PRICE OF BUTTER.

Hawke's Bay Tribune, Volume VI, Issue 268, 28 October 1916, Page 2

PRICE OF BUTTER.

THE ; "d LEVY

TESTING THE VALIDITY OF ORDER-IN-COUNCIL.

Wellington. Oct. 27. Before the Full Court to-day a case was brought by way 7 of summons under the Declaration of Judgments ■ Act to test the validity 7 of the . • Order-in-Council made under section I 19 of the Customs Act, 1913, and i section 24 of the Regulation of Trade and Commerce Act purporting to prohibit the export of butter and I cheese. The plaintiffs were the Taratahi Dairy Co.. Ltd., of Carterton, and the Mangarei Co-op. Dairy Co., New Plymouth, and the defendant the Attorney-General. The Chief Justice (Sir Robert Stout), Justices Edwards and Chapman were on the bench. Mr. M. Myers appeared for the plaintiffs and the Solicitor-General (Mr. J. W. , Salmond) for the defendant. In outlining the object of the proI ceedings, Mr. Myers said the Order-in-Counc(l did not impose prohibition in the largest sense, but did impose a number of restrictions, the principal of which was that no butter or cheese could be exported unless the exporter paid a charge or tax of i‘d per pound on butter fat used in the factory. It did not matter whether butter or cheese so made from butter fat was exported or consumed in New Zealand, and a manufacturer might have two or three factories, some engaged in making butter or cheese for export and some for purely home consumption Yet he had to pay the tax just the same.

Mr. Justice Edwards: He gets it back again. Mr. Myers: No, sir, that is really just what he does not do. Continuing, counsel said it was not necessary for a person or company 7, although holding an export license, to export an ounce of butter. One person might manufacture for home consumption and share in the distribution and the man who manufactured for export might not get back one sixpence. Distributing was made amongst those selling butter in New Zealand.

The Chief Justice: Who is the licensing authority i Mr. Myers: Mr. Robert Triggs, one of the Public Service Commissioners.

The Chief Justice: And who owns the money I It seems to me that it becomes Crown money. * Mr. Myers contended that >f the money went to the Consolidated Fund it could not be paid out in the way in which it was.

Continuing, Mr. Myers pointed out that some manufacturers sold only in New Zealand and some exported all their output. The first man made a loss because the maximum price was fixed in New Zealand.

The Chief Justice: Hardly a loss. Perhaps he does not get extra gain. Mr. Myers: He estimates his loss from the other man who sells not an ounce in New Zealand. He gets back not only his own Jd but possibly something more, and people who export get nothing at all. Mr. Justice Chapman: I suppose we may take it that it was the assumption of the Government that unless some such regulation were made manufacturers would not sell tbeir butter here but would send it home.

Myers : I suppose so, sir, but it is quite fallacious. The Chief Justice: Men who partially export and partially sell locally get back a portion of the charge imposed. Mr. Myers cited the case of a manufacturer who might export nine-tenths of his out output and sell one-tenth locallv.

The Chief Justice: He may be a gainer by the extra price' obtained for the exported butter. Mr. Myers said that only a very small proportion of butter made in New Zealand was consumed in the country. An exporter might get more for his butter than he would in New Zealand, but he might get less as the export market was a fluctuating one. The exporter took a risk.

The Chief Justice: I do not think we are to go into the ethics of the matter. The whole question seems be: Is the Order-in-Council authorised by an statute in New Zealand i

Mr. Myers. If there is power to impose a charge or tax, not for charges of the Government, but to take money out of the pockets of A and put it into the pockets of B ? Mr. Justice Chapman: Can you call a license fee a tax 1

