Grain Elevators Board (Vic) v Dunmunkle Shire

[1946] HCA 13

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(Judgment by: Williams J)

Grain Elevators Board (Vic)
vDunmunkle Shire

Court:

Judges: Latham CJ
Rich J
Starke J
Dixon J
McTiernan J

Williams J

Hearing date:
Judgment date: 31 May 1946

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Judgment by:
Williams J

The question is whether 24 acres of land situated in the shire of Dunmunkle on which are erected buildings with elevators and other machinery necessary for the bulk handling of grain by the appellant, the Grain Elevators Board, and which has at all material times been exclusively used for those purposes, is exempt from rates under s. 249 (1) of the Local Government Act 1928 Vict.. This sub-section exempts "land the property of His Majesty which is unoccupied or used for public purposes." To qualify for this exemption two requisites are necessary, (1) that the land shall be the property of the Crown, and (2) that it shall be unoccupied or used for public purposes. It is not disputed that the subject land is being used for public purposes, so that the crucial question is whether it is the property of His Majesty. The land is vested in the Board at law and in Equity and so can only be the property of His Majesty if the Board can claim to represent the Crown. In order to determine this question it is necessary to consider the legal effect of the Acts by which the Board is incorporated and from which it derives its functions, duties and powers.

The Principal Act is the Grain Elevators Act 1934 . This Act has been amended by the Grain Elevators Acts 1935, 1942, and 1943 . The only provision in these amending Acts that needs to be noticed is s. 3 of the Act of 1942, which provides that, "notwithstanding anything in any Act, land used exclusively for any grain elevator under the Principal Act shall not be deemed to be ratable property within the meaning of any Act." This Act is not applicable because it was not in force when the present rate was struck, and we were also informed that the same point will arise in the future because the Board owns other land which is not entitled to the benefit of this exemption.

There is also the Grain Elevators (Financial) Act 1936 , which provides for the raising of money by sale of Victorian stock and debentures for the purposes of the Grain Elevators Acts . This Act provides that the Grain Elevators Board shall pay to the Treasurer of Victoria as they become due such sums as the Treasurer may require in order to provide for the payment of interest and contributions to the National Debt Sinking Fund in respect of the moneys so raised. The Act provides an alternative method of raising money for the purposes of the Board to that provided by the principal Act but the total amount to be raised by either method is limited to £2,000,000.

The Principal Act provides that the Board shall consist of three members and be a body corporate under the name of the Grain Elevators Board and shall have perpetual succession and a common seal and be capable in law of suing and being sued and of purchasing, taking, holding, selling, leasing, taking on lease, exchanging and disposing of real and personal property for the purposes of and subject to the Act. The members of the Board are appointed and may be removed from office by the Governor in Council. They are appointed for a term but may be removed at any time. Section 7 empowers the Board, with the approval of the Governor in Council, to appoint a general manager and in the exercise of its discretion to appoint and remove such other officers and employees as it requires. This section and s. 8 provide that no officer or other employee of the Board shall be subject to the Public Service Act 1928 Vict., but that the general manager or other officer of the Board who at the date of his appointment is an officer of the Public Service shall, in the event of his office under the Board being discontinued or the Board dissolved, be eligible to be reappointed to the Public Service on the basis that his service under the Board has been service in the Public Service.

Section 10 authorizes the Board, with the approval of the Minister of Agriculture, to acquire existing elevators and appurtenances for handling wheat grown in bulk as well as the land upon which they are situated, to enter into arrangements for the use of existing elevators and appurtenances, to construct new elevators and appurtenances, and operate, maintain and control such elevators and appurtenances. Section 11 requires the Board to carry out a number of surveys and investigations with respect to the construction of new elevators, and the most effective design and method of construction, and to report to the Minister and cause to be prepared schemes for new country and terminal elevators and estimates of costs and, if the Governor in Council approves, to proceed to carry any such scheme into effect. Sections 17 and 18 confer upon the Board powers and duties which it is authorized to exercise in its discretion. Section 17 authorizes the Board to enter upon and use land subject to the payment of compensation. Section 18 authorizes the Board to store in the elevators under its control all grain of the prescribed quality offered for the purpose, and requires it to afford all reasonable proper and equal facilities for the storage of grain and to buy grain where necessary for the purpose of delivering grain to persons who present warrants. Sections 25 and 26 protect the Board and its officers from actions for conversion and detinue of any grain and from responsibility for loss of or damage to grain due to certain causes. Section 27 authorizes the Board in respect of its services to demand and receive such reasonable charges as are prescribed. Sections 29-32 confer wide contractual powers on the Board, but s. 33 provides that no contract for a consideration in excess of £1,000 or extending over a period exceeding one year shall have effect unless sanctioned by the Governor in Council. Sections 35-40 confer power on the Board, with the consent of the Governor in Council, to borrow upon debentures at interest sums not exceeding £2,000,000 and on overdraft, a sum not exceeding £75,000. Section 37 (9) provides that the repayment of the principal and the payment of interest on the debentures shall be guaranteed by the Government of Victoria. Sections 41 and 42 provide for the audit of the accounts of the Board by the Auditor-General at the expense of the Board and for the Board presenting an annual report to Parliament.

