Judges: Dixon CJ
McTiernan J
Williams J
Webb J
Fullagar J
Kitto J

Taylor J

Judgment date: 13 March 1953

Judgment by:
Taylor J

In Boreham's Case the Commonwealth of Australia and Commonwealth Hostels Ltd sues the defendant Boreham to recover the sum of PD40 9s. 6d. being the balance of moneys alleged in the writ to be owing for board and lodging supplied to the defendant, his wife and two children at the Bunnerong Hostel, a hostel which was established to provide temporary accommodation for immigrants.

The hostel, which comprises a number of buildings, is situated at Bunnerong near Sydney on land leased to the Commonwealth and was, during the period in respect of which the claim is made, controlled and managed by Commonwealth Hostels Ltd , a company incorporated on 13th September 1951 under the Companies Act 1938 (Vict.) and registered in New South Wales as a foreign company. The hostel was established some considerable time before the incorporation of the company and, for a time, it was controlled and managed by the Commonwealth through officers of the Department of Labour and National Service. It was during this period that the defendant and his family first came to the hostel and their occupation of quarters at the hostel continued until after the control and management thereof was assumed by the company. There is no dispute that during the period in respect of which the claim is made the defendant and his family were provided with "board and lodging" as alleged.

The dispute between the parties has arisen out of the circumstance that on 18th April 1952 written notice was given to the defendant that the charge for accommodation and the benefits provided for himself, his wife and children would be increased as from 27th April 1952. The defendant paid the increased charge for three weeks from the last-mentioned date, but these payments were made by the defendant and other occupants of the hostel "under protest until such time as our legal officers instruct us to discontinue payment or until the increase is removed". After the expiration of the period of three weeks the defendant refused and continued to refuse to pay the amount of the increase, and it is in respect of the total sum so involved that this action is brought.

The facts concerning the claim have been agreed upon by the parties and, upon those facts as set forth in a case stated, the following questions are raised by Kitto J. for the opinion of this Court:

1.

Is it open to me on the facts and documents aforesaid to find that the payments which the defendant became liable to make for the accommodation and other benefits provided as above-mentioned during the period from 20th April 1952 to 20th September 1952, both inclusive, were payments-(a) of rent, within the meaning of the Landlord and Tenant (Amendment) Act 1948-1951 (N.S.W.), or (b) for a declared service, within the meaning of the Prices Regulation Act 1948-1949 (N.S.W.)?

2.

If question 1 (a) be answered, yes, and I find that the said payments were payments of rent within the meaning of the said Landlord and Tenant (Amendment) Act 1948, as amended, was the amount thereof affected in any and what manner by the operation of that Act?

3.

If question 1 (b) be answered, yes, and I find that the said payments were payments for a declared service within the meaning of the said Prices Regulation Act 1948, as amended, is the amount thereof affected in any and what manner by the operation of that Act and the declaration and orders made thereunder or any of them?

4.

Has the defendant's knowledge or belief as to the nature or extent of the relationship between the plaintiff the Commonwealth of Australia and the plaintiff company at any time any and what materiality to the question whether either of the plaintiffs is entitled to judgment in this action?

5.

If, having regard to the answers to the preceding questions, the defendant is liable to pay in respect of the said period a sum in excess of that which he has already paid, is the excess amount owed to the plaintiff the Commonwealth of Australia or to the plaintiff company?

6.

If the said excess amount is owed to the plaintiff company, has this Court jurisdiction to give judgment for the plaintiff company in this action?

At the outset it should be stated that the parties, by their counsel at the hearing, were in agreement that the facts clearly showed that the defendant never at any time became a tenant to either the Commonwealth or the company and that the payments from time to time made by the defendant were not in the nature of rent. I have no doubt that this is the correct conclusion on the facts and questions 1. (a) and 2. should be answered accordingly.

The substance of the remaining questions makes it quite clear that the initial question for consideration in this case is whether the defendant agreed to make payments at the increased rate and, if so, whether the Commonwealth or the company was the other contracting party. If there was no such agreement on the part of the defendant the claim of the plaintiffs must fail at the outset whilst it is a matter of considerable importance in relation to some of the questions whether, if such an agreement was made, the Commonwealth was contractually entitled and bound.

