LEASK v COMMONWEALTH OF AUSTRALIA

Judges: Brennan CJ

Dawson J
Toohey J
Gaudron J
McHugh J
Gummow J
Kirby J

Court:
Full High Court

Judgment date: 5 November 1996

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Dawson J

In this case the Court is required to answer a question reserved for its consideration by McHugh J, namely, whether s 31(1) of the Financial Transaction Reports Act 1988 (Cth) (``the Act'') is a valid law of the Parliament of the Commonwealth. Section 31(1) provides that a person commits an offence against the section if the person is a party to two or more non-

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reportable cash transactions and, having regard to a number of specified matters, including the manner or form in which the transactions were conducted, it would be reasonable to conclude that the person conducted the transactions in that manner or form for the sole or dominant purpose of ensuring, or attempting to ensure, that the currency involved in the transactions was transferred in a manner and form that would not give rise to a significant cash transaction or would give rise to exempt cash transactions.

The terms used in the sub-section need some explanation. Under s 7, where a cash dealer is a party to a significant cash transaction, he must report the transaction to the Director of AUSTRAC unless, amongst other things, the transaction is an exempt transaction. AUSTRAC is the Australian Transaction Reports and Analysis Centre. ^[30] s 3(1). A ``cash dealer'' includes a bank and other specified financial institutions or persons dealing in money. <sup>[31]</sup> s 3(1). A ``significant cash transaction'' means a cash transaction involving the transfer of currency of not less than $10,000 in value. ^[32] s 3(1). ``Currency'' means the coin and paper money of Australia or of a foreign country that is designated as legal tender and circulates as, and is customarily used and accepted as, a medium of exchange in the country of issue. Under s 9 certain significant cash transactions are exempt transactions. In particular, a significant cash transaction between a financial institution and a customer is in certain specified circumstances, an exempt transaction so far as the institution is concerned if the transaction has been entered in the institution's exemption register. The information obtained by the Director of AUSTRAC is called ``FTR information'' ^[33] s 3(1). and he is required to compile, analyse and disseminate it and, amongst other things, to provide advice and assistance to the Commissioner of Taxation. ^[34] s 38. The Commissioner of Taxation is entitled to access to FTR information and the Director may authorise a law enforcement agency and the Australian Customs Service to have access to it. ^[35] s 27(1). ``Law enforcement agency'' is defined to mean the National Crime Authority, the Australian Federal Police and the Australian Securities Commission. ^[36] s 27(14).

That is sufficient for present purposes to indicate the general scheme of the Act and the context in which s 31(1) must operate. The mischief with which the Act was designed to deal is identified in the Second Reading Speech to the Cash Transaction Reports Bill ^[37] The name of the Act was originally the Cash Transaction Reports Act 1988 (Cth). as being ``the underground cash economy, tax evasion and money laundering''. It was intended to ``give law enforcement agencies the ability to monitor the movement of large amounts of cash and thus to identify tax evaders and the recipients of proceeds of crime''. ^[38] Second Reading Speech to the Cash Transaction Reports Bill 1987, Senate, Parliamentary Debates (Hansard), 25 November 1987 at 2413.

Under s 4 the principal object of the Act is said to be the facilitation of the administration and enforcement of taxation laws. Notwithstanding this, the Commonwealth in its argument did not rely primarily upon the power of the Parliament to make laws with respect to taxation, ^[39] Constitution, s 51(ii). but upon its power to make laws with respect to currency. Section 51(xii) of the Constitution confers power upon the Parliament to make laws with respect to `` [ c]urrency, coinage, and legal tender''. Of course, if that head of power is sufficient to support the law, then it is unnecessary to consider such other heads of power as might also be relied upon for that purpose.

The plaintiff submitted that s 31(1) has an insufficient connection with currency for it to be described as a law with respect to it. He also submitted that the offence created by s 31(1) imposes strict or absolute liability because a person might be found guilty upon the basis that ``it would be reasonable to conclude'' that the person conducted the cash transactions in question for the prohibited purpose. That submission would appear to relate to the contention contained in the plaintiff's written argument that the law is not reasonably capable of being seen as appropriate and adapted to achieving an object or purpose within power and is not reasonably proportionate to some object or purpose within power.

