PERMANENT TRUSTEE AUSTRALIA LIMITED v COMMISSIONER OF STATE REVENUE (VIC)

Judges:
Gleeson CJ
McHugh J
Gummow J
Kirby J
Hayne J
Callinan J
Heydon J

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2004] HCA 53

Judgment date: 12 November 2004

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Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ

This case stated by a Justice of the Court asks whether the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) (``the Mirror Taxes Act'') is ``invalid or ineffective'' to permit an assessment to stamp duty under the Stamps Act 1958 (Vic) (``the Stamps Act '') as a State taxing law which applies by reason of the Mirror Taxes Act in relation to ``Commonwealth Places''. ^[1] The Stamps Act was repealed by s 284 of the Duties Act 2000 (Vic) with effect from 1 July 2001. For present purposes, nothing turns on that. The reference here is to s 52(i) of the Constitution which states:

``The Parliament shall, subject to this Constitution , have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to:

• (i) the seat of government of the Commonwealth, and all places acquired by the Commonwealth for public purposes.''

(emphasis added)

2. The use in the case stated of the phrase ``invalid or ineffective '' reflects the distributive operation given the Mirror Taxes Act by s 6(3). This limits to the range of the power of the Parliament what otherwise would be the application pursuant to the Mirror Taxes Act of State taxing laws to places in States that are, at the relevant time, Commonwealth Places.

3. The validity of the Mirror Taxes Act was called into question in Paliflex Pty Ltd v Chief

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Commr of State Revenue (NSW) ^[2] 2003 ATC 4983 at 4986 [ 14]- [ 15]; (2003) 78 ALJR 87 at 90 [ 14]- [ 15], 100 [ 63]; 202 ALR 376 at 380, 394. and South Sydney City Council v Paliflex Pty Ltd , ^[3] (2003) 78 ALJR 101; 202 ALR 396. but the cases were decided on grounds which made it unnecessary to answer the present question.

Allders

4. The enactment of the Mirror Taxes Act was a sequel to the decision in Allders International Pty Ltd v Commr of State Revenue (Vic) . ^[4] 96 ATC 5135 ; (1996) 186 CLR 630. This Court delivered judgment in Allders on 14 November 1996. The case concerned an assessment to ad valorem duty under the Stamps Act of a lease of shop premises on land at Tullamarine which had been acquired by the Commonwealth in 1961 for use as an airport. Pursuant to the Federal Airports Corporation Act 1986 (Cth), the land was then held by that corporation for and on behalf of the Commonwealth. This Court held that s 52(i) of the Constitution denied any operation of the Stamps Act to charge the lease with stamp duty. It further held that the circumstance that the Stamps Act had general application and was not limited in operation to a Commonwealth place did not necessarily deny to the law the character of a law with respect to a Commonwealth place. In that regard, the earlier decision in Worthing v Rowell and Muston Pty Ltd ^[5] (1970) 123 CLR 89. was applied.

5. During the course of the hearing of the present matter, the Court refused an application by the respondent, the Commissioner of State Revenue (``the Commissioner''), to re-open Worthing , and thus Allders .

6. To a very large degree, the consequences of Worthing were resolved by Parliament, after consultation with and the agreement of the States, in the Commonwealth Places (Application of Laws) Act 1970 (Cth) (``the 1970 Act''). However, the general application provision in the 1970 Act was qualified by the statement in s 4(5) that this did not have effect ``so as to impose any tax''. Of s 4(5), Dawson J observed in Allders : ^[6] 96 ATC 5135 at 5143; (1996) 186 CLR 630 at 646. That Dawson J dissented as to the outcome in Allders is immaterial for present purposes.

``... The wording of the exception suggests that its purpose was to avoid offending s 55 of the Constitution which requires laws imposing taxation to deal only with the imposition of taxation, but it is sufficient to exclude the [ Stamps Act], which is clearly an Act imposing a tax, from being applied by the [ 1970 Act].''

7. In Allders , an application was made to re- open Worthing , but this was refused. ^[7] 96 ATC 5135 ; (1996) 186 CLR 630 at 635. Gaudron J said in Allders of the refusal to re-open Worthing and other decisions concerned with s 52(i) of the Constitution: ^[8] 96 ATC 5135 at 5151; (1996) 186 CLR 630 at 661-662.

``... That being so, s 52(i) must, in my view, be approached in this case on the basis that it is primarily a grant of legislative power and not, as I suggested in Svikart v Stewart ^[9] (1994) 181 CLR 548 at 577. , a provision which is primarily concerned with the exclusivity of powers found elsewhere in the Constitution.''

The consequences of Allders with respect to State taxation laws have, in turn, been dealt with by the legislation now under challenge, again after consultation with and the agreement of the States.

8. Section 17 of the Stamps Act charges upon dutiable instruments and for the use of the Crown in right of Victoria the duties specified in the Third Schedule, and s 17A deems the duty to be a debt due to the Crown and payable to the Commissioner. The present dispute should be approached on the footing that, were it not for the effective operation of the Mirror Taxes Act, the reasoning in Allders would produce the result that the Commissioner would fail in an assessment to stamp duty based solely upon the operation of the Stamps Act.

The facts

9. On 27 March 2001, the Commissioner made an assessment to stamp duty (identified as having been made under the Stamps Act, ``being a corresponding applied law pursuant to the [ Mirror Taxes Act]'') in respect of an instrument of lease identified in the case stated as ``the Development Agreement''. The instrument was assessed to duty in the sum of $762,583.20. The Development Agreement is dated 1 July 1998 and concerns the development of a hotel at Tullamarine Airport. Since 2 July 1997, this place, which is land registered under the provisions of the Transfer of Land Act 1958 (Vic), has been vested in the Commonwealth ^[10] By virtue of a declaration made by the Minister for Finance under s 11 of the Airports (Transitional) Act 1996 (Cth) and dated 1 July 1997. and leased by the Commonwealth to Australia Pacific Airports (Melbourne) Pty Ltd (``APAM'') for a period of 50 years on terms that the land be used as an airport. Other uses not inconsistent with use as an airport are permitted, but any sub-lease must be consistent with regulations made under the Airports Act 1996 (Cth).

10. The appellant (``Permanent'') and APAM are two of the three parties to the Development Agreement. Clause 5.2 of the Development Agreement contains an agreement between

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APAM and Permanent for entry into a lease to Permanent on completion of the development on terms attached as Sched G. Clause 2.1 of the Development Agreement states the intent that Permanent will procure Hilton International Co to conduct a four star hotel on the leased premises.

11. The reasons for decision given by the Commissioner for the assessment indicate that the assessment was made on the basis that the Development Agreement was an agreement for lease required by s 77 of the Stamps Act to be charged under the Third Schedule as if it were a lease. There is a disputed issue concerning the method of computation of the duty but that is not before this Court.

12. Permanent's objection to the assessment was, pursuant to s 33B of the Stamps Act, set down for hearing before the Supreme Court of Victoria. On 3 October 2003, this Court ordered that that part of the objection concerning the validity of the Mirror Taxes Act be removed into this Court pursuant to s 40 of the Judiciary Act 1903 (Cth). There followed the case stated for consideration of the Full Court.

The case stated

13. Question 1 asks whether the State legislation is invalid in so far as of its own force it purports to sustain the assessment of Permanent to duty in respect of the Development Agreement. In the light of the dismissal of the application to re-open Worthing and Allders , question 1 must be answered ``Yes''.

14. The critical question is question 2. This is in the following terms:

``If Yes to [ the above], is the [ Mirror Taxes Act] invalid or ineffective to permit the assessment of duty under the Assessment:

• (a) on the ground that it is a law imposing taxation and deals with:
  • (i) a subject matter or subject matters other than the imposition of taxation;
  • (ii) more than one subject of taxation,

  contrary to section 55 of the [ Constitution]?

• (b) on the ground that it impermissibly delegates the legislative power of the Commonwealth?
• (c) on the ground that it discriminates between States or parts of States contrary to section 51(ii) of the Constitution or an implied limitation in the Constitution to that effect?
• (d) on the ground that, by a law of trade, commerce or revenue, it gives a preference to one State or any part thereof over another State or any part thereof, contrary to section 99 of the Constitution?
• (e) otherwise?''