In spite of the statement contained in the case that the defendant "did not verbally or in writing agree to pay the increased charge for accommodation", I have no doubt that the defendant did, by his conduct, agree to make such payments. It is perhaps unnecessary to say that contracts may arise not only from express words, but also from the conduct of parties, and in this case the defendant's conduct must be taken unequivocally to indicate his agreement to pay the increased charges. He received notice on 18th April 1952 that the charges would be increased as from 27th April; he and his family remained in the hostel after the latter date and continued to do so during the period in respect of which the claim is made and for an initial period of three weeks he made payments at the increased rate. It is true that these payments were made under protest, as previously mentioned, and with this aspect of the matter I shall deal presently, but apart from this circumstance the defendant's actions could lead to no conclusion other than that he was agreeable to the new terms. What then was the effect of making the payments under protest? Is it open to a person in the circumstances in which the plaintiff found himself to say "I shall remain in occupation and I shall pay the increased charges but I shall pay them under protest and that will indicate that I am not agreeing to make these increased payments?" In my opinion, he is not. The words "under protest" have no precise legal significance, except where they are given some special meaning by statute or by agreement and, in the circumstances of this case, could mean no more than that the defendant, though agreeing to pay the increased charges, did not wish to be taken as abandoning any existing material right. No doubt the defendant had in mind the provisions of the Landlord and Tenant (Amendment) Act 1948-1951 (N.S.W.) and the Prices Regulation Act 1948-1949 (N.S.W.). His conduct cannot, in my opinion, give rise to the inference that he was not, otherwise, assenting to a variation of the charges, for it would be a strange thing if a lodger whilst agreeing after reasonable notice to pay at an increased rate and though doing so under protest, could reserve the right to claim at some later or even remote stage that he had never so agreed. Perhaps the point may be more clearly stated by saying that where one or two parties of a contract enters into it, "under protest", he nevertheless makes a binding contract. The case of Smith v William Charlick Ltd ^[F27] is clear authority for the proposition that a payment of money made under protest cannot be said to be an involuntary payment, except in special circumstances which are not present in this case. No doubt the defendant made the increased payments during the first three weeks of the relevant period in order that he might be allowed to remain in occupation of his quarters. The payments were not involuntary in any legal sense and, in my opinion, the only effect of paying under protest was to indicate an intention not to abandon any rights, extraneous to the contract, which might afford him protection against, or some relief from, his newly assumed obligation.

These observations leave untouched the question whether this new obligation was assumed under a contract made with the Commonwealth or with the company, but, in my opinion, there can be little, if any, doubt that the company was the other contracting party. It was argued on behalf of the plaintiffs that the defendant originally made his agreement for accommodation with the Commonwealth and that, notwithstanding the subsequent assumption by the company of the management and control of the hostel pursuant to the agreement between it and the Commonwealth on 20th November 1951 the original agreement between the defendant and the Commonwealth relating to the former's accommodation subsisted, though with some modifications, at all relevant times. In my opinion, this view is not open on the evidence. Although it may be said that the company undertook the management and control of the hostel on behalf of the Commonwealth and therefore, in a general sense, that it acted on behalf of the Commonwealth, it is clear that in the performance of its functions of management and control it acted as a principal in relation to persons with whom it contracted. The agreement of 21st November 1951 makes it clear that such a course was intended and the evidence does not suggest that when the company entered into contracts it did so otherwise than in the capacity of a principal. On the contrary, the facts in the case and the relevant documents make it quite clear that the company acted as a principal on such occasions. I have no doubt that the original contract for accommodation made between the defendant and the Commonwealth was novated shortly after the assumption by the company of the management and control of the hostel or at the very latest when the company and the defendant with the assent of the Commonwealth made their agreement with respect to accommodation at the increased charges. Accordingly, the action, if maintainable, is maintainable at the suit of the company alone.

