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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Barwick C.J.: The plaintiff is engaged in commercial transport. In the course of its business it operates motor vehicles registered by the State of New South Wales as ``interstate vehicles'' restricted to use in interstate transport operations.

The plaintiff seeks declarations, in substance, that the State may not lawfully demand the payment of stamp duty in respect of the issue of the certificates of registration of such vehicles: that is to say, that sec. 84G of the Stamp Duties Act , 1920 as amended (N.S.W.) (the Act) cannot validly apply to the issue of such certificates. The plaintiff claims in this respect the protection of sec. 92 of the Australian Constitution.

The question in the case is whether the exaction of stamp duty upon the issue of a certificate of registration of an ``interstate vehicle'' is a relevant burden on the plaintiff's interstate transport operations, themselves admittedly a part of trade, commerce and intercourse between the States within the operations of sec. 92.

The basic principles by the application of which this matter is to be resolved may be briefly and categorically stated.

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ATC 4200

Transport for reward across State lines is part of that trade, commerce and intercourse which is constitutionally declared to be absolutely free:
Australian National Airways Pty. Ltd. v. The Commonwealth (1945) 71 C.L.R. 29 . That freedom is invaded if that activity is inhibited or burdened by any act of any legislature or of any executive. Essential to the activity of interstate transportation is the use of the roads which lead to the crossing of State lines. A tax, as distinct from a recompense for services rendered or provided, exacted in connection with the registration of such vehicles so that they may be so used is such a burden:
Hughes & Vale Pty. Ltd. & Anor. v. The State of New South Wales & Ors. (No. 2) (1955) 93 C.L.R. 127 .

Interstate transportation is to be free of such burdens. That trade and commerce has been deliberately placed in what might be described as a privileged position. It is not to be relatively free, no more burdened than comparable intrastate activities: but absolutely free. Thus, as it has long been decided, sec. 92 cannot be limited to protection against discriminating burdens.

It is the operation of a statue, including a statute imposing taxation, which is the determinant of there being or not being a relevant burden, not the subject matter of the statute. The operation of the statute includes all it relevantly does, but remote and merely consequential results or effects of the operation of the statute are not to be regarded as within that operation.

Here, there is no question that the amount of duty chargeable under sec. 84G of the Act is a tax. No considerations such as found favour with a majority of Justices in support of the road tax in Hughes & Vale Pty. Ltd. v. The State of New South Wales & Ors. (No. 2) and
Armstrong & Ors. v. The State of Victoria & Ors. (No. 2) (1957) 99 C.L.R. 28 , are involved in this case. The impost of sec. 84G is for the purpose of raising revenue. It is not related to any consequence upon the roads of their use by motor vehicles.

Again, it is clear in this case that the use of the subject vehicles will be exclusively in the course of interstate transport. Indeed, the registration of the vehicles confines them to such use. Also, it is beyond question that the vehicles may not be so used without being registered under the Motor Traffic Act , 1909 as amended (N.S.W.).

The vehicle is registered in the records of the Commissioner of Motor Transport: sec. 12(1), Motor Traffic Act . The Commissioner may issue a certificate of registration and a label to be affixed to the vehicle denoting its registration. Application for the registration of the vehicle must be made. A fee charged on registration to cover the administrative cost of registration perhaps may not amount to a tax on the use of the vehicle: but, as I have said, a tax exacted on registration of the vehicle is a relevant burden.

The stamp duty is payable by the person in whose name a motor vehicle is registered for use on the roads: that means, in this case, by the plaintiff in respect of its vehicles used exclusively in the course of interstate trade, commerce and intercourse.

Although sec. 84G requires the amount of the duty to be sent to the Commissioner for Road Transport along with the application for registration of the vehicle, the duty on the issue of the certificate becomes a debt due to the State Crown and is recoverable in the courts from the person in whose name the certificate or registration is issued.

According to the text of sec. 84G and the second schedule to the Act, the tax is payable on the issue of the certificate of registration. It has been pointed out that there is no statutory obligation on the person in whose name a vehicle is registered to possess a certificate of registration. It is also said that the person in whose name the vehicle is registered is neither required to apply for such a certificate nor to accept it when issued. So much for the purpose of argument may be granted. But, having registered the vehicle, the Commissioner may issue such a certificate. Thus, without any act on the part of the person to whom the certificate may be issued, other than an application to register the vehicle, the tax becomes payable by him: it is exigible ``on the issue of the certificate''. The Commissioner controls the issue.

The certificate, when issued, is not an instrument of title to the vehicle, nor does the statute make its contents evidence in any relevant respect.

