PERMANENT TRUSTEE AUSTRALIA LIMITED v COMMISSIONER OF STATE REVENUE (VIC)

Judges: Gleeson CJ
McHugh J
Gummow J

Kirby J
Hayne J
Callinan J
Heydon J

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2004] HCA 53

Judgment date: 12 November 2004

Kirby J

164. A case stated [188] By Gummow J, 30 January 2004. asks questions of the Court concerning the constitutional validity of the Stamps Act 1958 (Vic) (``the Stamps Act'') [189] The Stamps Act was replaced by the Duties Act 2000 (Vic) on 1 July 2001. The relevant legislation for these reasons is the Stamps Act. and of the Commonwealth Places (Mirror Taxes) Act 1998 (Cth) (``the Mirror Taxes Act'').

165. The Mirror Taxes Act was enacted by the Federal Parliament in response to the decision in Allders International Pty Ltd v Commr of State Revenue (Vic) . [190] 96 ATC 5135 ; (1996) 186 CLR 630. By that decision, this Court held that a State revenue law, imposing stamp duty upon a lease or agreement to lease with respect to part of a Commonwealth place, [191] Constitution, s 52(i). was invalid. This was because s 52(i) of the Constitution reserves to the Federal Parliament ``exclusive power'' to make laws with respect to Commonwealth Places.

166. The Commonwealth place in Allders was a portion of the Melbourne (Tullamarine) Airport. The State revenue authority was the Victorian Commissioner of State Revenue (``the Commissioner''). The dispute concerned the liability to tax of an instrument relating to the use of portion of the airport. In these proceedings, the same Commonwealth place is involved. The Commissioner again asserts his right to recover the revenue. Again, an instrument of lease is involved which, under the Stamps Act, would otherwise be liable in Victoria to assessment to duty in a substantial sum. [192] $762,583.20. See reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [ 9]; reasons of McHugh J at [ 103]. But now, the Commissioner relies for the validity of his assessment not only on the Stamps Act but also on the Mirror Taxes Act, a federal Act.

167. The scheme of the latter conforms to an announcement by the Federal Treasurer that federal legislation was ``necessary to protect State revenues following the Allders decision''. [193] Federal Treasurer, Press Release No 109, 6 October 1997. The legislation was described as forming ``part of an Inter-jurisdictional Taxation Agreement (IJTA)... settled between the Commonwealth, States and Territories''. [194] Federal Treasurer, Press Release No 109, 6 October 1997. The Treasurer said: [195] Federal Treasurer, Press Release No 109, 6 October 1997.

``In fulfilling its commitment under the IJTA to protect State revenues, past and future, from the implications of the Allders decision I announce that from today, the Commonwealth will apply stamp duty, payroll tax, financial institutions duty and debits tax on businesses operating in or on Commonwealth Places. The Commonwealth legislation will include provision for a credit to be given for any pre-payments made by taxpayers under existing State legislation.

...

The Commonwealth legislation will mirror in Commonwealth places the taxes and thresholds of the State in which the Commonwealth place is located. This ensures that State Governments will

ATC 5026

continue to determine the taxes applying in Commonwealth Places in their States. State Revenue Offices will be contracted to collect the Commonwealth revenue and enforce compliance.''

168. Two essential questions are raised by the stated case. These are whether this Court should review the correctness of its decision in Allders (and the earlier decision in Worthing v Rowell and Muston Pty Ltd [196] (1970) 123 CLR 89. upon which Allders relied); and, if not, whether the Mirror Taxes Act survives complaints as to its validity, raised in this case by Permanent Trustee Australia Ltd (``Permanent''). Permanent objects that, in several respects, the Mirror Taxes Act exceeds, or otherwise offends, the provisions of the Constitution.

The facts, legislation and issues

169. The facts and legislation : The facts necessary to understanding the issues are sufficiently stated in the reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ (``the joint reasons'') [197] Joint reasons at [ 9]- [ 12]. and in the reasons of McHugh J. [198] Reasons of McHugh J at [ 107]- [ 110]. Also described there are the relevant provisions of the Mirror Taxes Act, [199] Joint reasons at [ 16]- [ 19]; reasons of McHugh J at [ 116]- [ 123]. the instruments (federal and State) made to implement the relevant intergovernmental agreement reflected in the Mirror Taxes Act [200] Joint reasons at [ 20]. and applicable provisions of the Stamps Act. [201] Joint reasons at [ 22]- [ 24].

170. The scheme of the intergovernmental and interstatutory arrangement so established, is to create a round-robin of funds by which the Commissioner recovers upon instruments applicable in or on a Commonwealth place revenue as if that place were part of the State; pays such revenue to the Commonwealth; and later receives it in return. Care has been observed in the legislation to conform to the fundamental requirement of the Constitution stated in s 81. By that provision, all revenues and moneys received by the Executive Government of the Commonwealth:

``... shall form one Consolidated Revenue Fund, to be appropriated for the purposes of the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.''

171. To this extent at least, the scheme of federal constitutional law is preserved by s 23(1) of the Mirror Taxes Act:

``Notwithstanding anything in the terms of an applied law, there must be credited to the Consolidated Revenue Fund all amounts received under an applied law that are required by section 81 of the Constitution to be so credited.''

172. A standing appropriation is made for the payment out of the federal Consolidated Revenue Fund in accordance with the Mirror Taxes Act and a State ``applied law'', such as the Stamps Act. [202] Mirror Taxes Act, s 23(4). In this way, the State revenue receives the ultimate benefit of the federal taxation imposed by the Mirror Taxes Act, less some administrative charges. However, the federal legislation is careful to comply with the strictures in Ch IV of the Constitution (``Finance and Trade'') governing payment to, and appropriation from, the Consolidated Revenue Fund. Moreover, there is another important provision in Ch IV to be complied with. This is s 99 forbidding federal preferences in revenue laws.

173. The issues : The questions asked in the stated case are set out, or described, in the joint reasons. [203] Joint reasons at [ 13]- [ 14]. See also reasons of McHugh J at [ 110]. The first question attempts to raise again the Commissioner's argument that the Stamps Act applies of its own force to the instrument executed by Permanent. If that argument were to succeed, it would render otiose the need of the Commissioner to rely on the Mirror Taxes Act and the associated federal [204] Commonwealth Places (Application of Laws) Act 1970 (Cth). and Victorian [205] Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), as amended by Statute Law Revision Act 2000 (Vic), s 3, Sched 1, item 23. laws.

174. Question 2 concerns the substantive attacks by Permanent on the validity of the Mirror Taxes Act (upon the assumption that the State legislation is invalid of its own force to sustain the assessment to duty). In turn, the paragraphs of question 2 raise objections to the validity of the Mirror Taxes Act by reference to ss 55, [206] Question 2(a). 51(ii) [207] Question 2(c). and 99 [208] Question 2(d). of the Constitution and a complaint that the Mirror Taxes Act impermissibly delegates to the Executive Governments of the States (relevantly here, to the Treasurer of the State of Victoria) lawmaking powers reserved by s 52(i) of the Constitution to the Federal Parliament. [209] Question 2(b).

175. Question 3 presents the argument of impermissible delegation in a different form. Question 4 concerns the costs of the proceedings.

The decisions in Worthing and Allders should apply

176. The ``requirement'' of leave : At the opening of his submissions, the Commissioner addressed question 1. However, the decisions of this Court in Worthing and Allders stand as an

ATC 5027

obstacle to a conclusion that State legislation, such as the Stamps Act, could apply of its own force in respect of an instrument applicable to a Commonwealth place.

177. The Commissioner sought leave to persuade the Court that the decision in Worthing , and the cases that had followed it, should be reconsidered. [210] Permanent Trustee Australia Ltd v Commissioner of State Revenue [ 2004] HCATrans 043 at 1444-1446 . Substantial written arguments had been addressed to the point by the parties and by the interveners. At the conclusion of oral argument on the point, limited to that made on behalf of the Commissioner, it was indicated that a majority of the Court was of the view that the application for leave should be refused. [211] Permanent Trustee [ 2004] HCATrans 043 at 1484-1485. I made it plain that it was my opinion that the Commissioner did not require leave to advance his first argument. [212] Permanent Trustee [ 2004] HCATrans 043 at 1489-1492.