Whether or not it is maintainable at all depends upon the answers to a number of problems which arise in relation to the Prices Regulation Act 1948-1949 (N.S.W.) and declarations and orders thereunder. It was contended by counsel for the defendant that the rights of the defendant under the agreement for accommodation were, in the language of s. 3 (1) of the Act, rights under an agreement for the provision of lodging and therefore constituted "a service" within the meaning of that Act. Further, it was said, a service of this nature was a "declared service" pursuant to Prices Declaration No. 82 (N.S.W.) made under the Act on 10th October 1951 and maximum rates for such a service had been fixed either by Prices Regulation Order No. 190 (N.S.W.) or Prices Regulation Order No. 259 (N.S.W.). Both of these orders were made before the charges for accommodation at the hostel were increased and since such increased charges were in excess of the maximum rates so fixed the plaintiff company, it was claimed, was not entitled to recover. The first answer made by the company to this line of defence was that it represented the Crown in right of the Commonwealth and that the Prices Regulation Act 1948-1949 (N.S.W.) does not and did not at any material time bind the Crown in that right. Secondly, it was said that Prices Declaration No. 82 (N.S.W.) excludes from the category of services declared by it services which are supplied or carried on by "a State or semi-governmental or local governing body" and the company even if it does not in a strict legal sense, represent the Crown was at all material times a semi-governmental body. It was further argued that if upon its true construction the Act does purport to bind the Crown in right of the Commonwealth it exceeds the limits of the legislative power of the State.

The Act does not purport expressly to bind the Crown and, as far as I can see, there is nothing in the Act giving rise to any implication that this was the intention of the legislature. On the contrary its provisions seem to me to be intended to regulate rights as between "subject and subject" (cf. Minister for Works (W.A.) v Gulson ^[F28] , at p. 358 per Starke J.), and the whole history and purpose of the wartime and post-war legislation with respect to price fixing, both Commonwealth and State, clearly supports this view. In Gulson's Case ^[F29] Rich J. expressed the view that "the Crown in all its capacities is prima facie not bound by a statute made in any part of the Empire unless this is provided for expressly or by necessary implication" ^[F30] . This view was expressed after a consideration of Williams v Howarth ^[F31] ; Theodore v Duncan ^[F32] and Federal Commissioner of Taxation v Official Liquidator of E. O. Farley Ltd ^[F33] . The observations of Williams J. in Gulson's Case ^[F34] indicate quite clearly that he accepted the same view which, again, is implicit in the reasons of Starke J. The latter accepted as a rule of construction "that the Crown is not bound by a statute unless specially named or included by necessary implication despite the distinction taken in R. v Sutton ^[F35] between the Crown in right of the States" ^[F36] . Having accepted the existence of the rule of construction Starke J. proceeded to examine the legislation in order to see if it contained any indication of contrary intention, and added that general words were not enough to give such an indication. In my opinion the rule, as stated by Rich J. in Gulson's Case ^[F37] must now be taken to be the true rule.

As I have already said, there are no indications in the Prices Regulation Act that it was the intention of the legislature to bind the Crown; on the contrary, its provisions tend to the opposite conclusion. But this conclusion cannot assist in the solution of the present case unless it should also be held that the company in a strict legal sense, represents the Crown and is therefore entitled to the same privileges and immunities as the Crown itself. Its relationship to the Executive Government is substantially determined by the agreement of 21st November 1951 and it is, I think, material to indicate the general purport and effect of that agreement. Before doing so, however, it is desirable to make some reference to the memorandum and articles of association of the company. Whilst its objects specify that the company was established to provide, acquire, take over, establish, equip, maintain, conduct, control, manage or supervise hostels housing and other forms of accommodation in Australia for the accommodation of migrants, members of the Defence Forces of the Commonwealth and their dependants, persons in the service of the Commonwealth and persons engaged upon work for the Commonwealth for whom the Minister of State for Labour and National Service requests the company to provide accommodation, the company is authorized to engage in many other activities. Clause 5 of the memorandum contains a provision prohibiting the payment of any part of its income or property by way of dividend, bonus or otherwise howsoever by way of profit to the members of the company, and cl. 6 provides that if upon the winding up or dissolution of the company there remains after the satisfaction of all its debts and liabilities any property whatsoever, the same shall not be paid to or distributed amongst the members of the company but shall be paid or transferred to the Minister and shall be applied in such a manner as he may direct. Article 31 gives to the Minister the right to appoint the directors of the company and, pursuant to arts. 33 and 39 (e), the power to remove directors summarily is also vested in the Minister. Article 55 provides that the accounts of the company shall be audited by the Commonwealth Auditor-General. The agreement recites the registration of the company with the object of providing in Australia hostels housing and other forms of accommodation in Australia for the accommodation of the classes of persons specified in the object to which I have referred and also recites that the memorandum of the company has been so framed as to preclude the company from paying or transferring any portion of its income or property directly or indirectly by way of dividend, bonus or otherwise howsoever by way of profit to members of the company. After reciting the intention of the parties that the company shall assume responsibility for managing and conducting the hostels, housing and other forms of accommodation and ancillary services then being managed and conducted by the Commonwealth through the Department of Labour and National Service, the agreement proceeds to specify the terms upon which this is to be done.

