HIGH COURT OF AUSTRALIA
British American Tobacco Australia Ltd v State of Western Australia and Anor
[2003] HCA 47
Gleeson CJ, McHugh, Gummow, Kirby, Hayne and Callinan JJ
2 September 2003 - Canberra
Kirby J. 89 This is another appeal arising out of the constitutional invalidation of the State tobacco licensing laws operating before 1997. Pursuant to such laws, the States of the Commonwealth raised very large amounts of revenue. By this court ' s decision in Ha v New South Wales [1] the State laws were held invalid. Numerous problems then arose as to the entitlement to recover payments that had been made on the erroneous assumption of the validity of those laws.
An important constitutional value
90 Recovery of invalid taxes: In Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd, Mason CJ observed: [2]
There is [a] fundamental principle of public law that no tax can be levied by the executive government without parliamentary authority, a principle which traces back to the Bill of Rights 1688 (Imp). [3] In accordance with that principle, the Crown cannot assert an entitlement to retain money paid by way of causative mistake as and for tax that is not payable in the absence of circumstances which disentitle the payer from recovery. It would be subversive of an important constitutional value if this Court were to endorse a principle of law which, in the absence of such circumstances, authorized the retention by the executive of payments which it lacked authority to receive and which were paid as a result of causative mistake.
91 In a federal polity, such as the Commonwealth of Australia, the foregoing passage is necessarily understood as requiring a clarification of the "fundamental principle of public law" so that no tax may be levied by an executive government without valid parliamentary authority. This additional requirement derives from the language and implications of the Constitution itself.
92 The foregoing is the starting point for analysis in the present appeal. [4] It was overlooked by the cull court of the Supreme Court of Western Australia from which this appeal comes. It is a point that distinguishes this case from earlier proceedings in Roxborough v Rothmans of Pall Mall Australia Ltd [5] in which an attempt was made (successful in the event) to recover moneys paid by retailers to a wholesaler pursuant to contracts framed to conform to the system of State licence fees on the sale of tobacco products. The wholesaler in that case, which failed in its resistance to the action of the retailers, was the present appellant, British American Tobacco Australia Ltd (BAT), then known by its former name. The foundation for the proceedings was the decision of this court in Ha. [6] The basis of that decision was that, properly understood, the State law imposed a duty of excise. That is a form of taxation the imposition of which is reserved by the Constitution to the Federal Parliament. [7]
93 In Roxborough, [8] I dissented from the conclusion that the retailers could recover the payments that they had made. The point of distinction between the approach I favoured and that of the majority was a view I took of the implications of the Constitution for the principles of the common law and of equity as they bound private parties. In the present case, the law of a different State is involved. [9] But there is no relevant distinction of legal principle on that ground.
94 Centrality of the Constitution: It was central to my reasoning in Roxborough (as it is here) that this court is "obliged to solve the legal problem that has arisen … by reference to the constitutional invalidation of a taxation statute" . [10] Rules of the common law and of equity upon which a party might rely to achieve recovery in such circumstances "always adapt themselves to the Constitution" . [11] They offer a solution necessarily "fashioned in a way that is harmonious with the postulates upon which constitutional invalidity, and its outcomes, fall to be decided" . [12]
95 Because of the "important constitutional value" referred to by Mason CJ in Royal Insurance, I suggested in Roxborough that a different principle would apply where proceedings were brought not (as there) between private parties but in order to oblige a governmental party "to disgorge funds unlawfully collected by invalid taxes" . [13] Such a distinction has been recognised in judicial decisions both in the United States of America and in Europe. Ultimately, such a distinction "derives its justification from the way in which the constitutional context shapes the applicable legal rules" . [14] In the case of a governmental defendant, there are special reasons, traceable to public law and ultimately to the Constitution, that oblige recovery. [15] This is so because recovery from the polity that exacts an unconstitutional tax is ordinarily the most effective, appropriate and just way of enforcing the "important constitutional value" at stake and discouraging future breach of it.
96 The issue that occasioned my dissent in Roxborough no longer separates me from the other members of this court. In this case, the Constitution is accepted as the starting point for deriving the legal rights and obligations of the parties, both substantive and procedural. On the face of things, the first respondent, the State of Western Australia (the State), which exacted the constitutionally invalid tax from the appellant, BAT, should therefore be required to surrender the tax it unlawfully collected and to refund the same to the taxpayer that paid the tax. For my analysis of the issues in this appeal, this "important constitutional value" is crucial to the resolution of the remaining points of controversy that fall for decision.
The facts and legislation
97 The facts and statutes: The facts are explained in other reasons. [16] The applicable legislation may also be found there. Leaving aside the Constitution itself, [17] the relevant legislation falls into 4 categories. These are (1) the applicable provisions of the Judiciary Act 1903 (Cth); [18] (2) the provisions of the Business Franchise (Tobacco) Act 1975 (WA) effectively invalidated by the decision of this court in Ha; (3) the provisions of the Crown Suits Act 1947 (WA); [19] and (4) a provision of the Limitation Act 1935 (WA) [20] .
98 Also set out in other reasons is a description of the course that these proceedings took in the Supreme Court of Western Australia. Doubtless responding to the arguments of the parties, that court did not notice that the proceedings were in federal jurisdiction, involving therefore the exercise of the judicial power of the Commonwealth. That was undoubtedly the case, at least because the matter brought by BAT against the State was one "arising under [the] Constitution, or involving its interpretation" . [21] With respect to such matters, the Federal Parliament, pursuant to the Constitution, has made a law investing a court of a State with the relevant federal jurisdiction, namely the Judiciary Act 1903 (Cth), s 39(2) .