The Commonwealth submitted that s 31(1) does not create an offence of absolute or strict liability. It pointed to the fact that the circumstances to which regard must be had in reaching the required conclusion include ``any explanation made by the person as to the manner or form in which the transactions were conducted''. ^[40] s 31(1)(b)(ii). Moreover, the Commonwealth submitted, the required conclusion is that the person concerned conducted the transactions for a specified purpose, namely, the sole or dominant purpose of ensuring that the transactions would not give rise to a significant cash transaction or would give rise to exempt

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cash transactions. Upon this basis the Commonwealth argument was that the sub- section requires proof that the person charged with an offence knew of the nature of a significant cash transaction or of exempt cash transactions and intended by structuring his or her transactions in the manner or form alleged to ensure that they would not give rise to a significant cash transaction or exempt cash transactions. The only effect of the words ``it would be reasonable to conclude'' is, the Commonwealth contended, to lower the standard of proof from that of beyond reasonable doubt to that of a reasonable conclusion.

There is no doubt that the wording of s 31(1) leaves it far from clear whether intention, or mens rea, ^[41] cf Ratzlaf v United States (1994) 126 L Ed (2d) 615 . is an ingredient of the offence which it creates and, if so, the nature of the intention required. In that situation, it is my view that the Commonwealth submission should be accepted. In He Kaw Teh v The Queen ^[42] (1985) 157 CLR 523 at 591. I drew attention to the divergence of view as to whether there is still a presumption that, in creating a criminal offence, the legislature intends a guilty intent appropriate to the offence to be an ingredient of the offence. I did not find it necessary in that case to express any concluded view, but Gibbs CJ ^[43] (1985) 157 CLR 523 at 528. applied the rule in Sherras v De Rutzen ^[44] [ 1895] 1 QB 918 at 921. in the light of its reaffirmation in Lim Chin Aik v The Queen , ^[45] [ 1963] AC 160 at 173. R v Warner , ^[46] [ 1969] 2 AC 256 at 272. Gammon Ltd v Attorney-General (Hong Kong) ^[47] [ 1985] AC 1 at 12-13. and Cameron v Holt . ^[48] (1980) 142 CLR 342 at 346, 348. That rule is as follows:

``There is a presumption that mens rea, an evil intention, or a knowledge of the wrongfulness of the act, is an essential ingredient in every offence; but that presumption is liable to be displaced either by the words of the statute creating the offence or by the subject-matter with which it deals, and both must be considered.''

In He Kaw Teh v The Queen ^[49] (1985) 157 CLR 523 at 566. Brennan J also affirmed the rule in Sherras v De Rutzen and said that `` [ e]arlier doubts as to the existence of the presumption or as to its strength (see, eg, Proudman v Dayman <sup>[50]</sup> (1941) 67 CLR 536 at 540. ) have now been removed''. <sup>[51]</sup> See also Sweet v Parsley [ 1970] AC 132 at 152 ; Gammon Ltd v Attorney-General (Hong Kong) [1985] AC 1 at 14 . Brennan J pointed out that ``for practical purposes knowledge of the circumstances which give the act its character when an act is voluntarily done is the ordinary form of an intent to do it''. ^[52] (1985) 157 CLR 523 at 570. The reference to ``wrongfulness'' in the passage I have cited from Sherras v De Rutzen must be read in that light; mens rea does not require knowledge of the illegality of the act.

I would apply the presumption in the case of the offence created by s 31(1) of the Act and would do so with increased confidence because of the ambiguity inherent in the wording of the sub-section. Even if with some statutory offences the nature of the offence may indicate that the presumption operates weakly, if at all, the nature of the offence created by s 31(1), gleaned from the way in which it is worded, indicates that it is not an offence of that kind. That means that I adopt the submission made by the Commonwealth that the words ``it would be reasonable to conclude'' go to the standard of proof to be applied and do not rebut a presumed requirement of mens rea as an ingredient of the offence.

Even if s 31(1) did create an offence of absolute or strict liability, I do not think that the argument which the plaintiff seeks to put would be available to him. To say that a law is not reasonably capable of being seen as appropriate and adapted to achieving an object or purpose within power or is not reasonably proportionate to some object or purpose within power is to posit a proposition or propositions which do not assist in determining the validity of the law. The expressions are borrowed from other jurisdictions and their usefulness is limited; indeed, it may be thought that they confuse rather than clarify the processes by which the validity of a law under our Constitution must be determined.

The words ``appropriate'' and ``adapted'' appear to have their origin in the judgment of the United States Supreme Court delivered by Marshall CJ in McCulloch v Maryland , ^[53] (1819) 17 US 159 at 206. where the following passage appears:

``Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.''