178. The opinion that I hold is identical to that expressed by Deane J in Evda Nominees Pty Ltd v Victoria . [213] (1984) 154 CLR 311 at 316. See also Philip Morris Ltd v Commissioner of Business Franchises (Vict) (1989) 167 CLR 399 at 409 ; Brownlee v The Queen (2001) 207 CLR 278 at 312-315 [ 100]- [ 108] ; British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566 at 1591 [ 134]; 200 ALR 403 at 437 . His Honour there said that:

`` [ A] party does not require the permission of the Court to present or to continue to present argument that is relevant to the decision in the case, including argument seeking to show that a previous decision of the Court is wrong and should not be followed.''

Because this difference is fundamental, I will briefly state why I reject the supposed requirement of leave.

179. There is no express foundation in the Constitution (or, so far as it would help, any legislation) to support such an impediment to argument. Indeed, the text of the Constitution is inconsistent with the requirement. This Court is the ultimate guardian of the judicial power of the Commonwealth. [214] Constitution, s 71. It derives its existence and functions from the Constitution and owes its duty to it. If the Constitution requires a result in a relevant contested matter, no rule of practice of the Court can impede that outcome. Judges of this Court have repeatedly stated that constitutional doctrine stands on a different basis to other holdings, so far as the requirements of the law of precedent are concerned. [215] Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 277-279 ; Queensland v The Commonwealth (1977) 139 CLR 585 at 592-594 ; Stevens v Head (1993) Aust Torts Reports ¶ 81-203 at 61,983; (1993) 176 CLR 433 at 461-462 ; Lange v Australian Broadcasting Corporation (1997) Aust Torts Reports ¶ 81-434 at 64,229-64,232; (1997) 189 CLR 520 at 562-566 ; Coleman v Power (2004) 78 ALJR 1166 at 1219 [ 289], 1221-1222 [ 298], 1222 [ 301] per Callinan J; 209 ALR 182 at 255, 257-259 . In part, this is because the Constitution is itself the source of legal authority and thus is placed apart. In part, it is because of a recognition (affirmed by history) that different generations read the Constitution in different ways according to the perceptions of different times. [216] Victoria v The Commonwealth (``the Payroll Tax Case '') (1971) 122 CLR 353 at 395-397. The duty of the Justices to the Constitution is individual. No group or number of them can impede the discharge of that duty by one or a minority of them.

180. The supposed requirement of leave is an impediment to argument. Without argument, effective persuasion about error may be impossible. Procedural requirements are sometimes convenient for courts. However, in proceedings involving the meaning of the Constitution, it is erroneous to allow convenience to overwhelm the possibility of constitutional enlightenment. Courts have other means to prevent legal representatives or parties from wasting their time. Such means, and not a supposed threshold obligation to obtain ``leave'' from a majority, are the proper ways to prevent repetition of futile arguments.

181. As a consequence of the decision of the majority, this Court did not hear the oral arguments of the parties and interveners addressed to the first question in the stated case. For those who consider the procedure necessitating leave to be constitutionally valid, it thereby became unnecessary to make further reference to the primary argument of the Commissioner. However, because I do not take this view, I am required to state, in summary at least, why I consider that question 1 should be answered ``Yes''. I must do so on the basis of the written arguments.

182. Worthing and Allders are correct : The decision of this Court in Worthing was reached by a slim majority. [217] Barwick CJ, Menzies, Windeyer and Walsh JJ; McTiernan, Kitto and Owen JJ dissenting. The reasons for each viewpoint were ``finely balanced''. [218] Allders 96 ATC 5135 at 5155; (1996) 186 CLR 630 at 669, noting that Windeyer J stated that he had changed his mind during argument: Worthing (1970) 123 CLR 89 at 127. However, neither of these considerations is an argument of incorrectness. It is the nature of constitutional interpretation that it will often produce contested, closely divided, outcomes [219] See eg Ha v New South Wales 97 ATC 4674 ; (1997) 189 CLR 465 ; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 ; Shaw v Minister for Immigration and Multicultural Affairs (2003) 78 ALJR 203 ; 203 ALR 143 . and be open to later revision.

183. I do not accept that the determinative opinion of Walsh J in Worthing [220] (1970) 123 CLR 89 at 136-141. was so significantly different from those of the other judges of the majority as to cast doubt on the emerging principle. Nor do I accept (as the Commissioner suggested) that the majority in Worthing overlooked the primary question of characterisation of the State law, that is, whether it was a law ``with respect to'' a Commonwealth place. Given that characterisation of laws is such a common function performed by this Court, it would be astonishing if it had been misunderstood. Clearly, the task was one of classifying the law in question to determine whether it invaded the

ATC 5028

``exclusive'' legislative powers marked out for the Federal Parliament. [221] By the Constitution, s 52(i). This is the way that the majority in Worthing described what they were doing. [222] Worthing (1970) 123 CLR 89 at 102 per Barwick CJ, 131 per Windeyer J, 139 per Walsh J. It was affirmed in a case that quickly followed. [223] Attorney-General (NSW) v Stocks and Holdings (Constructors) Pty Ltd (1970) 124 CLR 262 at 269 per McTiernan J. It is the way the decision in Worthing was described and applied in Allders . [224] 96 ATC 5135 at 5159; (1996) 186 CLR 630 at 676-677. As I see it, Worthing involved nothing more than giving effect to the language of ``exclusive'' legislative power contained in s 52(i) of the Constitution.

184. It is true that, when Worthing was decided, it came to many as a surprise. But this is not an unusual feature of constitutional adjudication. Assumptions are made and then exploded when the light of analysis is shone on a corner of the Constitution not previously subjected to scrutiny. [225] Sue v Hill (1999) 199 CLR 462 is an example. See also Gould v Brown (1998) 16 ACLC 316 ; (1998) 193 CLR 346 ; Re Wakim; Ex parte McNally (1999) 17 ACLC 1055 ; (1999) 198 CLR 511 . By the time the present case came before this Court, the principle in Worthing appeared well and truly entrenched. It has been followed by the Court in numerous cases. [226] R v Phillips (1970) 125 CLR 93 ; Stocks and Holdings (1970) 124 CLR 262; Allders 96 ATC 5135 ; (1996) 186 CLR 630. (Leave to reopen Worthing was denied in Allders .) In others, it has been referred to without doubt, or assumed and applied. [227] Svikart v Stewart (1994) 181 CLR 548 at 557 ; Paliflex Pty Ltd v Chief Commr of State Revenue (NSW) 2003 ATC 4983 at 4987 [ 18], 4988 [ 24], 4991 [ 40]; (2003) 78 ALJR 87 at 90 [ 18], 92 [ 24], 95 [ 40]; 202 ALR 376 at 381, 383, 387-388 . Against the correctness of the principle of Worthing , no voice has since been raised in this Court. [228] In Allders 96 ATC 5135 at 5143 and 5148; (1996) 186 CLR 630 at 646 and 655 Dawson J and Toohey J dissented but accepted the authority of Worthing . Nor has doubt been stated in any other court.

185. The supposed ``inconveniences and complications'' which were voiced in Worthing as a reason for resisting the interpretation that the majority adopted have, as Windeyer J predicted, proved ``less serious than would be those that would come from any other of the suggested constructions of s 52''. [229] Worthing (1970) 123 CLR 89 at 131. See also at 103 per Barwick CJ. After Worthing was decided, the Commonwealth Places (Application of Laws) Act 1970 (Cth) was enacted. That federal Act was supplemented by associated State legislation. [230] eg Commonwealth Places (Administration of Laws) Act 1970 (Vic). Together these laws alleviated most of the ``inconveniences'' whilst faithfully upholding the language of the Constitution. To overrule Worthing would now require unthreading the federal and State legislation that ensued. It would necessitate change of many judicial decisions, legal instruments and private actions made on the basis of the Worthing construction of the requirements of s 52(i).