Paragraph (a) conceals a threshold question concerning the force of the phrase in s 52(i) ``subject to this Constitution'' and the subjection of the exclusive power conferred by s 52(i) to the requirements of s 55 respecting `` [ l]aws imposing taxation''.

15. Before turning to consider the varied issues raised by question 2, it is necessary to refer more closely to the provisions of the Mirror Taxes Act and inter-governmental arrangements made thereunder.

The Mirror Taxes Act

16. The central provision is s 6(2). This states:

``Subject to this Act, the excluded provisions of a State taxing law, as in force at any time before or after the commencement of this Act, apply, or are taken to have applied, according to their tenor, at that time, in relation to each place in the State that is or was a Commonwealth place at that time.''

The operation of s 6(2) is comprehended only by regard to a definitional chain. The phrase ``excluded provisions'' in relation to a State taxing law means (s 6(1)):

``provisions of that law to the extent that they are excluded by paragraph 52(i) of the Constitution.''

The phrase ``excluded by paragraph 52(i) of the Constitution'' means (s 3):

• ``inapplicable by reason only of the operation of section 52 of the Constitution in relation to Commonwealth Places.'' (emphasis added)

The force of the requirement of inapplicability by reason only of the operation of s 52 is readily apparent. Laws may be inapplicable for other constitutional reasons, for example, the exclusive federal legislative power with respect to customs and excise conferred by s 90, and the protection given by s 114 against the imposition by the States, without the

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consent of the Parliament of the Commonwealth, of tax on property of any kind belonging to the Commonwealth. In cases where one or other of these provisions of the Constitution also provided an invalidating cause, s 6(2) of the Mirror Taxes Act would not apply the State law to any Commonwealth place.

17. Section 6(2) applies the excluded provisions ``of a State taxing law''. That term is defined in s 3 as follows:

``State taxing law , in relation to a State, means the following, as in force from time to time:

• (a) a scheduled law of the State;
• (b) a State law that imposes tax and is prescribed by the regulations for the purposes of this paragraph;
• (c) any other State law of the State, to the extent that it is relevant to the operation of a law covered by paragraph (a) or (b).''

The scheduled State taxing laws in respect of Victoria include the Stamps Act. Paragraph (a) of the definition thus governs this case.

18. An applied law does not have effect in relation to amounts which have become due for payment before 6 October 1997 under that applied law (s 7). That is the date on which the public was notified by the federal Treasurer that legislation to the effect of the Mirror Taxes Act would be enacted. ^[11] Explanatory Memorandum to the Commonwealth Places (Mirror Tax) Bill 1998 and other Bills, at 31 (``the Explanatory Memorandum'').

19. Section 6(6) provides that that section, and thus the central provision in s 6(2), does not have effect in relation to a State unless there is in operation in relation to that State an arrangement under s 9. Section 9 empowers the Governor-General to make an arrangement with the Governor of a State in relation to the exercise or performance of a power, duty or function (not being a power, duty or function involving the exercise of judicial power) by an authority of the State under the applied laws of the State. Section 9(2) implements the operation of such an arrangement by stating:

``Where such an arrangement is in force, the power, duty or function may or must, as the case may be, be exercised or performed accordingly.''

20. By instrument dated 13 December 2000, ^[12] Commonwealth of Australia Gazette , GN50, 20 December 2000. there was made an arrangement between the Governor-General and the Governor of the State of Victoria, the former acting with the advice of the Federal Executive Council and the latter with the advice of the Premier of the State. The arrangement was in the following terms:

`` [ W]here, under a law of the State to which a part of the applied laws [ being State taxing laws applied under the Mirror Taxes Act] corresponds, an authority in relation to the State... may or must, as the case may be, exercise or perform a power, duty or function (not being a power, duty or function involving the exercise of judicial power), the corresponding power, duty or function under that part of the applied laws may or must, as the case may be, be exercised or performed by that authority.''

21. Further, a statute of Victoria, the Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), provides in s 7:

``Despite any State law, a State authority has any power, duty or function that the [ Mirror Taxes Act] authorises or requires the authority to exercise or perform.''

22. Section 6(4) of the Mirror Taxes Act stipulates that `` [ a]n applied law has effect subject to any modifications under section 8''. In turn, s 8(2) states:

``The Treasurer of a State may, by notice in writing, prescribe modifications of the applied laws of the State, other than modifications for the purpose of overcoming a difficulty that arises from the requirements of the Constitution.''

By Notice dated 23 January 2001, the Treasurer of the State of Victoria declared modifications to certain State laws, including the Stamps Act, with effect from the later of 6 October 1997 or the date of commencement of the provision to which the modification relates.

23. As a result of the modifications made to the Stamps Act, s 17(1) thereof is applied to the Development Agreement by charging the duty ``for the use of the Crown in right of the Commonwealth'', and s 17A is applied by deeming duty to be a debt due to the Crown in that right and payable to the Commissioner.

24. All amounts so received under the Stamps Act as an applied law must be credited to the Consolidated Revenue Fund as required by s 81 of the Constitution. Section 23(1) of the Mirror Taxes Act so provides. That section also appropriates that Fund for payments to a State of amounts so credited under an applied law of

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a State (s 23(4)). Thus, there is a significant interest of the States in upholding the validity of the Mirror Taxes Act.

25. Moreover, the appropriation made by s 23 is a standing rather than annual appropriation. In that respect, ``the Parliament forgoes its annually-exercised power over expenditure by government'', because `` [ s]tanding appropriations need not be included in annual appropriations''. ^[13] Brown v West (1990) 169 CLR 195 at 207 .

Stated case question 2(a) - ss 52(i) and 55 of the Constitution

26. We turn now to consider question 2 in the stated case, beginning with par (a), concerning the operation of s 55 of the Constitution. The threshold issue is whether s 55 has any application at all to a law made in exercise of the power conferred by s 52(i). The Commissioner, and the Attorney-General of the Commonwealth who intervened in support, submitted that s 55 has no such application.

27. The Explanatory Memorandum recited ^[14] at 7-8. the receipt of advice by the Government:

``that the constitutional limitations on laws imposing taxation, requiring laws imposing taxation to deal with no other matter, and requiring such laws to deal with one subject of taxation only (Constitution, section 55), do not apply to the Bill. As these principles do not usually restrict State drafting of State taxing laws, the task of adopting relevant State drafting by reference could have been made more difficult if those principles applied.''

28. Section 4 of the Mirror Taxes Act states:

``This Act has effect only to the extent that it is an exercise of the legislative powers of the Parliament under the following provisions of the Constitution:

• (a) paragraph 52(i);
• (b) section 73;
• (c) paragraph 77(iii);
• (d) paragraph 51(xxxix), so far as it relates to paragraph 52(i), section 73 or paragraph 77(iii).''

29. The reliance placed upon ss 73 and 77(iii), and in that regard s 51(xxxix), supports provisions of the Mirror Taxes Act such as s 10 which invests federal jurisdiction and restricts appellate access to this Court. It is unnecessary to canvass the question whether s 51(xxxix) aids the exercise of the exclusive legislative power conferred by s 52 of the Constitution.

30. The Mirror Taxes Act in its essential respects founds upon s 52 of the Constitution. That is designedly so. Reliance upon a head of power in s 51 would immediately attract the operation of s 55 and deprive the Commonwealth of the cover against s 55 which it asserts is afforded by the reasoning in Buchanan v The Commonwealth . ^[15] (1913) 16 CLR 315. To recognise this is not to gainsay the proposition that validity is a question not of intention but of power from whatever source derived. ^[16] Ex parte Walsh and Johnson; In re Yates (1925) 37 CLR 36 at 135 per Starke J; R v Hughes (2000) 18 ACLC 394 at 398 [ 15], 415 [ 112]; (2000) 202 CLR 535 at 548 [ 15], 581 [ 112] .

Buchanan

31. This was an action brought in this Court to recover moneys demanded colore officii and paid under protest to the Commonwealth. The moneys were paid for probate and succession duties assessed on assets in the Northern Territory of an estate of which the plaintiffs were the executors under a grant of probate in New South Wales. A reseal was required in the Territory before the assets there could be administered by the plaintiffs.