But the context in which those words were uttered make it plain beyond argument that they did not envisage a restriction upon the powers of Congress. ^[54] See Adelaide Company of Jehovah's Witnesses Inc v The Commonwealth (1943) 67 CLR 116 at 133-134 per Latham CJ. On the contrary, they were spoken in rejection of an argument that Congress was restricted in the exercise of the powers otherwise vested in it by the constitution by the addition to its enumerated powers of the power to make ``all laws which

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shall be necessary and proper, for carrying into execution the foregoing powers, and all other powers vested by this constitution, in the government of the United States, or in any department thereof''. ^[55] (1819) 17 US 159 at 202. Of that clause, Marshall CJ said: ^[56] (1819) 17 US 159 at 205.

``To waste time and argument in proving that, without it, congress might carry its powers into execution, would be not much less idle, than to hold a lighted taper to the sun. As little can it be required to prove, that in the absence of this clause, congress would have some choice of means. That it might employ those which, in its judgment, would most advantageously effect the object to be accomplished. That any means adapted to the end, any means which tended directly to the execution of the constitutional powers of the government, were in themselves constitutional. This clause, as construed by the state of Maryland, would abridge, and almost annihilate, this useful and necessary right of the legislature to select its means. That this could not be intended, is, we should think, had it not been already controverted, too apparent for controversy.''

Notwithstanding that Marshall CJ intended the words ``appropriate'' and ``adapted'' to signify anything but a requirement that the means adopted by the legislature to achieve a constitutionally valid end must be proportionate to that end, they have been taken up and used, in conjunction with a so-called principle of proportionality, to suggest just such a requirement. For example, in Cunliffe v The Commonwealth ^[57] (1994) 182 CLR 272 at 296. Mason CJ said:

`` [ I]n those cases in which the validity of a law depends upon its being characterised as a law directed to carrying out the relevant head of power by providing for a matter incidental to its subject matter, it may be material to ascertain whether the law is capable of being `reasonably considered to be appropriate and adapted' to that purpose or object, that is, whether the law satisfies the criterion of reasonable proportionality.''

The concept of reasonable proportionality has its origin in Europe, where it was developed as an instrument for the review of legislative and administrative acts. ^[58] See Cunliffe (1994) 182 CLR 272 at 356-357; Minister for Resources v Dover Fisheries (1993) 43 FCR 565 at 575 per Gummow J. In the jurisprudence of the European Court of Justice the principle of proportionality emerged from the legal systems of member states of the European Community as a general principle of European Community law. The principle was written into the Treaty establishing the European Economic Community (the Treaty of Rome) by the Treaty on European Union (the Maastricht Treaty), in an amendment which also gave formal recognition to the principle of subsidiarity (of which there is no Australian equivalent), in the following terms: ^[59] Art 3b.

``Any action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty.''

The inappropriateness of such a concept in Australian constitutional law where legislative power is with few exceptions conferred by reference to subject-matter rather than aims or objectives is immediately apparent. It is even more apparent when regard is had to the manner in which the principle is applied. For example, in a case involving a challenge to a prohibition by a directive of the European Council upon the use in agriculture of a certain substance, ^[60] R v Minister for Agriculture, Fisheries and Food; Ex parte FEDESA [ 1990] 5 ECR I-4023 . it was submitted that the prohibition infringed the principle of proportionality. The European Court of Justice stated the principle as follows: ^[61] [ 1990] 5 ECR I-4023 at I-4063.

`` [ T]he lawfulness of the prohibition of an economic activity is subject to the condition that the prohibitory measures are appropriate and necessary in order to achieve the objectives legitimately pursued by the legislation in question; when there is a choice between several appropriate measures recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued.''

In deciding whether the measure in question satisfied that test, even whilst recognising that as an exercise of discretionary economic powers by the Council the measure had to be ``manifestly inappropriate'' for it to be declared invalid, the Court considered the practicability of the measure, the possibility that it might lead to a black market, the relative merits of prohibition and the dissemination of information and advice, and the appropriateness of causing financial hardship to certain traders. ^[62] [ 1990] 5 ECR I-4023 at I-4063-I-4064. When considering whether a law is with respect to a particular head of power in our Constitution, such matters are not relevant. They are essentially political rather than judicial considerations.