By the agreement the company undertakes the management and control of such of the hostels as are from time to time specified by the Minister. Clause 4 provides that the Minister may at any time after consultation with the board of directors direct the type, characteristics and standard of the accommodation and facilities to be provided and the company undertakes to ensure that satisfactory arrangements will be made for the accommodation of the number and classes of persons notified to it. Further, the company undertakes to maintain the hostels and the property of the Commonwealth comprised therein in good repair; to permit the Minister or any person nominated by him to inspect the premises at all reasonable times; to proceed to close down the hostel or other form of accommodation as soon as is reasonably practicable after being so requested in writing by the Minister; and not to alter the scales of charges from time to time approved by the Minister for accommodation and facilities provided in the hostels. Nothing in the agreement is to be deemed to confer on the company any right, title or interest in any of the real or personal property of the Commonwealth comprised in the hostels, whilst cl. 2 provides that the Commonwealth will make available by way of loan to the company upon such terms as may be determined by the Minister such funds as are appropriated by Parliament for the purpose. A number of other terms of the agreement make it quite clear that the company is subject to almost continuous supervision and direction by the Minister or officers appointed by him for that purpose.

In Grain Elevators Board (Vict.) v Dunmunkle Corporation ^[F38] Latham C.J., after discussing the tests which had been proposed and applied from time to time for the purpose of determining whether a person or a body is entitled to the privileges and immunities of the Crown went on to say:

"But if a board is a body independent of the Government with discretionary powers of its own, so that it is not a mere agent of the Government, then such a body does not represent the Crown. This was the criterion which was applied in Fox v Government of Newfoundland ^[F39] and by this Court in Repatriation Commission v Kirkland ^[F40] . See also Ex parte Graham; Re Forestry Commission ^[F41] . The question was put in the following form in Roper v Public Works Commissioners ^[F42] , at p. 52 - whether the persons in question were acting as servants of the Crown or merely as a statutory body invested with public rights, duties and liabilities like the trustees of a public dock or public park. Were they Government servants doing the work of the Government? In Metropolitan Meat Industry Board v Sheedy ^[F43] , at p. 905, their Lordships of the Privy Council described the Board there under consideration as `a body with discretionary powers of their own. Even if a Minister of the Crown has power to interfere with them, there is nothing in the statute which makes the acts of administration his as distinguished from theirs"' ^[F44] .

Repatriation Commission v Kirkland ^[F45] was a case which presented special features and it was held that the Repatriation Commission represented the Crown in the strict legal sense. This conclusion was based on the ultimate view that it was "a corporation to which is handed over the administration of what is really a Government department" (per Knox C.J. and Starke J. ^[F46] ): that "the functions of the Repatriation Commission have been expressly made functions of the Executive Government in the strict sense" (per Higgins J. ^[F47] ) and that Parliament had "simply created a very special department for a very special purpose, and for convenience has `vested' the property in that department" (per Rich J. ^[F48] ). But none of these observations could have any application to the facts of the present case. It is true that the company's functions were for a time performed by a department of the Executive Government, but this does not constitute those functions when performed by the company functions of the Government, nor does the existence in the Minister of a power to control and direct the company's activities, or the fact that it may, to a considerable extent be dependent upon loans from public revenue, make such a conclusion possible. The plain fact is that it is a body with an independent existence and that it has a substantial measure of independent discretion in the performance of its functions and those functions are not characteristically functions of Government. I have no doubt that the company does not represent the Crown in any legal sense and that it is not entitled to the privileges and immunities of the Crown.

