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HIGH COURT OF AUSTRALIA

Airservices Australia v Canadian Airlines International Ltd

[1999] HCA 62

Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne, Callinan JJ

14-15 April, 3 May, 2 December - Canberra

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Hayne J.   508  The facts and circumstances giving rise to the present appeals are set out in the judgments of other members of the court. There are 2 central issues in the appeals. The first is whether the determination of charges payable to the Civil Aviation Authority (the Authority) for the period commencing on 1 July 1991 (the Determination) was valid. The second is whether the legislative provisions giving the Authority a statutory lien over the aircraft operated by Compass Airlines Pty Ltd (Compass) (and which the respondents leased to Compass) are valid. It is convenient to examine the issues in that order.

The validity of the Determination

  509  I agree with Gaudron J (substantially for the reasons given by her Honour) that the preferable construction of s 67 of the Civil Aviation Act 1988 (Cth) (the CA Act 1988) is that it imposed 2 limitations on the power of the Authority to determine charges:

   first, that the amount or rate of a charge be "reasonably related to the expenses incurred or to be incurred by the Authority in relation to the matters to which the charge relates" ; and

   second, that the amount or rate of a charge should not be such as to amount to taxation.

I also agree with her Honour that the Determination did not infringe either of these requirements.

  510  In considering the first of these limitations it is important to recognise, as Gaudron J points out, that "' [m]atters ' is a word of complete generality" ^[1] and that "[t]he notion of ' reasonable relationship ' , as postulated by s 67 of the CA Act 1988, is as indeterminate as is that section ' s reference to ' matters to which the charge relates '" . ^[2] The respondents contended, in effect, that "reasonably related to" meant more than simply "having a discernible logical connection with" . They contended that, in its context, the phrase meant either "not greater than" or "not substantially different from" . Further, they contended that the comparison required was a comparison with expenses incurred or to be incurred by the Authority in providing each particular service to each particular user. Thus the respondents contended that s 67 required that "the amount or rate of a charge" be not greater than or not substantially different from the expenses incurred or to be incurred by the Authority in providing the particular service to the particular user.

  511  I do not accept this construction of s 67 . For the reasons given by Gaudron J, I agree with her Honour that the relationship required by the section was not a relationship between a charge (or rate of a charge) and the cost of a particular service, but a relationship between a charge and the expenses incurred or to be incurred with respect to the provision generally of the services and facilities to which the charge related. I would add some further observations to the reasons which Gaudron J gives for this conclusion.

  512  First, it is not possible to draw some precise accounting comparison between a rate of a charge and the expenses incurred in providing a particular service to a particular user. Such a comparison could be made only by first converting the rate of charge to the money sum that is to be charged to the user. But the CA Act 1988 speaks of comparing the amount or rate of a charge with expenses. That is, it contemplates a comparison between a rate and an amount identified as expenses incurred or to be incurred. A comparison of that kind does not readily invite any precise accounting dissection and calculation of the sums that are to be compared. Rather, it invites qualitative comparisons of broad equivalence between global receipts and expenditures.

  513  Secondly, if the inquiry is to focus on the particular occasion for charge, how are future expenses ( "expenses … to be incurred by the Authority" ) to be taken into account? Assuming that future expenses are capable of estimation, acceptance of the respondents' argument would mean that no use could be made of such estimates in deciding the amount of expenses properly allocated to a particular occasion for charge. The future expenses could never be said to relate, in the manner contended for by the respondents, to the "actual" expenses incurred in providing a service. The reference to "expenses … to be incurred" suggests, then, that the inquiry is not confined to the particular occasion for charge and is not directed to ascertaining the "actual" expenses incurred in providing the particular service.

  514  Thirdly, if the inquiry is of the kind asserted by the respondents, how is account to be taken of the statutory requirements that the Authority make a reasonable return on assets, ^[3] pay a reasonable dividend ^[4] and maintain a reasonable level of reserves? ^[5] Payment of a dividend might be said to be an expense in that there is an outflow of money, but I doubt that the Authority ' s making a return on assets or retaining sufficient funds to maintain reserves could be described as expenses.

  515  Finally, if it were to be necessary to ascertain the cost to the Authority of providing each particular service to each particular user, how is that costing to be done? How, for example, is the Authority ' s overhead to be allocated? No doubt some allocation of overhead and system - wide expenses could be made, but any such allocation would very likely be based, in part, on more or less arbitrary assumptions and would very likely require great administrative effort and cost. It is to be doubted that the statute required it.

  516  For the reasons given by Gaudron J, I also agree that the Determination did not "amount to taxation" and that none of the other attacks on its validity made by the respondents should succeed. It follows that the Determination was valid.

The statutory lien

  517  There can be no doubt that the effect of the CA Act 1988 ' s provisions dealing with the imposition of a statutory lien over aircraft was to provide for the acquisition by the Authority of an interest in property which it did not previously have. But the guarantee of just terms that is contained in s 51(xxxi) of the Constitution is not automatically engaged by the fact that a law provides for an acquisition of property. To engage that guarantee, the law in question must be characterised as a law with respect to that compound conception "acquisition - on - just - terms" . ^[6] It is the power to make that kind of law which is abstracted from the content of some of the other heads of power.

  518  As was said by 6 members of the court in Nintendo Co Ltd v Centronics Systems Pty Ltd: ^[7]

   

The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property for the purposes of s 51 of the Constitution. ^[8]

  519  The charges which may be satisfied by sale of an aircraft under these provisions of the CA Act 1988 may not have been (and were not, in these cases) incurred by the owner of the aircraft. Thus the security interest, for the creation of which the CA Act 1988 provides, attaches in this case to the property of one person to satisfy the debt of another. That fact might suggest that the law providing for creation of the security interest is not concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity. It is necessary to recall, however, that the lien is a lien over the aircraft which was used in ways that gave rise to the imposition of the charge; it is not a lien over any other property of the owner of the aircraft. That being so, for the reasons given by Gummow J, the statutory lien provisions are not properly characterised as a law with respect to the acquisition of property on just terms from any person for any purpose in respect of which the Parliament has power to make laws. Rather, they are to be characterised as a law with respect to trade and commerce with other countries and among the States.

  520  Each of the appeals should be allowed and orders made as proposed by Gleeson CJ and Kirby J.