99 Implications of federal jurisdiction: It follows from these incontestable facts that the analysis whereby the full court held that s 6(1) of the Crown Suits Act 1947 (WA) operated of its own force to govern the outcome of the proceedings could not be sustained as a matter of law. As it was the failure of BAT to give the notice provided for in s 6(1) that had founded the conclusion of the full court that BAT ' s proceedings were bound to fail, the premise upon which summary judgment was entered by the full court against BAT was knocked away. Once this point was established, the balance of the proceedings in this court became a search on the part of the State (supported in this respect by other States intervening and, in large part, by the Commonwealth) for provisions of federal law that would sustain or uphold, as applicable in federal jurisdiction, the notice requirements of the Crown Suits Act 1947 (WA) or (as a fallback position) a notice requirement of the Limitation Act 1935 (WA).
100 In this way, the central issue in this appeal became one of reconciling 2 important constitutional values. The first, already mentioned, is the principle that a polity that lacks constitutional authority to receive payments extracted from a taxpayer should normally be obliged to refund such payments. The second is the principle that a key invention of the Constitution, whereby federal jurisdiction may be vested in State courts, should normally be safeguarded and upheld, not stultified. [22] This can best be achieved in practice if, to the full extent provided by law, [23] State laws are picked up, and adapted, so as to apply to the resolution of matters in federal jurisdiction. BAT ' s arguments, in effect, laid emphasis upon the first constitutional value. The State, and the interveners, laid emphasis upon the second.
Common ground
101 There was much common ground between the parties. It permitted this court to concentrate on the differences that emerged before it.
102 Thus, there was no suggestion that the decision in Ha should be reopened or that the principle in that case did not apply to the Business Franchise (Tobacco) Act 1975 (WA). Nor was it contested that BAT ' s action against the State attracted federal jurisdiction and that the Supreme Court of Western Australia was exercising such jurisdiction when it purported to give summary judgment in favour of the State.
103 The amenability to summary judgment of BAT ' s action was ultimately the only legal issue in contest. That contest was to be resolved by the application of the principles of law that govern the provision of summary judgment. Such relief is not restricted to a case that is simple or self - evident. Establishing that a party has no reasonably arguable cause of action may sometimes require extended legal analysis. [24] In the case of novel causes of action, a measure of caution should be exercised in providing summary judgment. [25] This is especially so where the facts, adduced at trial, might cast light and colour upon the resolution of the legal questions. But no such concerns arise on the facts of the present appeal.
104 BAT accepted that, if s 6 of the Crown Suits Act 1947 (WA) applied to its proceedings, it had not satisfied the obligation to give notice to the State before action as there provided. On the face of things, if the premise were established, that conclusion would justify the entry of summary judgment. On the other hand, if s 6 of the Crown Suits Act 1947 (WA) did not apply to the proceedings brought by BAT against the State (subject to the supplementary argument concerning the applicability of the Limitation Act 1935 (WA)), the judgment would have to be set aside. The matter would then proceed to trial on the defences raising legal issues that have not so far been considered.
105 The high measure of concurrence between the parties thus presents a comparatively simple principal question. Yet it is not one simple to answer. It is whether, as a matter of law, s 6 of the Crown Suits Act 1947 (WA) applied to BAT ' s matter in federal jurisdiction. If it did, the judgment of the full court, although for different reasons, would be affirmed. If it did not, the judgment would have to be set aside and the matter remitted for trial unless the Limitation Act 1935 (WA) defence could sustain the summary judgment.
106 There are 3 preliminary points that I must mention. They concern assumptions that were made in presenting the foregoing issue for decision in this court. I must identify them because, otherwise, it will be assumed that I make the assumptions inherent in the reasoning of others. I do not. It is important for me to say why this is so. No judge is bound to accept the concessions of parties, or the assumptions that they adopt about the law - least of all the Constitution. [26] One day the assumptions accepted in this case will be challenged. Other important and arguable issues will then be disentangled.
Diversity jurisdiction: a constitutional foundation?
107 Suits by interstate "residents" : By s 75(iv) of the Constitution, it is provided that this court shall have original jurisdiction in all matters:
between States, or between residents of different States, or between a State and a resident of another State.
108 BAT ' s statement of claim, annexed to the writ issued out of the Supreme Court of Western Australia, asserts in para 1 that BAT is "a company incorporated in the State of New South Wales" . The second respondent, the Commissioner of State Taxation of Western Australia, was sued by that statutory title. The Commissioner is no longer an active party to these proceedings. In this court, BAT accepted that its action should be confined to its claim against the State. Nevertheless, when the proceedings were commenced in the Supreme Court of Western Australia, clearly the Commissioner was a resident of that State. On the face of things, it would therefore appear that the matter propounded in the proceedings was one "between residents of different States" or "between a State and a resident of another State" . Without any resort to laws enacted by the Federal Parliament, and on the basis of an express constitutional provision, federal jurisdiction would be established. The judicial power of the Commonwealth would be engaged.