32. The Territory had been surrendered by the State of South Australia to and accepted by the Commonwealth within the meaning of s 122 of the Constitution. In the exercise of the legislative power conferred by s 122, s 7(1) of the Northern Territory Acceptance Act 1910 (Cth) (``the Acceptance Act'') specified that `` [ a]ll laws in force in the Northern Territory at the time of the acceptance shall continue in force, but may be altered or repealed by or under any law of the Commonwealth''. Further, s 5 of the Northern Territory (Administration) Act 1910 (Cth) (``the Administration Act'') provided that any law continued in force under s 7 of the Acceptance Act was to ``have effect in the Territory as if it were a law of the Territory''. In the generality of these application of laws provisions, this legislation foreshadowed the scheme later adopted with the 1970 Act to meet the exigencies not of s 122 but of s 52 of the Constitution.

33. Among the laws of South Australia so applied to the Territory in the fashion just described were the Succession Duties Act 1893 (SA) and the Administration and Probate Act 1891 (SA), the first imposing succession duty and the second probate duty. The submission of the plaintiffs in Buchanan was that there were thus at least two separate subjects of taxation dealt with by the Acceptance Act and the

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Administration Act, and the legislative power of the Parliament under s 122 had been subject to the requirement in s 55 that a law imposing taxation (as each of the federal statutes was) deal with one subject of taxation only.

34. That argument was rejected. Two reasoned judgments were delivered by Barton ACJ and Isaacs J; Gavan Duffy and Rich JJ concurred in the conclusion arrived at by the other Justices. ^[17] (1913) 16 CLR 315 at 335. The reasons given emphasised (i) the absence from the Parliament of any representation of the people of the Territories; ^[18] (1913) 16 CLR 315 at 327-328 per Barton ACJ. (ii) the design of s 55 as a protection for the Senate ``which represents the States as such''; <sup>[19]</sup> (1913) 16 CLR 315 at 328 per Barton ACJ; see also at 335 per Isaacs J. (iii) the ``taxation'' with which s 55 is concerned is that found in s 51(ii), ``the taxation of a Commonwealth whose component parts are the States''. <sup>[20]</sup> (1913) 16 CLR 315 at 330 per Barton ACJ; see also at 332-333 per Isaacs J. Isaacs J also considered at length but did not rule upon the further argument that, even if s 55 otherwise might apply to Territory laws, the effect of the surrender and acceptance process provided for in s 122 was that ``all municipal laws'' in force at the time of the surrender remained in force until negatived by the Commonwealth, and the South Australian taxing laws of 1891 and 1893 were such ``municipal laws''. ^[21] (1913) 16 CLR 315 at 332-334.

35. Things have changed since Buchanan was decided. Proposition (i) has not held good for many years, in particular since legislation providing for full representation of the Northern Territory and the Australian Capital Territory in each chamber of the Parliament was upheld in Western Australia v The Commonwealth ^[22] (1975) 134 CLR 201. and Queensland v The Commonwealth . ^[23] (1977) 139 CLR 585. Propositions (ii) and (iii) do not address the situation of Commonwealth Places. These, unlike territory surrendered under s 122, remain within the area of the respective States. ^[24] R v Phillips (1970) 125 CLR 93 at 100-101, 110-111, 112, 124, 131-132 ; Paliflex Pty Ltd v Chief Commr of State Revenue (NSW) 2003 ATC 4983 at 4991 [ 41]; (2003) 78 ALJR 87 at 95 [ 41]; 202 ALR 376 at 388 . Hence the interest of the States in achieving by dint of the Mirror Taxes Act the application of the Stamps Act in those places.

36. Thus, whatever may be the continuing strength of Buchanan respecting the relationship between s 122 and s 55, a matter not here in issue, Buchanan provides no binding authority respecting Commonwealth Places. Moreover, the text of the Constitution in terms subjects the exercise of the legislative power conferred by s 52 to the Constitution as a whole. As with s 51, the conferral of legislative power by s 52 is made ``subject to this Constitution''. Section 122 contains no such express statement. Once it be concluded, as it has been in Allders , that s 52(i) is a grant of legislative power not a statement of the exclusivity of powers found in s 51, such as the taxation power in s 51(ii), <sup>[25]</sup> 96 ATC 5135 at 5160-5161; (1996) 186 CLR 630 at 679-680. then the phrase ``subject to this Constitution'' aligns s 52(i) with the requirements of s 55.

37. It follows that, contrary to what was said in the Explanatory Memorandum, it was not permissible to draft the Mirror Taxes Act unconstrained by the requirements of s 55 of the Constitution. To those requirements we now turn.

The requirements of s 55 of the Constitution

38. In Osborne v The Commonwealth , ^[26] (1911) 12 CLR 321. where the validity of the Land Tax Act 1910 (Cth) and the Land Tax Assessment Act 1910 (Cth) was unsuccessfully challenged on grounds invoking s 55 of the Constitution, Higgins J made prescient observations. His Honour said: ^[27] (1911) 12 CLR 321 at 371-372.

``The course of a great part of the argument for the plaintiff must seem to any outsider rather grotesque. Learned counsel have taken the two Acts and have examined every nook and cranny with microscopic care, in order to find, if possible, some provision which has transgressed the Constitution in any particular, even the most insignificant, and then they have applied great industry and ingenuity to demonstrate that if such and such a provision be treated as invalid, the remainder of the Acts would be `substantially different' from what Parliament intended, and must be invalid also. It is not pretended that the impugned provisions affect the plaintiff; but if the plaintiff can show that the whole of the legislation is bad because of some provision which does not concern him, he will be free from obligation to pay the tax. Into such barren intellectual gymnastics we are forced in this case, and probably in cases to come.''

39. Section 55 states:

``Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws

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imposing duties of excise shall deal with duties of excise only.''

The section is to be read with the immediately preceding provisions of ss 53 and 54. These deal with proposed appropriation laws as well as with proposed tax laws. The need for legislative control of the former was a ``logical consequence'' of control of the latter. ^[28] Durell, The Principles and Practice of the System of Control over Parliamentary Grants , (1917) at 3. For the present case, it is important to read s 55 with those parts of s 53 reading:

``Proposed laws... imposing taxation, shall not originate in the Senate....

The Senate may not amend proposed laws imposing taxation...

The Senate may at any stage return to the House of Representatives any proposed law which the Senate may not amend, requesting, by message, the omission or amendment of any items or provisions therein....

Except as provided in this section, the Senate shall have equal power with the House of Representatives in respect of all proposed laws.''

40. The text of s 53 plainly may be used to assist in the construction of s 55. Thus, the only proposed law which is excepted from the Senate's power to amend is the Bill that purports to impose the tax, and it is only the Act that imposes the tax that is subject to the prohibition in the first part of s 55. ^[29] cf the remarks of Higgins J in FC of T v Munro (1926) 38 CLR 153 at 210 .

41. However, there is a significant difference between the two sections. The received opinion in this Court is expressed in the joint judgment in the Native Title Act Case : ^[30] Western Australia v The Commonwealth (1995) 183 CLR 373 at 482 .

``Section 53 is a procedural provision governing the intra-mural activities of the Parliament. The traditional view is that this Court does not interfere in those activities ^[31] s 57 apart; see Cormack v Cope (1974) 131 CLR 432 at 454 ; Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 184 . . That view was stated by Mason CJ, Deane, Toohey and Gaudron JJ in Northern Suburbs General Cemetery Reserve Trust v The Commonwealth of Australia ^[32] 93 ATC 4118 at 4127; (1993) 176 CLR 555 at 578. in reference to s 54 of the Constitution:

`a failure to comply with the dictates of a procedural provision, such as s 54, dealing with a ``bill'' or a ``proposed law'' is not contemporaneously justiciable and does not give rise to invalidity of the resulting Act when it has been passed by the two Houses of the Parliament and has received the royal assent.'

The traditional view accords both with the text of s 53, which speaks of `proposed laws' rather than `laws' ^[33] Osborne v The Commonwealth (1911) 12 CLR 321 at 336, 352, 355 . and with the intention manifested in the Convention Debates ^[34] Official Report of the National Australasian Convention Debates , (Adelaide), 13 April 1897 at 472-473. .''

