Anderson's Pty Ltd v Victoria

[1964] HCA 77
111 CLR 353

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(Judgment by: Owen J)

Anderson's Pty Ltd
vVictoria

Court:

Judges: Barwick CJ
Mctiernan J
Kitto J
Taylor J
Menzies J
Windeyr J

Owen J

Legislative References:
Stamps Act 1958 (Victoria) - subdiv (14) of Div 3 of Pt II

Case References:
Bolton v Madsen (1963) - 110 CLR 264
Parton v Milk Board (Vic) - (1949) 80 CLR 229
Dennis Hotels Pty Ltd v Victoria - (1960) 104 CLR 529
Matthews v Chicory Marketing Board (Vic) - (1938) 60 CLR 263
Peterswald v Bartley - (1904) 1 CLR 497
Browns Transport Pty Ltd v Kropp - (1958) 100 CLR 117
Bank of Toronto v Lambe - (1887) 12 App Cas 575

Hearing date: 9, 12 and 13 October 1964
Judgment date: 17 December 1964

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Judgment by:
Owen J

In each of these five demurrers the plaintiff seeks a declaration that ss 131B, 131C and 131E of subdiv (14) of the Victorian Stamps Act are invalid, at least insofar as they purport to apply to hire-purchase agreements relating to new goods manufactured in Australia. Anderson's Pty Ltd, the plaintiff in the first case, is a retail trader in new goods comprising furniture, furnishings and domestic appliances. It sells some of its goods for cash and disposes of others under hire-purchase agreements. In each of the remaining four cases the plaintiff is a hire-purchase company which purchases goods, such as motor vehicles, plant, machinery and domestic appliances, and disposes of them to customers under hire-purchase agreements.

The attack on the validity of the sections is based upon the contention that they impose duties of excise.

Subject to certain immaterial exemptions, s 131B(1) imposes upon every "instrument of instalment purchase" the duty specified in the Third Schedule to the Act and under that Schedule the amount of duty is to be assessed by reference to the "purchase price" of the goods. The duty is made payable by the "vendor" and, subject to s 131C(1), it is to be denoted by adhesive stamp (s 131B(2)). S 131C(1), however, enables the Governor-in-Council to declare any person carrying on business as a "vendor" of goods "under instalment purchase agreements" to be an "approved vendor". Such a "vendor" is not liable for payment of stamp duty denoted by adhesive stamp but is required to furnish to the Comptroller of Stamps a monthly statement giving particulars of all "instalment purchase agreements" entered into by him during the preceding month and to pay in cash a sum equal to the aggregate amount of stamp duty which would have been payable in respect of all such agreements had they been stamped.

A "vendor" is forbidden, by s 131D(1), to add the amount of any duty payable by him to any amount payable by the "purchaser" of any goods "or otherwise demand or recover or seek to recover" any such amount from the "purchaser". And, by s 131E(1), the "vendor" of any goods under an "instalment purchase agreement" is required, where the "purchase price" is not less than £10, to prepare an "original instrument" in relation to the agreement conforming with the requirements of the section. S 131A defines a number of the terms used in the subdivision. "Instalment purchase agreement" means "a credit purchase agreement, a hire-purchase agreement or a rental agreement". "Goods" include "all chattels personal other than money, livestock, books and things in action and include any fixture severable from the realty". "Credit purchase agreement" means an agreement whereby the purchase price of goods is payable by not less than six instalments to be paid over a period of not less than six months and under which any of the instalments are to be paid after delivery of the goods to the purchaser, but does not include an agreement under which the purchaser is a person engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates. "Hire-purchase agreement" means "agreement for the bailment of goods under which the bailee may buy the goods or under which the property in the goods may pass to the bailee or under which any provision for credit of payments is to be made in the event of a subsequent purchase of the goods . . . but does not include any agreement under which the purchaser is a person who is engaged in the trade or business of selling goods of the same nature or description as the goods to which the agreement relates". "Purchase price" means "in the case of a credit purchase agreement or a hire-purchase agreement, the total amount payable under the agreement by the purchaser on any account whatsoever in respect of the goods the subject-matter of the agreement less the amount of the deposit or other money or consideration paid or given to the vendor at or before the making of the agreement and less the total amount payable under the agreement for or by way of interest or insurance or other charge . . .". "Purchaser" means "the person to whom goods are bailed or sold or agreed to be bailed or sold under an instalment purchase agreement", and "Vendor" means "the person by whom goods are bailed or sold or agreed to be bailed or sold" under such an agreement. "Rental agreement" means "an agreement for the bailment of goods under which the bailee may after a specified number of instalments of rent (not being less than two instalments) have been paid in respect thereof continue the bailment or from time to time renew the bailment at a nominal rent or without any further payment or on the payment of a nominal periodical or other amount". And, in the case of a rental agreement, "purchase price" means "the price at which the goods the subject-matter of the agreement might have been purchased for cash at the time of entering into the rental agreement".

The submissions made on behalf of the plaintiffs are that the duty thus imposed -- which is undoubtedly a tax -- is imposed "upon" or "in respect of" or "in relation to" goods and is levied upon a dealing with the goods in the course of their passage to the consumer. The amount of duty payable is calculated by reference to the value of the goods with which the dealing is concerned and the duty is an indirect tax in the sense that it is imposed in the expectation or with the intention that it will be passed on by the person paying it. It is said, and I agree, that if these features exist, they are characteristic of an excise duty. But the first question must be whether, on an examination of the relevant provisions of the Act, they are present. If they or some of them are, the enquiry must then be whether there are other and counter-balancing considerations which point to the opposite conclusion. And, finally, it must be determined upon a consideration of all the elements involved in the legislation whether the tax is properly to be described as a duty of excise. In my opinion the impost is not of that character. I begin with the fact that it is called a stamp duty and is imposed upon instruments. It is true that they are instruments evidencing certain types of transactions relating to goods but it matters not what the goods are; what attracts the tax is the method of disposing of them. The amount of tax payable on any particular transaction is not related, except in the case of "rental agreements", to the value or quantity of the goods. It is assessed upon what is called the "purchase price" but which is in reality the difference between the amount of the deposit paid by the "purchaser" or the amount allowed to him by way of deposit representing the value of goods "traded in" by him and the total of the payments to be made by him less interest and other charges. It is plain that this "purchase price" will vary from case to case even though the goods may be identical. The goods may be imported, wholly or in part. They may be second-hand goods, that is to say they may have earlier reached the hands of a consumer by means of an instrument on which duty has been paid and have found their way back from him into the hands of the "vendor" or some other distributor. The "vendor" is prohibited from adding the amount of the tax paid to the "purchase price" and thus passing it on to the "purchaser". It is true that a means of passing on the tax in an indirect fashion may perhaps be found by increasing interest rates or by adding to the cost of goods an amount which may be capable of approximate calculation but this would be, to use the phrase of the Judicial Committee in Bank of Toronto v Lambe (1887) 12 App Cas 575, at p 583, "an obscure and circuitous" way of passing on the tax. It is a tax imposed directly upon a "vendor" of goods if and only if he chooses to dispose of them by a form of contract which involves the extension of credit to a "purchaser" who is not himself a trader in goods of that description.

When all these considerations are taken into account, it is impossible in my opinion to say that the tax is a duty of excise and I would therefore allow the demurrers.