Opinion Number. 1705

Subject

ACQUISITION OF TEA ACQUISITION OF TEA: CLAIM FOR PAYMENT IN RESPECT OF TEA UNDER COMPANY’S CONTROL IN NETHERLANDS EAST INDIES: WHETHER NOTICE ACQUIRING TEA EXTENDS TO TEA OUTSIDE AUSTRALIA

Key Legislation

NATIONAL SECURITY (PRICES) REGULATIONS regs 20, 44

Date
Client
The Acting Chairman, Tea Control Board

The Acting Chairman, Tea Control Board, has submitted for advice a claim by D. and J. Fowler Limited for payment under regulation 44 of the National Security (Prices) Regulations of the value of certain tea claimed to have been under the Company’s control in the Netherlands East Indies on 28th February last, the date on which the Minister for Trade and Customs issued a notice requisitioning all tea in the possession or under the control of that company.

Regulation 44(1)–(3) of the National Security (Prices) Regulations reads as follows:

    1. Whether the Minister after receipt of a report from the Commissioner, is satisfied that it is necessary or expedient so to do in the interests of the public safety, the defence of the Commonwealth and the Territories of the Commonwealth, or the efficient prosecution of the war, or for maintaining supplies and services essential to the life of the community, he may, by notice published in the Gazette or given to any person or persons, direct all or any persons who, whether as owners or otherwise, have in their possession or under their control any specified goods to retain and hold the goods, or a specified quantity thereof, for and on behalf of His Majesty.
    2. Upon the publication or giving of the notice, the title to and property in the goods or the quantity thereof shall be divested from the owners thereof and become vested in His Majesty freed from any charge thereon and from any claim, contractual or otherwise, and the holders or owners of the goods shall thereupon be discharged from any other contractual engagements whatsoever in respect thereof; and the title and property of the owners shall be converted into a right to receive payment of the value of the goods or the quantity thereof as hereinafter provided.
    3. All such persons, and their agents and servants, shall, without delay, obstruction or objection, give immediate and peaceable possession of the goods or the quantity thereof to the Minister or to any authorized officer.

In pursuance of regulation 44(1), the Minister for Trade and Customs on 28th February, 1942, issued a notice ‘to all persons in Australia who have, at any time, in their possession or under their control any tea’ directing them, whether as owners or otherwise, to retain and hold the said tea for and on behalf of His Majesty.

On 2nd March, 1942, the Commonwealth Prices Commissioner, in pursuance of regulation 20 of the National Security (Prices) Regulations, required all persons who, whether as owners or otherwise, had, at midnight on 28th February, 1942, in their possession or under their control five hundred pounds weight of tea or more to furnish to him, within seven days from the date of the requirement, a return in the form of a statutory declaration setting forth particulars as to the quantity, cost into store, description, etc., of tea in their possession or under their control at midnight on 28th February, 1942.

On 21st March, i.e. a fortnight overdue, D. and J. Fowler Limited made a statutory declaration, signed by J.H. Ward, that the Company held in store a quantity of tea, including 33,83878 pounds of Javanese origin.

On 10th June, D. and J. Fowler Limited forwarded the following letter to the Tea Controller:

Relative to the order published in special gazette 28th February, whereby we were instructed to retain and hold Tea in our possession or under our control to the order of His Majesty, considerable difficulty has been experienced in obtaining full particulars of Tea that was under our control in Netherland East Indies at 28th February last. However, we have been able to obtain some particulars of our purchases, which we attach.

You will realise the delay in obtaining this information and we do not expect any further communication until the Netherland Indies has been cleared of the enemy.

The annexure to the letter sets out that the Company had purchased from Mirandolle Voute and Company and W.P. Phipps and Company 2,358 chests or approximately 262,000 pounds, and that this tea was under their control in Netherland East Indies on 26th February and that, to the best of their belief, none of the parcels advised have reached Australia.

This claim may be followed by claims by other importers of tea and the question at issue involves many thousands of pounds.

The object of the National Security (Prices) Regulations is the regulation of the prices in Australia and, although regulation 44 is in general terms, it must, I think, be construed as applying only to goods in Australia. While goods outside Australia might be in the possession or under the control of a person in Australia as at the date specified in a notice given under sub-regulation (1) of regulation 44, the goods, so long as they were outside Australia, would be subject to the laws of the country in which they are situated. The Commonwealth Regulations could not prevent the latter laws operating such operation might prevent the Commonwealth Regulations being effective.

Further, it is to be observed that sub-regulation (2) of regulation 44 provides that goods specified in a notice published under the regulation shall vest in His Majesty ‘freed from any charge thereon and from any claim, contractual or otherwise’. It is not, in my opinion, competent for a regulation to be made under the National Security Act affecting generally claims arising under the laws of countries outside Australia (see Maxwell, Interpretation of Statutes, 8th Edn., p. 128). Sub-regulation (2) cannot, therefore, in my view, be construed to oust such charges and claims enforceable outside Australia.

The fact that the Regulations do not contain any machinery for dealing with the special circumstances that may arise in connexion with goods outside Australia indicates, in my view, that the regulation does not contemplate the acquisition of such goods.

In my opinion, therefore, regulation 44 does not apply to goods outside Australia, and the claim of the Company should not be admitted.

[Vol. 34, p. 503]