Air Caledonie International & Ors v The Commonwealth of Australia

[1988] HCATrans 228

IN THE HTGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S53 of 1988

B e t w e e n -

AIR CALEDONIE INTERNATIONAL and

OTHERS

Plaintiffs

and

THE COMMONWEALTH OF AUSTRALIA

Defendant

Demurrer

MASON CJ

WILSON J

BRENNAN J

Air(2)

DEANE J

DAWSON J

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 11 OCTOBER 1988, AT 10.18 AM

,...	~ 1. .
vvyJ .._ J.51lL.	....ue Hi0 i1 Court of Australia

ClT 1 / 1 /MB 1 11/10/88

MR R.P. MEAGHER, QC:  May it please the Court, in this matter

I appear with my learned friend, MR A. ROBERTSON, for the plaintiffs. (instructed by Blake Dawson

Waldron)

MR G.F. -GRIFFITH, QC, Solicitor-General for the Commonwealth:

If the Court pleases, I appear with MRS P.A. SHARP, for the defendant. (instructed by the Australian

Government Solicitor)

MASON CJ:  Mr Meagher.

MR MEAGHER:  May it please the Court. If I may hand to the

Court some copies of our outline of submissions.

MASON CJ: 

Thank you.

MR MEAGHER: 

If I may also hand to Your Honours a few othAr

documents: a copy of the MIGRATION AMENDMENT ACT
1988 and a copy of the DEPARTURE TAX ACT 1978, and,

finally, a copy of Migration Regulations Statutory

Rules No 315 of 1987.

MASON CJ:	Thank you.	Yes.
MR MEAGHER:	May it please the Court.	The plaintiffs are, in

this action, alleging that section 34A and, in

particular, subsection (3) of the MIGRATION AMENDMENT

ACT 1987 is invalid as being beyond the power of

the Commonwealth. If Your Honours would be good

enough to go to the section in question - if I may

take Your Honours to it. Your Honours for this

purpose will need the MIGRATION AMENDMENT ACT

1987, wcl1 is No 133 of 1987. That was on our

list of authorities, it is not one of the documents

I have just handed up. If I may just take the Court

to the section - it is a fairly short section - so

the Court may appreciate the scope and ambit of it.

(Continued on page 3)

ClTl/2/MB	2	11/10/88
Air ( 2)

MR MEAGHER (continuing):  ·subsection (1) says that:

Where a passenger, other than a

prescribed passenger, travels to

Australia on an overseas flight, the

passenger shall pay the prescribed fee

for immigration clearance of that

passenger by an officer at the airport

at which the passenger intends to enter

Australia.

Stopping there, Your Honours will see that applies

to passengers arriving on overseas flights. It does

not apply to passengers arriving otherwise, for
example, by ship. It applies to passengers other
than prescribed passengers. If Your Honours go

to subsection (6), the definition part of the

section, Your Honours will see:

'passenger' means a person (whether an

Australian citizen or not) who travels to

Australia as a passenger on an aircraft

operated by an international air operator.

So,..the fee is payable both by citizens and by

that other class, which I can conveniently perhaps

call migrants, if they travel to Australia. It

applies, in other words, both to migrants and to

non-migrants.

Subsection (1) also deals with" a prescribed

passenger' and in order to know what that means

one has to go to the regulations, which I handed

up this morning, which sets out on page 2:

For the purposes of subsection 34A(l) of

the Act, a passenger that is a person who

is not 12 years of age, that is to say, the

12th anniversary of whose birth has not

occurred, is .a prescribed passenger. the tax, and others do not. So, some migrants seeking entry do have to pay (Continued on page 4)

ClT2/l/JM	3	11/10/88
Air(2)

DEANE J:	What gives the power to prescribe by regulation?
MR MEAGHER:	May I - - -?
DEANE J:	Do not trouble now, Mr Meagher.
MR MEAGHER:	I think I shall be eventually able to answer

that question. So migrant children, for example - it

presumably requires parents - do not have to

pay the fee. hldYour Honours will appreciate that

since the persons who have to pay the fee in

general are passengers, that would exclude, for

example, the crew of an aircraft, they would not

have to do it.

DEANE J:  &3ction 67, is the answer to my question,

Mr Meagher.

MR MEAGHER:  Thank you, Your Honour. The next thing I

need to draw Your Honours attention to is the

definition of "overseas flight":

means a flight that commenced at,

or during which the aircraft

called at, a place outside Australia.

So that, for example, if there were a round trip

from Sydney -say Sydney, Brisbane, Noumea, Sydney-

and nobody alighted at Noumea, still every

passenger would have to pay the arrival tax. But

most mysteriously, just stopping at (1), the the prescribed fee. If one were left simply with

subsection (1), one would assume it was a payment

to the Crown or the Immigration Department or

whatever, but it simply does not say. Subsection (2)

says:

The fee shall be collected by

the international air operator

operating the flight.

If one stopped there, one would perhaps get

the impression that the international air operators

were collection agents, as it were, of the Crown.

(Continued on page 5)

ClT3/l/SR	4	11/10/88
Air(2)

MR MEAGHER (continuing):  Subsection (3) says:

The international air operator shall

pay to the Commonwealth the amount of

the fee payable by a passenger -

-- not the fee itself, but the amount of the fee

whether or not the operator has collected

that amount from the passenger.