Since the company is, therefore, bound by the provisions of the Prices Regulation Act 1948-1949 (N.S.W.) the rights to which the defendant was entitled under his agreement for accommodation constituted "a service" within the meaning of that Act and it was a "declared service" unless it was a service supplied by a "State or semi-governmental or local governing body". The expression "semi-governmental" body has caused me considerable difficulty. It is not a technical term and it is impossible to give any precise meaning to it. It was argued, however, that its application is limited to bodies having an association only with one or more of the States and that it has no application to bodies, having only an association with the Commonwealth. There is real difficulty in determining what is meant by the expression "semi-governmental". No doubt, it is possible to say that a body which represents the Crown in the strict sense is not semi-governmental; it is governmental. This proposition may lead to the very general conclusion that a semi-governmental body is a body which, whilst not legally representative of the Crown, has some definite and substantial connection with it in the performance of its functions. But not every such body could be said to be a semi-governmental body, because the characterisation of the body as such would, to some extent, be dependent upon the nature of the functions performed by it, and the mere existence of some contractual relation between such a body and the government would not be sufficient to invest it with this character. However, it is, I think, unnecessary to attempt to give any precise meaning to the term because it is clear that the defendant's first submission on this point is correct. The expression appears to have originated in some of the legislation passed in 1942 to refer from the States to the Parliament of the Commonwealth power to make laws with respect to certain subject matters. In New South Wales the relevant Act referred to the Parliament of the Commonwealth, inter alia, "profiteering and prices (but not including prices or rates charged by State or semi-governmental or local governing bodies for goods or services)". It is of interest to note that although power was referred to the Commonwealth Parliament in this limited form the National Security (Prices) Regulations continued to operate in their original form. But by subsequent declarations under those regulations there was omitted from the declaration of services, those services "supplied or carried on by State or semi-governmental or local governing bodies". The form of one of the earlier declarations made under the National Security (Prices) Regulations appears in the report of the Victorian Chamber of Manufactures v Commonwealth ^[F49] , and it is notable that the first of these declarations excepted services supplied or carried on "by any State of the Commonwealth or any authority constituted by or under any State Act" and also those "supplied or carried on by any Local Government Authority established for any locality by or under any State Act relating to any local government". The exception in Prices Declaration No. 82 (N.S.W.) of services supplied or carried on by any "State or semi-governmental or local governing body" must, I think, in the circumstances be taken to refer to bodies which, though not in the strict sense representative of the Crown, have some real and substantial relationship to the Government of New South Wales.

The question then arises whether the relevant prices regulation orders in New South Wales operated to fix a lower rate for "board and lodging" than that which the company seeks to charge with respect to the relevant period. So far as I can see the only point which arises on this matter arises under cl. 4 of Prices Regulation Order No. 190 (N.S.W.). This paragraph purports to fix and declare the maximum rate at which any person may supply any board and/or lodging which is not of substantially the same kind as board and/or lodging supplied by that person on the prescribed date, to be such rate as, after application by that person, is fixed by the commissioner by notice in writing to such person, or, until such rate has been fixed by such notice as aforesaid, the rates in the order thereinafter specified. "Prescribed date" means in relation to the supply by any person of any kind of board and/or lodging 1st March 1949, or if substantially the same kind of board and/or lodging was not supplied by that person on that date, the last preceding date upon which substantially the same kind of board and/or lodging was supplied by that person. Clause 4 appears to be the relevant provision in this case and if this paragraph does not operate to fix a rate for the service supplied to the defendant, then the company would be entitled to charge at the increased rate. Counsel for the company argued that this clause did not so operate because its operation was confined to those cases where a person had supplied board and/or lodging of some kind on the prescribed date, but of a character which was not substantially the same as that supplied at the date of the promulgation of the order. In my view, cl. 4 is not limited in its operation to persons who supplied board and lodging on the prescribed date. It applies to any person supplying board and lodging which corresponds with the description "not substantially the same kind as board and/or lodging supplied by that person on the prescribed date". I understand the clause to fix a maximum rate with respect to any board and lodging which is not substantially the same kind as any board or lodging supplied by that person on the prescribed date. In the result, therefore, I am of the opinion that cl. 4 did operate to fix a maximum rate for the board and lodging supplied to the plaintiff and that the company was not entitled to charge at a rate in excess of that prescribed.

Questions not dissimilar to those which arise in Boreham's Case, also arise in Bogle's Case and Clark's Case, and I find myself in general agreement with the reasons of my brother Fullagar which I had an opportunity of considering after setting out my own views on the questions which arise in Boreham's Case. In the circumstances, it is sufficient for me to say that I entirely agree that the questions asked in all three cases should be answered as proposed by Fullagar J.