186. In the end, it is impossible to escape the force of the word ``exclusive'' appearing in s 52(i). That word expels a State Parliament, including by the enactment of a law cast in general terms, from making a law ``with respect to the conduct of persons within a place, or transactions there''. [231] Worthing (1970) 123 CLR 89 at 131 per Windeyer J. See also at 103 per Barwick CJ, 120 per Menzies J, 140-141 per Walsh J. And that is that.

187. Conclusion: first question : It follows that the answer to the first question in the stated case is ``Yes''. The Stamps Act is invalid in so far as, of its own force, it purports to sustain the assessment of Permanent to duty in respect of the lease on and in the Commonwealth place in question.

188. This is a conclusion that I would reach on my consideration of the written submissions of the parties. Necessarily, I did not have the advantage of more than a few minutes of oral argument addressed to the point, and then limited to the argument for the Commissioner. One day the issue may return. In constitutional discourse, few rulings can be said to be forever final. But the prospects for a reversal of Worthing appear bleak.

The giving of preference is contrary to s 99

189. The s 99 point : Although, as I will indicate, [232] See below these reasons at [ 239]. I am in agreement with much of the joint reasons upon the other issues presented by the stated case, I have formed a firm view that the Mirror Taxes Act impermissibly gives preference to one State over another State, contrary to s 99 of the Constitution. This conclusion requires an affirmative answer to question 2(d). That answer would invalidate the Mirror Taxes Act. Upon that footing, it becomes strictly unnecessary to answer the other questions, including one (concerning the first limb of s 55 of the Constitution) which is also contestable. It is convenient, therefore, to go directly to the s 99 point.

190. The requirements of s 99 : Section 99 appears in Ch IV of the Constitution. It states:

``The Commonwealth shall not, by any law or regulation of trade, commerce, or revenue, give preference to one State or any part thereof over another State or any part thereof.''

191. Permanent complains that the Mirror Taxes Act purported to apply as a federal law the taxing laws of each State in or in relation to Commonwealth places in such State, acquired for the public purposes of the Commonwealth. It was not contested that rates of taxation in the States and, indeed, the types of taxes that are levied by them, differ greatly from State to State.

192. Permanent therefore argued that by a federal law, namely the Mirror Taxes Act, the Commonwealth was disbursing from the one federal Consolidated Revenue Fund different

ATC 5029

sums in accordance with that Act which necessarily involved giving ``preference'' to the State receiving a larger sum out of that Fund over another State receiving a smaller sum from the same federal source. This, Permanent said, was forbidden by s 99. In my view, Permanent is correct in this submission.

193. The extent of the preference : To make good its contention that the payment out of the federal Consolidated Revenue Fund to each State in respect of stamp duty payable on an instrument would result under the Mirror Taxes Act in the payment of significantly different sums, Permanent produced a Table. This sets out the varying payments to the different States of the Commonwealth, having regard to the provisions of the State legislation concerned thereby incorporated into federal law as its discrimen . [233] Permanent denied that the Take-Out Amount under the Development Agreement in question was consideration in the nature of a premium. However, for the purposes of the Table and to elaborate its present argument, it assumed against itself that it was.

194. Simplifying the Table somewhat, so as to reduce it to its bare necessities sufficient to establish Permanent's argument based on s 99, the following emerges as the duty to be collected in the several States of the Commonwealth, by State officials on behalf of the Commonwealth, paid into the federal Consolidated Revenue Fund and then paid out to the States concerned. The Table assumes in each State an instrument dated 1 July 1998, similar to the Development Agreement brought to duty in this case, but on the further hypothesis that it existed in respect of a Commonwealth place in the other States of Australia: 

                        TABLE

State Act adopted      Estimated duty to be     Percentage of

by Mirror Taxes Act    paid to each State       Victorian total



Stamps Act 1958 (Vic)           $762,583.20             100.00%

Duties Act 1997 (NSW)           $254,265.20              33.34%

Stamp Act 1894 (Q)            $2,102,790.20             275.75%

Stamp Duties Act 1923 (SA)    $2,447,872.00             321.00%

Stamp Act 1921 (WA)           $2,699,320.20             353.97%

Stamp Duties Act 1931 (Tas)   $2,179,342.00             285.78%

195. From the figures and estimates in the Table, it is clear that the sum payable from the federal Consolidated Revenue Fund to ``the State concerned'', [234] Mirror Taxes Act, s 23(3). namely Victoria, in respect of the same instrument and transaction liable to duty at the same time is substantially more (by $508,318) than the State of New South Wales would receive from the federal Consolidated Revenue Fund in respect of an identical transaction.

196. It is true that the amount payable to Victoria would, in its turn, be less than the amount payable to the States of Queensland, South Australia, Western Australia and Tasmania in respect of an identical transaction and instrument at the same time. However, in terms of s 99 of the Constitution, it is sufficient that the party complaining of non-compliance should be able to show ``preference to one State... over another State''. Permanent submitted that this was manifest in the payment under the Mirror Taxes Act to the State of Victoria of a sum less than would be paid in otherwise identical circumstances to the States of Queensland, South Australia, Western Australia and Tasmania.

197. In any case, Permanent submitted, correctly in my view, that the validity of the Mirror Taxes Act had to be considered by reference to the entire scheme. By virtue of the facts demonstrated in the Table, it argued that the impugned federal law expressly provided for differential federal payments as between the several States of the Commonwealth. Although elsewhere in Ch IV of the Constitution provision is envisaged for differential ``financial assistance'' to particular States ``on such terms and conditions as the Parliament thinks fit'', [235] Constitution, s 96. no such entitlement exists in the particular nominated case of ``any law or regulation of trade, commerce, or revenue ''. [236] Constitution, s 99 (emphasis added). On the contrary, in such a case (of which this was one) Permanent argued that differentiation amounting to ``preference to one State... over another'' was strictly forbidden. The Mirror Taxes Act offended that prohibition.

198. The applicability of s 99 to s 52(i) : It is not as if the drafters, and those advising the

ATC 5030

Commonwealth in the preparation of the Mirror Taxes Act, were unaware of (or overlooked) the ``preference'' problem presented by s 99. As I have shown, careful attention was paid to the strict requirements of s 81, also appearing in Ch IV, providing for ``revenues'' of the Commonwealth to be received into the one Consolidated Revenue Fund and to be appropriated therefrom. The requirements of s 81 were duly complied with. So why did the drafters not conform with the requirements of s 99 of the Constitution, on the face of its language equally stringent?

199. The answer to this question is found not in some artificially narrow construction by those advising the Commonwealth of the scope and operation of s 99 (or of the word ``preference'' appearing there). The advice was that s 99 of the Constitution had no application at all to a law made pursuant to s 52(i), as the Mirror Taxes Act purported to be. The theory of this advice was that the Bill that became the Mirror Taxes Act concerned a subject upon which the Federal Parliament had ``exclusive power'' of legislation. It was therefore for that Parliament, in effect, to do as it pleased without having to comply with a provision such as s 99.

200. One can see the glimmer of a textual foundation for this proposition, rooted in the word ``exclusive'' and in the notion that, in such matters of ``exclusive'' federal concern, the Parliament was unconstrained by the vexing limitation imposed to protect the several States in respect of disbursements from the federal Consolidated Revenue Fund. Such a view might be reinforced by comforting notions that, after all, the federal law in question was doing no more than giving back to the States what would have been their revenue, but for the troublesome interposition of s 52(i) and the decision of this Court in Allders . [237] 96 ATC 5135 ; (1996) 186 CLR 630. In Allders at 633, the Solicitor-General for the Commonwealth sought to uphold the interest of the taxpayer, Allders. At 635 he opposed reopening Worthing . So it cannot be suggested that Allders came as an unwelcome surprise to the Commonwealth.

