Opinion Number. 1668



Key Legislation

Constitution s 51(xxxi): Australian Barley Board Regulation reg 16

The Secretary, Department of Commerce

I refer to your memorandum No. W.51.1.15 of 6th August requesting further advice with regard to the requirement of ‘just terms’ contained in the Constitution.

The last paragraph of my Opinion No. 22 of 1940(1) was based on the assumption that the facts justified the claim of the R. brothers that they were producing a special type of barley for a special market which has never been over-supplied. It now appears from your memorandum that the barley produced by the R. brothers did not differ substantially from barley produced by a number of other growers, and that they had not been receiving a price higher than No. 1 malting price, and further that their market was no more certain than that of other growers of similar barley. In view of these facts I do not think the R. brothers have any special claim to better treatment than other growers of the same grade of barley.

In regard to the general question of just terms, having regard to the lack of reliable criteria produced by the war and by the magnitude of the acquisition scheme, I think that a court would be reluctant to interfere with the determinations of the Minister provided it was apparent that the Commonwealth was not making a profit from the scheme and that no obviously unfair discriminations as between growers were made. It is impossible to say what prices would have been realized if the acquisition had not taken place, and even if it were possible to arrive at the approximate figure in any particular case, I do not think the Commonwealth would be bound to take that as a criterion. The Commonwealth has power to make laws in respect of the acquisition of property for any purpose in respect of which the Parliament has power to make laws, and in the present instance it has done so for the purpose of the defence of the Commonwealth. The ‘just terms’ are not to be determined in the abstract, but in relation to the purpose of the acquisition and the place of a particular acquisition in the whole scheme. Assuming the Commonwealth has proceeded to sell the barley as quickly and as advantageously as was practicable, justice can hardly be said to require the Commonwealth to pay the growers as a whole more than the amount realized by it after deducting expenses. An averaging process must take place as among the growers, because it would, in my opinion, be impossible, to keep a separate account in respect of each person from whom barley was acquired. On the other hand, justice does, I think, require account to be taken, as far as is reasonably practicable, of differences in quality.

I do not think that either of the schemes mentioned in your memorandum contains any element of obviously unfair discrimination, and I do not think a court would interfere with either. The justice of both schemes appears to depend to some extent, however, on the number of different grades of barley which are recognized. You suggest, for example, that one grade would be ‘malting quality’. It is stated, however, in the information supplied by the Australian Barley Board, that the prices in West Australia for 2-row barley suitable for malting vary up to 6d. per bushel according to quality. It would hardly seem fair, therefore, to treat all malting quality as one grade, unless margins for quality within a particular grade are provided for.

The question which of the two schemes outlined would achieve the fairer results is, in my view, a matter for the Minister, on the recommendation of the Board, to decide. The scheme outlined in the proposed amending regulations appears to me, however, to take more account of the variations in individual cases, especially as regards railway freight, than either of those schemes. The proposed amendments to regulation 16 are, however, drafted on the assumption that the proceeds of sale of each grade of barley are to be kept separate for the purpose of fixing compensation. It would appear from your memorandum, however, that that system might be less just than a system involving a total pool with margins for quality, as the higher grades, being kept off the local market, would realize lower prices for the benefit of lower grades.

I can only advise that the system should be adopted which appears to the Minister to be likely to achieve the maximum of justice. When the basis of compensation is finally decided on I shall be glad to advise whether any, and if so what, amendments of the Regulations are necessary to give effect to it.

[Vol. 33, p. 266]

(1) Opinion No. 1663.