And subsection (4):

An amount payable to the Commonwealth by an international air operator under

subsection (3) is a debt due to the

Commonwealth and may be recovered in a court of competent jurisdiction.

There is no express language that makes the amount

payable by a passenger, under subsection (1), a

debt recoverable by anyone.	It may or may not
be of such.	The outstanding features of the section

therefore are these, in our respectful submission;

first that the fee payable to somebody by the

passenger, which is ostensibly to promote

immigration clearances, is imposed on passengers

for payment, presumably to the airline operators,

who do not provide immigration clearances. The

second feature is that the amount exigible by the

Commonwealth from the airline operators in

subsections (3) and (4) is a compulsory payment by

those operators to the Commonwealth in respect of

provision of clearance facilities, not to them

because they do not need clearance facilities, but

in respect of other persons, namely the passengers

or some of the passengers whom they carry.

(Continued on page 6)

C1T4/1/HS	5	11/10/88
Air(2)

MR MEAGHER (continuing): In that overall context, our

submission is that the provisions of 35A and,

particularly, 35A(3) and (4), do not come

within the migration power nor under any other

head of power. They are, indeed, we would

concede or, they would if standing alone, we

concede, be within the taxation power because

there is nothing to stop the Commonwealth

imposing tax on any people by any discrimenae

it wishes. ·

DEANE J: In w:1.atever amount the executive might decide?

MR MEAGHER: Certainly,perhaps,but what I was going to

put to the Court is that, as a tax, it is running

into section 55 difficulties in which case it should

not be in the MIGRATION ACT.	I was just thinking
of Your Honour's question.	As framed, it probably

would not be a tax for that reason because it is

not an amount fixed by the Parliament.

DEANE J: Well, it is in whatever amount the executive might

prescribe on whatever people the executive may not

exempt.

MR MEAGHER:  Yes, that is right. Well, may I put it this

way because it is ..... it is probably more accurate:

it may or may not be valid under the tax power but,
if it is valid under the tax power, then it is not

contained in the Act on its own and, therefore,

falls foul of section 55.

Now, if I may contrast the difference between the arrival tax, which had a short-lived history - it only existed from 1 January 1988 to 30 June 1988 -

with the departure tax which has been with us for

some time. If Your Honour's go to the DEPARTURE

TAX ACT 1978, Your Honour will notice the different manner in which Parliament has dealt with that

impost.

(Continued on page 7)

ClT5/l/SH	6	11/10/88
Air(2)

MR MEAGHER (continuing):  It proclaims itself to be a tax.

The Act is supplemented by the DEPARTURE TAX

COLLECTION ACT, which explains who can collect

it and who cannot. In paragraph 5 it says:

Tax is imposed in respect of the departure,

after the commencement of this Act, of

a person from Australia for another country,

whether or not the person intends to return

to Australia.

And 6 gives you the rate of tax at $10 which was

subsequently amended to $20 and then re-amended

later to come back to $10. The only significance

of that is that the arrival tax, or so-called

clearance duty, was not imposed in the same way.

Now, if Your Honours would be good enough to go

to our written submissions.

TOOHEY J:  Mr Meagher, just before we do that, is there

anything in the 1987 amendment to the MIGRATION ACT
or in the Act itself that spells out this notion

of immigration clearance?

MR MEAGHER:  I think not, Your Honour, it is not a defined

term. It is described in the minister's second

reading speech which, really, is not all that

helpful. In answer to Your Honour Mr Justice Deane,

in Hansard of 7 October 1987 when introducing the

bill on the second reading, the minister at page 885

said this, which I do not think really clarifies

the point, indeed, adds to the mysteries.

Clause 7 of the Bill establishes the

mechanism whereby a new immigration

clearance fee for service can be collected

and paid to the Commonwealth. At present,

the full cost of undertaking immigration

clearance services at ports of entry is

borne by the Australian taxpayer. These

costs are increasing dramatically each

year, because the number of persons travelling

to Australia is increasing and because of improved clearance services. In order to

recoup part of these costs, it was announced

in the Budget package that passengers over 12

years of age arriving on international flights
and who require immigration clearance on

arrival will, from 1 January 1988, be required

to pay a $5 immigration clearance fee. The

fee is to be collected by international airline
operators who bring the passengers to Australia.
In turn, the operators will pay the fees

will be a debt due to the Commonwealth.

collectable by them to the Commonwealth.

ClT6/l/MB	7	11/10/88
Air(2)

Revenue generated from the fee is

estimated to total about $17m in a full year.

It will be used -

and this comes close to the answer to Your Honour's

---= question -

to offset the cost of immigation inspection
of passengers at airports; the costs
relating to passengers who are refused
entry; the cost of facilities to detect
fraudulent immigration documentation; the

the cost of issue of visas -

may I just stop there and emphasize that -

the salaries and other costs of airport

staff; and general administrative overheads.

Now, that is a somewhat odd document because the

minister is including, as one of the main items of a clearance, the cost of clearance, the cost

of the issue of visas which is, presumably, an act

which takes place in other countries, countries

other than Australia. One can understand the

concept of the inspection in Australia of visas
issued elsewhere, being described as a clearance
cost. It is not very easy to understand the

concept of the issue of a visa being a clearance

cost. But that is as far as I can get to answer

Your Honour's question. The term is not, I think,

otherwise defined.