42. On the other hand, as was noted in the Native Title Act Case , s 57 stands in a different position. This is so although s 57, in specifying the procedures for the resolution of differences between the two chambers of the Parliament with respect to a ``proposed law'', uses that same term as ss 53 and 54.

43. It was held in Victoria v The Commonwealth and Connor ^[35] (1975) 134 CLR 81. that the Petroleum and Minerals Authority Act 1973 (Cth) was not a valid law of the Commonwealth. The Bill for that statute was not a ``proposed law'' which could have been submitted to a joint sitting under the procedures of s 57 of the Constitution and as a result the Bill had not become a valid statute. Failure in the conditions precedent to the exercise of the power conferred by s 57 upon the Governor- General to dissolve both chambers simultaneously thus may tender a justiciable issue of the validity of the passage at a subsequent joint sitting of a ``proposed law'' whose passage was the subject of disagreement between the two chambers. Both Gibbs J ^[36] (1975) 134 CLR 81 at 161. and Mason J, ^[37] (1975) 134 CLR 81 at 184. who, with Barwick CJ and Stephen J, constituted the majority, expressly rejected the submission that the use of the expression ``proposed law'' in s 57 should lead to a similar conclusion in relation to that section to the conclusion that the phrase ``proposed laws'' in s 53 was directed only to the internal affairs of the Parliament.

44. Like s 55, s 54 uses the phrase ``shall deal only with'' but in respect of `` [ t]he proposed law which appropriates revenue or moneys for the ordinary annual services of the Government''. However, the terms of s 55 are directed to ``laws'' not to ``proposed laws''. The issue of compliance with s 55 may provide a matter arising under the Constitution or involving its interpretation within the meaning of s 76(i) of the Constitution. That is well settled (over the contrary opinion of Higgins J in Osborne ^[38] (1911) 12 CLR 321 at 373-374. Higgins J had noted the difference in the language of s 54 and s 55 but then asked `` [ w]hy is an Appropriation Act not invalid by reason of its substance if a taxation Act is invalid by reason of its substance?'' ) and not disputed. However, as things stood in 1951, Dixon J was able to speak in his judgment in Moore v The

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Commonwealth ^[39] (1951) 9 ATD 283 at 290; (1951) 82 CLR 547 at 569. of ``the hitherto ineffectual menaces of s 55''.

45. That was said with respect to a long line of cases. That had commenced even before the establishment of this Court. The enactment of the Customs Act 1901 (Cth) preceded that of the Customs Tariff Act 1902 (Cth). Part VIII of the former statute (``the Customs Act'') contained provisions for the computation and payment of duties, including s 153 which constituted duties Crown debts recoverable by court proceedings in the name of the Collector of Customs. <sup>[40]</sup> See Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 . The latter statute (``the Tariff Act'') stated that it imposed duties of customs in accordance with the Schedule (s 5), and that the Customs Act was ``incorporated'' and to be ``read as one'' with it (s 2). In Stephens v Abrahams (No 2) , ^[41] (1903) 29 VLR 229. the Full Court of the Victorian Supreme Court held that Pt VIII of the Customs Act was not a ``law imposing taxation'' within the meaning of s 55 of the Constitution. The result was the upholding of the conviction of the respondent under ss 234 and 236 of the Customs Act (which were located in Pt XIII) for having been unlawfully concerned in making false statements in a customs declaration.

46. In Stephens , the Full Court heard full arguments by Deakin and by Isaacs KC on the question whether, on the assumption that the first limb of s 55 did apply to Pt VIII, ss 234 and 236 were ``other matter'' which was ``of no effect'' or whether they were saved as within the description of laws dealing with the imposition of taxation. The Full Court did not rule on this question, but views were expressed upon it. Williams J said of ss 234 and 236: ^[42] (1903) 29 VLR 229 at 250.

``These sections cannot be said to be matter foreign to the imposition of taxation; they are parts of the machinery provided for the enforcement of the tax, and, if so, they may be held to be an almost essential part of an effective measure of taxation.''

Hood J was of the opinion that: ^[43] (1903) 29 VLR 229 at 255.

`` [ s 55] would only regulate the manner in which the legislation should be carried out, and I think it is not to be read so as to include any and every section that increases the orbit of taxation. Such a mode of reading it would include the [ Acts Interpretation Act 1901 (Cth)], and probably many others that I, for one, would never dream of calling taxing Acts.''

47. The line of cases continued in this Court with Osborne , ^[44] (1911) 12 CLR 321. and included FC of T v Munro ^[45] (1926) 38 CLR 153. and Cadbury-Fry-Pascall Pty Ltd v FC of T . ^[46] (1944) 7 ATD 471 ; (1944) 70 CLR 362. This Court continued to draw the distinction between laws imposing taxation and pecuniary and other obligations cast in terms of a penalty or even (as in Moore ) as ``additional taxation'' which were for the protection of the revenue or which provided ``legal machinery'' by which the obligation declared by the imposition of taxation was effectuated. That line of authority continued after Moore with FC of T v Clyne , ^[47] (1958) 11 ATD 428 ; (1958) 100 CLR 246. Re Dymond , ^[48] (1959) 12 ATD 1 ; (1959) 101 CLR 11. Collector of Customs (NSW) v Southern Shipping Co Ltd , ^[49] (1962) 107 CLR 279. and MacCormick v FC of T . ^[50] 84 ATC 4230 at 4239; (1983-1984) 158 CLR 622 at 644.

48. The legislation under challenge in these cases had been enacted by following what, in Moore , Dixon J called the ``tried and venerated procedure'' of framing a general statute (``an assessment Act'') and a statute dealing specifically with the imposition of liability (``a taxing Act''). ^[51] (1951) 9 ATD 283 at 290; (1951) 82 CLR 547 at 569.

49. In these cases, undoubtedly a tax was imposed by the taxing Act; the issue was whether the provisions in the relevant assessment Act imposed a further tax and did so in a statute dealing with a range of matters allegedly beyond the imposition of tax. These attacks all failed because of the ``protective'' character ascribed to the provisions of the assessment Act. Thus, it was not necessary to decide the issue, vital to the party contesting validity, that would arise if the assessment Act did contravene s 55, namely whether the ``machinery'' provisions which were relied upon by the revenue could be disregarded as ``other matter'' within the concluding words of the first sentence of s 55. ^[52] cf FC of T v Clyne (1958) 11 ATD 428 at 430-431, 431-432; (1957-1958) 100 CLR 246 at 260-261, 262-263 . This was the issue raised at the outset but unresolved in Stephens in 1903.

50. However, there is a second category of case. On two occasions, in Air Caledonie International v The Commonwealth ^[53] (1988) 165 CLR 462. and Australian Tape Manufacturers Association Ltd v The Commonwealth , ^[54] (1993) 176 CLR 480. statutes amending respectively the migration and copyright laws and which were not split between a tax Act and an assessment Act were held to impose taxation and to deal with ``other matter'' within the meaning of s 55 of the Constitution. The result of the application of s 55 was to deny effect to that ``other matter''. In particular, Air Caledonie ^[55] (1988) 165 CLR 462 at 471-472. established with respect to the relationship between the principal statute and

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the amending statute on the one hand, and s 55 on the other, that both the amending statute imposing taxation and the thus amended principal statute deal only with the imposition of taxation. However, attacks based on the first limb of s 55 failed with respect to the service charges and child maintenance payments recovery scheme respectively at stake in Airservices Australia v Canadian Airlines International Ltd ^[56] (2000) 202 CLR 133. and Luton v Lessels & Anor . ^[57] 2002 ATC 4311 ; (2002) 210 CLR 333.

The Mirror Taxes Act and s 55

51. The Mirror Taxes Act transverses these two classes of case. Undoubtedly the legislation is concerned with the imposition, assessment and collection of taxation by the Commonwealth. But, in apparent reliance upon a view taken of the relationship between s 52(i) and s 55 of the Constitution, and the significance for that purpose of Buchanan , there has been no splitting of the legislation into a tax Act and an assessment Act.

