Smith v Capewell

142 CLR 509
26 ALR 507

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(Judgment by: Mason J)

Between: Smith
And: Capewell

Court:

Judges: Barwick CJ
Gibbs J
Stephen J

Mason JMurphy J
Aickin J

Subject References:
Constitutional Law (Cth)

Hearing date: Sydney, 24 April 1979
Judgment date: 4 October 1979

Melbourne

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Judgment by:
Mason J

The respondent, who carries on business as a skin dealer at Charleville in Queensland, is a registered fauna dealer in that State. He was charged in Central Court of Petty Sessions, Sydney, with an offence against s. 105 (a) of the National Parks and Wildlife Act, 1974 (NSW), as amended ("the Act") in that between 1st April 1976 and 10th April 1976 he did carry on the business of a skin dealer otherwise than under and in accordance with the authority conferred by a licence issued under s. 124 or s. 125 of the Act. The magistrate found that the respondent did carry on business as a skin dealer in New South Wales between the dates referred to in the charge and that he did so without a licence. However, the magistrate also found that the respondent's carrying on of business consisted of entry into a transaction of interstate trade and commerce which was protected by s. 92 of the Constitution and that, in consequence, s. 105 (a) did not validly apply to the respondent's activity which was the foundation of the alleged offence. His Worship dismissed the information and ordered the appellant to pay the respondent's costs. From that decision the appellant has appealed to this Court, pursuant to the grant of special leave.

Section 105 of the Act provides:

"A person shall not -

(a)

exercise or carry on;

(b)

advertise, notify or state that he exercises or carries on or is willing to exercise or carry on; or

(c)

in any way hold himself out to the public as ready to exercise or carry on, the business of a skin dealer, unless he does so under and in accordance with the authority conferred -

(d)

by a skin dealer's licence under section 125; or

(e)

in so far as the act constituting the offence forms part of the business of a fauna dealer - by a fauna dealer's licence under section 124 ."

Section 125 provides:

"(1)

An authorised officer may issue a licence (in this Act referred to as a 'skin dealer's licence'), authorising a person to buy or sell skins as a skin dealer and otherwise to exercise or carry on the business of a skin dealer.

(2)

A person licensed under subsection (1) shall not exercise or carry on business as a skin dealer in New South Wales at or on any premises that are not registered under this section.

(3)

An authorised officer may issue registration certificates in respect of each of the premises at or on which a person licensed under subsection (1) exercises or carries on business as a skin dealer in New South Wales."

Section 124 makes similar provision for the issue by an authorized officer of a fauna dealer's licence.

Mr. McHugh for the appellant did not suggest that the application of the prohibition in s. 105 (a) to the carrying on of business in the course of interstate trade could be justified on the ground that it, taken together with other provisions in the Act, constitutes a permissible regulation of interstate trade which does not contravene s. 92. In this respect it seems to have been assumed that the reasoning which led this Court in Fergusson v. Stevenson (1951) 84 CLR 421 to hold that s. 19 (1) of the Fauna Protection Act, 1948 (NSW) had no application to the possession of goods in the course of transport from one State to a port in another State for shipment overseas would have equal application to s. 105 (a) and to its operation in this case. The case for the appellant was that the respondent, in the course of carrying on his business of a skin dealer, entered into a contract for the sale of kangaroo skins in New South Wales without having a licence under the Act, that the contract did not form part of interstate trade and that he therefore fell outside the protection given by the constitutional provision.

Before I turn to the evidence, I should emphasize that what is prohibited by s. 105 (a) is the carrying on in New South Wales of the business of a skin dealer without a licence. In order to fall within the prohibition it is necessary that the defendant should engage in activities in New South Wales that constitute the carrying on of the business of a skin dealer. It would not be enough, for example, to show that the defendant entered into a single or isolated contract for the sale of skins. If this be all that emerged from the evidence, it could not be said that he was a dealer in skins or that what he did was something done in the course of carrying on the business of a skin dealer .

Furthermore, s. 105 (a) is directed only to the prohibition of the carrying on of business in New South Wales without a licence. It is not concerned with the premises at or upon which the business is carried on. Section 125 (2) constitutes a separate and distinct prohibition against the carrying on of business at or on any premises that are not registered under the section. Section 125 (3) provides for the issue of registration certificates in respect of the premises at which a licensed person carries on business in New South Wales. Thus it is the function of the registration provisions, rather than the function of the licence, to authorize the carrying on of business at particular premises.

In the present case the evidence disclosed that the respondent carried on business as a skin dealer at Charleville in Queensland. In the course of the business he sold skins to customers in New South Wales and delivered skins across the border to customers in that State. In the course of carrying on the business he therefore engaged from time to time in transactions of interstate trade, at least by delivering skins across the State border and possibly by entering into contracts for sale which called for the delivery of skins from Queensland to the premises of purchasers in New South Wales. I say "possibly" because the evidence dealt with two transactions only and the critical question is whether the transaction relied upon by the appellant formed part of interstate trade and commerce.

In argument counsel for the respondent referred to the respondent's business at Charleville as an interstate business or as a business which was itself part of interstate trade. This of course was a misdescription. With the exception of banking business, which has been thought to possess unique characteristics, no business has yet been recognized as itself forming part of interstate trade, though the individual transactions entered into in the course of carrying on that business may form part of that trade. Thus, in Hospital Provident Fund Pty. Ltd. v. Victoria (1953) 87 CLR 1 , at pp 14-15, 38-39 , it was held that the business of insurance did not itself constitute interstate trade. And in H. C. Sleigh Ltd. v. South Australia (1977) 136 CLR 475 , it was held that the system of refinery exchange was in the same category: see the discussion at pp. 494-495 and 505-507.