(Continued on page 9)

ClT6/2/MB 8 11/10/88

Air(2)
MR MEAGHER (continuing): In paragraph 1 of our written

submissions we submit that the impost on each

passenger under subsection (1), as distinct

from the impost on air operators under

34A(3), may perhaps be a fee for the services

---~rovided by the Commonwealth with respect to the immigration clearance of that passenger,

although,we add, that would be a very odd
description because it is odd to describe a

fee payable by someone to a third party, in

respect of services rendered by the Commonwealth,
as a fee for the provision of service.

In paragraph 2 we submit that the purported imposition of a duty on a person not the recipient

of the service being provided - and here,of course,

we are talking about the duty that arises in

subsections (3) and (4) on the airlines - first

to collect the fee and secondly to pay an
equivalent amount, whether collected or not, to
the Commonwealth is not incidental to the power
to make laws with respect to immigration and
is not a fee for services, because no services

are being provided to the airline operators,

but, if anything, is a tax in a classic

definition as being a compulsory exaction of

money by the Commonwealth for public services

enforceable at law. And, as Your Honour

Mr Justice Deane says, if a tax, then it is a

tax on anyone the executive thinks fit in any

amount they think fit.

In paragraph 3 we concede that 34A may in

a -general way facilitate the collection of money

by the Commonwealth, and in the administration

of migration, but that those subsections lack

the necessary connection with the immigration power. We choose that language because it is

the language used by the former Chief Justice

Sir Harry Gibbs in GAZZO's case.

In paragraph 4 we point to what we say

are factors, the ~umulative effect of which

together confirm the remoteness of any connection

between 34A(3) and (4) and the head of powers

to make laws with respect to immigration and we

set them out. These require just one or two

slight amendments:  (c) is probably incorrect

and I will take Your Honours to that in a

moment. That probably should be deleted.

On the other hand, (i) should be added after

(h), namely the fairly obvious point that airline operators are not persons who are

contemplating entry into Aus,tra 1 i _..,. (a) is

the fee in subsections (1) and (2) is the fee
for services rendered by the Commonwealth to

passengers, but apparently not payable to the

Commonwealth. (b) the fee in (1) and (2) is '

CIT7/l/JM	9	11/10/88
Air ( 2)

payable by those who are not migrants, as
well as those who are, because you can have

Austra+ian citizens paying it.

Possibly the fee referred to in (1)

is payable by passengers in transit as well

~--as those who enter Australia. This is a matter

which I said to Your Honours may well not be

correct. If Your Honours go to the Act,
section 34A and look at the definition of

"passenger" in subsection (6), that would seem

to be couched in terms wide enough to include

transit passengers. But then, if Your Honours

go back to subsection (1), the fee is only

payable in respect of immigration clearance

and transit passengers do not require

immigration clearance. So, the better view

is probably that the fee is not payable in

respect of transit passengers.

(Continued on page 11)

CIT7/2/JM	10	11/10/88
Air(2)

MR MEAGHER (continuing): (d): the fee is payable only

to international air operators and not to the

person providing the service. That is, we are

only talking about the fee there, we are talking

about the fee payable by passengers referred to

in subsection (1). They do not have to pay the

__ fee to the person providing the clearance services,

they pay their carrier. (e): the international

airline operator merely transport the passenger who

is later to be inspected there being no other
or pre-existing relationship or duty. And, of

course, it goes without saying that the

international air operators are not the people

who effect, technically, entry of their

passengers into Australia. They merely bring

the passengers to Australia. Entry does not incur

until the passengers leave the actual airport.

(f): it is clearly possible for the Connnonwealth

to have collected the fees at the time the

service is provided and from the persons to whom

the service was provided. But for some curious

reason that fairly obvious course was not taken.

MASON CJ: It is easier, is not it, if you can validl~ to

collect the fee from the international airline

operator?

MR MEAGHER: Probably that is a simple answer, Your Honour.

DEANE J: But also if you go into reasons, it is fairer, is

not it, to require a passenger coming to

Australia to pay the amount when he buys his ticket

then to slap it on him when he arrives, possibly

without any warning?

MR MEAGHER: Certainly, Your Honour, we would have to concede

that. But if so, one would have thought there

would be no problem in the Connnonwealth, by a

suitable agent at the end where the passenger

gets on the aircraft, to have someone there

to handle the matter at that end. The Connnonwealth

is not, of course, restricted to doing it here,

they can do it overseas. (g): we submit that

section 34A(3) is the amount of the fees rather

than the fees themselves which are to be paid

by the international operators to the Connnonwealth

and the amount is to be paid whether there has

been a corresponding collection or not.

(h):  we again make the point that there are

other ways of coming to Australia than by

air operations and no provision is made for a

clearance fee in respect of, for example, ships.

And (i) is the fairly obvious point I made, that

ClT8/l/SR	11	11/10/88
Air(2)

the airline operators are not themselves entrants

into Australia. They are not the migrants.

In, 5, we submit, further - - -

WILSON J:  What about the crew of an aircraft, they go

through immigration, do they not?

MR MEAGHER:  They do indeed, Your Honour. They have to

be cleared, but they do not have to pay the fee,

oddly enoug~ because they are not passengers.	So
it does not operate on them. Further, whether
or not the imposition of a requirement on

international air operators answers the description

of a law with respect to immigration, the fact

that the inspection service is not provided

to the plaintiffs prevents the levy from being

a fee for services in relation to the plaintiffs.

That proposition is based on what one hopes is

an accurate assumption that inherent in the very

idea of a fee for services is the notion that

the fee is payable by the recipient of the

services to the provider of those services.

