The General Manager of the Australian Wheat Board has referred the following memorandum to me for advice:

At recent meetings the Board has been considering the question of erection of storage bins for the accommodation of bulk wheat, but before proceeding definitely with its propositions, it desires to be clear regarding its legal powers in the matter.

The Board does not contemplate establishing a bulk handling system in any State, but rather supplementary storages to facilitate the handling and storage in special circumstances. The particular project at present under discussion is a bin at Ardrossan in South Australia which would accommodate about 1 m. bushels, and would include, of course, the necessary equipment for placing the wheat in and discharging it from the bin.

The special circumstances existing at Ardrossan is chiefly to overcome disabilities associated with cornsack shortages, combined with the opportunity which is offering to take advantage of facilities which are being provided at that Port by the Broken Hill Proprietary Company in the loading of vessels with dolomite obtained from local deposits.

During the war period, the war-time Board erected several of these supplementary storage bins in W.A. and Victoria; it also established special storage deposits in the various States for the accommodation of bagged wheat.

The appropriate sections of the Wheat Stabilization Act which appear to be relevant to this issue are:

Section 6(2.) The Board shall be a body corporate with perpetual succession and a common seal and may acquire, hold and dispose of real and personal property and shall be capable of suing and being sued in its corporate name.

Section 13(1.) The Board, subject to any directions of the Minister …

(d) manage and control all matters connected with the handling, storage, protection, treatment, transfer or shipment of any wheat or other things purchased or otherwise disposed of by the Board; and

(e) do all matters which it is required by this Act to do or which are necessary or convenient to be done by the Board for giving effect to this Act.

It would seem to us that the above sections would confer on the Board the power to erect storages wherever it considers it necessary to do so. There is the point, however, that this power may in practice, be limited by obligations under section 20 of the Act which sets out the price which has to be paid to growers for wheat delivered to the Board and the method to be adopted in its calculation.

The procedure which the Board would follow in providing the new storages would be, initially, to pay for them out of the funds provided for the Pool operating in the year in which the storages are erected. This expenditure would, of course, be capitalised in the accounts of the Board, and the respective Pools would ultimately only be charged with the Board’s approved rates of depreciation, which, in effect, represents the cost to the respective Pools for the use of the accommodation. The depreciated asset value is carried forward from Pool to Pool.

(2)  In my opinion, the Board has legal power subject to the directions of the Minister, to erect at Ardrossan in South Australia a storage bin for the storage of bulk wheat together with all necessary handling equipment.

(3)  The Board, being an artificial person created by statute, can only do what its statute as its instrument of incorporation authorizes it to do. Consequently, to answer the question raised by the Board, it is necessary to find what powers have been conferred on the Board by its statute.

(4)  These powers are to be found in section 13 of the Wheat Industry Stabilization Act 1948 (Commonwealth) and section 4 of the Wheat Industry Stabilization Act 1948 (South Australia). These sections read as follows:

13.(1.) The Board may, subject to any directions of the Minister, for the purposes of the export of wheat and wheat products, the interstate marketing of wheat and the marketing of wheat in the Territories of the Commonwealth, or for the purposes of, or purposes incidental to, any international agreement to which Australia becomes a party—

(a)  purchase or otherwise acquire any wheat, wheaten flour, semolina, corn sacks, jute or jute products;

(b)  sell or dispose of any wheat, wheaten flour, semolina, corn sacks, jute or jute products purchased or otherwise acquired by the Board;

(c)  grist or arrange for the gristing of any wheat, and sell or otherwise dispose of the products of the gristing;

(d)  manage and control all matters connected with the handling, storage, protection, treatment, transfer or shipment of any wheat or other things purchased or otherwise acquired by the Board or sold or otherwise disposed of by the Board; and

(e)  do all matters which it is required by this Act to do or which are necessary or convenient to be done by the Board for giving effect to this Act.

(2.)  The Board may refer to a State Board for advice on any matter concerning wheat in the Sate concerned.

(3.) Nothing in this Act shall be deemed to prevent the Board from exercising any capacity, power or function conferred upon it by any State Act.

(4.) The Board may, subject to the direction of the Minister administering the Commonwealth Act—

(a)  purchase or otherwise acquire any wheat, wheaten flour, semolina, corn sacks, jute or jute products;

(b)  sell or dispose of any wheat, wheaten flour, semolina, corn sacks, jute or jute products purchased or otherwise acquired by the Board;

(c)  grist or arrange for the gristing of any wheat, and sell or otherwise dispose of the products of the gristing;

(d)  manage and control all matters connected with the handling, storage, protection, treatment, transfer or shipment of any wheat or other things purchased or otherwise acquired by the Board or sold or disposed of by the Board; and

(e)  do all matters which it is required by this Act to do or which are necessary or convenient to be done by the Board for giving effect to this Act.

(5)  I assume for the purposes of this opinion that a State Parliament can confer powers upon a corporation created by a Commonwealth Act. Consequently, the Board has full power to manage and control all matters connected with the storage of wheat purchased, acquired, sold or disposed of by it, and to do all matters which are convenient to be done by the Board for giving effect to the Act, uncomplicated by any consideration as to whether the wheat is destined for overseas, interstate or intra-state, although I take it from paragraph 3 of the Board’s memorandum that the bin at Ardrossan will be used for the purpose of shipping wheat out of the State of South Australia mostly for destinations which are either overseas or in another State.

(6)  It should be also noted that the Board’s powers conferred on it by the South Australian Act are not qualified in any way by any reference to State legislation dealing with the storage of wheat, as is the case, in the New South Wales Wheat Stabilization Act 1948.

(7)  By the two Acts referred to in paragraph 4, the Board has been constituted to carry out the important commercial function of selling Australian wheat. In order to perform this function properly, the Board must do all kinds of incidental things, including arranging for the proper storage of wheat, even to the extent of erecting storage facilities where necessary. The power to do these incidental things is contained in the words ‘do all matters which it is required by this Act to do or which are necessary or convenient to be done by the Board for giving effect to this Act,’ and I think that the erection of a storage silo may well be convenient, if not necessary, to be done by the Board for giving effect to the Act, i.e., to enable the Board to carry out its functions. Accordingly, if the erection of a silo at Ardrossan is necessary or convenient for giving effect to the Act, then the Board may, subject to the directions of the Minister, erect one.

(8)  I can find nothing in the financial provisions of the Act which is inconsistent with the foregoing views.

(9)  The Board is required, by section 20 of the Commonwealth Act to pool all the net proceeds of the sale of wheat, and distribute the pool as set out in the section. The net proceeds are defined by sub-section (8) as being the net return from the disposal of wheat after payment of, inter alia, storage charges incurred by the Board. This section, coupled with section 13(e), empowers the Board to pay any necessary charges for the storage of wheat.

(10)  I very much doubt whether this authorises the expenditure of a large capital sum on the erection of a silo. However, section 30 empowers the Minister to arrange with the Commonwealth Bank for the making by the Bank of advances to the Board ‘for the purposes of the Board’. In accordance with the view expressed above, the erection of a silo would be ‘for the purposes of the Board’, and the Minister could make the necessary arrangement with the Bank to finance the erection of the silo. The payment of interest and depreciation, or amortization, charges in accordance with standard commercial practice could then properly be made against the gross proceeds of the sale of wheat, as ‘storage charges’, pursuant to section 20(8). At the conclusion of the Board’s operations, the silo would be disposed of to the best advantage, the proceeds being used to repay the balance (if any) of the advance by the Bank, and any deficiency or surplus would have to be a matter for adjustment with the pool.

[Vol. 39, p. 331]