THE BUTTER-FAT LEVY.

Stratford Evening Post, Volume XXXI, Issue 77, 28 October 1916, Page 3

THE BUTTER-FAT LEVY.

A TEST CASE. Per Press Wellington, October 27. 'Before the Fitll Court to-day acase was bro.ught, by way of a . summons, under the Declaratory Judgments Act to test the validity of the Order-in-Couudl made under Section ' f . txf the , Customs Act, 1913, and. Section 2JA)f the Regulation of Trade and Commerce Act, purporting to prohibit-the; export of butter and cheese. ’ .^ Plaintiffs were the Taratahi Dairy -Co., Ltd., of, Carterton, and the Mangorei Co-operative Dairy Factory,Co., Ltd., New Plymouth. The defendant was the Attorney-General. . ’ f Chief Justice (Sir Robert Stout), Justices Edwards nlitV Chapman' were on the bench; j\JV M. Myer^appeared for plaintiffs., and the Solicitor-Gene-ral, Mr w. Salmond, for the do fondant. . ,T'n outlining the object of the proceedings, Mr Myers said that the Ordev-iu-Council did not impose prohibition in the, largest : sense, but did impose a / number of restrictions, the principal of which was that no butler or cheese could ho exported unless the exporter paid a charge or tax of |d per lb on bnttei'Jat used in the factory. It did not matter whether butter or cheese so made from the but-ter-fat was exported or consumed in New Zealand, and-jho manufacturer might have two or three factories, some engaged in making butterj or cheese for. export, and some for -purely .b'jnUs consumption, yet be had to pay the tax just the same. Justice Edwards: ' j‘Hc gets it

back again.” Mr Myers: “No, Sir; That is really just what he does not do.” Continuing, counsel said that it was not necessary for a person ,pr • pompany, although holding an export license, to export an ounce of butter. One person might manufacture for home consumption,..'uncli qlujire in- ;the distribution, and a nmii wha miumfue•tured for expert might ri'6t' geU%VAIv one sixpence of fhe distribution that was made amongst those selling butter in New Zealand. e The Chief Justice “Who is the licensing authority?” Mr Myers:—“Mr Robert Trigg a, (mo of the Public Service Commission crs.” ’ J ’ The Chief Justice: ,“And \yh.ojo.tvus the money? It seems to me. that itbecomes Crown money.” Mr Myers contended that if the money went to the Consolidated Fund it could not be paid out in the''way 'in which it was. Continuing, Mr Myers pointed opt 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 ho does riot get an extra gain.” Mr Myers; “Ho gets liis loss from the other man who sells not an ounce ! in New Zealand. He gets back not only Ins' own ;)d, hut possibly something more, and people who exportget nothing atf all.”

Justice Chapman: “I suppose we

may fake it that it was an assumption of the Government that unless some such regulation were made manufacturers would send it home.” Mr Myers: “1 suppose so. Sir, hut it is, quite fallacious.” The Chief Justice: “Mon who partially export and partially sell locally get back a proportion of the charge imnosed,”

Mr Myers cited the case /of a manufacturer t who might export ninotenths of his output and sell onetenth locally. The Chief Justice:—‘‘Hie may be the gainer by the extra price obtiUhed for exported butter.”

Mr Myei.s. fhftt only a- very small ( ,rrtpoi'iidii of the butter made 'Lt Nq\v . Zealand'was consumed in the /tilln try. The exporter might get more for his butter than he would ill New Zealand, but ho might get less, as the expert market was a fluctuating one. The exporter took the risk. The Chief Justice: “T do not think we are to go into’ the ethics of the matter. The whole question seems to he, is the Order-iu-CmiUcii J authorised by any statute in Nt'w Zealand?"

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

Mr Myers: ‘‘l do not think this is'a license fee,” Mr Myers suggested that what blight have been done was that* it 'ccu'tatir proportion of the output from each -factory might have been imfik hi' New Zkiland. Ho went on to refer to the fact that the tax was also imposed on a • manufacturer of cheese who did not get anything, hack, but who still had to pay hi/ijd .per lb. The Chief Justice: “If there is proved to be power to make a levy, is there power to distribute money which seems to me to he Crown •funds ?”/

Mr Myers referred to the expressed desire some little time ago of the manufacturers, of l)u|ter for local consumption to | the price, as they found they were making less profit than the expoker. Thou followed the Board of Trade report and the fixing ,of a- maximum,.price. The Govoruor-iii-Co uncil, he contended, had no power to fix a limit to the prices obtained/ Ijv'-the exporter, but only to fix the maximum price for local consumption. The charge, lie added, pewas both an export "duty and excise duty, and the Governor was really limiting the maximum price the exporter was getting.