201. Seeking to justify the apparent departure from the constitutional requirement of equal disbursement of revenue amongst the several States out of the one Consolidated Revenue Fund pursuant to federal law, the explanatory memorandum circulated with the Bill that became the Mirror Taxes Act was quite clear: [238] Australia, House of Representatives, Commonwealth Places (Mirror Tax) Bill 1998 (Cth), Explanatory Memorandum at 7-8 [ 1.15]- [ 1.16].

``The limitation on the Commonwealth's taxing power, precluding its use so as to discriminate between States or parts of States, does not apply to the Bill. The Government is also advised that the constitutional limitations on laws imposing taxation, requiring laws imposing taxation to deal with no other matter, and requiring such laws to deal with one subject of taxation only (Constitution, section 55), do not apply to the Bill. As these principles do not usually restrict State drafting of State taxing laws, the task of adopting relevant State drafting by reference could have been made more difficult if those principles applied.

Differences between the taxing laws of different States could have been argued to produce discrimination between States or parts of States; the legislation could have been split between an appropriation Bill and an assessment Bill, requiring selective reference to different parts of State drafting for the two purposes; and the question could have arisen whether mirror taxation is one, or more than one, subject of taxation. Because of the powers under which the Bill is proposed , each of these difficulties is believed to be irrelevant.''

(emphasis added)

202. The Commissioner and interveners (including the Commonwealth) urged acceptance of this reasoning. However, it is flawed. It must be rejected. It is inconsistent with the plain words of the Constitution, with that document's structure and purposes and with the Commonwealth's practice in other respects.

203. As to the words, s 52 (like s 51) opens with the qualifying phrase ``subject to this Constitution''. It may be that the structure of the Constitution would have imported such a limitation in any case. A national constitution expressed in relatively brief language must be read as a whole. The several parts must be integrated with each other so far as the context allows. However, in the case of s 52 the qualifying phrase is expressly stated. There is no reason, either in the language or context of s 99, if it otherwise applies, to exclude it from controlling laws made under s 52. On the contrary, so far as s 52 supports a law of ``revenue'' (the subject matter of s 99) in respect of a Commonwealth place, the limitation imposed by s 99 applies, in terms, to a law made pursuant to that section.

204. The purpose and history of s 99 : The purpose and history of s 99 reinforce this conclusion. It is a provision in a crucial part of the Constitution that was the subject of fierce negotiation before federation. One of the impediments to federation, that almost

ATC 5031

prevented its achievement in 1901, was the fear of preferential disbursement of federal revenue to some of the new States, in ways that would be unfair to others. This was, for example, a reason why, in Tasmania, Andrew Inglis Clark, a ``primary architect of our Constitution'', [239] Theophanous v The Herald and Weekly Times Ltd & Anor (1994) Aust Torts Reports ¶ 81-297 at 61,623; (1994) 182 CLR 104 at 172 per Deane J. withheld his support from the final document. [240] Neasey and Neasey, Andrew Inglis Clark , (2001) at 208-209.

205. At the time of federation, the concern of the founders related to the supposed efficiency of a colonial regime committed to policies of free trade as against protectionism. There was equal concern that smaller, less populous States would be a burden on the larger ones. [241] Garran, Prosper the Commonwealth , (1958) at 45-49, 87-88, 99-100. The proposed federal compact nearly came unstuck several times because Mr George Reid, and those of like persuasion, ``compared New South Wales to a teetotaller proposing to keep house with five drunkards''. [242] Garran, Prosper the Commonwealth , (1958) at 99. See also Australian Dictionary of Biography , (1988), vol 11 at 351. There would have been no federation, certainly none in 1901, without the acceptance of the provisions in Ch IV of the Constitution, notably s 99.

206. Sir Robert Garran explained: [243] Garran, Prosper the Commonwealth , (1958) at 118-119.

``The greatest trouble of all was over federal and State finance. The States were giving up all their customs and excise revenue. The federal tariff was an unknown quantity, but whatever it might be the Commonwealth would at the outset have far too much revenue, and the States far too little; some of it must be returned to the States. But how much should the Commonwealth raise? How much should it be obliged to return? And on what basis of apportionment? Here were questions that not only vitally affected the budget of each State, but raised the stormy question of free trade versus protection. All sorts of hard and fast formulas were tried and found wanting, owing to the impossibility of forecasting the future. With many misgivings formulas were agreed on for the first ten years; after that, the only possible way was to `trust the Federal Parliament'.''

The trust, however, was controlled by one strict rule against giving ``preference'' to States or parts of States in the federal disbursement of its revenue.

207. Unlike some provisions in Ch IV, s 99 was neither temporary in its operation, nor limited to endure for a specified interval. [244] As in the Constitution, ss 87 (``ten years after the establishment of the Commonwealth''), 88 (``within two years after the establishment''), 93 (`` [ d]uring the first five years after the imposition of uniform duties of customs''), 94 (`` [ a]fter five years from the imposition of uniform duties of customs'') and 96 (`` [ d]uring a period of ten years''). Nor was it allowed to fall into desuetude. [245] As in the Constitution, s 101 (Inter-State Commission). It was not amended by referendum, as s 105 was to be, so as to remove an application limited by reference to time. [246] Constitution, s 105, deleting the words ``as existing at the establishment of the Commonwealth''. See Constitution Alteration (State Debts) 1909 (Cth). It was a permanent, important, governing principle of the Australian federal arrangement. One of the primary objects for the creation of this Court was to uphold that compact. It must be upheld by reference to the text of the Constitution. Where the constitutional charter is clear and applicable, as it is here, it cannot be overridden by intergovernmental agreements and inter- dependent federal and State legislation. [247] See Attorney-General (WA) v Marquet (2003) 78 ALJR 105 at 140-144 [ 202]- [ 216]; 202 ALR 233 at 282-286 .

208. I therefore agree with this much of the conclusion expressed in the joint reasons. [248] Joint reasons at [ 83]- [ 84]. Laws made under s 52 of the Constitution are subject to the requirements of s 99. I also agree with the joint reasons that the Mirror Taxes Act is a law or regulation of ``revenue'' within s 99 of the Constitution. As such, it attracts the prohibition on ``preference'' by any law of revenue ``to one State... over another State''. [249] The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 153-154 , quoted in the joint reasons at [ 82].

209. It follows that the premise upon which the Commonwealth considered that it could ignore s 99 is knocked away. This is a serious result because it seems clear from the quoted passage in the explanatory memorandum that, but for that premise, the federal officers, rightly, perceived great difficulties in the structure and expression of the Mirror Taxes Act. As I shall indicate, those difficulties are real. In the event, they prove fatal.

210. Apart from anything else, it might have been expected that the error of advice would have been avoided because of the great care, taken elsewhere in the Mirror Taxes Act, [250] s 23(1). to conform to the other applicable provision in Ch IV, namely s 81. If a law made under s 52(i) of the Constitution was subject to that provision (as the Commonwealth accepted, provided by its law and conformed to in practice) it is puzzling to imagine how it could have been thought that s 99 would not equally apply. Presumably, it was considered that the rule about the Consolidated Revenue Fund was somehow more fundamental than the rule against giving preference to particular States in laws of revenue. However that might be, mistake there was. It led the drafters of the Mirror Taxes Act into constitutionally forbidden territory.

211. The impermissible ``preference'' : I now reach the point where I depart from the joint reasons. [251] See joint reasons at [ 85]- [ 86]. It may be accepted that the ``preference'' to one State over another State, appearing in terms of a prohibition in s 99, means more than simply different outcomes in

ATC 5032

the application of the federal revenue law as between different States. [252] Elliott v The Commonwealth (1936) 54 CLR 657 at 682-683 . To take the most obvious example, a law of revenue providing for the payment to one State of a sum calculated by reference to the population of that State, the aggregate or per capita incomes of the taxpayers in that State or some like discrimen , would not, as such, offend s 99. That is not the kind of ``preference'' to which that section is addressed. What is forbidden is ``preference'' that involves the differential application of the federal law in question in a way that affects the disbursement amongst the States by reference to their character as States (or any part thereof). Differentiation may exist. But if it is created by a federal revenue law, it cannot give ``preference''. The hallmark of federal laws, so far as they are classified (as here) as laws of ``revenue'', is that they must be even-handed as between the several States.