The fact that the legislative powers conferred upon the Commonwealth Parliament by s 51 of

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the Constitution are expressed to be with respect to subject-matters means that a law is within power if the acts, facts, matters or things upon which it operates fall within the description of one or more heads of power. As McHugh J said in Re Dingjan; Ex parte Wagner : ^[63] (1995) 183 CLR 323 at 368-369.

``In determining whether a law is `with respect to' a head of power in s 51 of the Constitution, two steps must be taken. First, the character of the law must be determined. That is done by reference to the rights, powers, liabilities, duties and privileges which it creates. <sup>[64]</sup> The Commonwealth v Tasmania (the Tasmanian Dam Case) (1983) 158 CLR 1 at 152. Secondly, a judgment must be made as to whether the law as so characterised so operates that it can be said to be connected to a head of power conferred by s 51. In determining whether the connection exists, the practical, as well as the legal, operation of the law must be examined. <sup>[65]</sup> Herald & Weekly Times Ltd v The Commonwealth (1966) 115 CLR 418 at 440 ; the Tasmanian Dam Case (1983) 158 CLR 1 at 152. If a connection exists between the law and a s 51 head of power, the law will be `with respect to' that head of power unless the connection is, in the words of Dixon J, ^[66] Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 at 79 . `so insubstantial, tenuous or distant' that it cannot sensibly be described as a law `with respect to' the head of power.''

Establishing the requisite connection is often a matter of degree, but once it is established, it does not matter that the legislature has chosen a means of achieving its aim which goes further than is necessary or desirable. That is a matter for the legislature. As Dixon CJ said in Burton v Honan : ^[67] (1952) 86 CLR 169 at 179.

`` [ O]nce the subject matter [ of the law] is fairly within the province of the Federal legislature the justice and wisdom of the provisions which it makes in the exercise of its powers over the subject matter are matters entirely for the Legislature and not for the Judiciary.''

Or as Kitto J said in Herald and Weekly Times Ltd v The Commonwealth : ^[68] (1966) 115 CLR 418 at 437.

`` [ T]he fact that the Parliament has chosen to go to great lengths - even the fact, if it be so, that for many persons difficulties are created which are out of all proportion to the advantage gained - affords no ground of constitutional attack.''

To introduce the concept of proportionality, whether it be via the notion that a law must be reasonably appropriate and adapted to some end in view or by any other route, is to introduce a concept which is alien to the principles which this Court has hitherto applied in determining the validity of laws passed by the Commonwealth Parliament. Putting purposive powers to one side, so far as I am able to discern the attempt to do so has been made only in relation to the incidental power which is to be implied as an aspect of each of the substantive heads of power in s 51, that is to say, the power to legislate with respect to all those things which are reasonably incidental to the complete fulfilment of the power. In this context it is important to appreciate that, whilst it is correct to speak of implied incidental powers, each head of power is but one grant of power. As Brennan J said in Cunliffe : ^[69] (1994) 182 CLR 272 at 318. ``the core and incidental aspects of a power are not separated; the power is an entirety''. No doubt as one moves closer to the outer limits of a power, the purpose of a law which lies at ``the circumference of the subject [ matter of the power] or can at best be only incidental to it'' ^[70] Bank of NSW v The Commonwealth (the Bank Nationalization Case) (1948) 76 CLR 1 at 354 per Dixon J. becomes important, because ``by divining the purpose of a law from its effect and operation, its connection with the subject of the power may appear more clearly''. <sup>[71]</sup> Cunliffe (1994) 182 CLR 272 at 319 per Brennan J. ``Purpose'' in that connection is merely an aspect of what the law does in fact ^[72] Cunliffe (1994) 182 CLR 272 at 354. and the test remains one of sufficient connection. If that connection is established, it matters not how ill-adapted, inappropriate or disproportionate a law is or may be thought to be. ^[73] Cunliffe (1994) 182 CLR 272 at 351-352.

The purpose of a law passed pursuant to a head of power is a different thing from the purpose of the head of power. In Cunliffe ^[74] (1994) 182 CLR 272 at 296. Mason CJ, whilst recognising that most of the heads of power in s 51 are not of a purposive nature, thought that:

``that does not mean that faithful pursuit of purpose is a relevant or critical element only in those cases in which one is concerned with the reach of an implied incidental power in conjunction with a specific power which is truly purposive.''

^[75] cf Cunliffe (1994) 182 CLR 272 at 356 where I expressed the view that there is no real scope for any implied incidental power in relation to a truly purposive power.