109 The supposed defect in this reasoning about the constitutional words lies in early decisions of this court holding that a corporation cannot be a "resident" within s 75(iv) of the Constitution. [27] The decisions establishing that principle involved a remarkable narrowing of the constitutional language. In my view, it is a narrowing unjustified by the text or the context. In many ways it is reminiscent of judicial holdings in Australia and elsewhere at the same time to the effect that a "person" , when referred to in legislation (for example for the purpose of admission to professional practice) did not include a woman. [28] The only justification for such a narrow interpretation of s 75(iv) of the Constitution was the expressed judicial fear about an extension of the jurisdiction of this court that might result in an inundation of work that this court could not easily deflect to other courts in the views then held concerning the obligation of this court to discharge a jurisdiction conferred on it by the Constitution.
110 Today, such fears have receded. The reasons include the statutory powers of this court to remit proceedings, including to a court of a State where there is at any time pending a cause involving the exercise of federal jurisdiction. [29] True, a new spectre has arisen, to revive the early fears, following the action of the Federal Parliament in purporting to define the jurisdiction of federal courts other than this court, and to provide for exclusive jurisdiction of matters in federal courts, with the apparent intent to restrict, or prevent, remittal or removal of causes to other courts. [30] But such transitory concerns cannot control the meaning of constitutional language. [31] In a proper case, this court should reconsider the early determination that corporations, including statutory corporations, cannot be "residents" of a different State for the purposes of s 75(iv) of the Constitution. Self - evidently, corporations are, and were at the time when the Constitution was made, legal persons. They were then, and still are, frequent litigants in the courts. Their existence was contemplated by the Constitution itself. [32] Although in 1985 in Crouch v Commissioner for Railways (Qld) [33] this court declined to reopen its early holding on the meaning of s 75(iv) , the decision is open to the strongest doubt and criticism. In my view it is wrong. [34] One day this court will say so.
111 As I have pointed out, there was another (statutory) foundation for the claim to federal jurisdiction, namely the power in s 76(i) of the Constitution whereby the Parliament could make laws conferring original jurisdiction on this court in any matter "arising under this Constitution, or involving its interpretation" . BAT ' s claim involves the interpretation of the Constitution (and on one view arises under its terms). It therefore attracts federal jurisdiction on that basis.
112 Constitutional foundation for suits: I have mentioned this first preliminary point for a purpose. In respect of s 76 of the Constitution, and the list of matters there appearing, federal jurisdiction has only an indirect foothold in the Constitution. There it is dependent upon the making of laws by the Federal Parliament. In the matters mentioned in s 75 , including s 75(iv) , federal jurisdiction is conferred by the Constitution itself. By implication, the matters of federal jurisdiction expressly provided by the Constitution are core or cardinal matters for which an irreducible minimum jurisdiction was thought to be constitutionally essential.
113 Leaving aside the provisions of paras (i) and (ii) of s 75 (which concern relations with other countries) and para (v) (which is a vital means of upholding the rule of law in relation to the Executive Government of the Commonwealth) [35] the provisions of paras (iii) and (iv) reflect, in the Australian context, an important feature of a federal polity. Such a polity is made up of a national entity (in Australia, the Commonwealth) and subnational entities (the States). The powers of government of the nation (legislative, executive and judicial) are divided and distributed, according to the Constitution, between these entities. Inevitably, there will be disputes as to where power in a particular case lies. It is inherent in s 75(iii) and (iv) that the resolution of such questions involves federal jurisdiction and the exercise of the judicial power of the Commonwealth. It is to prevent any risk that, misguidedly or by oversight or mistake, the Parliament might restrict the exercise of federal jurisdiction in such matters, that express provision is made by s 75 , not only for the existence of the federal jurisdiction in question but for its conferral on this court as an irreducible minimum.
114 It would be hard to imagine a clearer indication than appears in s 75(iii) and (iv) of the recognition that, in matters involving the respective powers of the Commonwealth and the States, where questions of constitutional validity of governmental acts are commonly difficult or impossible to avoid, a specific means and judicial venue are provided for their resolution. It would be inconsistent with this explicit constitutional arrangement for legislation to be enacted, whether federal or State, that purported to constrain or restrict the federal jurisdiction so provided in a way limiting or curtailing its exercise.
115 By s 78 of the Constitution, the Federal Parliament is empowered to "make laws conferring rights to proceed against the Commonwealth or a State in respect of matters within the limits of the judicial power" . However, that provision, appearing after the 3 constitutional sections providing for federal jurisdiction, can only be a facultative one. It is limited by its terms to conferring "rights" . Such "rights" are only those that permit the beneficiary "to proceed" . And the rights to proceed are in respect of the "matters within the limits of the judicial power" .
116 Irreducible jurisdiction and power: To the extent that provisions of the Judiciary Act 1903 (Cth) [36] rest for their validity upon the terms of s 78 of the Constitution, such provisions must partake of the beneficial character contemplated by that section. They are not to be read as diminishing, restricting or imposing limitations upon the incidents of federal jurisdiction necessary to fulfil the scheme of the Constitution. On the contrary, this court has repeatedly held that s 78 empowers the Parliament, as necessary, to create and confer substantive rights, not just procedural rights. [37] Implicit in the constitutional scheme is the provision to the independent Judicature (and in the matters mentioned in s 75 , irreducibly to this court) of the judicial power of the Commonwealth to resolve conflicts of a defined constitutional character. Relevantly, BAT ' s claim is such a conflict.
117 The foregoing conclusion helps to clarify the essential federal and constitutional character of BAT ' s claim and of the jurisdiction exercised by the courts of Australia to resolve contested questions about its enforcement.