212. In ascertaining the meaning of ``preference'', as in all matters of constitutional interpretation, the duty of this Court is to have regard to the substance of the impugned law and not, as such, its form . [253] Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27 ; Ha 97 ATC 4674 at 4683; (1997) 189 CLR 465 at 498. See also Re Wakim (1999) 17 ACLC 1055 at 1,078 [ 103]; (1999) 198 CLR 511 at 572 [ 103]. The concern of the Court, in giving effect to one of the comparatively few express prohibitions in the Constitution, must necessarily be to address and uphold its object. It is not, as such, to evaluate the policy that lay behind the impugned law or the drafting in which that policy is expressed.

213. It does not matter that the intentions of the drafters of the Mirror Taxes Act were pure; that the objects in sight were laudable; that the social justifications for particular State preference were overwhelming; or that the State policy concerns were compelling. All of these are issues that might possibly be capable of resolution by the kind of differentiated financial assistance provided for in s 96 of the Constitution. However, if amounting to ``preference'', they cannot be allowed in a ``revenue'' law (of which this is one) conforming to s 99.

214. Care must be taken against slipping out of the constitutional language appearing in s 99. It makes no explicit reference to ``discrimination'' or ``discriminate''. These words appear elsewhere in the constitutional text. [254] Constitution, ss 51(ii), 117. However, whilst one can accept that the kind of ``preference'' which is forbidden carries a pejorative or discriminatory flavour, the eyes should remain fixed on the words of s 99. Those words address attention to a prohibition of a federal law, relevantly, in the giving of ``preference to one State... over another State'', and doing so ``by any law... of... revenue''.

215. The word ``preference'' is defined in the Macquarie Dictionary [255] 3rd ed (1997) at 1686. as ``prior favour or choice'', ``a practical advantage given to one over others'', a ``prior right or claim''. The New Shorter Oxford English Dictionary [256] (1993), vol 2 at 2330-2331. defines ``preference'' to be `` [ t]he action or an act of preferring or being preferred;... prior choice''. In the context of economics, it defines the word as the ``favouring of, or an advantage given to, one... over others in business relations;... the favouring of a country by admitting its products free or at a lower import duty than those of other countries''. So the focus of attention is upon affording differential favours or advantages, the existence of a particular favour or advantage being judged in a practical way.

216. The history that lay behind the Mirror Taxes Act may be understood, as may the object of replenishing an unexpected and sudden shortfall in State revenues consequent upon Allders . Cooperation between the elements of the Commonwealth (federal, State and Territory) is a basic postulate of the Australian Constitution. [257] Re Wakim (1999) 17 ACLC 1055 at 1,094-1,095 [ 193]- [ 195]; (1999) 198 CLR 511 at 602-603 [ 193]- [ 195]. Such cooperation is to be upheld, so far as the constitutional text permits. However, in this case, we face not an implied constitutional prohibition (as has caused difficulties enough in the past [258] eg Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193 (implied rule of law); R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 (implied separation of the judicial power); Re Wakim (1999) 17 ACLC 1055 ; (1999) 198 CLR 511 (implied prohibition of State conferral of judicial power on federal courts). ). Section 99 is an express injunction, deliberately adopted as part of the federal bargain upon the basis of which the Commonwealth was established. If the prohibition is enlivened, arguments of convenience melt away. The prohibition must simply be obeyed. This Court must say so. If anything, it is made even more clear in this case because there is a reflection of a somewhat similar prohibition on discrimination in taxation laws in s 51(ii) of the Constitution. [259] Constitution, s 51(ii): ``taxation; but so as not to discriminate between States or parts of States''.

217. Explanations of the ``preference'' : In Cameron v DFC of T , [260] (1923) 32 CLR 68 at 79. Starke J, referring both to ss 99 and 51(ii), said: [261] Colonial Sugar Refining Co Ltd v Irving [ 1906] AC 360 at 367 and R v Barger (1908) 6 CLR 41 were referred to.

``A law with respect to taxation applicable to all States and parts of States alike does not infringe the Constitution merely because it operates unequally in the different States - not from anything done by the law- making authority, but on account of the inequality of conditions obtaining in the respective States. On the contrary, a law with respect to taxation which takes as its

ATC 5033

line of demarcation the boundaries of States or parts of States necessarily discriminates between them, and gives a preference to one State or part thereof over another State or part thereof.''

218. In the same case, Isaacs J explained the form of ``discrimination'' that was forbidden by s 51(ii) in terms that are equally applicable to the kind of ``preference'' that is forbidden under s 99 of the Constitution: [262] Cameron (1923) 32 CLR 68 at 76-77.

``Stock in Queensland and stock in New South Wales are, by reason solely of their State situation, `treated differently,' by the mere fact that different standards are applied to them respectively. It does not matter whether those legal standards are arbitrary or measured, whether dictated by a desire to benefit or to injure, the simple fact is they are `different,' and those different legal standards being applied simply because the subject of taxation finds itself in one State or the other there arises the discrimination by law between States which is forbidden by the Constitution.''

219. Also in Cameron , Knox CJ said: [263] (1923) 32 CLR 68 at 71-72.

``It is manifest that the fair average value, as found by the table, of stock in different States varies according to the State in which such stock are found; and that this is the only discrimen pointed out in the table.... [ W]hen the localities selected to furnish the discrimen are States or parts of States the discrimination is expressly forbidden.''

220. In the same decision, Higgins J explained: [264] (1923) 32 CLR 68 at 78.

``Two pastoralists may in fact make £ 1,000 net profit - one in New South Wales, the other in Queensland; and yet under these Rules they may be treated as making unequal profit, and be liable to pay unequal income tax. The only reason for this result is that one is in Queensland, the other in New South Wales.''

221. The criteria explained in Cameron have been accepted in later cases. [265] eg Conroy v Carter (1968) 118 CLR 90 at 99-100 per Taylor J (Kitto and Windeyer JJ concurring). There have been relatively few such cases. Doubtless, this is because, until now, few attempts have been made to enact federal revenue laws containing a provision that selects the place of disbursement of the federal revenue by reference to the tax being higher in one State and lower elsewhere by reference to the same event or happening occurring in the other State. In the past the prohibition in s 99 has been obeyed. On this occasion it has not.

222. By the Mirror Taxes Act, the State revenue authorities have, pursuant to federal law, been authorised to collect, effectively on behalf of the Commonwealth, and to pay into the one federal Consolidated Revenue Fund, taxes levied in significantly different amounts in relevantly identical circumstances, the sum raised and disbursed to the States by the Commonwealth taking as ``its line of demarcation the boundaries of States''. [266] Cameron (1923) 32 CLR 68 at 79. In my view, this would be a forbidden discrimination in taxation within s 51(ii). But more to the present point, in the matter of the federal disbursement pursuant to a revenue law such as the Mirror Taxes Act, it is the giving of forbidden ``preference'' to one State over another State by such federal law . This is not a mere matter of form. It is the whole substance and purpose and effect of the federal law in question. In its disbursements, it prefers one State over another State. [267] cf Barger (1908) 6 CLR 41 at 79-80, 105-108, 130-132; Cameron (1923) 32 CLR 68 at 79-80; James v The Commonwealth (1928) 41 CLR 442 at 457, 460-462, 464-465 ; Crowe v The Commonwealth (1935) 54 CLR 69 at 83, 86, 92, 96-97 ; Elliott (1936) 54 CLR 657 at 668-669, 678, 680, 682-683, 686-693; FC of T v Clyne (1958) 11 ATD 428 at 433-434; (1958) 100 CLR 246 at 265-266 . It cloaks the federal Act with State-referred differentiation.

