RAINSONG HOLDINGS PTY LIMITED v AUSTRALIAN CAPITAL TERRITORY & ANOR

Judges: Mason CJ
Brennan J
Deane J

Dawson J
Toohey J
Gaudron J
McHugh J

Court:
Full High Court

Judgment date: Judgment handed down 7 December 1993

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Dawson J

These proceedings were heard concurrently with those in Capital Duplicators Pty. Ltd. v. Australian Capital Territory (No 2) ^[6] 93 ATC 5053. . The plaintiffs in that case challenged the validity of the Business Franchise (``X'' Videos) Act 1990 (A.C.T.) (``the Act''), only before 1 April 1993, by which date the plaintiffs had been placed in liquidation, and had ceased to trade. The plaintiff in this case, Rainsong Holdings Pty. Ltd., challenges the Act as amended by the Business Franchise (``X'' Videos) (Amendment) Act 1993 (A.C.T.) on 1 April 1993.

In this matter Brennan J. referred questions to the Court in identical terms to those referred in Capital Duplicators Pty. Ltd. v. Australian

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ATC 5090

Capital Territory (No 2) , except that they raise the validity of the Act as amended.

Under the Act as amended an initial application for a wholesale licence must be accompanied by an initial fee assessed by the Commissioner on a basis which the Commissioner considers fair and reasonable having regard to ^[7] s. 19. :

• (a) the wholesale value of the applicant's total stock of ``X'' videos held or likely to be held in the first and second months,
• (b) the fee likely to be payable in respect of that total stock in the third and fourth months,
• (c) the gross income likely to be received from trading in videos in the first two months, and
• (d) the initial fees assessed for other applications.

It seems that none of this fee is repayable if the Commissioner's reasonable estimates turn out to be wrong. No licence fee is payable in the second month ^[8] s. 9(2)(c). , presumably because the Commissioner takes this period into account in assessing the initial fee. The licence fee for the third month is the franchise fee which the licensee would pay in a ``typical month'', having regard to the level of the licensee's trade in the first two months ^[9] ss. 9(2A), 20A. The licensee estimates what the Commissioner will estimate, and any difference between the two estimates is refundable: s. 20A(4). . The licence fee for the fourth and subsequent months, calculated in the same way as before the amendment, is 40% of the wholesale value of videos supplied in the month which occurred two months before the licence period. Retail licence fees are calculated in an analogous way to wholesale fees, and are only payable in respect of videos which have not been taken into account in the calculation of any other licence fee.

Assuming that the fees charged by the Act for a licence to wholesale or retail ``X'' videos are taxes upon goods, they are taxes upon sale or hire, and apply whether the goods sold or hired are locally manufactured or produced or imported. For the reasons I gave in Capital Duplicators Pty. Ltd. v. Australian Capital Territory (No 2) ^[10] at ATC p 5073. , therefore, they are not duties of excise.

The amendments raise no matters which affect the view which I expressed in Capital Duplicators Pty. Ltd. v. Australian Capital Territory (No 2) that the Act is not a law for the classification of materials for the purposes of censorship.

It follows that the questions referred to the Court should be answered:

• 1. No.
• 2. No.
• 3. Unnecessary to answer.