The Secretary, Department of Commerce, has forwarded the following memorandum to me for advice:

On the 6th July the Victorian Dairy Products Board seized nine cases of butter which had been forwarded for sale at Melbourne by S.W. of Smithton, Tasmania.

The butter was seized in response to a telephone message from the Secretary of the Tasmanian Board that W. was not the holder of an owner’s licence under the Dairy Produce Interstate Regulations and had shipped per the ketch ‘Coomondery’ the butter referred to above.

The butter was eventually sold by the Dairy Board and realised £28.5.0 net after deducting commission and other charges. Mr. W. wrote to the Department on the 10th July explaining that the butter had been consigned in ignorance of the legislation operative in Tasmania and asked that the butter be returned to him or the money realised by its sale remitted to him. He was advised that this could not be done and that, in the circumstances, the Department did not propose to take legal proceedings.

I have now received a further letter from Mr. W. dated 23rd July in which he again asks that the proceeds of the sale of the butter be remitted to him as the decision of the Privy Council in James v. The Commonwealth⁽¹⁾ indicated that the Department was acting outside its legal jurisdiction.

The matter is referred to you for advice as to whether the Department can legally be called upon to remit the amount involved.

Subsection (3) of section 5 of the Dairy Produce Act 1933–1935 is as follows:

(3) Any dairy produce which has been, or is in process of being carried in contravention of this Act shall be forfeited to the King.

Dairy produce is defined in the Act to include butter. The butter belonging to Mr. W. was being or had been carried in contravention of the Act. It was, therefore, by virtue of subsection (3) of section 5, properly seized as forfeited.

In the recent dried fruits case (not yet reported) the following passage appears in the judgment of the Privy Council:

On the other hand, the Dairy Produce Act 1933–1935 raises exactly the same issue as that raised in this case in respect of the Dried Fruits Act.⁽²⁾

In view of the decision of the Privy Council in James’ case it is clear that should Mr. W. proceed against the Dairy Produce Board in respect of the seizure of his butter he would be successful.

In view of the decision of the Privy Council it appears that provisions of the Dairy Produce Act which authorise any interference with interstate trade in dairy produce are ultra vires and accordingly there is no legal authority for the seizure of butter consigned interstate without a licence.

In these circumstances I am of opinion that the best course for the Dairy Produce Board to follow is to pay to Mr. W. the proceeds of the butter seized.

[Vol. 29, p. 298]

(1) (1936) 55 CLR 1.

(2) (1936) 55 CLR 1 at 55.