The Secretary to the Treasury has submitted the following memorandum received by him from the Secretary to the Postmaster-General's Department to me for advice:

I am to inform you that Mr A.B.C. was the Contractor for the supply of a number of poles to this Department in Western Australia, and in connection with order No. 2585 for 100 poles, valued at £ 52.10.0, gave an irrevocable authority on 15 June 1911 for payment to be made to the credit of Messrs Henry Wills & Company at the Union Bank, Freman-tle. Subsequently, on 2 September 1912, order No. 2585 not having been completed, C. endorsed the order to pay the amount from any orders to which he had supplied poles in lieu of against order No. 2585. An amended account covering that amount was accord-ingly prepared and passed for payment on the 4th idem.

2. A communication was received from Messrs Henry Wills & Company, under date of 3 October 1912 respecting this matter, and on inquiry being made it transpired that the voucher for £52.10.0 was passed for payment along with three others all in favour of C, and payment was effected personally to him on the morning of 5 September 1912. The Cashier was not specially advised of the order in favour of Wills & Coy, and the fact that order No. 1 on the back of one of the four claims paid to C. had been filled in authorising payment to Wills & Company's credit passed unnoticed in the Cashier's Branch.
3. The question of the Department's liability to pay Wills & Company was referred by the Deputy Postmaster-General, Perth, to the Crown Solicitor of the State of Western Australia, who advised as follows:

I have no doubt that the order amounts to an equitable assignment, consequently as you received notice of it before you had paid the money over to C, you are liable to Henry Wills & Coy for the amount of the order. The only doubt that arises on the case is on the question of the stamp to which the instrument is liable. It is not stamped at all, but I understand that you do not intend to take any advantage of this omission on the part of Messrs Wills & Coy, I would recommend, however, that before paying you affix a penny revenue State stamp and duly cancel same and that you get a properly stamped undertaking from Messrs Wills and Coy that they will indemnify you against any loss which you may sustain by reason of the instrument being held inadmissible in evidence for want of proper stamping or against any duty or penalty which you may be called upon to pay in order to render the instrument admissible in evidence. This indemnity had better be approved by me.

4. The matter was referred by this office to the Commonwealth Crown Solicitor for his opinion, and the following is copy of the reply received, viz.:

I concur in the opinion of the Crown Solicitor for Western Australia that the order endorsed on the claim amounts to an equitable assignment of the debt by C. to Wills & Co., and that as the Department received notice of such assignment Wills & Co. are legally entitled to payment.

I do not, however, share the doubt expressed by the Crown Solicitor based on the non-payment of stamp duty as the order in question is one prescribed under the Com-monwealth Audit Act and Regulations and is therefore not subject to State stamp duty under the decisions of the High Court.

When payment is made to Wills & Co., the amount could in my opinion legally be recovered from C. if he has sufficient property to make it worth while taking action against him.

5. Payment of the amount of £.52.10.0 was accordingly made to Messrs H. Wills & Co. on 7 December.
6. Every endeavour has been made to locate C. with a view to obtaining a refund of the amount overpaid to him, but his present whereabouts are unknown.
7. The following is a copy of a report now furnished by the Deputy Postmaster-General in regard to the matter:

1. The Accountant states that the payment to C. was due to laxity on the part of an officer of the Accounts Branch, and also on the part of two officers in the Cashier's sec-tion, the former for failing to submit the assignment signed by C. to the Accountant for a ruling as to its validity and for not forwarding the file to the Paying Officer for no-tation, and the two latter for effecting payment to C. without calling attention to the endorsement on the account and questioning the right of his claim to the amount.
2. It is pointed out by the Accountant, however, that Treasury Regulation 96 does not provide for an assignment of this nature, nor does it provide that moneys due to a claimant may be paid to the credit of the Bank Account of any person other than the claimant, and in view of all the circumstances he recommends Treasury Authority to be sought to charge the amount to Treasurer's Advance pending provision under Div. 113/4 'Miscellaneous'.
3. It is also suggested that a Treasury ruling be obtained as to the right of a claim-ant to vary Order No. 1 (Treasury Regulation 95b⁽¹⁾) so as to make the amount pay-able to a Bank to the credit of another person, and to make such order irrevocable.

I may add that action is being taken with regard to the officers concerned.

8. The matter is submitted for the consideration of the Treasurer to the recommen-dations contained in paragraphs 2 and 3 of the Deputy Postmaster-General's memor-andum, in which I concur.

The Secretary to the Treasury in submitting the matter states that it has always been held in the Treasury that payments could be made only as provided by the Audit Act 1901-1912 and Regulations and that consequently 'irrevocable' authorities need not be recognised.

Under the Audit Act and the Treasury Regulations accounts may be paid to a number of different persons, amongst others the following:

1. the principal;
2. the holder of an order to pay an agent;
3. the holder of a standing authority;
4. a person authorised by power of attorney.

Payment is not in any case authorised to be made to an assignee of a principal.

Neither an order to pay an agent nor a standing authority would amount to an assignment in itself. Both forms are forms prescribed by the Treasury Regulations which have the force of law and can only be altered in form or effect by the amendment of those Regulations. It appears to me to follow therefore that no person can by ad-dition or alteration alter them or their effect as between himself and the Common-wealth. I think therefore that for the purposes of the Audit Act and the Regulations the contractor in this case, as between himself and the Commonwealth, had no power to make the order irrevocable and had no power to add anything to the order to make it operate as an assignment. The very essence of the order is an authority to pay to an agent, and any alteration which would make it an assignment would entirely change its character.

I think it very doubtful whether a debt owing by the Crown could be assigned either at law or in equity without the assent of the Crown. The question is a difficult one and there is little or no authority on it, as under the conditions existing in the United King-dom it is almost impossible for the question to have arisen in the Courts there.

The case of Cox v. Smail 18 A.L.R. 299, in which an H Order [ to pay agent] was held to be an equitable assignment, did not in any way affect the rights of the Crown, nor was the thing assigned in the ordinary sense a debt owing by the Crown.

In view of the provisions of the Audit Act and the Regulations, and also to the fact that the Commonwealth represents the Crown, I do not think that the Commonwealth would be bound in such a case, so as not to be discharged by payment to the original creditor.

If any similar case arises it would be desirable to contest the claim of the alleged as-signee in order that the point may be authoritatively decided.

Possibly also it might be desirable to add to the Regulations a provision specifically providing that no endorsement on or addition to the forms shall render them irrevo-cable or in any way alter their effect in substance.

[Vol. 11, p. 105]

(1)Presumably 96 (b).