Transportation between the States of goods and people, but perhaps particularly of goods, is of the utmost concern to all States. This is particularly so in a country as widespread as Australia with noticeable diversity of available resources. Such transportation is essential if States are to be able to obtain those things

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ATC 4201

which they do not have or do not produce and to be able to market their produce, primary and manufactured. It goes without saying that the cost of transportation is basic to the ultimate cost of the goods carried, such cost thus being a significant factor in the promotion or discouragement, as the case may be, of the trade in the goods carried. Imposts placed on transport necessarily snowball in the costing process. They are not finally paid by the transport operator but by the consumer of the goods. It is thus of the utmost importance to all States that no imposts be placed directly or indirectly on interstate transport. In that regard at least, that form of trade, commerce and intercourse, as I have indicated, must be absolutely free.

The submission of the defendant is that the tax is no more than a stamp duty, a duty upon an instrument, and that any effect its payment has upon the operation of the plaintiff's vehicles in interstate commerce is remote and merely consequential. In other words, that a burden upon interstate trade and commerce is not within the operation of the Act.

But it seems to me to be undeniable that an interstate transport operator cannot use his vehicles on the roads of New South Wales in the course of interstate trade and commerce without having paid the stamp duty exigible on registration of the vehicles for use on those roads: it is intended by the Act that it be paid by the person who by registration of the vehicle obtains the right to use it on the roads. As I have already mentioned, the fee payable on registration or renewal of the registration of a vehicle, calculated as specified in sec. 3(4) of the Motor Car Act , 1951 (Vic.) was held to be a tax and inapplicable to vehicles used exclusively in interstate trade and commerce. That fee was payable on registration and renewal. The stamp duty here is payable on registration, i.e. on the certificate issued on registration and relating exclusively to the registration.

Something was sought to be made of the fact that the duty under sec. 84G was only payable upon the issue of a certificate of registration on an initial registration in the name of the applicant for registration and not on the renewal of that registration. But there is no substance in the suggestion. There is no rule that interstate transport may be taxed once but not annually or repetitively. If the right conclusion is that payment of the duty is a relevant burden, it cannot matter that it has to be paid once only.

Though in this case it will appear that I think the section itself operates to impose a burden on interstate trade and commerce, it is as well to bear in mind the words of Sir Isaac Isaacs in
The Commonwealth & Anor. and The Commonwealth Oil Refineries Ltd. v. The State of South Australia & Anor. (1926) 38 C.L.R. 408 at p. 423 . ``The prohibitions of sec. 90 and 92 of the Constitution may be transgressed not merely by a direct and avowed contravention. They are transgressed also by a statute - whatever its ultimate purpose may be, and however its provisions are disguised by verbiage or characterization, or by numerous and varied operations lengthening the connective chain, or by otherwise paying titular homage to the supreme law of the Constitution - if it operates in the end by its own force so as to do substantially the same thing as a direct contravention would do, either in attaining a forbidden result or in using forbidden means. The relevant constitutional prohibitions include both means and results. It is no justification for using forbidden means that permissible results are sought, nor for securing forbidden results that lawful means are employed.'' The application of these remarks is perhaps nowhere so salutary as in relation to commercial interstate transportation.

Section 84G provides that the stamp duty shall be paid by the person in whose name the certificate of registration is issued: that person is the person who applies to register the vehicle. A person who registers a vehicle exclusively for use in interstate trade and commerce is included in those by whom the Act requires the duty to be paid. That the plaintiff and those in the transport industry in a like case should have to pay the duty as part of the process of registering their interstate vehicles so that they may lawfully be used on the roads in the course of interstate trade and commerce is, in my opinion, no mere consequence of the imposition of the duty. It is within the intended operation of the section. The burden of its payment falls approximately and not remotely upon the plaintiff in its capacity as a registrant of an ``interstate vehicle''. The case is quite unlike that of manufacture dealt with in
Grannall v. Marrickville Margarine Pty. Ltd. (1955) 93 C.L.R. 55 . Its payment is not a mere antecedent to the inception of interstate trade:
The Queen v. Anderson ; exparte Ipec-Air Pty. Ltd. (1965) 113 C.L.R. 177 .

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ATC 4202

It was submitted by the plaintiff that, because the amount of the duty was to be sent with the application for registration, the payment of the duty was made a pre-condition to the registration. I doubt this interpretation of the relevant statutory provision. It seems to me that the Commissioner would be bound to register the vehicle, though the amount of the duty did not accompany the application for registration. Perhaps he might withhold the certificate of registration. But, in any event, upon its issue at his own instance, the duty would be recoverable.

However, if the payment of the duty were a pre-condition of registration, the conclusion that the payment of the duty was a burden upon interstate transport would, in my opinion, be unarguably patent. But, though the payment be not such a pre-condition, it is none the less, as I have indicated, an inadmissible burden on interstate trade and commerce because within the operation of the Act.

In my opinion, sec. 84G, in so far as it includes certificates of registration of interstate vehicles, places directly and not remotely a burden on the interstate commercial transportation of the plaintiff. Accordingly, the section cannot validly operate to require the plaintiff to pay the duty in respect of the issue of certificates of registration of ``interstate vehicles''. Declarations to give effect to this conclusion ought, in my opinion, to be made.