52. The result is that the scope of the Mirror Taxes Act is said to fall foul of s 55 in two respects. The first complaint (to reverse the order in which they appear in the constitutional text) is that the Mirror Taxes Act does not meet the requirement that it ``shall deal with one subject of taxation only''; the consequence is said to be that the whole of the statute is invalid by analogy with Mutual Pools and Staff Pty Limited & Anor v FC of T . <sup>[58]</sup> 92 ATC 4016 ; (1992) 173 CLR 450. This case was concerned with that portion of s 55 which requires that laws imposing duties of excise deal only with those duties. The second respect in which s 55 is said to operate is that the Mirror Taxes Act is a law ``imposing taxation'' but does not ``deal only with the imposition of taxation'', with the result that ``any provision therein dealing with any other matter shall be of no effect''.

53. The first ground of challenge fails. The applicable principles are those indicated by Dixon J in Resch v FC of T , ^[59] (1942) 6 ATD 203 at 219; (1941-1942) 66 CLR 198 at 223. subsequently applied in State Chamber of Commerce and Industry & Ors v The Commonwealth of Australia ^[60] The Second Fringe Benefits Tax Case 87 ATC 4745 at 4749; (1987) 163 CLR 329 at 344 . and, most recently, in Austin & Anor v Commonwealth of Australia . ^[61] 2003 ATC 4042 at 4082-4083 [ 190]- [ 192]; (2003) 215 CLR 185 at 272-273 [ 190]- [ 192].

54. It is unnecessary to repeat here what is there said. The Parliament clearly understood that the application of State taxation laws to Commonwealth Places was a single legislative initiative and the legislation had as its primary purpose the protection of State revenues following what would otherwise be the consequences of the decision in Allders . Looking at the subject-matter dealt with by the statute, it may fairly be regarded within the sense of the authorities as a unit rather than as a collection of distinct and separate matters.

The first limb of s 55

55. Greater difficulty arises with the objection based upon alleged failure to comply with the first limb of s 55. This task of construction requires regard to the place of s 55 in that part of the Constitution dealing with the relations between the two chambers of the Parliament. It often has been remarked that in this respect the Constitution represents a compromise without which federation could not have been achieved. ^[62] See, for example, Luton v Lessels & Anor 2002 ATC 4311 at 4313 [ 8]; (2002) 210 CLR 333 at 341 [ 8] .

56. Reference to the history of s 55 may be made, as established by Cole v Whitfield : ^[63] (1988) 165 CLR 360 at 385.

``not for the purpose of substituting for the meaning of the words used the scope and effect - if such could be established - which the founding fathers subjectively intended the section to have, but for the purpose of identifying the contemporary meaning of language used, the subject to which that language was directed and the nature and objectives of the movement towards federation from which the compact of the Constitution finally emerged.''

In considering the earlier decisions construing the first limb of s 55, it should be borne in mind that there then applied constraints upon interpretative technique which Cole v Whitfield was to remove. From such an examination as is now permitted, indeed required, several presently germane considerations appear.

57. First, the importance attached in the drafting of the Constitution to the restrictions imposed upon what otherwise was to be the equal power of the Senate with respect to all proposed laws ^[64] See Victoria v The Commonwealth and Connor (1975) 134 CLR 81 at 121, 143-144, 168, 185 . preceded that final and profound crisis in relations between the House of Lords and House of Commons respecting money Bills which was resolved by the Parliament Act 1911 (UK). But what the delegates to the Conventions that led to federation would have had well in mind was the turbulent relations concerning financial measures between the variously constructed colonial bicameral legislatures after the grants to the Australian colonies of responsible and representative government.

58. In 1893, it was said in the United Kingdom that, while `` [ i]n former times'' the

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ATC 5006

Commons had abused their right to grant supplies without interference from the Lords, by tacking to a Bill the Lords had no right to amend provisions to be accepted unconsidered or rejected with the supply measure, save for an instance in 1807, there was ``no recent occasion'' of irregular tacking. <sup>[65]</sup> Erskine May, A Treatise on the Law, Privileges, Proceedings and Usage of Parliament , 10th ed (1893) at 552-553. However, in his submissions in Stephens , <sup>[66]</sup> (1903) 29 VLR 229 at 234. Deakin referred to three cases of attempted ``tacking'' in Victoria between 1865 and 1877. ^[67] See also Todd, Parliamentary Government in the British Colonies , (1880) at 487-490; Jenks, The Government of Victoria (Australia) , (1891) at 256-258; McMinn, A Constitutional History of Australia , (1979) at 66-70; Twomey, The Constitution of New South Wales , (2004) at 572-573. Hence the force of the observation by Professor McMinn: ^[68] A Constitutional History of Australia , (1979) at 65.

``The various constitutions did not lay down firm and comprehensive rules on relations between the Houses: it was assumed that the colonial parliaments would follow the pattern of compromise popularly considered to be typical of the imperial Parliament. In fact such a pattern hardly existed; from 1832 to 1911 the British Constitution was in a state of highly unstable equilibrium, with the House of Lords occupying an essentially anomalous position. What happened in the colonies was that disputes between the Houses, very bitter disputes, became a recurrent theme. So when the House of Lords began its campaign of opposition to the Campbell-Bannerman government in 1906 it could almost be said to have been following the colonial pattern.''

59. Secondly, this state of political ferment had meant that, as Harrison Moore was to put it: ^[69] The Constitution of the Commonwealth of Australia , 2nd ed (1910) at 143.

``Australian experience has abundantly shown that no opinion upon financial powers is too wild to obtain some currency.''

Moreover, the response in the text of ss 53-55 of the Constitution was to insert terms which, as Moore said: ^[70] The Constitution of the Commonwealth of Australia , 2nd ed (1910) at 150.

``serve well enough to express the flexible ideas of political and popular thought, but are without legal precision.''

That last point became significant once it was accepted that, contrary to the intra-mural disputes respecting s 53, s 55 could give rise to justiciable controversies. Hood J was surely correct when in 1903 he described ^[71] Stephens v Abrahams (No 2) (1903) 29 VLR 229 at 255 . `` [ t]he subject-matter'' of s 55 as ``Parliamentary practice'' and `` [ t]he evils to be remedied'' as ``disputes between the Houses, leading possibly to what I may call `strikes'''. The difficulty with the text settled upon for s 55 was pinpointed by Mr Higgins when he spoke in committee at the Melbourne session in 1898. He said: ^[72] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2056-2057.

``The whole difficulty arises from the word 'imposition,' which may be said to involve a certain number of things.''

60. Thirdly, some qualification is required to the general proposition respecting s 55 which was stated as follows in Air Caledonie : ^[73] (1988) 165 CLR 462 at 471.

``An obvious purpose of the constitutional requirement that a law imposing taxation deal only with the imposition of taxation was to confine the impact of the limitations upon the Senate's powers with respect to proposed taxing laws to provisions actually dealing with the imposition of taxation, that is to say, to prevent `tacking'.''

``Tacking'' was said by Deakin to have: ^[74] Stephens v Abrahams (No 2) (1903) 29 VLR 229 at 235 arguendo .

``consisted invariably in the attempt to pass some foreign and usually very important measure by including it in some measure with regard to which the will of the people is believed to lie in a particular direction; and in the one legislative body seeking to take advantage of that to put the other in the position that it must either reject something which the people desire, or, if it accepts it, must accept also some other measure to which it has objections, and which it would reject if sent up as a separate measure.''

When s 55 is seen as directed to alleviating the mischief thereby indicated, a point made in the Convention Debates at Melbourne in 1898 by Mr RE O'Connor and Mr Kingston is of some force. This is the need for a construction of the first limb of s 55 that, while acknowledging the mischief against which it was directed, namely the abuses through ``tacking'' by the House of Representatives of its powers with respect to taxation, at the same time guards against abuse by the Senate of the protection given against tacking of non-taxation measures by assertion of a power in the Senate to frustrate the enactment of effective taxation laws. O'Connor said: ^[75] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2059.

``We all know from experience that the machinery of taxation, which involves its incidence, the exceptions to be made, and a number of matters of that kind, may be so altered as to cut down the collectable value of a tax by one-half. It might be that a machinery Bill would be so altered as to make the tax which was sought to be

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ATC 5007

imposed not worth collecting. If we want to hand over to the House of Representatives the sole power of dealing with the financial policy, as I think we do, we ought to see that they get it wholly, and that no one else is allowed to fritter it away.''