Further, it is the amount of the fee,
whether collected or not, that constitutes the

levy on the international air operators. The

collection from a class not being the recipient

of a service of the amount of a fee for services

provided to another class where what is collected

is not merely the fees paid but the equivalent

amount and whether collected or not constitutes,

if anything, a tax rather than a fee for a service.

(Continued on page 13)

ClT8/2/SR	12	11/10/88
Air(2)

MR MEAGHER (continuing):  If I may refer Your Honours to

PARTON V MILK BOARD - His Honour Mr Justice Dixon, dealt with a similar problem - 80 CLR 229, at

page 262. In that case it was compulsory

exactions on various people in Victoria to the

Victorian Milk Board and one of the persons who

had to pay the exaction was a dairy~Bn and dairymen
were defined as being "not dairy farmers who

produced milk", so they were not milk producers.

At page 262 His Honour said:

If the contribution in that case was

for services rendered, nevertheless I am

quite certain that the contribution levied

upon dairymen and owners of milk depots in

the present case was not of that

description.

The simple point His Honour was making was that there

was a service to the milk industry generally, but not

to that section of the milk industry who had to pay
the impost in question, and hence it was held to be

an impermissible excise.	In LOGAN DOWNS V
QUEENSLAND,	137 CLR 63, dealing with another -

His Honour Mr Justice Gibbs at page 63 says:

There is no doubt thats. 7 -

this is payments into a stock fund -

imposes a tax. "It is a compulsory

exaction of money by a public authority

for public purposes, enforceable by law,

and is not a payment for services

rendered".

It is a classic definition of MATTHEWS V

CHICORY MARKETING BOARD. And then the next sentence

is the one we rely on -

The amount levied does not purport to be,

and is not in fact, a payment for services

rendered to the person required to pay it -

indicating, in our respectful submission, that

inherent in the notion of a charge for services

rendered there is both that the charger is the
person who renders the services and the chargee

is the person who receives the benefit of those

services. Similarly - not in our list -

there is another passage by Your Honour Justice Mason

and Your Honour Justice Deane in the GOSFORD MEATS

COMPANY case, 155 CLR 368, where at page 385 if I may just read two sentences:

Viewed as a matter of substance, the question whether the licence fee payable

C1T9/l/HS	13	11/10/88
Air(2)

by the plaintiff in the present case is
a duty of excise is susceptible of but
one answer. It cannot be suggested that

the licence fee is insubstantial in

amount or that it represents a payment

for services rendered to the person

required to pay it -

assuming, yet again, in our respectful submission,

that the charge must be by the provider of the

services and to the person who receives the

benefit of that provision.

(Continued on page 15)

C1T9/2/HS	14	11/10/88
Air(2)

MR MEAGHER (continuing): Then, in paragraph 6, is

really making the same point in a slightly

different way, I think, that a compulsory

exaction upon the carrier of goods calculated

-- by reference to the quantity of goods carried would normally be classified as an excise and

if one treats passengers as if they were goods, as it were, that points up to the fact that in

normal parlance one would call this a taxation.

The exaction does not cease to be an excise by reason that the statute also imposes a fee for services upon the producer of the goods

calculated according to the same formula.

Finally, dealing with the section 55 point, we

say that since section 55 of the CONSTITUTION will

operate to render the other matter in the MIGRATION

than an ineffective attempt to amend the

ACT of no effect, if that Act were, in fact, amended, no more

principal Act and, therefore, not bringing down

the destruction of the principal Act itself. In

that respect, reference is made to McKELLAR's

case. They are our respectful submissions,

Your Honours.

MASON CJ: Yes, thank you, Mr Meagher. Yes, Mr Solicitor.

MR GRIFFITH:	If the Court pleases, may I hand our contentions to the Court. If Your Honours please, we do not
understand that my learned friends have relied
upon the acquisitions power so that part might be
ignored.

MASON CJ: No, not in - - -

MR GRIFFITH:  May we also hand to the Court some short

supplementary materials including reference to

Hansard and also to American legislation.

MASON CJ:	Thank you.
MR GRIFFITH:	That is referred to in paragraph 1 of our

contentions.

MASON CJ: Does the legislation specifically deal with

innnigration clearance services apart from

section 34A(2)?

MR GRIFFITH:  Not as we understand it. Your Honour. It is

implicit in the Act the obligation to have
appropriate entry permits. It is implicit that

there must be some process to consider that.

MASON CJ:  Yes.

ClTl0/1/SH	15	11/10/88
Air(2)

MR GRIFFITH:  As Justice Deane pointed out, the regulation-

making powers in section 67 including a reference

in paragraph (cb) to the:

Making provision for and in relation to

the collection by international air

operators of fees under subsection 34A(2) and it is pursuant to that that the relevant

regulations, no doubt, have been made.

DEANE J: Did you say (cb)?

MASON CJ: Page 3 in the 1987 Act.

MR GRIFFITH: It is an amending - (cb), Your Honour. It

says:

Making provision for and in relation to

the collection -

DEANE J:  Yes, I have it now, thank you.

MR GRIFFITH:  Yes. Our first proposition has been covered

in part by my learned friend's reference to

Hansard, page 885, 7 October 1987. That is the

second sheet of the attached materials.