Existence of a constitutional cause of action
118 Statutory and constitutional rights: A second preliminary question arises as to whether it is necessarily implicit in the Constitution itself that a cause of action exists upon which a party may sue, to vindicate its constitutional rights, at least where those rights involve a claim to reimbursement of an invalidly extracted tax.
119 Such a proposition is by no means heterodox. If it can be held (as it often is) that an ordinary statute gives rise to a private cause of action so as to vindicate its provisions, [38] how much more powerful are the arguments for recognising such an implication in a constitutional text? Typically, such a text concerns very important matters and is expressed in succinct language that does not purport to cover, in terms, every aspect of its application. Necessarily, implications must be derived from the text and structure of the document. The history of the Australian Constitution has repeatedly demonstrated the importance of constitutional implications. [39] Nowhere has this been more so than in the case of the exercise of the judicial power. [40]
120 In the present proceedings, the relevant questions would be these: Having regard to the express terms of s 90 of the Constitution, which provides that the imposition of duties of excise is exclusive to the Federal Parliament, where it is shown that a State Parliament has purported to impose a duty of excise on a taxpayer, in breach of that constitutional proscription, does an implied constitutional cause of action exist by which the taxpayer may recover the invalid impost paid on the mistaken assumption that the State law was valid? Is such a cause of action implicit as a means of vindicating the proscription of the Constitution?
121 If such an implied cause of action were found in the Constitution, any purported intrusion of State legislation to defeat or limit its successful enforcement would be unlikely to succeed. Federal legislation might regulate the enforcement of such a claim. But it would seem unlikely that a State law, purporting to defend the State against recovery designed to vindicate the Constitution, would be picked up and treated as "applicable" to a claim in a State court exercising federal jurisdiction in such a matter. (In the view that I take of s 75(iv) such a cause of action between BAT and the State could always be brought in the original jurisdiction of this court circumventing any need to bring proceedings in a State court or to rely on State laws to render the State liable as such).
122 United States analogues: In Bivens v Six Unknown Named Agents of Federal Bureau of Narcotics, [41] the Supreme Court of the United States decided an analogous question arising under the United States Constitution. The appellant there claimed to have suffered an actionable wrong by reason of the entry into his apartment of federal agents who, without warrant, searched the apartment and arrested him on narcotics charges, allegedly without probable cause. He brought proceedings in the federal District Court claiming damages. That court dismissed the suit on the basis that there was no federal cause of action. [42] However, the Supreme Court upheld the argument that there was a constitutional cause of action based on breach of the Fourth Amendment. [43] The availability of such an action had been a matter of uncertainty for some time. [44]
123 It was central to the reasoning of Brennan J, who wrote the opinion of the Supreme Court of the United States, that the Constitution imposed a limitation on the exercise of governmental power [45] and that damages constituted a conventional remedy, in the common law legal system, for the vindication of rights in the event of an invasion of personal interests. [46] His Honour cited Marbury v Madison [47] to demonstrate that:
The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws, whenever he receives an injury.
124 In Bivens it was held that the appellant did not have to prove that the provision of damages was essential to uphold the Constitution in order to establish this right of action. It was sufficient that he should show a violation of the Constitution to be "entitled to redress his injury through a particular remedial mechanism normally available in the federal courts" . [48] The same view has been taken in this court concerning private causes of action based on ordinary statutory provisions. The existence of statutory procedures to uphold the statutory prescription is not necessarily fatal to the co - existence of an action for damages based on the statute.
125 The dissentients in the Supreme Court in Bivens feared what was termed "another avalanche of new federal cases" . [49] This was a view reminiscent of the early decisions in this court on s 75(iv) of the Australian Constitution. The spectre of avalanches, floods and other natural catastrophes is often invoked by those who resist the orderly exposition and elaboration of the law according to principle. However, in Bivens that concern was rejected by the majority. [50] In every new thought about the law or the Constitution judicial anxieties of such a kind must be faced. The legal mind often displays a tendency to resist novelty because it challenges its repose. We must be alert to this trend so that we can avoid unwarranted manifestations of it.
