.O. No. 782 divided bread into four categories and attached a price to each category. P.R.O. No. 787 divided bread into three categories and again attached a price to each category. It was argued that because P.R.O. No. 787 changed the classification of bread, and thereby changed the whole pricing system, there was indicated a separate intention to repeal the former classification, and that the revocation of P.R.O. No. 782 was therefore entirely independent of the latter part of P.R.O. No. 787 which prescribed the maximum price for each new category of bread. Acceptance of this argument would lead to the result that there was thereafter no operative price control on bread. It is clear enough that the attention of the Commission was not directed to this possibility and that it had no actual intention to produce such a result. I am unable to see how it can be regarded as a necessary consequence of what the Commission did. It is plain that the Commission intended to produce two results at the same point of time - the repeal of the old and the coming into operation of the new, but nonetheless in an assumed order. The intention necessarily involved in such a process is that both events should happen. The intention is that a new set of maximum prices should come into force, supplanting the old, not that the old set shall come to an end, nothing being substituted in its place. If the new set does not come into operation nothing supplants the old, which remains operative. There is nothing in the words used or the context to suggest any other intention.
6. As to P.R.O. No. 792 there is nothing which I wish to add to what is said in the joint judgment of Mason and Wilson JJ beyond saying that if an interested party wished the Commission, before fixing a new price, to re-examine a former order on the ground that it had previously proceeded on a wrong basis, rather than merely looking at intervening events, an express request should be made. No such request was made and in those circumstances it was proper for the Commission to confine its attention to new factors arising after the former determination.
7. As to P.R.O. No. 798 I would add that in my opinion the evidence falls just short of warranting the inference that there was improper pressure brought to bear on the Commission or an abrogation by the Commission of its independent function. It may well be that there are grounds for suspicion but there is not sufficient material to warrant an affirmative finding to that effect. I would not regard it as proper for the Commission, or any of its members to "sound out" the Minister with a view to ascertaining how far they would have to adjust their views to avoid the exercise of his veto power. That would be an abandonment of their statutory function. However the material available fails to prove that that was what occurred.
8. I would accordingly dismiss the appeal and allow the cross-appeal save in so far as it relates to the validity of P.R.O. No. 787.
9. Appeal dismissed.
10. Cross-appeal allowed.
11. Order of the Court of Appeal of the Supreme Court of New South Wales set aside and in lieu thereof order as follows:
Appeal allowed.
12. Judgment of Woodward J set aside, and in lieu order:
(i) that it be declared that Prices Regulation Order No. 787, in so far as it purported to fix and declare the maximum price for the goods specified in the order, was invalid;
(ii) that the action be otherwise dismissed;
(iii) that the plaintiffs pay to the defendants two-thirds of the taxed costs of the action.
13. Further order that the present appellants pay to the present respondents two-thirds of the taxed costs of the appeal to this Court (including the cross-appeal) and to the Court of Appeal.
14. Solicitors for the appellants, Stephen, Jaques and Stephen.
15. Solicitor for the respondents, H. K Roberts, Crown Solicitor for the State of New South Wales.