(Continued on page 17)

ClTl0/2/SH	16	11/10/88
Air(2)

MR GRIFFITH (continuing):  My learned friend read from the

top third of. the right-hand paragraph on page 885.

The only sentence we would add is the sentence at

the end of the last full paragraph:

Consultation with the airline operators is taking place to ensure that the legislation

and mechanisms to impose the charge will impose as small an administrative burden

as necessary on the airlines.

We also attach two pages further on in these
materials a copy second reading speech, 25 May 1988,
dealing with the repeal of section 34A. That
section is quite useful for explaining both the

derivation and the operation of the provision.

Page 3031, right-hand column, and Mr Holding's

second reading speech:

The Bill contains amendments to the MIGRATION

ACT 1958 to implement a recent decision to

repeal the innnigration clearance fee, which
was introduced to offset certain costs

incurred by or for the Department of Innnigration,

Local Government and Ethnic Affairs in

dealing with international air passengers.

Does Your Honour have the right page?

GAUDRON J:	Yes, thank you.
MR GRIFFITH:	The Australian innnigration ciearance fee was
introduced into the MIGRATION ACT 1958 in
1987. It was modelled on the clearance fee

operating in the United States of America - and if I may pause there. We do attach that

American legislation in these materials -

and requires adult passengers on international

flights seeking to enter Australia after

1 January 1988 to pay a fee for the services

relating to their innnigration clearance.
The scheme provides for the fee to be
collected, and paid to the Connnonwealth,
by the international airline operator who
brought the passengers to Australia,

whether or not the airline collected the fee.

Most - but not all - international airlines

operating in the Australian market protested

about the innnigration clearance fee, and there

is currently High Court action to test the

validity of the fee and the airlines' liabilities

under the Act. The Government's view has

been that much, if not all, of the claimed

shortfall in fees could have been made good

by the airlines changing their administrative

arrangements towards those used in the

ClTll/1/MB	17
Air(2)

United States of America by many of the same

airlines. The Government now proposes

however to abolish the current $5 fee.

The international air operators will continue

to be liable to remit to the Cotmnonwealth
the fee payable by all passengers carried

to Australia before 30 June 1988.

And in the last paragraph in that colunm:

The abolition of the itmnigration clearance fee of $5 from 1 July 1988 should be

viewed in the context that the Government has agreed that a $5 share of the new and

reduced departure tax of $10 will be

notionally allocated towards migration costs

incurred in processing international

passengers. The revenue from such an

allocation is estimated to be $18.45m in

1988-89, which roughly equates to revenue

forgone from repealing the itmnigration

clearance fee.

If I could turn then to the American legislation,

the United States Code, Department of Cotmnerce.

The relevant section is section 205 which appears on the third page of the American materials.

(Continued on page 19)

ClTll/2/MB	18
Air(2)
MR GRIFFI'IH (continuing):	One can see in the American

provision a provision very similar to section 34A

section 285 amends section 286of the IMMIGRATION AND

NATIONALITY ACT OF 1952. It inserts a schedule

fees providing for a:

$5.00 user fee (fee) per individual

for the immigration inspection of

each passenger ..... arriving at a port

of entry in the United States.

Then there is an exemption in respect of arrival

from certain places. Paragraph (f) on the next

page, "collection", provides:

(1) Each person that issues a document

or ticket to an individual for

transportation by a commercial vessel

or commercial aircraft into the

United States shall -

" (A) collect fran that individual the

fee charged under subsection (d) at
the time the document or ticket is

issued; and

"(B) identify on that document or

ticket the fee charged under

subsection (d) as a Federal inspection

fee.

And then the provision of subsection (3) provides

that those persons:

shall remit those fees to the

Attorney General -

within a certain time. And then follows provisions

for the disposition of the receipts in a

particular account to be used to the costs of the
inspection process. So, in outline the scheme is,

we would suggest, very similar to that provided

under section 34A, There were ederal regulations

which attach in respect of the

immigration user fee. That is part 286. The

regulation point 2 in the right-hand column

provides for the levy of the:

$5.00 user fee (fee) per individual

for the immigration inspection of

each passenger (with certain

exceptions.

And over the page, regulation 286.5 requires for

the collection by those who transport the passengers

and also for other relevant matters.

ClT12/l/SR	19	11/10/88
Air(2)

DAWSON J: Where does the fee that is collected go, just

into consolidated revenue, Mr Solicitor?

MR GRIFFITH: In Australia, yes it does.

DAWSON J: Not in America, I notice it goes into a

-~immigration user fee account.

MR GRIFFITH:  It goes into a fund. Yes, it does, Yo11r Ronour,

that is a relevant difference. But inasmuch

as it is necessary, Your Honour, we would refer

to the second reading speech, indicating that the

amount collected only partly defrays the cost

so that there is a balancing process there.	But
it is through consolidated revenue and not to
a special fund.

DEANE J:	But you cannot say that because it is whatever
amount the executive decides it is going to
extract?
MR GRIFFITH:	Your Honour, we were going to refer to that,

but our submission is, Your Honour, that the fee

is expressed as a fee in relation to service

and it must be a reasonable fee so that it could

not be regarded as any fee which may be assessed,

but one which is reasonable. But could we refer to

that as part of our submission, Your Honour? We

would not submit, Your Honour, that any fee could

be fixed, but one which must bear a reasonable

relationship to the particular service.

DEANE J: What, to the cost of the particular passenger or

the cost of all passengers or the cost of

air passage or - - -

MR GRIFFITH:  In respect of what are the services provided.