223. State law can, as State legislators please, differentiate within a State's own borders and concerns in the revenue the State collects from State taxpayers. State law may do so in matters of stamp duty, so that instruments brought to tax have significantly different consequences as between the several States of the Commonwealth. In doing this, there is no offence to the Constitution. But when, as here, the federal legislative power is engaged, the prohibition in s 99 of the Constitution must be obeyed. The Mirror Taxes Act conflicts with s 99. On its face, it offends the Constitution.

224. Past authority does not save the law : The citation of Elliott v The Commonwealth [268] (1936) 54 CLR 657. See joint reasons at [ 87]- [ 88]. in the joint reasons does not save the impugned federal law from invalidity under s 99 of the Constitution. As the constitutional text, the history that preceded it and the cases that have applied it [269] See reasons of McHugh J at [ 125]- [ 158] and especially Clyne (1958) 11 ATD 428 at 433-434, 435, 437-438; (1958) 100 CLR 246 at 265-266, 268, 272. show, the imposition of differentiated federal revenue collection and disbursement as between the several States was, and is, a very sensitive federal issue. It is not enough to say that State taxes are different inter se and, therefore, that ``discrimination'' in the operation of the federal law does not ``give preference'' as forbidden by the Constitution. The critical words are ``shall not... give preference''. It is the latter phrase that must be addressed, not, as such, the concept of

ATC 5034

``discrimination'' which imports different notions. [270] Elliott (1936) 54 CLR 657 at 683 per Dixon J (diss). See reasons of McHugh J at [ 156]- [ 157].

225. The impugned law does ``give preference'' when looked at from the perspective of the several States of the Commonwealth, viewed from the standpoint for which the prohibition on giving such preference in revenue laws was provided in s 99. It is certainly so from the perspective of the Australian taxpayers in the several States. It is so directly by reference to their locality in different States. It is so under federal not State law. Obviously, on the face of the federal law, and in its operation by reference to State geography, the payment from the federal Consolidated Revenue Fund ``gives preference'' to one State over another. The character of the federal law for these constitutional purposes is therefore fixed by the consequences of that federal law as a revenue measure, necessarily burdening and advantaging differentially those subject to it. The constitutional character is not determined by other provisions of other laws of the States.

226. The rule in s 99 of the Constitution is one fundamental to the requirements of the federal compact. It is addressed to federal lawmaking as such. It is a guarantee not only to the States as political entities but to the people of Australia (the ``electors'') living in the different States. The provision should not be eroded by this Court, which is duty bound to uphold that compact. Least of all should this be done by reference to judicial dicta concerning other provisions of the Constitution securing other and different purposes.

Justification of helping States to overcome inconvenience

227. Inadmissible justifications : Bereft of the postulated excuse for the impermissible ``preference'' on the face of the federal law, the Commissioner (and the Commonwealth) argued that there was no ``preference'' because, viewed as a matter of equalising the position of taxpayers in Commonwealth Places with equivalent taxpayers elsewhere within the boundaries of the State concerned, the kind of differentiation forbidden by s 99, by reference to the State discrimen , was not engaged. This argument convinces a majority of this Court. [271] Joint reasons at [ 91]- [ 95]. It does not convince me.

228. The impugned law (the Mirror Taxes Act) is a statute made by the Federal Parliament. It is not, as such, a series of State laws although supplementary laws of the States were enacted to facilitate the impugned scheme. Alone, such State laws would have been incompetent to intrude into the regulation of events or things in or of Commonwealth Places. There, the Federal Parliament enjoyed ``exclusive'' legislative power. Still less could the State laws have disbursed federal revenue from the one Consolidated Revenue Fund in respect of such places. Thus, it is necessary, in judging the federal law against the standard of s 99 of the Constitution, to look to the effect of what it does and the criterion that it selects for its operation.

229. When this is done, the federal law, in substance and effect, provides for differentiated payment as between the States. It does not address internal State adjustments within the boundaries of the States concerned - as such not a matter of federal legislative power. The Mirror Taxes Act provides for national disbursements to all of the States. It does so by giving federal preferences ``to one State... over another State''. Under the scheme of the Constitution a payment would necessarily have to come in the form of an appropriation for the purposes of the Commonwealth from the ``one Consolidated Revenue Fund'' provided by s 81 of the Constitution. This, indeed, is what the Mirror Taxes Act purports to do. [272] Mirror Taxes Act, s 23(4). It then provides for the payment to each State of the sums provided. What is important is not, as such, the source and purpose of the payment, for the moneys received by the Commonwealth undoubtedly passed into the Consolidated Revenue Fund. It is in the appropriations from that federal Fund that the prohibition on ``preference to one State... over another State'' is enlivened. Matters antecedent, excuses and supposed justifications cannot circumvent or avoid the constitutional prohibition on ``preference''. The Constitution looks to the effect and substance of what the federal law actually does as such a law. And it must be remembered that the source of the legislative power to make the federal law is the exclusive power of the Federal Parliament over legislation with respect to Commonwealth Places.

230. The appeal to the supposed justification of equalising the burden on taxpayers in different States by reference to ``the corresponding State taxing law'' [273] Mirror Taxes Act, s 8(4)(b)(ii). See joint reasons at [ 92]. within those States , so that taxpayers will be ``as nearly as possible [ subject to the same burden] as [ they]

ATC 5035

would be under the corresponding State taxing law alone if the Commonwealth Places in the State were not Commonwealth Places'', [274] Mirror Taxes Act, s 8(4)(b). cannot circumvent the prohibition stated in s 99 on preferences in federal revenue laws. So far as the exclusive federal power to make laws with respect to Commonwealth Places is concerned, its exercise must conform to the federal constitutional standard. It is not enough that it conforms to the varying standards of the States. The federal standard, for well established reasons, forbids preferences. Those reasons gave rise to s 99 of the Constitution. The Mirror Taxes Act on its face enacts differential preferences as between the States, in the benefits of federal taxation revenue received from the one federal Consolidated Revenue Fund. Such differentiation is forbidden by the Constitution. No amount of explanation or intra -State justification can sustain the offending provisions.

231. The Commonwealth is a national polity. It is obliged to conform to national standards stated in the Constitution. None of those standards was more important at federation, and few have proved so beneficial since, than the creation by the Constitution of a continental common market and national economy. Within that market and economy, the Commonwealth is obliged, in all of its revenue laws, to avoid giving preferences as between the States. The Mirror Taxes Act only failed to comply with this requirement because it was wrongly assumed that it was exempt from the requirements of s 99. The belated, previously unconsidered, justification now advanced should be rejected.

232. Overcoming inconvenience : The supposed inconvenience of this conclusion is greatly exaggerated. [275] See Worthing (1970) 123 CLR 89 at 131-132 per Windeyer J. There were several courses that the Federal Parliament could have adopted, conformably with s 99 of the Constitution, if it wished to offset the fall in State revenues consequential upon the Allders decision without enacting inter -State preferences. It could, for example, have struck a common federal impost upon instruments made in or in relation to Commonwealth Places and provided for reimbursement from the fund thereby collected to the States without giving ``preference'' by reference to the boundaries (or parts) of the States concerned.

233. Alternatively, it could have devised a scheme to give financial assistance to a State ``on such terms and conditions as the Parliament thinks fit'' pursuant to s 96 of the Constitution. Doubtless, there were other ways in which the perceived Allders problem could have been solved, if that were the intergovernmental wish. What could not be done was to enact a federal law, such as the Mirror Taxes Act, disbursing federal revenue from the one federal Consolidated Revenue Fund to different States according to a formula giving preference as between them in terms of a criterion expressed by reference to the boundaries of the State concerned.