However, to speak of the purpose of a non- purposive power is merely to speak of its subject-matter. To take this case, the purpose of the power to make laws with respect to currency can be nothing more than the authorisation of legislation upon the subject of currency. Nevertheless, Mason CJ continued: ^[76] (1994) 182 CLR 272 at 296-297.

``Faithful pursuit of purpose is necessarily a relevant consideration when the validity of a

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law is sought to be sustained on the ground that it is designed to achieve an end within power, even though it operates on a subject matter beyond power. In cases of this kind, in considering whether there is a substantial or sufficient connection between the impugned provision and the relevant law, it may be material to inquire whether the provision is capable of being reasonably considered to be appropriate and adapted to the end in view. The requirement that there be an affirmative answer to that inquiry implies that `a reasonable proportionality must exist between the designated object or purpose and the means selected by the law for achieving that object or purpose'.''

I must confess that I have some difficulty with that passage. I assume that in speaking of ``a substantial or sufficient connection between the impugned provision and the relevant law'', his Honour was speaking of a substantial or sufficient connection between the impugned provision and the relevant head of power. And if that is so, ``the end in view'' must mean the end or purpose of the head of power. But as I have said, most heads of power do not have an end or purpose other than the authorisation of legislation upon their subject-matter and whether a law is upon a subject-matter depends upon its connection with that subject-matter. If, on the other hand, ``the end in view'' to which his Honour refers is the end of the legislation, this is only a relevant consideration if it assists in determining whether the requisite connection between the law and the subject-matter of a head of power is established. If it is established, the proportionality or appropriateness of the means selected by the Parliament to achieve the end in view are matters for it alone.

In Cunliffe Mason CJ suggested that whether a law is reasonably considered to be appropriate and adapted to the purpose or object of a head of power and whether it satisfies the criterion of reasonable proportionality are tests which ``have been employed in determining whether a law which seeks to implement an international convention to which Australia is a party is within the external affairs power''. <sup>[77]</sup> (1994) 182 CLR 272 at 296. He said that this is so because (and the words are those of Dixon J in R v Burgess; Ex parte Henry <sup>[78]</sup> (1936) 55 CLR 608 at 674. ) ``the nature of [ the] power necessitates a faithful pursuit of the purpose''. However, the purpose to which Dixon J was referring in R v Burgess; Ex parte Henry was not the purpose of the external affairs power - it is not a purposive power ^[79] See Victoria v The Commonwealth (1996) 70 ALJR 680 at 690, 739; 138 ALR 129 at 147, 215 . - but the purpose of implementing an international convention, namely, the 1919 convention for the regulation of aerial navigation. The faithful pursuit of that purpose was necessary because the fact that the legislation in question purported to give effect to an international convention was what, upon a particular view, brought it within the external affairs power. That is to say, it was the fact that the legislation in question purported to implement an international convention that, upon that view, established a connection between the law and the external affairs power.

Subsequently, in The Commonwealth v Tasmania (the Tasmanian Dam Case ) ^[80] (1983) 158 CLR 1. it was held that the implementation of a bona fide international convention was of itself sufficient to establish the requisite connection between the law effecting the implementation and the external affairs power. No doubt it is necessary to examine whether such a law does in fact implement the convention, and in doing so it has been thought relevant to ask whether the law is appropriate and adapted to the task or whether it exhibits a reasonable proportionality. But the implementation of international conventions is not a head of power under s 51. ``External affairs'' is, and the question to be asked in relation to that power is whether there is a sufficient connection between its subject- matter and a law which seeks to rely upon it.

Similarly, in my view, Deane J can have meant no more in the Tasmanian Dam Case ^[81] (1983) 158 CLR 1 at 259. when he said that a ``law must be capable of being reasonably considered to be appropriate and adapted to achieving what is said to impress it with the character of a law with respect to external affairs''. In the context, what impressed a law with the character of a law with respect to external affairs was the fact that it implemented a treaty. What Deane J was saying was no more than that to establish the requisite connection between the subject-matter of external affairs and the law, the law must implement the treaty. If I may say so with respect, it adds little, if anything, to say that it must be appropriate and adapted and not disproportionate to that purpose. ^[82] See Victoria v The Commonwealth (1996) 70 ALJR 680 at 739; 138 ALR 129 at 215 .