Kingston spoke more bluntly: ^[76] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2058.

``It occurs to me that to negative the power of amendment in the Senate with regard to the imposition of taxation, while giving them full power, if they so desire, of mutilating the machinery necessary for the collection of the taxation, would be to give them, by a side-wind, control over the policy of taxation of the Commonwealth, and that they ought not to possess.''

61. Fourthly, it follows that the narrower the meaning given the phrase ``shall deal only with the imposition of taxation'', the greater the scope for the Senate by amendment (not forbidden by s 53) of so-called machinery provisions to denude a taxing measure of its full efficacy.

62. Fifthly, what was meant by ``laws imposing taxation'' a century ago was informed by then current legislative practice. This varied. As to New South Wales, Mr Barton said that, in that colony: ^[77] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2056.

``as well as in other countries [ ,] [ b]ills providing purely for the amount and limit of the tax have been separated from measures which dealt with the assessment and collection, and in many cases very properly separated.''

On the other hand, in his argument in Stephens , Deakin made the point: ^[78] (1903) 29 VLR 229 at 237-238.

``For more than a century in England every new Act imposing a tax has included all the machinery to collect or otherwise connected with it. Take the Statute of 1901, 64 Vict, c 7, which imposes a new tax on coal. It not only includes that tax, but also contains in an appendix the provisions as to the exportation of coal, modifications of the Customs Act , the new tax, and a new procedure.''

63. More recently, in Re Dymond; Ex parte the Debtor Menzies J observed: ^[79] (1959) 12 ATD 1 at 7-8; (1959) 101 CLR 11 at 27-28.

``... [ A]s appears from Erskine May's Parliamentary Practice ^[80] 10th ed (1893) at 542. , the parliamentary convention, upon which ss 53 to 55 of the Constitution were unquestionably based, prevented the Lords from amending Bills which they received from the Commons dealing with aids and supplies, so as to alter, whether by increase or reduction, the amount of a rate or charge - its duration, mode of assessment, levy, collection, appropriation, or management; or the persons who pay, receive, manage, or control it; or the limits within which it is leviable.''

How, one might ask, is the mischief of ``tacking'', with which the first limb of s 55 is particularly concerned, involved at all by denying a power of amendment of provisions for the assessment and collection of revenue raised by the one legislative measure? It is that consideration which guides a construction of s 55 to deal with any ambiguity in the expression of political thought it contains.

64. The statements by O'Connor, Kingston and Barton which have been set out above were made in debate on a motion by Barton in committee that after the word ``imposition'', the words ``and collection'' be inserted in the first sentence of what by then was cl 55 of the 1897 draft Bill. In the form in which it was first adopted, in the 1891 draft Bill, cl 55(3) had stated: ^[81] Official Record of the Debates of the Australasian Federal Convention , (Sydney), 9 April 1891 at 954.

``Laws imposing taxation except Laws imposing duties of Customs on imports shall deal with one subject of taxation only.''

The words emphasised had been omitted from the 1897 draft Bill. It appears that Mr Isaacs, relying upon an opinion attributed to Sir Samuel Griffith, had questioned whether, as the clause now stood in the 1897 draft Bill, ``a law providing for the collection of taxation as well as the imposition would not be ultra vires ''. <sup>[82]</sup> Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2056 per Mr Barton. See also Twomey, The Constitution of New South Wales , (2004) at 553-554. The motion was lost. In understanding what happened, the speech of Mr Symon is significant. He spoke of the ``compromise of 1891'' and of the danger of reviving a discussion upon the relations between the House of Representatives and the Senate ^[83] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2062-2063. and continued: ^[84] Official Record of the Debates of the Australasian Federal Convention , (Melbourne), 8 March 1898 at 2063.

``If the words `laws imposing taxation,' and the subsequent words, `the imposition of taxation only,' cover machinery - and I am not prepared to say that they do not - then the object is accomplished, and we must submit. I do not wish to move any limitation on these words. If, on the other hand, they do not cover machinery, I say that this is not the time to re-open the discussion and to take away from the Senate the power it

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ATC 5008

would otherwise have of expressing an opinion as to the establishment of a new department in the Executive Government. That is a new attack on the powers of the Senate. It is an effort to reduce further the powers of the Senate in dealing with Bills.''

The result was to leave for the future an authoritative pronouncement as to the construction of s 55.

``Dealing with the imposition of taxation''

65. In the line of cases in this Court to which reference has been made, there were expressed differing opinions on the question of construction of the first limb of s 55. None was essential to the outcome in any of these decisions.

66. Isaacs J alone was of opinion that there was no distinction between ``imposing taxation'' and ``dealing with the imposition of taxation'' in s 55 so that a law providing machinery for assessment, levying, collection and recovery of tax was not a law dealing with the imposition of taxation. ^[85] FC of T v Munro (1926) 38 CLR 153 at 184-193 . That involved reading s 55 as if it stated ``laws imposing taxation shall only impose taxation''. On the issue of construction alone, the view of Isaacs J should not be accepted.

67. It may be noted that, in FC of T v Clyne , ^[86] (1958) 11 ATD 428 ; (1957-1958) 100 CLR 246. which was decided shortly before Re Dymond , Dixon CJ, with the agreement of McTiernan, Williams, Kitto and Taylor JJ, said that probably Isaacs J would not have gone so far as to regard as no part of the imposition of taxation within s 55: ^[87] (1958) 11 ATD 428 at 432; (1957-1958) 100 CLR 246 at 263.

``... any process for requiring provisional payment of the proportion of income as part of a scheme of taxation in which the burden or incidence of the tax, the source from which the burden should be borne, and the ultimate ascertainment of the tax finally payable formed a closely associated congeries of liability.''

In Re Dymond , Menzies J said ^[88] (1959) 12 ATD 1 at 7; (1958-1959) 101 CLR 11 at 27. that a contrary view to that of Isaacs J was part of the decision in Moore .

68. If the construction advanced by Isaacs J be rejected, the question then becomes one of the scope of the phrase ``dealing with'' the imposition of taxation. As to this, it was accepted by Dixon CJ, Fullagar J, Kitto J and Windeyer J in Re Dymond ^[89] (1959) 12 ATD 1 at 1, 3-4, 5, 8; (1958-1959) 101 CLR 11 at 17, 20-21, 23, 29. that: ^[90] (1959) 12 ATD 1 at 3; (1958-1959) 101 CLR 11 at 20-21.

`` [ an Act] would not be `dealing with' anything other than the imposition of taxation if it prescribed the persons who were to pay the tax and the classes of income in respect of which they were to be taxed. It may very well be that an Act imposing an income tax could, without offending against s 55, contain all or most of the provisions in fact contained in Pt III of the Income Tax Assessment Act [ 1936 (Cth)], which is headed `Liability to Taxation'. Such provisions do not impose taxation, but they deal with the imposition of taxation, because the specification of the persons who are to be liable to taxation and the definition of their liability is part of the denotation of the term `imposition of taxation'.''

The other view goes further and accepts that provisions for the assessment, collection and recovery of tax are provisions which deal with the imposition of taxation. That proposition, with which the above majority disagreed, was accepted by McTiernan J, Taylor J and Menzies J in Re Dymond . ^[91] (1959) 12 ATD 1 at 1, 5-6, 6-8; (1958-1959) 101 CLR 11 at 17, 23-25, 26-28. This conclusion follows from a construction of the words ``dealing with'' as allowing ``the insertion of any provision which is fairly relevant or incidental to the imposition of a tax on one subject of taxation'' and the inclusion ``in a taxing Act [ of] provisions incidental and auxiliary to the assessment and collection of the tax''. The former formulation is that of Higgins J in Osborne ^[92] (1911) 12 CLR 321 at 373. and the latter that of Starke J in Munro . ^[93] (1926) 38 CLR 153 at 215.