Mr. Myers: I do not think this is a license fee. Mr. Myers suggested that what might have been done was that a certain portion of output from each factory might have been kept in New Zealand. He went on to refer tu the fact that the tax was also imposed on manufacturers of cheese who did not get anything back, but who still had to pay his |d per lb. The Chief Justice: If there is proved to be power to make the levy is there power to distribute

money which seems to we to be Crown funds ? Mr. Myers referred to the expressed desire some little time ago of iminufflcturers of butter for local consumption to increase the price as the'y found they were making less profit than exporters. They followed the Board of Trade report and the fixing of the maximum price. The* Governor-in-Couucil. he contended, had no poweY to fix the limit to prices obtained by the exporter, but only to fix the maximum price for local consumption. The charge, he added, was both an export duty and an excise duty, and the Governor was really limiting the maximum price the exporter was getting. . ' The Chief Justice: He is only saying, “If you export you must pay fd per lb.” . . Mr. Myers quoted authorities in support of bis contention that the charge was a tax and that the Governor-in-Couneil had no power to impose taxation which could not be imposed without express direction of the legislature. If the Order-in-Council were held to be valid, where, he asked, was the matter going to end. If a charge could be levied there was no limit to what might be done. Exporters of meat, wool and hemp might be told, “You must pay 7 so much per bale or per carcase to g’o into a fund to be paid io manufacturers of butter who are selling it locally, and who are not getting the greater gain of the exporter.” THE CASE FOR THE CROWN. Opening the case for the Crown, Mr. Salmond called attention to the immense powers which had been entrusted to the executive of the Government during the present national emergency. These powers were conferred partly 7 by common law but had been largely added to by special legislation. At the present time the situation was simply we were practically living under a despotic Government. Statutes passed during war time were tj be treated as emergency statutes, and must be viewed in a bioad, judicial spirit. Having a view’ the welfare of the State it would not be a service to the State to restrict the funcions of the Government in such time as the present. Restrictions should not be read in a statute for which there was no substantial foundation. Extraordinary powers of government were now being exercised in all parts of the Empire. The Government was in a position not only to tax goods, but to commandeer them. It could, if it liked, take all butter and cheese for nothing.

The Chief Justice: That is not taxing. Mr. Salmond: It is worse than taxing. The British Government, in exercise of its common law prerogative, had taken possession of aeroplanes and when owners did not accept the comptnsation offered, the court found they were entitled to nothing. While Royal prerogative lasted, surely the Governor could go the length of levying a charge on the butter trad®. The Chief Justice: The Governor does not hold the Roy r al prerogative ; that is held in England. Counsel quoted numerous cases in which the Roy r al prerogative had been exercised and he quoted from judgments to show that ordinarily constitutional methods could be fortsaken in time of war. He submitted that the executive could, under the, war. regulations, override any Act on the statute book. The Chief Justice: Surely you don’t suggest that. Mr. Salmond : Certainly. Thy Chief Justice: Can the Government override a constitutional Act!

Mr. Salmond : I mean within scope of regulating powers set forth for purposes of war. Most extensive powers had been exercised Jay the Attorney-General, and the Government had been accorded uncontrolled use of millions of money in connection with the war.

The Chief Justice: Section 54 of the Constitutional Act is still law, and there is no power in force in New Zealand to cancel it.

The Chief Justice pointed out that there was a delegation of the Governor’s authority to an outside body which decided what a particular charge should be. Such delegation had not hitherto been upheld. Mr. Salmond contended no tax was levied. The essence of a tax was obligation. This was not an obligation, it was a condition pure and simple. No one could be sued for a charge. It was no more a tax than a charge made by a shopkeeper for his goods. It was for his good, ic the price to.be paid for the* license, it was a true condition such as was provided by the Act. One condition of tax was that it must go into the public revenue, but this money’ was not treated as revenue, it went into a special trust fund.

The Chief Justice: It is Crown money, and part of it can be taken for payment of Crown officers. Mr. Salmond : Only expenses of administration of that trust were t/j be taken. The essence of the matter was not Government control of the fund, but a sensible device to equalise profits of all concerned. It v.as simply a regulation of trade and commerce having regard to conditions created by 7 the war.