234. Conclusion: approach is uncon- stitutional : This Court should not struggle to ``correct'' the outcome in Allders . A price of the Federal Parliament's exclusive legislative power to make laws with respect to Commonwealth Places is that, in such places, State laws, including State revenue laws, are inoperative by their own force. The attempt effectively to revive them with all their many differences, through a vehicle of federal law, unsurprisingly runs into constitutional difficulties. By its nature, federal legislation normally has a national and not a local operation. If it is taxation legislation, it must refrain from giving preference between States and parts of States. And so far as the federal law is one of revenue, the imposition of preference to one State over another is expressly and emphatically prohibited.

235. A court such as this must not only give meaning to the constitutional text having regard to its language and history. It must view each decision as a precedent upon which others may build in the future. [276] See Silbert v Director of Public Prosecutions (WA) (2004) 78 ALJR 464 at 467-468 [ 20]- [ 21]; 205 ALR 43 at 48 . Any wavering over preferential payments of federal revenue by reference to the criterion of State identification offends text and history. More importantly, it offends a pivotal control on the disbursement of federal revenue enshrined in the Constitution as an express prohibition.

236. Result: a breach of s 99 : The consequence is that the Mirror Taxes Act is invalid on the ground that it is contrary to s 99 of the Constitution. An attempt is made in s 4 of the Mirror Taxes Act to breathe life and ``effect'' into the Act by particular reference to nominated sections of the Constitution. Necessarily, no such provision can stand against an express constitutional prohibition such as appears in s 99. No statutory attempt is made to do so.

ATC 5036

237. The foregoing reasoning requires that question 2(d) in the stated case be answered ``Yes''. In the result, Permanent succeeds in its challenge to the purported imposition upon it, under the Mirror Taxes Act, of the duty which the Commissioner seeks to recover. The Act cannot be read down nor can the impost otherwise be held constitutionally valid.

Residual questions are unnecessary to answer

238. It follows that it is unnecessary to answer any of the other questions in question 2. To do so at any length, in the face of the invalidation of the Mirror Taxes Act, would be to pursue issues that, for me, are theoretical.

239. Whilst I incline to agree with the opinions expressed in the joint reasons rejecting Permanent's submissions that the Mirror Taxes Act imposes taxation dealing with more than one subject of taxation; [277] Joint reasons at [ 38]- [ 54]. impermissibly delegates the legislative power of the Commonwealth; [278] Joint reasons at [ 75]- [ 78], applying Gould (1998) 16 ACLC 316 at 382-383 [ 284]- [ 287]; (1998) 193 CLR 346 at 485-487 [ 284]- [ 287]. offends s 51(ii) (which on the face of things is not engaged, the Act being made under s 52(i) [279] Joint reasons at [ 79]- [ 80], applying Allders 96 ATC 5135 at 5151-5152, 5160-5161; (1996) 186 CLR 630 at 662, 678-680. and is ``otherwise'' invalid, [280] Joint reasons at [ 97]. I have much more hesitation about the correctness of their Honours' conclusion concerning the application of the first limb of s 55 of the Constitution. [281] Joint reasons at [ 55]- [ 74]. Certainly, I agree that the issues raised under s 55 are justiciable. [282] Joint reasons at [ 44]- [ 50]. I also agree with what their Honours write about Buchanan v The Commonwealth (1913) 16 CLR 315 . See joint reasons at [ 31]- [ 36].

240. Ordinary prudence dictates that, where constitutional invalidity is established on one ground (as in my view it is), the proliferation of unnecessary dicta about other grounds of invalidation should be avoided. I will obey that injunction.

Orders

241. For the foregoing reasons, I agree in the answers to questions and in the orders proposed by McHugh J. [283] Reasons of McHugh J at [ 160]- [ 163].

ORDER

Questions in the Case Stated answered as follows:

1.

2.

3.

4.