126 Damages, in our law, include not only general damages in tort (of the kind for which Mr Bivens sued) but also special damages (for which BAT sues). Special damages include the recovery of a specific money sum founded in a cause of action framed in contract, including implied contract, [51] on the principles of restitution [52] on the basis of a constructive trust or a sui generis cause of action based on the Constitution itself afforded to redress invalid governmental action taken under colour of office (colore officii). [53]
127 Constitutional actions in Australia: So far, this court has not adopted a view of the enforcement of the Constitution that extends to implying from its terms (even language as emphatic and exclusory as s 90 ) an implied constitutional cause of action enjoyed by a party for redress in the case of a breach of a constitutional prohibition. [54] In Kruger v The Commonwealth [55] 4 members of the court considered this issue explicitly in the circumstances of that case, namely Brennan CJ, [56] Toohey J, [57] Gaudron J [58] and Gummow J [59] . Technically, for the purpose of deriving a binding rule from Kruger on this point, the reasoning of Gaudron J must be disregarded because her Honour was in dissent as to the ultimate disposition of the proceedings. However, from the answers given by the court to the questions separated for decision in Kruger it is clear that the court held that the Constitution did not contain any right, as alleged in that case, breach of which would give rise to a right of action sounding in damages. [60]
128 It could be said that Kruger is distinguishable from the present case and that recovery of an invalid tax, collected in breach of a constitutional prohibition, is different from the causes of action propounded by the plaintiffs respectively in Bivens and Kruger. Nevertheless, there is no escaping the way in which this court expressed its opinion in Kruger. A lot of words were written. But in the end, they come down to little more than Toohey J ' s aphorism that "[t]he implied limitation [in the Constitution] operates as a restriction on legislative power, not as grounding a cause of action" . [61] There is no suggestion in the reasoning in Kruger that a different approach would follow from an express constitutional prohibition such as that stated in s 90 . The court ' s approach was said by Brennan CJ to follow from a view of the Australian Constitution as an instrument of government and one "concerned with the powers and functions of government and the restraints upon their exercise" . [62]
129 It is, with respect, an invalid leap of logic from the identification of the suggested character of the Constitution (even accepting it for the moment to be accurate and complete) to a conclusion that the instrument "reveals no intention to create a private right of action for damages for an attempt to exceed the powers it confers or to ignore the restraints it imposes" . [63] Alike with the majority of the Supreme Court of the United States in Bivens, I see no reason to infer such a restrictive "intention" . "Intention" is a judicial fiction. It can only be given content according to the Constitution ' s purposes, express or implied. Where the applicable purpose is to prohibit a State Parliament from imposing a duty of excise [64] my view is that the "intention" of the Constitution is to permit the right in those from whom the invalid "duty of excise" has been extracted to sue to obtain repayment of the sum.
130 In Kruger, Gaudron J was reassured in her conclusion that there was "no necessity to invent a new cause of action" because she had concluded that there were common law rights already available in that case which the plaintiffs could invoke to vindicate the rights that she held them to enjoy. [65] So it is now held, because BAT may sue the State on an indebitatus count at common law for moneys had and received by the State to the use of BAT as an exaction of an invalid duty of excise. The defect of this reasoning has been noted in earlier cases. [66] If a party must rely on common law rights to vindicate itself against governmental conduct beyond the powers provided by the Constitution (even, in this case, prohibited by its terms) that party is vulnerable to the legislative abolition of such rights. Alternatively, such rights might be so circumscribed by procedural requirements (such as a notice before action) or limitations imposed upon the bringing of proceedings, as effectively to limit or curtail the enforcement of such rights, although they derive ultimately from the constitutional prohibition.
131 If (as intuition suggests) such abolition or restriction could not validly be given effect, this must be so because ultimately the Constitution will itself recognise, and uphold, a private action brought to vindicate its provisions in this regard. Litigants already bring many proceedings of various kinds that invoke the beneficial protection of the Constitution. I am unpersuaded by the reasoning in Kruger that this court should deny the kind of constitutional cause of action that the Supreme Court of the United States found implied in Bivens. If the New Zealand courts, following Bivens, can derive by the techniques of the common law an action for damages for the violation by public employees of the civil rights of others, without aid of an entrenched constitutional provision, [67] how much stronger is the footing for such a claim in the Australian constitutional context? At least, how much stronger is such a claim in the case of a demand for the recovery of an unconstitutional tax exacted in the face of an explicit constitutional prohibition?
132 In his reasons in Kruger, Gummow J drew comfort from the lack of necessity in this country that was said to have forced United States courts to provide remedies where, by contrast here, the Judiciary Act 1903 (Cth) provides differently and the Constitutionrelates differently to the common law. [68] But what the Australian Parliament has enacted in the Judiciary Act 1903 (Cth), it may repeal. [69] As an issue of principle, in matters of constitutional doctrine, it is impossible to rely upon the terms of current legislation to vindicate the Constitution. It is true that, by decisions of this court, the common law in Australia, unlike that of the United States, has a national character. However, that differentiation reinforces, and does not undermine, my approach.
133 It is impossible for the common law or the principles of equity [70] to conflict with the Constitution. Such law, including in respect of proceeding for the recovery of invalid payments, moulds itself to the constitutional provisions. The facts of this case make it simpler in Australia to invoke the common law and rules of equity to supplement, with a single national voice, the norms of the Constitution. Whatever dispute there may be about the provision of damages for implied constitutional torts (as upheld in Bivens and rejected in Kruger), a constitutional claim for reimbursement of an invalidly exacted tax is a much clearer case. In effect, it is no more than a constitutional means of upholding the "important constitutional value" mentioned earlier in these reasons. [71] The fact that there may presently be other common law and equitable remedies is irrelevant. Where the Constitution speaks clearly in terms of a prohibition, its words necessarily carry the power of its own vindication and enforcement.
134 A constitutional source of rights: It follows that, if I were approaching the question in this appeal as I think it should be answered, I would resolve it by reference to an implied cause of action, derived from the Constitution itself, permitting recovery of an invalid tax levied in breach of a constitutional provision. I would overrule Kruger to the extent that it holds otherwise. I do not accept the view that the leave of a majority of the court is necessary for the correction of erroneous constitutional decisions. [72] There is no hint of such a procedural requirement in the Constitution itself and it cannot be imposed by judicial fiat.