The second reading speech indicates the ambit

of the area which, as my learned friend-Mr Meagher

pointed out, includes the issuing of visas which,

we would submit,is an aspect reasonably pertaining

to that.

DEANE J:	Do not let me take you out of your course,
Mr Solicitor.

(Continued on page 21)

ClT12/2/SR	20	11/10/88
Air(2)

MR GRIFFITH:  Yes, but in that wide sense

adumbrated by the minister on page 885, the

last full paragraph, Your Honour, we would

submit that the fee is to be fixed as a

referable to those items of expenditure

--which, we submit, Your Honour, are related to

the aspect of entry.

BRENNAN J: It is not suggested the second reading speech

has some statutory effect, I take it?

MR GRIFFITH:  No, Your Honour, but we would submit,

Your Honour, that when one looks at the

struture of the legislation, it is stated to

be a fee referable to some service, Your Honour,

and one can identify the content of the service.

Inasmuch as, Your Honour, it is asserted that

it is not a fee for service, we submit, the

onus is on those alleging that to show that it

in truth is not a fee fixed reasonably referable

to some relevant service. So that to some extent,

Your Honour, we would rely on the onus on the

plaintiff to establish the contrary. But, we

submit, Your Honur, that plainly the fee, when

one looks at its legislative history, both its

enactment and repeal and within the structure of

the Act and its amount, Your Honour - and perhaps

leglislative history could include here the

analo.gous American experience - that one has a
modest fee which does not, in our submission,

excite any anxiety by its mere amount, Your Honour,

that there is some relevant ground of

disproportionality to indicate that it is anything

other than a fee, in other words, not a tax.

But,we would submit, Your Honour, there is no

material for the Court to indicate anything other

than what appears to be on face value of the

legislation by its own terms. Such material as

there is available to the Court, in our submission.

is confirmatory of the aspect of fee for service,

Indeed, we understand my learned friend's

contentions so far as the service in relation to

the passenger was concerned, really was not

to contend to the contrary.

DEANE J:	What if one formed the view that the Act did not
limit the fee by reference to what was reasonable for the passenger, or for somebody?

MR GRIFFITH: Well, then there could be difficulties,

Your Honour, because we would submit that the

fee must be limited in two aspects. This is

once more taking us ahead of our intended

course of submission, Your Honour.

DEANE J: Well, I did not think I was in the sense that

I follow you are going to argue that the amount

of the fee is restricted by the Act. Is your

argument predicated on acceptance of that?

CIT13/l/JM	21	11/10/88
Air(2)

MR GRIFFITH:  Your Honour, we would submit firstly that the

fee must be reasonable.

DEANE J: That is what I was asking you. If one were to

form the view that under this Act the Commonwealth

____ executive is at large as to the amount it prescribes,

is that the end of the case?

MR GRIFFITH:  Your Honour, we have great difficulties to get

to that point, because we would say, Your Honour,

that one would read down the regulation-making
power to keep.it within power, if that was the
point where one went beyond power. So that on

no view would it be our submission one can get

to that point. The regulation-making power,

in our submission, Your Honour, cannot be construed

to go beyond constitutional power.

DEANE J: Then, are you going to deal with the question

whether what is on no view, in your view, is on

one view in somebody else's view and that one

cannot get from this Act a coherent policy

limiting the fee by reference to discernible

criteria?

MR GRIFFITH:	Your Honour, as to that, our submission is that one can and one does, both - - -
DEANE J:	I know that, but what if one cannot?
MR GRIFFITH:	Your Honour, then there may be difficulties,

because if one got to the point where one could

impose what was characterized as a tax, and not

a fee for service by regulation, Your Honour,

one is in a different area of constitutional

validity.

(Continued on page 23)

CIT13/2/JM	22	11/10/88
Air(2)

DEANE J:	Thank you.
MR GRIFFITH:	We submit in paragraph 2 of our contentions

that immigration clearance is fundamental to a

determination of the status of persons entering

Australia from overseas and in that wa~ we would

submit, is clearly both within the immigration

power and the aliens power and make passing

reference to NOLAN which was decided by this Court

on 13 September 1988 as to the support of the

provisions of the MIGRATION ACT. It is our

submission, of course, the process of immigration

clearance necessarily applies both to Australians

and non-Australians. The imposition of an

immigration clearance fee, in our submission, upon

those persons, or upon an international air

operator carrying those persons to Australia is

incidental to the provision of immigration

clearance services, and as to that we contend that

the scheme established by section 34A was a

reasonable and appropriate means of effectuating

the collection of the immigration clearance fee.

Once that categorization is reached, in

our submission, the justice and wisdom of particular
provisions, or the means of effectuating the

collection of the fee, is a matter within the

discretion of the legislature. My learned friend

lists in paragraph (a)~adding a paragraph (i)
to page 2 of his contentions,various matters
which, we submit, go no more than criticism
to the mechanism adopted by the legislature
as to the manner in which this relevant

imposition should be imposed.

BRENNAN J:  The imposition you are speaking of here is the imposition upon the passenger to pay?

MR GRIFFITH:  Yes, Your Honour. In paragraph 2 we are dealing

with the imposition of the fee itself. In

paragraph 3, Your Honour, we take the extra step

dealing with the requirement that the air operator

carry it, but Your Honour, we submit that -

BRENNAN J:  Before getting to the air operator, what is the

sanction upon a passenger who does not pay, or what

is the liability of a passenger who has not paid?