When the respondent entered into contracts in New South Wales for the sale of skins, and this he did in the case of the two transactions dealt with in evidence, he did so in the course of carrying on his general business as a skin dealer, the headquarters of which were at Charleville. When the respondent said in evidence that he carried on business at Charleville, he did no more than designate Charleville as the headquarters or central place of the business. He did not convey that he had a Charleville business which was separate and disconnected from business transactions into which he entered in New South Wales. The evidence, to which I shall shortly refer, indicates that what he did in New South Wales was done in the course of carrying on his general business.

I now turn to the evidence with a view to ascertaining whether there was in terms a breach of s. 105 (a) and whether the transaction giving rise to that apparent breached formed part of interstate trade and commerce, as the magistrate found. It was common ground that the respondent had no licence under s. 124 or s. 125. Mr. Gee, a director of Gee Bros. Pty. Ltd., gave evidence for the appellant of two transactions which he had with the respondent involving the sale and delivery of skins. It was the second transaction that was alleged to constitute the prohibited carrying on of business. Mr. McHugh conceded that the first transaction was one which formed part of interstate trade to which s. 105 (a) did not apply.

Mr. Gee stated that on 15th March 1976 the respondent telephoned and offered to sell a load of green kangaroo skins consisting of reds and greys, the price of the reds being $3.50 each, the price of the greys being $2.50 each. On 23rd March the respondent telephoned to say that the skins were at Hornsby Cold Stores. Gee collected them and delivered them to Etherdon Tannery. After they had been tanned, it was discovered that the skins did not correspond with the skins which had been ordered. These skins had formerly been the subject of an order placed by another purchaser, Furedy & Co. of Botany, New South Wales. The respondent had brought the skins to Sydney to satisfy that order. However, Furedy & Co. were not prepared to pay a sufficient price, with the result that the respondent was compelled to sell them elsewhere and this he did to Gee Bros. Pty. Ltd.

When, early in April, the respondent called at the premises of Gee Bros. Pty. Ltd., the condition of the skins was discussed and a new price was agreed upon. Gee placed a further order with the respondent in terms identical with the initial order. Delivery was made against this order on 9th April at the premises of Gee Bros. Pty. Ltd. from the respondent's semi-trailer which brought the skins from Queensland. At the time of delivery the respondent produced a Permit to Remove Fauna dated 7th April 1976 which was issued under the Fauna Conservation Act, 1974 (Q.). The Permit stated -

"P. W. & D. A. CAPEWELL

11 BAKER ST.

CHARLEVILLE

is hereby permitted to remove fauna described in the Schedule hereunder from KENNEDY ST. CHARLEVILLE to WALLANGARRA."

It was subject to a condition which is not presently relevant. The Schedule listed a total of 649 grey and red kangaroo skins and stated that they were consigned to "GEE BROS BOTANY NSW". Wallangarra is a border town situated in Queensland. Nothing turns on the fact that the Permit was in the names of P. W. & D. A. Capewell.

The respondent gave evidence that the skins which he delivered in satisfaction of the skin order were obtained in the Charleville district and came through his Charleville processing works.

The magistrate seems to have confused the two transactions. However, that is not a matter of present concern because there is no dispute on the facts. The only question is whether the second transaction formed part of interstate trade and commerce.

In my opinion that question must be answered in the negative. In order that a contract should form part of that trade and commerce it is necessary that it contain a stipulation calling for the delivery of goods across a State border. There must a promise or obligation to carry from one State to another. It is not enough that the promise to deliver goods may be satisfied by goods that are brought from interstate or even that the parties expect that the promise will be satisfied by goods brought from interstate. What is required is the presence of a binding contractual obligation to bring the goods from another State. I need do no more than refer to the discussion of this question in W. & A. McArthur Ltd. v. Queensland (1920) 28 CLR 530 , at pp 540, 559-560 and H. C. Sleigh Ltd. v. South Australia (1977) 136 CLR, at pp 494-495, 507-508 .

All that can be said here in favour of the respondent is that, having regard to the respondent's place of business and the fact that Queensland evidently was the principal or sole source of his supply of kangaroo skins, it was expected that he would satisfy the order by bringing skins from Queensland. But expectation of the parties is not a substitute for stipulation in the contract. That was decided in Ex parte H. Brazil & Co. Pty. Ltd. (1978) 138 CLR 194 .

It was decided in North Eastern Dairy Co. Ltd. v. Dairy Industry Authority of New South Wales (1975) 134 CLR 559 that s. 92 protected the first sale of milk made within a State by a person who had transported the milk into that State across a State border for the purpose of sale. Had the contract in question in the present case been made by the respondent after, and not before, his transportation of the skins from Charleville to Sydney, it is very likely that the contract would have fallen within the protection given by s. 92. But this is of no avail to the respondent on the facts as they have been established.

The acknowledgment that the first sale of goods made within a State by the importer after delivery across a State border falls within the constitutional guarantee is a recognition of the need to protect interstate trade from interference which inhibits the first sale within a State of goods or commodities produced in another State. The consequence is that the constitutional protection attaches to the contract once it is made.

The same considerations do not apply when, as here, goods are transported across a State border in satisfaction of a contractual obligation which does not call for delivery across a State border. The contract is then already on foot. It is only the interstate delivery that needs and obtains protection under s. 92. At the time when the contract was made, it lacked any characteristic which would mark it as a transaction entered into in the course of interstate trade or connected with that trade. The subsequent delivery of goods across a State border, when that delivery is not called for by the contract, cannot endow the contract with an interstate character which it lacked at the time when it was made.

In the result I would allow the appeal.