Opinion Number. 1709


acquisition of meat
acquisition of meat: assessment of just compensation: whether Commonwealth must distribute to persons from whom property has been acquired full amount obtained by sale of property less expenses of sale: review of determination OF PRICE by Commonwealth Prices Commissioner

Key Legislation

NATIONAL SECURITY (AUSTRALIAN MEAT INDUSTRY COMMISSION) rEGULATIONS regs 32(a), (39(1): constitution ss 51(xxxi), 109: National Security (Apple and Pear Acquisition) Regulations

The Secretary, Department of Commerce

With reference to your memorandum of 4th November, 1942, whilst the Commission has power to purchase meat by voluntary agreement at any price (see regulation 32(a)), in my opinion as soon as the sale is made compulsory placitum (xxxi) of section 51 of the Constitution applies, and just terms must be given.

With regard to the suggestion that a regulation be promulgated preventing the sale of meat, i.e., presumably the first sale, to any person other than the Commonwealth, I think that such a regulation would be valid. There would, of course, be a possibility that some persons would refuse to sell to the Commonwealth on the terms offered, even though they could not sell elsewhere.

The next suggestion is that the Commission should acquire meat on just terms, and dispose of it at a slightly higher price after having done something in connexion with the meat such as holding it in cold store or moving it from the point of acquisition to the point of disposal. I do not see that action of this kind can be described as a service to the purchaser although, of course, the meat might have a greater market value at one place than at another, and at one time than at another. In my view, however, the mere fact that the Commission sells meat at a price slightly in excess of the price at which it acquired the meat does not establish conclusively that a just price was not paid for the acquisition. The just price for acquisition would normally be the market price at the time of acquisition. This price would depend on the extent of competition and other factors. If the Commonwealth were to acquire all meat, however, it might well be able, by virtue of its monopoly, to sell it at a price higher than the market price at the time of acquisition.

I do not think that this view is inconsistent with the recent decisions of the High Court in connexion with the National Security (Apple and Pear Acquisition) Regulations.

Andrews v. Howell (1) does not throw much light on the matters to be taken into account in assessing just compensation. Starke J. said that the whole scheme of the Regulations was designed to give the persons whose property is acquired more than they could ever hope for in any available market or any court of law. Dixon J. stated that the court would not arrive at the conclusion that the terms were unjust except after an examination of the facts upon which the law operated, of the circumstances affecting the subject-matter and of the considerations which appear to have actuated the legislature. Further, he said if it appeared from the terms of the enactment that the legislature had considered that a particular form or measure of compensation was just, the court would give great weight to the conclusion of the legislature. He thought that there was an indication in the Regulations that the compensation was to be the result of the marketing of the apples and pears and the receipt of the proceeds for distribution, after proper deductions, amongst the growers. He was not prepared to say that compensation determined on this basis was unjust, but it does not follow from this that His Honour was of opinion that the whole of the proceeds of sale, less expenses of selling, must in all cases and in all circumstances be distributed amongst the persons from whom the property was acquired.

In Tonking’s case,(2) Williams J., the Judge of first instance, said that, in the
circumstances of the case, the only safe guide to the real value of the fruit was the amount it realized, and that cogent evidence would be required to justify departure from this value. He stated this, however, in relation to the claim by the plaintiff that he could have obtained for his fruit more than the amount obtained from the Board.

In the Full Court Latham C.J. said that generally the determination of the value of goods depends upon an estimate of what the goods will bring in the market but that, when there is evidence of the price which goods have actually brought when marketed in an ordinary course, it would be contrary to common sense, when determining their value, to ignore this direct evidence and to seek evidence consisting of opinions as to what the goods would, upon certain hypotheses, be likely to bring when so marketed. This dictum does militate to some extent against the view I have expressed, but the words