MR GRIFFITH:  Your Honour, dealing with the second question

first, there is an obligation under

section 34(1) to pay so that there is a lawful

obligation which could be recovered as any other

lawful obligation expressed.

BRENNAN J:  At the suit of whom?

ClT14/l/HS	23	11/10/88
Air(2)

MR GRIFFITH:  At the suit of the Commonwealth. Your Honour,

there is no doubt that the money is payable to and

for the benefit of the Commonwealth, in our respect.

The provisions of subsection (2) provide a

provision for collection by way of agency, so that

our analysis would be, Your Honour, any moneys received by the

- - airline are moneys had and received by the airline operator, had
and received for the use of the Commonwealth.

BRENNAN J:  Is it a debt which is susceptible of discharge

by payment by a passenger to the Commonwealth?

MR GRIFFITH:  Your Honour, subsection (2) provides that it

should be collected by the international airline

operator so that the mechanism provided in the Act

is that it should be collected in that way and then

accounted for in full by the airline operator.

So that is the mechanism provided for by the Act.

(Continued on page 25)

ClT14/2/HS	24	11/10/88
Air(2)

MR GRIFFITH (continuing):  Now, perhaps it would be a

matter of argument, Your Honour, as to whether

a passenger who paid directly would have a defence if it were asserted in some other way against that

passenger that it had not been paid but, of course,

the fee could only be paid once, Your Honour.

-· There could no obligation to pay it twice.
BRENNAN J: Is the passenger liable to the airline in the

amount of the impost to the Act by subsection (l)?

MR GRIFFITH: Well, Your Honour, in our submission, the

passenger arriving in Australia is obliged to

pay the fee under subsection (1) and the mechanism

for payment provided is that it should be paid to

the airline operator but paid, Your Honour, in a

way that it is money paid for the use of the

Commonwealth. It is for that purpose. It is not

to the airline operator in a beneficial sense, in

our submission.

BRENNAN J:  Does that mean that the Commonwealth is the

creditor but it cannot sue?

MR GRIFFITH:  Your Honour, we would not submit that the

Commonwealth cannot sue.	We would submit the
Commonwealth could sue.

BRENNAN J:	Could sue.
MR GRIFFITH:	Yes.

GAUDRON J: And could it also sue the airline under the

succeeding subsection· - the airline operator?

MR GRIFFITH:	Of course, Your Honour, but could only recover the money once. The obligation upon the airline
operator is to pay the amount referrable to each
passenger brought to Australia.  -

GAUDRON J: Yes,. well, where is the limitation in respect of

any moneys recovered by the Commonwealth direct

from the passenger?

MR GRIFFITH: Well, Your Honour, firstly, the mechanism of

the Act is not one which sets up a mechanism for

direct recovery so that the scheme of the Act is

one to provide for the complete payment, we would

submit, but once of the $5.00 fee and the form is
to say there is an absolute obligation upon each
passenger other than a prescribed passenger to

pay the $5.00. It is to be paid by being paid

by way of collection to the air operator. The

air operator has not, then, no more obligation

than to account for the money to the Commonwealth

and, to better perfect that there is complete

payment -it really acts as an obvious legislative

ClTlS/1/SH	25	11/10/88
Air(2)

inducement, in our respect - the airline operator

is in the position of desiring to receive $5.00

by way of payment collected from each passenger

under paragraph (1) of section 34A because of the

obligation of the air operator to pay a sum

referrable to each and every passenger. If it

-~ - were not for the obligation in subsection ( 3) ,

well, then, in our submission, one would have

an unworkable scheme because there would be an
obligation on a passenger to pay. If there were
no obligation upon the international air operator

to pay, whether or not it collected, well, then the air operator could say, "Well, we will only

pay over such sums as passengers are prepared to

pay for us" and the scheme, in effect, would break

down. It would be necessary to establish a

collection or review mechanism at the point of

entry with all the obvious difficulties, uncertain,

and delays that that would have.

So, to answer Your Honour's question, we would

submit that it is not realistic to say, "Well, is

there a separate right of recovery?" The scheme
of the Act provides only one mechanism of recovery
for the full amount of $5.00, namely, payment to
the international air operator,collecting for or

on behalf of the Commonwealth, the $5.00 fee.

BRENNAN J: 

But that, rather, skates over, does it not, the

nature of the obligation which is said to be
created by subsection (l)? If it is not an

obligation which is enforceable by penal provisions,
assumedly it is an obligation in the nature of a

debt.

MR GRIFFITH: 

Yes, we would submit it is, Your Honour.

BRENNAN J: 

If it is an obligation in the nature of a debt,

then the creditor either has a right to recover it
once or the creditor, arguably, has a right to

recover .·it here twice.  Now, as I understand it,

has a right to recover it once from the passenger there is a difficulty in saying that the creditor

because it is only to be paid to the airline but

then the airline has no cause of action itself and yet there is a liability in the airline to

account to the Commonwealth under subsection (3).

(Continued on page 27)

ClT15/2/SH	26	11/10/88
Air(2)

MR GRIFFITH:	Your Honour, the airline has control over those that it brings as passengers to Australia
so that when·there is a statutory obligation on the airline operator to collect $5.00 from each
and every passenger and to account for every one
of those $5.00 to the Commonwealth of Australia,

--although, Your Honour, the airline cannot say

that the section enables the airline operator to

recover the $5.00 from the passenger, the airline

has perfect control over that matter, Your Honour,

by not carrying the passenger unless and until

that sum is paid.