For these reasons, it is my view that the relevant test of the validity of a law made under one of the substantive heads of power in s 51 of the Constitution is that of sufficiency of connection with its subject-matter. That is so

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whether or not in characterising the law it is necessary to invoke the implied incidental power. As I said in Cunliffe , ^[83] (1994) 182 CLR 272 at 352. the disproportion of a law to an end asserted to be within power may suggest that the law is actually a means of achieving another end which is beyond power. And no doubt there is a question of judgment involved in deciding whether a law exhibits a sufficient connection with the subject-matter of a head of power. But that does not involve a judgment as to the desirability of legislation, and the danger with expressing the test in terms of proportionality is that it suggests that the Court is concerned with the desirability of legislation. The Court does not for the purpose of determining validity under s 51 inquire into whether a law either is necessary to achieve an end or infringes fundamental values in a manner not justified by the pursuit of that end. ^[84] cf Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 31 per Mason CJ; Cunliffe (1994) 182 CLR 272 at 297 per Mason CJ. That is not, of course, to deny that, before construing a law as interfering with basic common law freedoms, the Court requires the clearest expression of intent. ^[85] See Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 183; Cunliffe (1994) 182 CLR 272 at 363. Whatever the position may be in other legal systems, the terms ``appropriate and adapted'' and ``reasonable proportionality'' are best avoided when enunciating a test to determine whether a law exceeds a non-purposive head of power under s 51 of our Constitution.

The situation may be different where the purpose of a law is a crucial determinant of validity, as it is where a power is conferred in purposive terms. Taking the defence power for example, a court must ask whether a law is for the purpose of defence. There is no subject- matter as there is with other powers - lighthouses ^[86] See Cunliffe (1994) 182 CLR 272 at 354. or external affairs, ^[87] See Victoria v The Commonwealth (1996) 70 ALJR 680 at 739; 138 ALR 129 at 215. for example - and it is therefore not possible to delineate the boundaries of the power by reference to subject-matter: the acts, facts, matters or things upon which a law with respect to defence may operate are, at least in war-time, virtually without limits. ^[88] See Richardson v Forestry Commission (1988) 164 CLR 261 at 326 . To determine the validity of a law said to be supported by a purposive power, a court must ask whether it is a law for the specified purpose, and the court may have to inquire into whether the law goes further than is necessary to achieve that purpose. That is an exercise in proportionality.

The situation is also different where a law is said to fall foul of a constitutional limitation on legislative power. As Brennan CJ points out in this case, and as I accepted in Australian Capital Television Pty Ltd v The Commonwealth , ^[89] (1992) 177 CLR 106 at 195. it may be within power to legislate in a way that affects an immunity conferred by a limitation on power where to do so is merely incidental to the achievement of a legitimate end. In such a situation one is concerned with the resolution of a tension between two principles and notions of proportionality may be relevant.

Neither of those situations is germane to this case. The power to make laws with respect to currency is not a purposive power and there is no suggestion that the law infringes any constitutional immunity. If there is a sufficient connection between that head of power and s 31(1) of the Act for it to be a law with respect to currency, it is of no consequence, so far as validity is concerned, that it operates harshly. ^[90] Compare the approach of the European Court of Justice to the validity of measures providing for the forfeiture of deposits in the context of regulating a common agricultural market: eg, Buitoni v FORMA [1979] 1 ECR 677 at 685 ; Atalanta v Produktschap voor Vee en Vlees [1979] 2 ECR 2137 at 2151 . On the distinction between ``principal'' or ``primary'' obligations and ``incidental'' or ``secondary'' obligations in relation to forfeiture of deposits, see Emiliou, The Principle of Proportionality in European Law: A Comparative Study , (1996) at 212-223. Thus, it would be of no consequence for that purpose if it were to impose absolute or strict liability. That would be a matter for the legislature, not the Court.

Section 31(1) is clearly incidental to the performance by a cash dealer of the duty imposed by s 7 of the Act to report significant cash transactions. The evident intention of the sub-section is to deter the structuring of a cash transaction so as not to constitute a significant cash transaction or so as to give rise to exempt cash transactions. It is the carrying out of a significant cash transaction to which a cash dealer is a party which imposes upon him the duty of reporting under s 7. To require significant cash transactions to be reported is plainly a means of gathering information upon the movement of currency. A law imposing that requirement imposes an obligation upon those dealing in currency with respect to their dealings. There is a clear connection between the subject-matter of currency and the imposition of that obligation and the connection extends to matters incidental to the performance of the obligation. In my view s 31(1) of the Act is a valid law of the Commonwealth and I would so answer the question reserved.