The’Chief Justice; “Hg is only saying, ‘lf you export, von must pay i'd par lb.’ ”

Mr Myers quoted authorities in support of the 'contention that the charge was a tax, and that the Gov-ernor-in-Council had no ixnver to impose taxation which could not be imposed without the 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 the charge could bo levied, there was no limit to what might he done. Exporters of meat, wool, and hemp might be told “You must pay

so ranch per bale or per carcase to go into the fund to be paid to the manufacturers of butter who are selling it locally, and who are not getting the greater gain of the exporter.”

For the Crown, Mr Salmond called attention to the llillnfillse jWwolS which had been entrusted to the Executive Government during tile present national • emergency. These powers were Conferred partly by common law, but had been largely added to by,'special legislation. At the- present time the situation was simply that wo were practically living under it despotic Government. Stfiliitcs passed during war time were to ho treated as emergency statutes, and must ho viewed in a broad judicial spirit, having in view the welfare of the State. It would not he ft service to the state to restrict the functions of tlio Government in shell a time as the present. The restrictions should not be read into a statute for which there was no substantial foundation. The extraordinary ■powers of the Government were now being exercised in all parts of the Empire. The Government was in a positiop not only til tax 'goods, hilt commandeer them. It could, if it liked, take all'the butter and cheese

for nothing. The Chief Justice: That is not

taxing.” Mr Salmond: “It is ,worse than taxing.” The British Government in the exercise of its eotllmon law prerogative had taken possession of an acropiarie altfl o ‘ikselt'khfc owner did not slc(.4|ftr the' cblnperisatio ! offered, the Cfi'diH 1 ffifind f ihat4ie : was' entitled to nothing '■while the Royal prerogative la'Mctl!' “SuYely the Governor could go tht? length of levying a charge on the butter, trade. The Chief Justice: The Governor does not holt? a Royal prerogative; that is hold in England. Counsel quoted numerous cases in .which the Royal prerogative had been exercised, and quoted from judgments to show that ordinary constitutional methods could under the war regulations override any Act on the Statute Book. The Chief Justice: Surely you don’t suggest that.” Mr Salmond: “Certainly.” Tlio Chief Justice: “Can the Government override a Constitutional Act?”

Mr Salmond: “1 mean within the scope ol reguhitmg powers set for til ior the 'pui-jlfises of/var, Most extensive fta'd ’been exercised, by the Att'dkioymkn-aij " ami Hie Hoyt ernmeik had bk'Vi l ;aV ! edrchxl Uncontrolled use of millions‘of money in connection with, the war.” ! T he Chief Justice; “Section 51 Of the Constitutional Actjis still law, and there is Uo power in tile Parliament °1 New Zealand to cancel it.” Jbc Chief Justice pointed out that there was a delegation, of the Uovernor’s authority to an outside -body which decided what the particular charge should he. Such delegation had not hitherto been‘upheld. i Mr Salmond contended that no tax was levied. Tlie essence of a tax was an obligation. This was not ah obligation, it was a condition pure and simple'. No one could be sued for the charge. It was no more' a tax than a charge made by a shop-keeper of his goods, ft was a price to bo paid for a license. It was true that the condition was such as was provided by the Act/ One condition of a-tn r x was that it must go into the public revenue, but this money was not treated as

i even no; it wont into a special trust fund.

Tire Chief Justice: “It is Crown money and part of it can he taken for payment of Crown officers.” Mr Salmond said only the expenses of administration of that trust were lo be taken. The essence of the matter was not Government control of the fund, but a sensible device to •qualisc the profits of all concerned. It was simply a regulation of trade and commerce, having regard to conditions created by tlio war.

The Eli ham Argus says that the" member for Egmont (Mr C. A. Wiik uson) has received e telegram from* Mr G. J. Anderson, member for Ma-

ta,,l ‘B> stating that twenty dairy companies in his district have requested him to actively opoose the butter-fat levy imposed, bv the Govoimuent. Ho suggested that joint action be taken by the Taranaki representatives in the direction of prevailing upon the Government to .make the loss a charge upon the consolidated fund. Mr ilkiiison replied, stating that as a tost case was pending, it would be better to a whit the resiflt before taking any further “cos.