The Acting Comptroller-General of Customs has forwarded, for advice as to whether the Commonwealth Government should take any action in the matter, papers relating to proceedings proposed to be taken by the New South Wales Government against Mr A.B.C. of Sydney, in respect of his failure to give, in accordance with regulation 11 (a) of the Regulations made under the Dairy Industry Act 1915 of New South Wales, two days' notice of his intention to export certain butter to Victoria.

The material facts, as they appear from the papers forwarded, are as follows:

1. Mr C. is licensed, under regulation 18 of the War Precautions (Dairy Produce Pool) Regulations, to trade in butter and cheese.
2. The butter transferred by him from New South Wales to Victoria was graded under the War Precautions (Dairy Produce Pool) Regulations and a permit for its transfer was issued by the Secretary to the Pool.
3. Mr C. is only one of several merchants who have failed to comply with the State Regulations and the case against him appears to be in the nature of a test case.

Regulation 11 of the War Precautions (Dairy Produce Pool) Regulations provides that all butter and cheese produced in New South Wales, Victoria, Queensland, South Australia and Tasmania shall be dealt with in accordance with those Regulations. Power is given to exempt small manufacturers and sales direct to suppliers.

Regulation 16 provides that all butter or cheese transferred from one State to another shall be graded by an official grader of the Department of Trade and Customs not more than fourteen days before the date of transfer.

Paragraph (a) of regulation 11 of the State Regulations under which the summons against Mr C. has been issued does not refer to grading.

Paragraph (b) of that regulation provides, however, that the notice shall be in the manner prescribed in Form H of the Regulations. Form H, omitting formal parts, is as follows:

Notice is hereby given that I (or we) intend to export butter as set out hereunder. The butter is at store, for the purpose of being examined and marked by an officer, and (where prescribed) frozen prior to shipment.

Regulations 13 and 14 provide for the butter being kept in a registered dairy produce store for a specified period at a certain temperature.

Regulation 15 provides that butter intended for export shall not be examined by an Inspector unless the temperature is more than 45 degrees and less than 65 degrees Fahrenheit.

It is not clear from the Regulations for what purpose the butter is to be examined and marked, as mentioned in Form H, but I am inclined to think, after consideration of the forms of Butter Grade Certificate, that the examination is for the purpose of grading.

It is, therefore, I think, clear, construing the Regulations as a whole, that the notice is required to enable the butter to be examined and graded prior to export.

If the Commonwealth had not made provision for such examination and grading then the State provisions would apply; but as regards the interstate trade in butter which is dealt with by the War Precautions (Dairy Produce Pool) Regulations, the Commonwealth legislation appears to cover the whole ground. The Commonwealth has assumed full control of that trade and the State laws with respect thereto are therefore impliedly abrogated (see Reid v. Colorado 187 U.S. 137 at 146-7).

I am, therefore, of opinion that Mr C. is not liable, under the Dairy Industry Act 1915 of New South Wales, for failure to comply with regulation 11 (a) of the Regulations made under that Act.

As regards the question as to what action the Commonwealth should take in the matter, I suggest that if it is desired to test the validity of the action of the State, the Commonwealth might, in the event of Mr C. being convicted by the Police Magistrate, apply for leave to intervene in the event of an appeal being made against the conviction.

I would point out, however, that, as the Dairy Produce Regulations will shortly expire, and are, I understand, not being operated as from 1st instant, it may be doubted whether it is worth while at this stage to have the question tested.

[Vol. 17, p. 18]