Footnotes

[188] By Gummow J, 30 January 2004.
[189] The Stamps Act was replaced by the Duties Act 2000 (Vic) on 1 July 2001. The relevant legislation for these reasons is the Stamps Act.
[190] 96 ATC 5135 ; (1996) 186 CLR 630.
[191] Constitution, s 52(i).
[192] $762,583.20. See reasons of Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ at [ 9]; reasons of McHugh J at [ 103].
[193] Federal Treasurer, Press Release No 109, 6 October 1997.
[194] Federal Treasurer, Press Release No 109, 6 October 1997.
[195] Federal Treasurer, Press Release No 109, 6 October 1997.
[196] (1970) 123 CLR 89.
[197] Joint reasons at [ 9]- [ 12].
[198] Reasons of McHugh J at [ 107]- [ 110].
[199] Joint reasons at [ 16]- [ 19]; reasons of McHugh J at [ 116]- [ 123].
[200] Joint reasons at [ 20].
[201] Joint reasons at [ 22]- [ 24].
[202] Mirror Taxes Act, s 23(4).
[203] Joint reasons at [ 13]- [ 14]. See also reasons of McHugh J at [ 110].
[204] Commonwealth Places (Application of Laws) Act 1970 (Cth).
[205] Commonwealth Places (Mirror Taxes Administration) Act 1999 (Vic), as amended by Statute Law Revision Act 2000 (Vic), s 3, Sched 1, item 23.
[206] Question 2(a).
[207] Question 2(c).
[208] Question 2(d).
[209] Question 2(b).
[210] Permanent Trustee Australia Ltd v Commissioner of State Revenue [ 2004] HCATrans 043 at 1444-1446 .
[211] Permanent Trustee [ 2004] HCATrans 043 at 1484-1485.
[212] Permanent Trustee [ 2004] HCATrans 043 at 1489-1492.
[213] (1984) 154 CLR 311 at 316. See also Philip Morris Ltd v Commissioner of Business Franchises (Vict) (1989) 167 CLR 399 at 409 ; Brownlee v The Queen (2001) 207 CLR 278 at 312-315 [ 100]- [ 108] ; British American Tobacco Australia Ltd v Western Australia (2003) 77 ALJR 1566 at 1591 [ 134]; 200 ALR 403 at 437 .
[214] Constitution, s 71.
[215] Australian Agricultural Co v Federated Engine-Drivers and Firemen's Association of Australasia (1913) 17 CLR 261 at 277-279 ; Queensland v The Commonwealth (1977) 139 CLR 585 at 592-594 ; Stevens v Head (1993) Aust Torts Reports ¶ 81-203 at 61,983; (1993) 176 CLR 433 at 461-462 ; Lange v Australian Broadcasting Corporation (1997) Aust Torts Reports ¶ 81-434 at 64,229-64,232; (1997) 189 CLR 520 at 562-566 ; Coleman v Power (2004) 78 ALJR 1166 at 1219 [ 289], 1221-1222 [ 298], 1222 [ 301] per Callinan J; 209 ALR 182 at 255, 257-259 .
[216] Victoria v The Commonwealth (``the Payroll Tax Case '') (1971) 122 CLR 353 at 395-397.
[217] Barwick CJ, Menzies, Windeyer and Walsh JJ; McTiernan, Kitto and Owen JJ dissenting.
[218] Allders 96 ATC 5135 at 5155; (1996) 186 CLR 630 at 669, noting that Windeyer J stated that he had changed his mind during argument: Worthing (1970) 123 CLR 89 at 127.
[219] See eg Ha v New South Wales 97 ATC 4674 ; (1997) 189 CLR 465 ; Re Patterson; Ex parte Taylor (2001) 207 CLR 391 ; Shaw v Minister for Immigration and Multicultural Affairs (2003) 78 ALJR 203 ; 203 ALR 143 .
[220] (1970) 123 CLR 89 at 136-141.
[221] By the Constitution, s 52(i).
[222] Worthing (1970) 123 CLR 89 at 102 per Barwick CJ, 131 per Windeyer J, 139 per Walsh J.
[223] Attorney-General (NSW) v Stocks and Holdings (Constructors) Pty Ltd (1970) 124 CLR 262 at 269 per McTiernan J.
[224] 96 ATC 5135 at 5159; (1996) 186 CLR 630 at 676-677.
[225] Sue v Hill (1999) 199 CLR 462 is an example. See also Gould v Brown (1998) 16 ACLC 316 ; (1998) 193 CLR 346 ; Re Wakim; Ex parte McNally (1999) 17 ACLC 1055 ; (1999) 198 CLR 511 .
[226] R v Phillips (1970) 125 CLR 93 ; Stocks and Holdings (1970) 124 CLR 262; Allders 96 ATC 5135 ; (1996) 186 CLR 630. (Leave to reopen Worthing was denied in Allders .)
[227] Svikart v Stewart (1994) 181 CLR 548 at 557 ; Paliflex Pty Ltd v Chief Commr of State Revenue (NSW) 2003 ATC 4983 at 4987 [ 18], 4988 [ 24], 4991 [ 40]; (2003) 78 ALJR 87 at 90 [ 18], 92 [ 24], 95 [ 40]; 202 ALR 376 at 381, 383, 387-388 .
[228] In Allders 96 ATC 5135 at 5143 and 5148; (1996) 186 CLR 630 at 646 and 655 Dawson J and Toohey J dissented but accepted the authority of Worthing .
[229] Worthing (1970) 123 CLR 89 at 131. See also at 103 per Barwick CJ.
[230] eg Commonwealth Places (Administration of Laws) Act 1970 (Vic).
[231] Worthing (1970) 123 CLR 89 at 131 per Windeyer J. See also at 103 per Barwick CJ, 120 per Menzies J, 140-141 per Walsh J.
[232] See below these reasons at [ 239].
[233] Permanent denied that the Take-Out Amount under the Development Agreement in question was consideration in the nature of a premium. However, for the purposes of the Table and to elaborate its present argument, it assumed against itself that it was.
[234] Mirror Taxes Act, s 23(3).
[235] Constitution, s 96.
[236] Constitution, s 99 (emphasis added).
[237] 96 ATC 5135 ; (1996) 186 CLR 630. In Allders at 633, the Solicitor-General for the Commonwealth sought to uphold the interest of the taxpayer, Allders. At 635 he opposed reopening Worthing . So it cannot be suggested that Allders came as an unwelcome surprise to the Commonwealth.
[238] Australia, House of Representatives, Commonwealth Places (Mirror Tax) Bill 1998 (Cth), Explanatory Memorandum at 7-8 [ 1.15]- [ 1.16].
[239] Theophanous v The Herald and Weekly Times Ltd & Anor (1994) Aust Torts Reports ¶ 81-297 at 61,623; (1994) 182 CLR 104 at 172 per Deane J.
[240] Neasey and Neasey, Andrew Inglis Clark , (2001) at 208-209.
[241] Garran, Prosper the Commonwealth , (1958) at 45-49, 87-88, 99-100.
[242] Garran, Prosper the Commonwealth , (1958) at 99. See also Australian Dictionary of Biography , (1988), vol 11 at 351.
[243] Garran, Prosper the Commonwealth , (1958) at 118-119.
[244] As in the Constitution, ss 87 (``ten years after the establishment of the Commonwealth''), 88 (``within two years after the establishment''), 93 (`` [ d]uring the first five years after the imposition of uniform duties of customs''), 94 (`` [ a]fter five years from the imposition of uniform duties of customs'') and 96 (`` [ d]uring a period of ten years'').
[245] As in the Constitution, s 101 (Inter-State Commission).
[246] Constitution, s 105, deleting the words ``as existing at the establishment of the Commonwealth''. See Constitution Alteration (State Debts) 1909 (Cth).
[247] See Attorney-General (WA) v Marquet (2003) 78 ALJR 105 at 140-144 [ 202]- [ 216]; 202 ALR 233 at 282-286 .
[248] Joint reasons at [ 83]- [ 84].
[249] The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 153-154 , quoted in the joint reasons at [ 82].
[250] s 23(1).
[251] See joint reasons at [ 85]- [ 86].
[252] Elliott v The Commonwealth (1936) 54 CLR 657 at 682-683 .
[253] Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 27 ; Ha 97 ATC 4674 at 4683; (1997) 189 CLR 465 at 498. See also Re Wakim (1999) 17 ACLC 1055 at 1,078 [ 103]; (1999) 198 CLR 511 at 572 [ 103].
[254] Constitution, ss 51(ii), 117.
[255] 3rd ed (1997) at 1686.
[256] (1993), vol 2 at 2330-2331.
[257] Re Wakim (1999) 17 ACLC 1055 at 1,094-1,095 [ 193]- [ 195]; (1999) 198 CLR 511 at 602-603 [ 193]- [ 195].
[258] eg Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 193 (implied rule of law); R v Kirby; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 (implied separation of the judicial power); Re Wakim (1999) 17 ACLC 1055 ; (1999) 198 CLR 511 (implied prohibition of State conferral of judicial power on federal courts).
[259] Constitution, s 51(ii): ``taxation; but so as not to discriminate between States or parts of States''.
[260] (1923) 32 CLR 68 at 79.
[261] Colonial Sugar Refining Co Ltd v Irving [ 1906] AC 360 at 367 and R v Barger (1908) 6 CLR 41 were referred to.
[262] Cameron (1923) 32 CLR 68 at 76-77.
[263] (1923) 32 CLR 68 at 71-72.
[264] (1923) 32 CLR 68 at 78.
[265] eg Conroy v Carter (1968) 118 CLR 90 at 99-100 per Taylor J (Kitto and Windeyer JJ concurring).
[266] Cameron (1923) 32 CLR 68 at 79.
[267] cf Barger (1908) 6 CLR 41 at 79-80, 105-108, 130-132; Cameron (1923) 32 CLR 68 at 79-80; James v The Commonwealth (1928) 41 CLR 442 at 457, 460-462, 464-465 ; Crowe v The Commonwealth (1935) 54 CLR 69 at 83, 86, 92, 96-97 ; Elliott (1936) 54 CLR 657 at 668-669, 678, 680, 682-683, 686-693; FC of T v Clyne (1958) 11 ATD 428 at 433-434; (1958) 100 CLR 246 at 265-266 .
[268] (1936) 54 CLR 657. See joint reasons at [ 87]- [ 88].
[269] See reasons of McHugh J at [ 125]- [ 158] and especially Clyne (1958) 11 ATD 428 at 433-434, 435, 437-438; (1958) 100 CLR 246 at 265-266, 268, 272.
[270] Elliott (1936) 54 CLR 657 at 683 per Dixon J (diss). See reasons of McHugh J at [ 156]- [ 157].
[271] Joint reasons at [ 91]- [ 95].
[272] Mirror Taxes Act, s 23(4).
[273] Mirror Taxes Act, s 8(4)(b)(ii). See joint reasons at [ 92].
[274] Mirror Taxes Act, s 8(4)(b).
[275] See Worthing (1970) 123 CLR 89 at 131-132 per Windeyer J.
[276] See Silbert v Director of Public Prosecutions (WA) (2004) 78 ALJR 464 at 467-468 [ 20]- [ 21]; 205 ALR 43 at 48 .
[277] Joint reasons at [ 38]- [ 54].
[278] Joint reasons at [ 75]- [ 78], applying Gould (1998) 16 ACLC 316 at 382-383 [ 284]- [ 287]; (1998) 193 CLR 346 at 485-487 [ 284]- [ 287].
[279] Joint reasons at [ 79]- [ 80], applying Allders 96 ATC 5135 at 5151-5152, 5160-5161; (1996) 186 CLR 630 at 662, 678-680.
[280] Joint reasons at [ 97].
[281] Joint reasons at [ 55]- [ 74].
[282] Joint reasons at [ 44]- [ 50]. I also agree with what their Honours write about Buchanan v The Commonwealth (1913) 16 CLR 315 . See joint reasons at [ 31]- [ 36].
[283] Reasons of McHugh J at [ 160]- [ 163].

 

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.