Finemores Transport Pty. Limited v. The State of New South Wales & Ors.

Judges: Barwick CJ
Stephen J
Mason J
Jacobs J
Murphy J

Aickin J

Court:
Full High Court of Australia

Judgment date: Judgment handed down 16 May 1978.

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Aickin J.: The relevant legislation is set out in the judgment of the Chief Justice and I do not repeat it here. I agree in the conclusion reached by the Chief Justice and with the substance of his reasons for concluding that the legislation cannot validly operate so as to require the plaintiff to pay the duty in question in respect of vehicles to be used exclusively in inter-State trade commerce or intercourse. I wish to add only some observations on the authorities.

In my opinion the invalidity of the relevant legislation in so far as it applies to vehicles used in inter-State trade commerce and intercourse is concluded by prior decisions of this Court. There are three decisions which are material.

The first is
Hughes and Vale Pty. Ltd. v. The State of New South Wales (No. 1) (1954) 93 C.L.R. 1 (P.C.) (`` Hughes and Vale (No. 1) ''). It established two main points, the first of which was that the imposition of a ton/mile tax on vehicle and freight was invalid in so far as it applied to inter-State trade, not-withstanding that the tax was uniform in its application to all motor transport. The second point was that a discretionary licensing system applying to all persons operating commercial vehicles was held to be contrary to sec. 92 in so far as it applied to those operating in or in the course of inter-State trade.

The second case is Hughes and Vale Pty. Ltd. v. The State of New South Wales (No. 2) (1955) 93 C.L.R. 127 (`` Hughes and Vale (No. 2) '') which dealt with the amended New South Wales legislation, namely the State Transport (Co-ordination) Act , 1931-1954 and two of its

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provisions. Section 12 of that Act imposed a licensing system which enabled the Commissioner to refuse a licence on a number of very generally expressed grounds and empowered him to impose conditions relating to a wide variety of matters. That provision was held to be contrary to sec. 92 in so far as it applied to vehicles engaged in inter-State trade. Section 18 required that every such licence was to be subject to a condition that the holder paid to the Commissioner what was described as a ``reasonable charge'' for the use of roads at rates to be fixed by the Commissioner at a figure not exceeding that recommended by a committee, and that he and the committee were to have regard to a number of stated matters. The charge payable was not to exceed the charge payable in respect of similar vehicles engaged in intra-State trade over the same routes and in the same circumstances. That charge was also held to be invalid. The Motor Vehicles Taxation Management Act , 1949-1951 (N.S.W.) read with the Motor Vehicles (Taxation) Act , 1951 (N.S.W.) provided for the imposition of a tax on motor vehicles at the time of application for registration and at the time of each renewal thereof. That tax was based on the unladen weight of the vehicle and it was provided that vehicles powered by diesel fuel were to be taxed at double the ordinary rate. It was held by the Court that sec. 18 of the State Transport (Co-ordination) Act , 1931-1954 was invalid and that the Motor Vehicles Taxation Management Act , 1949-1951 could not validly apply in respect of vehicles used exclusively for the purposes of inter-State trade commerce or intercourse. The majority of the Court however held that it was possible for the States to impose a fair and reasonable charge for the use of roads by vehicles engaged in inter-State trade commerce and intercourse, but that the impost referred to did not answer that description.

The tax in the present case precisely answers the description given by Fullagar J. to the tax on registration held invalid in Hughes and Vale (No. 2) at p. 214:

``It may well be that there is no constitutional objection to a provision requiring the registration of motor vehicles, including motor vehicles which are originally registered in other States and enter New South Wales from other States. Again, it may well be that the requirement of registration will not be invalidated by the mere fact that a uniform fee is made payable on registration: all States require payment of a fee on registration, and, unless some affirmative reason appeared for regarding it as a real burden or impediment on inter-State trade, the exaction of a fee as a mere incident of registration may be said not to offend against sec. 92: cf. Willard v. Rawson . But the exaction imposed by the Management Act and the Taxation Act cannot be regarded as a mere incident of registration regarded as an object in itself. What is imposed by those Acts is a real and very substantial tax on motor vehicles. The levying of a pecuniary impost is the end in view, and the impost is made payable on registration only because that is a convenient means of ensuring its collection. When we look at the actual operation of the legislation in relation to commerce, we cannot, I think, avoid saying that it does impose a real and direct burden on the carrying on of commerce in a particular way. And, if that is so, it cannot, consistently with sec. 92, operate in respect of the carrying on of inter-State commerce.''