Conclusions respecting the first limb of s 55

69. These formulations by Higgins J and Starke J should be accepted. They are consistent with the evident purpose of s 55, supported by its history, of restraining abuse by the House of Representatives of its powers with respect to taxing measures by the tacking of other measures and so placing the Senate in the invidious position of which Deakin spoke in his argument in Stephens . ^[94] (1903) 29 VLR 229 at 235. ``Tacking'' is quite a different matter to the insertion in a taxing statute of provisions for the assessment, collection and recovery of that tax.

70. To accept these propositions means that a law containing added provisions of this nature is still a ``law imposing taxation'' to which there attaches the stipulation in s 53 of the Constitution denying to the Senate a power of amendment but enabling a return of Bills with a request, by message, for omission or amendment of any items or provisions therein.

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ATC 5009

71. However, the construction of the first limb of s 55 which should be accepted does not foreclose further observance of a practice or convention of splitting Bills between a taxing Act and an assessment Act. An assessment Act of the character of those in the numerous decisions of this Court discussed earlier in these reasons will not be a law imposing taxation with respect to which s 53 will restrict the powers of the Senate.

72. The Mirror Taxes Act is an example of a legislative purpose of the House of Representatives which could only be achieved with difficulty by the splitting of Bills. In these and other cases where the House of Representatives decides upon a like course, the law which imposes taxation may deal with the assessment, collection and recovery of taxation without falling foul of the first limb of s 55.

73. The provisions of the Mirror Taxes Act including the application of the Stamps Act in its modified form appear to answer the description of laws providing for the assessment, collection and recovery of taxation, and so to be valid. No detailed submission to the contrary effect was made. Were such a point to be taken, a further issue would arise. This would be whether the impugned provisions nevertheless answered the more general expressions used by Higgins J and Starke J as to the width of the term ``dealing with''. These questions do not presently arise and may be put to one side.

74. The result is there should be answered ``No'' the question in par (a)(i) of question 2 of the case stated, namely whether the Mirror Taxes Act is invalid or ineffective to permit the assessment of duty under the assessment on the ground that, contrary to s 55 of the Constitution, it is a law imposing taxation and deals with a subject-matter or subject-matters other than the imposition of taxation.

Question 2(b) - impermissible delegation

75. The appellant refers to the provision of s 6(4) of the Mirror Taxes Act that `` [ a]n applied law has effect subject to any modifications under section 8'' and to the provision in s 8(2) that the Treasurer of a State may by notice in writing prescribe modifications of the applied laws of the State in question, other than modifications for the purpose of overcoming a difficulty that arises from the requirements of the Constitution. As indicated earlier in these reasons, it was pursuant to these provisions that by Notice dated 23 January 2001 the Treasurer of the State of Victoria declared modifications to the Stamps Act which, among other things, produced the result that duty is charged for the use of the Crown in right of the Commonwealth and the duty is a debt due to the Crown in that right.

76. The appellant complains that s 8 confers upon the Executive Governments of the States a delegated law-making power in contradiction of the conferral by s 52(i) of power on the Parliament of the Commonwealth which is exclusive of that of the State Parliaments.

77. However, the Parliament of the Commonwealth retains the power to repeal or amend at any time any provision of the Mirror Taxes Act. That being so, there is no ``abdication'' of the legislative power of the Parliament. ^[95] Cobb & Co Ltd v Kropp [ 1967] 1 AC 141 at 156-157 ; Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 at 263-265 ; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 484 ; Gould v Brown (1998) 16 ACLC 316 at 382-383 [ 284]- [ 287]; (1998) 193 CLR 346 at 485-487 [ 284]- [ 287] ; Byrnes v The Queen (1999) 199 CLR 1 at 10-11 [ 4] ; R v Hughes (2000) 18 ACLCL 394 at 412 [ 94]; (2000) 202 CLR 535 at 574-575 [ 94] .

78. Further, s 8(3) of the Mirror Taxes Act must be taken into account in assessing the status of the modifications made to the Stamps Act by the Notice dated 23 January 2001. Section 8(3) provides that this Notice was a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901 (Cth), ^[96] Section 46A is repealed with effect from 1 January 2005 by Sched 1, Item 6 of the Legislative Instruments (Transitional Provisions and Consequential Amendments) Act 2003 (Cth) but nothing turns on this for present purposes. thereby attracting powers of disallowance exercisable by each of the House of Representatives and the Senate. The submissions respecting impermissible delegation should be rejected.

Question 2(c) - s 51(ii) of the Constitution and discrimination

79. Section 51(ii) confers a power upon the Parliament of the Commonwealth to make laws with respect to:

``taxation; but so as not to discriminate between States or parts of States.''

It was held in Allders both that s 52(i) included a power to make a law imposing taxation, providing the law was otherwise one with respect to Commonwealth places and, further, that such a law was not subject to the prohibition against discrimination in s 51(ii). ^[97] 96 ATC 5135 at 5151-5152; (1996) 186 CLR 630 at 662, 678-680. The refusal of leave to re-open Allders has the consequence that the argument the appellant presents respecting s 51(ii) must fail at the threshold.

80. Question 2(c) also refers to ``an applied limitation in the Constitution to that effect''. However, no argument was presented or developed under this head independently of reliance upon s 51(ii) of the Constitution.

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ATC 5010

Question 2(d) - s 99 of the Constitution

81. Does the Mirror Taxes Act give a preference of the kind prohibited by s 99? This provides:

``The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.''

82. In The Tasmanian Dam Case , ^[98] The Commonwealth v Tasmania (1983) 158 CLR 1 at 153 . Mason J said of s 99 that with ss 98, 100, 101 and 102 it was one of a group of sections dealing with laws with respect to trade and commerce, and continued: ^[99] (1983) 158 CLR 1 at 153-154.

``In this context the concept of laws with respect to trade and commerce signifies laws made, or perhaps capable of being made, under ss 51(i) and 98 for that is the relevant power conferred on the Parliament to make laws with respect to trade and commerce. The prohibitions are naturally directed to laws which may be made in the exercise of that power, with the addition in the case of s 99 of revenue laws because the exercise of the taxation power might otherwise result in the giving of a preference to a State or to part of a State.''

83. The first step in the submissions by the appellant respecting s 99 is that, in its aspect concerned with laws or regulations of ``revenue'', the prohibition in s 99 is not limited to laws supported by s 51(ii) of the Constitution. That submission should be accepted.

84. The application of s 99 to a law supported by s 51(ii) of the Constitution was considered in FC of T v Clyne ^[100] (1958) 11 ATD 428 ; (1957-1958) 100 CLR 246. but with no suggestion that the prohibition in s 99 was limited to laws supported by s 51(ii). The significance of the choice of the word ``revenue'' in s 99 is indicated as follows by Quick and Garran: ^[101] The Annotated Constitution of the Australian Commonwealth , (1901) at 877.

`` [ T]he use of the wider word 'revenue' extends the prohibition to all revenues other than those arising out of taxation, and prevents any preference being given by the Commonwealth in respect of any revenue charges whatsoever; such as fees for postal, telegraphic, and telephonic services, or rates on railways of the Commonwealth.''

That being so, and given the presence in s 52 of the expression ``subject to this Constitution'', there is no reason to restrict s 99 in such a fashion as would deny to the Mirror Taxes Act the character of a law of ``revenue'' by reason of its source in s 52(i) rather than s 51(ii) of the Constitution.

85. The second submission by the appellant on this head of argument concerns the existence and nature of the prohibited preference. The appellant accepts that there would be no infringement of s 99 by the imposition by federal law of a stamp duty which applied to all Commonwealth Places whatever their location, even though the result could be that within the one State different rates would apply depending on the situation of a locality inside or outside a Commonwealth place in that State. What the appellant does assert is that the Mirror Taxes Act has an effect of preferring one State over another State because different rates of taxation and exemptions from taxation apply depending solely on whether the relevant Commonwealth place is in one State rather than another. The rates of taxation and, indeed, the types of taxes that are imposed by federal law differ from State to State.

86. These submissions should not be accepted. Several points should be made. First, this is not the occasion to seek to disentangle the reasoning in all the disparate authorities in the first 50 years of the Court which concern s 99 in its operation upon ``any law or regulation of trade, commerce...''.