Section 43 provides that the Board shall establish a general fund into which all moneys, including loan moneys, shall be paid, and that the general fund shall be applied by the Board for the doing and performing of all acts, matters and things which the Board is under this or any other Act empowered or required to do. Section 50 confers on the Board a wide power to make by-laws, including prescribing the scales of charges for the handling and storage of grain. Sub-section (2) provides that in determining scales of charges the Board shall fix the charges at such amounts as in its opinion will enable the cost of the operation of its elevators and other works and undertakings and interest on loans and payments into sinking funds and into renewal and depreciation funds and the cost of the administration of the Act to be covered. Sub-sections (3) and (4) provide that every by-law shall be subject to confirmation by the Governor in Council and shall not have any force or effect until so confirmed.

It was contended for the appellant that the effect of the Acts is to make the Board a branch of the Department of Agriculture so that it is performing its functions, powers and duties as part of the Executive Government of Victoria. The decision of this Court in Repatriation Commission v. Kirkland [ ^[35] ] was strongly relied on, but that case is plainly distinguishable. The Commission was there held to represent the Crown because it was charged with the administration of an Act which was designed to carry out two objects which are peculiarly within the province of the Government. At page 8 it is stated in the joint judgment of Knox C.J. and Starke J. that: - "The provisions of the Act taken generally, and especially those contained in ss. 7 (1), 11 (2), 50, 52, 57 (b) and 58, establish that the Commission is in the strictest sense a department of government, or at all events so practically identified with it as to be indistinguishable. It is a statutory corporation charged with the administration of an Act designed to carry out two objects which are peculiarly within the province of the Government, namely, the re-establishment in civil life of persons who have served in the defence forces, and the provision of pensions and benefits for persons incapacitated and the dependants of persons killed or incapacitated as a result of active service in those forces."

The Grain Elevators Board is not charged with the administration of a governmental function which a State must necessarily undertake but with an ordinary operation of trade and commerce, that is to say, the handling and storing of wheat in bulk. So long as s. 92 of the Constitution is not infringed, there is no constitutional difficulty to prevent the State of Victoria carrying on such a business. If the duties and powers of the Board were carried out by the Department of Agriculture the business would be done on behalf of His Majesty in right of the State of Victoria. The beneficial interest in the land would then be in the Crown, even if the legal estate was vested in a nominee.

But in my opinion the Grain Elevators Acts do not operate to make the Board a branch of the Department of Agriculture. The Minister may give express directions to the Board under s. 11 of the Principal Act to make the report already mentioned, and under s. 45 to report to him upon any matter relating to the handling of grain in bulk. Many important functions of the Board are made subject to the approval of the Governor in Council or of the Minister of Agriculture. But it is not uncommon to subject a statutory body exercising public duties to some degree of control by the executive. All moneys borrowed to enable the Board to acquire the requisite assets are raised as part of the public funds of the State or by the Board upon a State guarantee, so that it would be natural for the executive to control the manner in which these funds are to be applied. But the Board has important powers and duties in the performance of which it is not subject to any executive or ministerial control. Broadly speaking, capital expenditure is subject to the approval of the Minister, but the carrying on of the business of receiving, storing and delivering grain is left entirely under the control of the Board.

The Board exhibits all the outward characteristics of an independent entity: it is a separate corporation; it has extensive contractual powers; it has power to own land; it has power to engage and dismiss its own servants; it has its own separate funds. To obtain these funds it has power to raise moneys by public subscription and by way of overdraft; and to make charges for services rendered. It has power to sue and be sued, and it is given immunity from legal proceedings in certain respects. If it is, as its counsel alleged, subservient to the Government, the subservience must mainly arise from the power of the executive to remove the members of the Board at any time. But the Board is a legal entity quite separate from that of its members, and the question falls to be determined from a consideration of the extent of the executive control over the corporate body. None of these indicia would of themselves necessarily prevent the Board from being a branch of the Department of Agriculture but their cumulative effect is considerable.

There are two minor provisions in the Act inconsistent with such an agency. Section 16 provides that the Governor in Council shall by order determine any difference arising under the Act between the Board and the bodies defined in s. 3 as public corporations. Section 22 (3) provides that an officer of the Department of Agriculture shall arbitrate between an owner of wheat and the Board as to the amount of dockage to be imposed in respect of such owner's wheat. Section 22 (5) (b) provides in effect that the Board, if it loses, shall pay the fees of the arbitrator. It is an elementary principle of natural justice that no person shall be a judge in his own cause, and this principle would be completely violated unless the executive in the first and the Department of Agriculture in the second instance should be treated as separate entities from the Board.

Similar problems to that under discussion have arisen before. Each case must be resolved by a consideration of the purpose and effect of the particular Act by which the statutory body is established.

The decision bearing the nearest analogy to the present case would appear to be Metropolitan Meat Industry Board v. Sheedy [ ^[36] ]. The Grain Elevators Acts contain similar provisions to those relied upon by the Privy Council as indicating that the Metropolitan Meat Industry Board was not a servant of the Crown. It can also be said here that, although a Minister of the Crown has power to interfere with the Board, "there is nothing in the Statute which makes the acts of administration his as distinguished from theirs."

Counsel for the appellant relied on the provisions of the Grain Elevators Acts whereby the Board is directed to make an annual report to Parliament and whereby its charges are restricted to an amount required to meet the outgoings. But similar provisions will be found in the Acts discussed in the leading case of Mersey Docks v. Cameron [ ^[37] ] and in subsequent cases. Counsel also relied on the provision that the repayment of principal and payment of interest on the debentures shall be guaranteed by the Government of Victoria. But this tells against the appellant because, as the Privy Council pointed out in International Railway Co. v. Niagara Parks Commission [ ^[38] ]: "This provision would be meaningless if the Commission" (here the Board) "was not to be under any liability in the first instance."

For these reasons I would dismiss the appeal.