135 Insofar as the joint reasons [73] rely on what Gummow and Hayne JJ said in Re Patterson; Ex parte Taylor, [74] I would point out that, on the constitutional question in that case, that was a dissenting opinion which evidenced an unwillingness to accept the majority holding overruling Nolan v Minister for Immigration and Ethnic Affairs. [75] In so far as the joint reasons in this case suggest that the Justices of this court are bound by majority determinations about the meaning of the Constitution until a majority give permission to reopen past authority on the point, [76] I disagree. It is neither what the Constitution says nor what the Justices of this court have done, including in Re Patterson; Ex parte Taylor. Nor is such a course compatible with the special legal character of the basic law of a nation and the constitutional duty of this court. [77] No Justice can be relieved of that duty, by a past or present majority in the court - still less by the way the parties (who are so bound until the law is re - expressed by a majority of the court) make concessions or conduct their litigation. It is by voices of the judges expressed in dissent [78] that parties may be encouraged eventually to raise objections about erroneous judicial interpretations. Only in that way is error ultimately corrected and the true meaning of the Constitution expounded.
136 This court should read the Australian Constitution as a charter for the government of the Australian people. Intellectual limitations dating to a time when it was viewed as nothing more than an Imperial statute or an economic pact between colonies should long since have been discarded. History, including recent history, denies such a character to the Constitution. It is beyond time for this court to recognise the need for a fresh approach to its interpretation: one more in harmony with the Constitution ' s function and purpose and with the mainstream of judicial opinion in the contemporary common law world. [79] Our Constitution is an instrument of government. But it is also a source of rights and obligations of the people, not necessarily dependent for their vindication upon legislation vulnerable to change or reliant upon governmental action susceptible to the power of interests that may not always coincide with those of the citizens.
137 These conclusions notwithstanding, because the majority of this court approaches BAT ' s action in a different way, and views it as an action at common law that arises "under [the] Constitution, or involv[es] its interpretation" [80] (but is not sourced there with the consequences such a source would import) it is necessary for me, in the state of present authority, to pursue the same course.
The State, the Constitution and Crown suits
138 Constitutional status of the States: This beings me to a third preliminary point. It concerns the distinctive status of a State of the Commonwealth, summoned into existence by the Constitution.
139 Once the colonies named in s 6 of the covering clauses to the Constitution were "admitted into … the Commonwealth as States" they became, and were to be named, States as "parts of the Commonwealth" . [81] So also, in my opinion, were "the territories" there mentioned parts of the Commonwealth. This did not mean that the States ' colonial history, origins and governance became irrelevant. Express provision was made for the continuance, as at the establishment of the Commonwealth, of "the Constitution of each State of the Commonwealth" until "altered in accordance with the Constitution of the State" . [82] The Constitution also saved the powers of the Parliament of a Colony which became the Parliament of a State [83] and of the laws in force in the Colony which continued in force in the State [84] until Parliament provided otherwise. Decisions of this court have made clear the features of constitutional continuity between the colonies, as they were, and the States, as they became. [85]
140 Nevertheless, the federal arrangements established by the Constitution, and the necessary interrelationship between the States inter se (and to a limited extent, their respective relationships with the government of the United Kingdom) [86] made it impossible to conceive of the States, after federation, as merely the colonies retitled. Their position in the new federal Constitution was substantively different. As States, they partly share in the aggregate governmental powers of a new national entity, the Commonwealth of Australia. This change requires reconceptualisation of the legal character of the States. However, that process has taken a long time even to begin, such is the hold on the legal mind of entrenched notions.
141 The States and Crown immunity: In The Commonwealth v Mewett, [87] Gummow J and I, after referring to the history of the doctrine of Crown immunity in England, pointed out that the doctrine could not make an easy passage into Australian constitutional law, at least once the federal Constitution established the Commonwealth and the States and postulated an independent judicature with the constitutional power and duty to decide controversies involving them.
142 As we pointed out in Mewett, [88] a similar observation had earlier been made by Murphy J [89] in respect of the distinctive governmental character of the powers provided for in the Constitution. Yet, although these insights have become generally accepted [90] (and are endorsed by the reasoning of other members of this court in this case), [91] historically they took a long time to emerge. Until they became accepted, there was a great deal of erroneous thinking concerning the constitutional character of a State of the Commonwealth. This thinking assumed, without challenge, that a State represented, in some way, nothing more than a particular manifestation of the Crown. Hence, statutory texts and judicial decisions were replete with statements to the effect that a State of the Commonwealth was legally equivalent to the Crown in right of that geographical area of Australia. With the benefit of hindsight, appreciation of the democratic origins of the federal Constitution and analysis of its text, we can now see that such descriptions were fundamentally misconceived.
143 However correct it might have been to conceive of a British colony beyond the seas, politically speaking, as a manifestation of the Crown (later refined, when the unity of the Crown was abandoned, as a manifestation of the Crown in a particular geographical "right" ), such a notion was inapposite to a constituting polity of the Australian Commonwealth. It was a notion or legal metaphor rarely expressed in relation to the Commonwealth itself, that is, the federal polity. Doubtless this was because of the entirely novel character of the Commonwealth as a national political entity that had no earlier legal existence in any form. But in the States, where there remained a continuity of legislation (including constitutional legislation) [92] the perception of their true legal character was slow to dawn.