87. Secondly, the critical phrase in s 99, ``give preference... over'', expresses, as Dixon J put it in Elliott v The Commonwealth , <sup>[102]</sup> (1936) 54 CLR 657 at 682. ``a conception necessarily indefinite''. As a consequence, in a given case, much will depend upon the level of abstraction at which debate enters upon the particular issue. Hence the statement by Latham CJ in Elliott ^[103] (1936) 54 CLR 657 at 670. that the words ``give preference to A over B'' are not to be construed as meaning ``make a distinction or differentiation between A and B''. Elliott itself held, by majority, ^[104] Latham CJ, Rich, Starke and McTiernan JJ; Dixon and Evatt JJ dissenting. that the specification by the regulations challenged by the plaintiff of ports in some States only where unlicensed persons were not to be engaged as seamen did not give preference to any State or part thereof over another State or part thereof.

88. Thirdly, in Elliott , Latham CJ (one of the majority) remarked ^[105] (1936) 54 CLR 657 at 668. that, while preference necessarily involves discrimination or lack of uniformity, the latter does not necessarily involve the former. In the same case, Dixon J (one of the minority) expressed the same idea, saying: ^[106] (1936) 54 CLR 657 at 683.

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ATC 5011

``To give preference to one State over another State discrimination or differentiation is necessary. Without discrimination between States or parts of respective States, it is difficult to see how one could be given preference over the other. But I agree that it does not follow that every discrimination between States is a preference of one over the other. The expressions are not identical in meaning. More nearly, if not exactly, the same in meaning, is the expression `discrimination against.'''

Later, speaking of the term ``discrimination'' in s 117 of the Constitution, Gaudron J declared in Street v Queensland Bar Association : ^[107] (1989) 168 CLR 461 at 570-571.

``Although in its primary sense `discrimination' refers to the process of differentiating between persons or things possessing different properties, in legal usage it signifies the process by which different treatment is accorded to persons or things by reference to considerations which are irrelevant to the object to be attained. The primary sense of the word is `discrimination between'; the legal sense is `discrimination against'.''

89. This notion of discrimination as manifested in the text and interpretation of the Constitution was further considered in Austin v Commonwealth . ^[108] 2003 ATC 4042 ; (2003) 215 CLR 185. There, Gaudron, Gummow and Hayne JJ observed, with reference to recent authority: ^[109] 2003 ATC 4042 at 4069 [ 118]; (2003) 215 CLR 185 at 247 [ 118].

``... The essence of the notion of discrimination is said to lie in the unequal treatment of equals or the equal treatment of those who are not equals ^[110] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 240 ; Castlemaine Tooheys Ltd v South Australia (1990) 169 CLR 436 at 480 ; Cameron v The Queen (2002) 209 CLR 339 at 343-344 [ 15] . , where the differential treatment and unequal outcome is not the product of a distinction which is appropriate and adapted to the attainment of a proper objective ^[111] Street v Queensland Bar Association (1989) 168 CLR 461 at 510-511, 548, 571-573, 582 ; Cameron v The Queen (2002) 209 CLR 339 at 343-344 [ 15] . .''

90. In Elliott itself, some anticipation of this reasoning may be seen in the judgments of Rich J and Starke J (both members of the majority). Rich J said ^[112] (1936) 54 CLR 657 at 678. that the imposition of a licensing system at a particular port was conditioned upon a view of the necessity of executive action to maintain order and regularity at particular localities where those conditions did not exist or were imperilled. Starke J declared: ^[113] (1936) 54 CLR 657 at 680.

``Special legislation may be required for some localities and special rules for various occupations. Such discriminations are often desirable, but they are by no means preferences prohibited by s 99. A licensing system applied to some ports in Australia and not to others is but an illustration of this kind of discrimination. In some ports the conditions may be such as to require some local regulation of labour whilst in others regulation may be wholly unnecessary. But this is not a preference of one locality over another, or of one State or part of a State over another: it is a regulation required for the circumstances of particular ports and the labour conditions of those ports.''

91. Where then in the Mirror Taxes Act is there to be found the necessary element of discrimination between one State or any part thereof and another State or any part thereof? The scheme of the Mirror Taxes Act is to treat as relevantly of the same character the whole of the geographic area of each State, including those portions which are Commonwealth Places; the taxation laws applying in the Commonwealth Places are assimilated with those laws in the surrounding State. The scheme of the Mirror Taxes Act may produce differences in revenue outcomes between States, but that mirrors the differences that exist between the different taxation regimes from State to State. The differential treatment and unequal outcome that is involved here is the product of distinctions that are appropriate and adapted to a proper objective. There is no benefit or advantage enjoyed in or in relation to a Commonwealth place that is not shared by the remainder of the State in which it is located.

92. The nature of the power of modification conferred by s 8 of the Mirror Taxes Act is a significant pointer in the direction of the conclusions just stated. Modifications may be made for the purpose of enabling an applied law to operate so that the combined tax liability of a taxpayer under the applied law and the corresponding State taxing law is ``as nearly as possible the same as the taxpayer's liability would be under the corresponding State taxing law alone if the Commonwealth Places in the State were not Commonwealth Places'' (s 8(4)).

93. The appellant resisted these conclusions by reliance in particular upon Cameron v DFC of T . ^[114] (1923) 32 CLR 68. In that case, the valuation placed by regulations made under the Income Tax Assessment Act 1915 (Cth) upon livestock differed according to the particular State in which the livestock was found and regardless of

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ATC 5012

any other circumstances. The effect was held to discriminate between States or parts of States within the meaning of s 51(ii) of the Constitution. The appellant submits that, as with the regulations under challenge in Cameron , the criterion which gives rise to differential treatment here is location of the proposed hotel at Tullamarine Airport.

94. That involves several oversimplifications. The application of the Mirror Taxes Act produces the same revenue outcome as if the site were elsewhere in the State of Victoria. It is true that if the site were a Commonwealth place in another State the Mirror Taxes Act could produce a result differing from that obtained at Tullarmarine Airport. However, this would be a product of the assimilation of the other Commonwealth place to the situation of other localities in the other State in question. The differential outcome would reflect the policy expressed and implemented by s 8(4) of the Mirror Taxes Act. Even if all Commonwealth Places, whatever their State location, are to be considered as relevantly ``equal'', their differential treatment to assimilate them in this way is a proper objective in the sense of the authorities.

95. The result is that there is no infringement of the prohibition in s 99 of the Constitution.

96. In argument reference was made to Morgan v The Commonwealth . ^[115] (1947) 74 CLR 421. There the Court held that the references in ss 99, 100 and 102 of the Constitution to any law or regulation of trade or commerce must be read as restricted to laws that could be made under the power conferred by s 51(i). ^[116] (1947) 74 CLR 421 at 455, 458. The correctness of Morgan was challenged but not fully resolved in The Tasmanian Dam Case . ^[117] The Commonwealth v Tasmania (1983) 158 CLR 1 at 153-154, 248-249, 251 . The present case concerns a law or regulation of ``revenue'' not of trade or commerce. Morgan may be put to one side.

Remaining questions

97. Question 2(e) asks whether the Mirror Taxes Act is ``otherwise'' invalid or ineffective. It is inappropriate to answer that question in the absence of specific submissions directed to any particular further invaliding cause.

98. Question 3(a) fixes upon the Notice under s 8(2) given by the Treasurer of the State of Victoria on 23 January 2001. The appellant repeats here the submissions earlier considered in dealing with the ground asserting impermissible delegation of legislative power. Question 3(a) should be answered to the same effect, that is to say, in the negative.

Orders

99. Question 1 should be answered, ``Yes''. Paragraphs (a), (b), (c) and (d) of question 2 should be answered, ``No''. It is inappropriate to answer question 2(e). Question 3(a) should be answered, ``No''. It is unnecessary to answer question 3(b). Question 4 asks who should pay the costs of the stated case and of the hearing of the stated case before this Court. That should be answered, ``Permanent Trustee Australia Limited''.

100. The issues raised by the case stated were co-extensive with that part of the cause removed into this Court, namely the constitutional grounds of objection taken in the pending proceeding in the Supreme Court of Victoria. It will be for a single Justice to deal with any remaining questions of costs in this Court and to remit the cause to the Supreme Court of Victoria for its consideration of the remaining issues.