I refer to your memorandum dated 18th October, 1949, regarding the price at which wheat is to be supplied by the Australian Wheat Board for sale in Tasmania.

(2)  Included in your memorandum is the draft of a letter which your Minister had proposed to send to the Board. This letter is drawn on the assumption that, as a matter of law, the relevant legislation implies an obligation on the Board to supply wheat in each State, for sale there, in accordance with the law of the State, at the guaranteed price f.o.r. [free on rail]  main ports.

(3)  The relevant legislation does not seem to me to deal with the point at issue in completely clear terms. In these circumstances, I might have felt more confident in advising if I had had knowledge in detail of the grounds upon which the Board is basing its action in regard to wheat for Tasmania. But I would suppose the Board claims that it is left by the Acts with a discretion to decide whether it will supply wheat for consumption in Tasmania either by selling in Victoria or by selling in Tasmania; that if it sells in Victoria it must comply with the Victorian law; and that this is exactly what it proposes to do.

(4)  On the basis of the Commonwealth and State legislation and the report of the proceedings of the Conference of Commonwealth and State Ministers held at Canberra on 12th July, 1948, my own view is broadly as follows:

(a)  The Board is probably not contravening any positive statutory provisions in selling wheat in Victoria, in accordance with the Victorian Act, for consumption in Tasmania, thus producing the consequence that Tasmanian consumers will have to meet the cost of freight to Tasmania (unless of course funds are provided from some other source to defray the cost of freight).

(b)  The agreed plan (as set out in the Report) probably did not contemplate such a situation. On the contrary, the plan appears to have been designed to ensure that in all States, whether importing States or not, wheat would be available at ports at the same home consumption price—i.e. the guaranteed price, subject however to adjustment in certain special classes of sales.

(c)  The Minister probably has power under the Commonwealth Act and the Acts of the States concerned, namely, Victoria, South Australia and Tasmania, to direct the Board so to manage the handling, storage and transfer of wheat intended for consumption in Tasmania as to make available adequate supplies at the main ports in Tasmania for sale there in accordance with the provisions of the Tasmanian Act.

(5)  I propose to set out briefly my reasons for these conclusions which, as already stated, are, in my view, deducible from the relevant legislation and from the report of the Conference.

(6)  As the report of the Conference shows, the position of importing States was expressly adverted to in the preliminary discussions (see pages 13, 14), and it was apparently accepted that these States would pay the home consumption price, the difference between that and the export price being borne ‘by all the States’, presumably, out of the proceeds of the pool (see page 13). But of course it does not necessarily follow that the Acts clearly implement these understandings.

(7)  The relevant legislation comprises the Wheat Stabilization Act 1948 of the Commonwealth and the corresponding Acts of Victoria, South Australia and Tasmania, namely, Acts Nos. 5338 of 1948, 27 of 1948 and 69 of 1948 respectively.

(8)  In my view, none of these Acts expressly requires the Board to supply wheat for home consumption, at the guaranteed price f.o.r. main ports, in each and every State. Between them, the Commonwealth and State Acts seem to ensure that virtually all wheat will come under the control of the Board, that growers will get a guaranteed price and that, if the Board sells on the home market, it will sell in each State at a home consumption price. In some cases the home consumption price is to be the guaranteed price (Victorian Act section 14(a)). In other cases the price is to be the guaranteed price, but subject to certain adjustments (Victorian Act section 14(b)). But the Acts do not lay down expressly that the Board must sell, in any State, enough wheat to satisfy the home market in that State, still less that the Board must do so in each State. The Board is given powers which would enable it to do so (see, for example, the Commonwealth Act, section 13 and the Victorian Act, section 4). But it is not expressly required to exercise its powers in that particular way. Wherever the Board sells for home consumption, the price is fixed by law, and in identical terms. But it seems as a matter of law, to be left to the Board’s own discretion whether it supplies the local market by selling the wheat in the State concerned or by selling wheat (if it can find the buyers) in another State, for the buyer then being responsible for transport to the State of eventual consumption.

(9)  I now proceed to examine whether, by means of a direction of the Minister pursuant to the legislation, the Board can be required to supply the Tasmanian market, by sales from stocks in Tasmania, rather than by sales in Victoria (or one of the other mainland States).

(10)  Under section 13(1)(d) of the Commonwealth Act, the Board may, subject to any direction of the Minister, for the purpose, inter alia, of the interstate marketing of wheat, manage and control all matters connected with the handling, storage and transfer of any wheat purchased or otherwise acquired by the Board. A similar provision is in each State Act except that the reference to purpose is omitted.

(11)  To the extent that there is no express prohibition in the legislation to the contrary, these powers of direction could, I think, be used by the Minister for the purpose of assisting in carrying the plan into effect. I am not aware of any provision in the legislation which would prevent the Minister from giving a direction to the Board to manage the handling, storage and transfer of wheat in the manner specified in sub-paragraph (c) of paragraph 4 above. Supplies of wheat made available in accordance with the direction would be purchasable at ports (including Hobart) at the price provided for in section 14(a) of the Tasmanian Act, namely, the guaranteed price.

(12)  Writing today, on the eve of the announcement of the Privy Council’s reasons for judgment in the Banking case,¹ it is peculiarly difficult to say with confidence whether a direction in respect of the supply of wheat inter-State would or would not come within the prohibition of section 92 of the Constitution. The scope of this section was one of the matters argued fully before the Privy Council and, without knowing the reasons of the decision in the Banking case, one can only express a very tentative opinion on any question which may be affected by section 92. As at present advised, however, and assuming that the legislation as a whole does not contravene section 92, the particular direction here required could probably be so expressed as to avoid clash with the Constitution.

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Having, since the foregoing was written, rapidly perused the Privy Council’s reasons for judgment in the Banking case, I am still in doubt whether the Minister’s direction, if challenged under section 92, would be upheld. I shall give this point immediate further study, but shall not in the meantime withhold the advice given above.

27.10.49.

[Vol. 38, p. 380]

¹ Commonwealth v Bank of NSW [1948] UKPCHCA 1; (1949) 79 CLR 497 (26 October 1949).