144 Before the present Crown Suits Act 1947 (WA), the Parliament of Western Australia, in colonial times, had enacted a statute of the same title. [93] This was done just before federation. Historically, upon the creation of the State , it was natural enough that little thought would be given to the need for new constitutional thinking, and new statutory provisions, to provide for the enforcement of liability against the new and different political entity constituted by the State. Instead, a confusion between the constitutional State and the Crown persisted. It did so, notwithstanding the increasingly circumscribed role which the Crown played as such (including at a State level) in the legislature, executive and judicial organs of the State - the last, by the federal Constitution, fully integrated into the independent Judicature of the Commonwealth. [94]
145 A similar question in Ireland: I referred to these considerations in passing in the last case in which application was made (as now repeated in this appeal) to reopen the rule established by the decision of this court in The Commonwealth v Evans Deakin Industries Ltd. [95] In Bass v Permanent Trustee Co Ltd [96] I expressed doubt as to:
whether, at this stage in the understanding of the nature of a State of the Commonwealth, as provided for in the Constitution, it is appropriate to continue to treat it as an emanation of the Crown; and whether, in the Australian Commonwealth a State enjoys (as has until now been assumed) the immunity from suit historically attributed to the Crown as the personification of the sovereign.
146 I drew attention, in Bass, to the reasoning of Walsh J in the Supreme Court of Ireland in Byrne v Ireland. [97] His Lordship there considered the liability of the Irish State in the context of the suggestion that the immunity of the Crown had devolved upon the successive manifestations of the Irish polity. [98] The question addressed the State as initially established, before the republican constitution, by the Constitution of the Irish Free State in 1922. At that stage, Ireland remained (as the Commonwealth and the States of Australia still are) a constitutional monarchy under the Crown.
147 In Byrne, [99] Walsh J concluded that the importation of the prerogative immunity of the Crown from English law to the new constitutional Irish State had evidenced "an erroneous over - simplification" . [100] It was a result of lawyers and judges who had embraced that opinion overlooking "the fact that the basis of the Crown prerogatives in English law was that the King was the personification of the state" [101] whereas the establishment of a new and distinct State in Ireland by a written constitution deriving its authority ultimately from the people whose will gave it birth, introduced a new and different character to the State. Similar views were expressed in Byrne by Budd J. [102] A contrary opinion was stated by FitzGerald J. [103] Some measure of the fundamental differences that can exist on such basic questions of constitutional principle may be seen in the fact that the trial judge, whose decision was overturned by the majority of the Supreme Court of Ireland, described some of the propositions advanced to him, and subsequently upheld, as "preposterous" . [104]
148 Crown Suits Act and the State: The significance of this issue to BAT ' s proceedings is that the Crown Suits Act 1947 (WA), invoked by the State in this case, does not, in its terms, purport to impose an obligation to give notice in writing as a pre - condition to an action against the State of Western Australia as such. It expresses that obligation as a precondition to a "right of action [lying] against the Crown" . [105] An "action" (being in the context an action against the Crown ) must be commenced within the specified period of a year. But if, under the Australian Constitution, the action in question lies not against the Crown but against the State , as such, a statutory provision addressed to the requirement to give notice to, and to commence proceedings against, the Crown within a specified time is irrelevant. Upon this hypothesis, the source of BAT ' s cause of action lies elsewhere. It lies against the State of Western Australia which it has sued by that name. The Crown Suits Act 1947 (WA) says nothing at all in relation to it.
149 This view of the meaning of ss 5 and 6 of the Crown Suits Act 1947 (WA) may still leave work for that Act to perform, in respect of residual Crown liability in Western Australia where no issue arises of the liability of the State as a constitutional polity created by the federal Constitution. But in the context of that Constitution, at least, the State enjoys a constitutional status as such, indeed one that renders it liable to the exercise of federal jurisdiction in this court pursuant to s 75(iv) of the Constitution and in State courts pursuant to the Constitution and the Judiciary Act 1903 (Cth). That liability, expressly stated, reconfirms in the Australian context the error of oversight identified by the Supreme Court of Ireland in Byrne in assuming that a State law is necessary to render the State liable to be sued in a State court, because it is a manifestation of the Crown. In my opinion, the language of s 75(iv) of the Australian Constitution denies that assumption.
150 Upon the basis of the foregoing reasoning, the source of the supposed problems of BAT, in terms of ss 5 and 6(1) of the Crown Suits Act 1947 (WA), disappears. There being no State law expressly addressed to the obligation of notice to the State, as such, or requiring the commencement of the action within a year of the accrual, no question arises as to whether, conformably with the federal Constitution, any such requirements are picked up and applied to BAT ' s claim.
151 Conclusion - an open question: Although this is the way that I would dispose of the principal obstacle posited by the State in these proceedings, [106] I accept that there may be arguments to the contrary that have not been fully canvassed in the way the arguments proceeded in the hearing of this appeal. For example, by s 3 of the Crown Suits Act 1947 (WA), the term "Crown" is defined to mean "the Crown in right of the Government of Western Australia" . Whilst this is not, as such, the "State" , it is conceivable that a purposive construction of that Act might treat the references to "Crown" as no more than a statutory shorthand for the "State" . Such an interpretation would derive some support from the provision in s 5(2) of the Crown Suits Act 1947 (WA) directing that proceedings against the Crown are to be taken under the title "the State of Western Australia" , although I am conscious that there is a world of difference between titles and substance.
152 To reach a final view on the extent to which (if at all) the former immunity of the Crown survived the change of the one - time Australian colonies into States of the Commonwealth, and inured to the advantage of such States, it would be necessary to invite more detailed submissions than were received on that issue. Such submissions would have to address the way in which governmental immunity has evolved in other constitutional democracies [107] and the extent to which some form of immunity may be postulated, or tolerated, by the language of s 78 of the Constitution.