The fact that that tax was imposed on registration and renewal and that the tax now in question is imposed on registration and transfer of registration is a trifling and immaterial difference. Moreover the present tax is not distinguishable from the tax dealt with in
Armstrong v. The State of Victoria (No. 2) (1957) 99 C.L.R. 28 (`` Armstrong (No. 2) '') which dealt with sec. 6, especially subsec. (4), of the Motor Car Act , 1951 (Vic.). The words used by Dixon C.J. at p. 60 are directly applicable to the present tax:

``It appears to me that on a proper scrutiny of Pt. II of the Motor Car Acts , 1951-1956 (Vict.) and the second schedule it must be seen that no room exists for the grounds upon which it has been sought to reconcile with sec. 92 the imposition upon vehicles exclusively engaged in inter-State commerce of the rates contained in sub-para. (b) of para. B of the schedule. (1) The exaction cannot be regarded simply as a fee contributing to the cost of registration a service in the interest of motor car owners and drivers and others so that it is nothing but an incident or adjunct of the traffic. (2) It cannot be treated as another contribution to the maintenance of the

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highways compensatory for the use made of them. (3) It cannot be justified as a tax upon the ownership or possession of a chattel considered independently of the use of the chattel in the carriage of persons or goods, including the inter-State carriage of persons or goods. (4) It cannot be treated as involving no appreciable burden upon the possession of a motor vehicle as a means of inter-State carriage and movement.

The truth is that the owner of a motor vehicle unregistered elsewhere is prohibited from driving it upon a Victorian highway in the course of inter-State commerce unless, in order to obtain registration, he pays an annual tax involving an appreciable burden, a tax which is heavier if he desires to carry passengers or goods or journey in the course of trade and increases with the size of his vehicle, that is to say with its carrying capacity. It is thus a tax the incidence and quantification of which is bound up with inter-State trade and commerce when it is applied to vehicles exclusively engaged therein.''

The fact that that tax was an annual charge is again an immaterial difference for it cannot matter that the burden is imposed once only as a necessary condition of the use of the vehicle at all and not again until the vehicle changes hands. That decision again demonstrates that a burden on inter-State trade is no less a burden because it is non-discriminatory in character. To the same effect as Armstrong (No. 2) are cases dealing with similar registration provisions in South Australia:
Nilson v. The State of South Australia (1955) 93 C.L.R. 292 ; Pioneer Tourist Coaches Pty. Ltd. v. The State of South Australia (1955) 93 C.L.R. 307.

There is nothing in the present case which enables reliance to be placed on that part of the majority's decision in Hughes and Vale (No. 2) which indicates that a genuine charge for the use of the road or roads may in an appropriate case fall outside the operation of sec. 92. Armstrong (No. 2) provides an example of such a charge which was held to be valid as not being in conflict with sec. 92 but an examination of the facts in that case shows how remote it is from the present and that no reliance can be placed upon it in support of the validity of the provisions now in question.

I am therefore of opinion that the plaintiff should succeed in this action and that the appropriate declarations as to invalidity should be made.

ORDER:

Declaration that sec. 84G of the Stamp Duties Act , 1920 (as amended) of the State of New South Wales is inapplicable to the plaintiff in respect of vehicles used or intended to be used exclusively in the course of or for the purposes of inter-State trade or commerce and that the duty imposed by the said sec. 84G cannot be and has not been validly levied on any Certificate of Registration or any renewal thereof issued pursuant to the provisions of the Motor Traffic Act , 1909 (as amended), of the said State in respect of any vehicle of the plaintiff so used or intended to be so used.

Order that the defendants repay to the plaintiff all amounts paid by it by way of ad valorem stamp duty in respect of Certificates of Registration and renewals thereof issued pursuant to the said Motor Traffic Act to the plaintiff in respect of motor vehicles used in or intended to be used solely in the course of or for the purposes of inter-State trade.

Order that the defendants pay the costs of the plaintiff of this application.