153 With all of the foregoing reservations about the assumptions which the parties made before us concerning the approach that this court should take to the issues before it, I therefore turn to the conclusions that I would reach on the matter as it was argued.
The Crown Suits Act and the Judiciary Act
154 A constitutional right to proceed: In the view that I take, that the Constitution was the proper starting point for resolving the supposed impediment to BAT ' s claim posed by the State, like other members of the court, [108] I would conclude that the right of BAT to proceed against the State was implied from, or possibly stated in, the Constitution itself. It did not require a State law, such as the Crown Suits Act 1947 (WA), to afford that right (with the consequent risk that it might be afforded on procedural or other conditions that were not fulfilled in the particular case).
155 Upon these premises I agree with Gleeson CJ that there was a question anterior to that presented by the State. [109] It lay behind much of the argument in this court. It was to be answered by a reflection on the implications of the federal Constitution itself. I agree that the Constitution, by implication, confers BAT ' s right to proceed against the State of Western Australia and recourse to the provisions of the Crown Suits Act 1947 (WA) for that purpose is neither necessary nor appropriate. [110] I also agree with the joint reasons that "State legislation of itself could not control the constitution of the action or its outcome" . [111]
156 That leaves the questions presented by the arguments of the State concerning whether, notwithstanding this foundation for BAT ' s right to proceed, State law restrictions, in the form of s 6(1) of the Crown Suits Act 1947 (WA) or s 47A of the Limitation Act 1935 (WA) are picked up and applied in federal jurisdiction by force of s 79 of the Judiciary Act 1903 (Cth) and this notwithstanding the terms of s 64 of the Judiciary Act 1903 (Cth).
157 Application of the Judiciary Act: So far as s 79 of the Judiciary Act 1903 (Cth) is concerned, I agree with the joint reasons that, given that the Constitution itself impliedly affords BAT the right to proceed against the State, federal law "otherwise provided" both in the Constitution and (to the extent necessary) by s 39(2) of the Judiciary Act 1903 (Cth). [112] The provisions of s 6(1) of the Crown Suits Act 1947 (WA) cannot be severed from s 5 of that Act. The 2 sections constitute an integrated State scheme for Crown (and possibly State) liability. In a matter in federal jurisdiction involving the State as a party they are inapplicable and therefore ineffective.
158 It is necessary to consider s 64 of the Judiciary Act 1903 (Cth) because of the supplementary argument of the State invoking s 47A of the Limitation Act 1935 (WA). By s 64 of the Judiciary Act 1903 (Cth) it is provided that, in the particular case of a suit in which, relevantly, a State is a party, the rights of the parties "shall as nearly as possible be the same, and judgment may be given … as in a suit between subject and subject" .
159 By s 47A of the Limitation Act 1935 (WA) particular provision is made in respect of actions brought against any person, excluding the Crown, for acts done in pursuance (putting it generally) of statutory or other public authority. In such cases it is obligatory for the proposed plaintiff, as soon as practicable, to give notice of action. By this provision of State law, agents of the State, and on one view the State itself as a constitutional entity, are arguably protected from suit by procedural preconditions that do not apply to a suit between subject and subject.
160 Arguable questions invalidate judgment: The State, supported by other governmental parties, urged that a leeway was recognised in s 64 of the Judiciary Act 1903 (Cth) for the special governmental characteristics, relevantly, of a State, by the words in s 64 "as nearly as possible" . In a greater understanding of a State ' s need for protection, it is conceivable that a basis might be established to exempt the State, in this regard, from the requirement, in federal jurisdiction, that the rights of the parties in a suit against it should generally be the same as in a suit between subjects so as to expel notice provisions. Given that the foundation of BAT ' s right to proceed lies in the Constitution itself and to vindicate a constitutional provision, it seems highly doubtful that s 47A of the Limitation Act 1935 (WA), with its special protective provisions, could impede BAT ' s recovery. Section 64 of the Judiciary Act 1903 (Cth) might be read as giving effect, in this respect, to the high constitutional purpose that would otherwise be frustrated by a narrow reading. State statutory impediments are not made more palatable (or valid) by being conceptualised as preconditions to the existence of a suit when their practical effect is to defeat the success of the suit claiming reimbursement of moneys extracted by a constitutionally invalid tax.
161 It is unnecessary to resolve this question finally. It is sufficient to say that, on several grounds, it is arguable that s 47A of the Limitation Act 1935 (WA) is not applicable to the action BAT has commenced against the State, is not picked up by s 79 of the Judiciary Act 1903 (Cth) and is excluded by s 64 of that Act. In these proceedings it is also unnecessary to consider whether, and if so to what extent, federal legislative power extends to pick up, and apply, the State law in an action in federal jurisdiction that has the effect of protecting a State from liability in respect of moneys recovered as a tax which the State Parliament had no power to enact. That question may arise at a later stage of these proceedings.
Conclusion and orders
162 It follows that this court must set aside the summary judgment entered by the full court of the Supreme Court of Western Australia. At the very least BAT ' s case was reasonably arguable. So much followed once it was appreciated that the matter involved the exercise of federal jurisdiction. Indeed, once the case was seen as an action involving the federal Constitution (if not actually based upon it) the possibility of special State procedural laws impeding the vindication of federal constitutional interests became difficult, perhaps impossible, for the State ultimately to sustain.
163 I therefore agree in the orders proposed by Gleeson CJ.
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