BRENNAN J:  Albeit in breach of its contract of carriage?

MR GRIFFITH: Well, Your Honour, it is an obligation on the

passenger to pay the $5.00 and the obligation

which applies to the passenger - not when the

passenger, of course, is overseas but referable
to the passenger intending to travel to Australia -

is to paid $5.00 to be collected by the international

air operator.

DAWSON J:  Well, the obligation to the passenger is

towards the airline operator?

MR GRIFFITH:  The obligation to the passenger, Your Honour,

is to pay $5.00.

DAWSON J:	To the airline operator?
MR GRIFFITH:	Well, to pay $5.00, Your Honour, to and for the benefit of the Commonwealth.
DAWSON J:	It has to pay it to someone?
MR GRIFFITH:	Yes, the method of payment, Your Honour, is

to the airline.

DAWSON J:  Well, there is an obligation to pay, it is an

obligationtopayto, someone and someone is the

airline operator?

MR GRIFFITH:	Yes, Your Honour, on behalf of another person, the Commonwealth.
DAWSON J:	Yes.
MR GRIFFITH:	So that our submission is that the scheme

of the Act, when one looks at it, is a simple

administratively convenient scheme to ensure that

each passenger other than a prescribed passenger

who is travelling to Australia on an overseas

flight shall pay the prescribed fee. We submit

that it is within the immigration power and the

alien's power for such imposition of fee to be

C1Tl6/l/MB	27
Air(2)

made referable to the innnigration services

provided on that passenger when it arrives on

an overseas flight.

DAWSON J:  Mr Solicitor, I am not at all sure that I know

_what I am looking for. What is the difference

--between a fee for services and a tax, bearing in

mind, of course, that you can recoup costs by

imposing a tax and bearing in mind too that in the

broadest sense, I suppose, all taxes are fees for

services?

MR GRIFFITH:  Well, Your Honour, the conventional definition

of tax, for example, MATTHEWS V CHICORY BOARD

is something - - -

DAWSON J:  That does not tell me what fee for services

is?

MR GRIFFITH:  - - - which is other than a payment for

services. Now, one must then characterize,

Your Honour, what is a payment for services.

DAWSON J:  That is what I am asking you to say, what is

the criterion?

MR GRIFFITH:	Your Honour, the criteria is that the payment which is to be imposed, Your Honour, is referable
to a service.
DAWSON J:	Well, you see, you can find the referability

in the fact that the amount collected is kept
separate and is used in payment of the cost

of the service. But, of course, it is not something

which you have here.

MR GRIFFITH:  Your Honour, in our submission, it is sufficient

if it has a reasonable relationship to the cost

of service so that if, for example - -·-

DAWSON J:  Well, what do you mean by reasonable, reasonable

in what sense? One would rather suspect that the

amount here is reasonable in the sense that it is an

amount that the traffic can bear?

MR GRIFFITH:	WeJ.l, Your Honour, we would submit to the contrary. It might be the departure tax could
be stated to be something of that sort in that
it is not expressed. referable to any costs related
to departure, but in respect of this amount,
Your Honour, there is the - we have the statement
in the two second reading speeches, Your Honour,
indicating that it is only partly defraying these
costs in relation to the provision of the service.
DAWSON J:	Yes, well where is the reasonableness, what is

it that is reasonable?

ClT16/2/MB	28
Air(2)	(Continued on page 28A)
MR GRIFFITH:	Well, Your Honour, if there was a fee which

plainly more than recovered the costs, plus any

allowance for a reasonable profit margin on that

possibly, so that it bore no relationship to the

service provided. Now, one obvious test, Your Honour,

-~is whether the fee is, what may be termed here,

a nominal sum; $5.00, Your Honour, in relation

to a service involving the elements indicated in

the second reading speech.

(Continued on page 29)

ClT16/3/MB	28A
Air(2)

MR GRIFFITH (continuing): In our submission, Your Honour,

plainly on its face, on the information available,

there is a reasonable relationship to the amount

of the fee.

DAWSON .l:_ I do not see it at the moment. I mean, if it

--is more than the cost of the service, obviously there is no relationship. One could say the

same thing if it is less than the cost of the

se.rvice. It is merely an imposition.

MR GRIFFITH:	Your Honour, if it is less than the cost of the service, in our submission, there is
no real difficulty about it because then one
cannot say that it is unreasonable ta recover
less than the cost of the service provided.
DAWSON J:	But it does not establish any relationship

between the cost of the service and the amount.

MR GRIFFITH:  Your Honour, it is a relationship in that

it goes to defray it, to use the expression.

DAWSON J:  How do I know that it goes to defray it;

it goes into consolidated revenue?

MR GRIFFITH:	Your Honour, in our submission, the fact that a payment goes into consolidated revenue
is not decisive to an issue of whether a sum
is a fee for service.

DAWSON J: Well, it makes any relationship between the

amount and the service very difficult to

discern, does it not?

MR GRIFFITH:	Your Honour, it is a matter really of value judgment, in our submission, Your Honour,
of saying if one is looking at a fee which is
not a large fee, but $5.00, Your Honour, one is
looking to the service provided, can one say
that there is, on the face of things, a
reasonable relationship so there is not an
exaction of a sum of money which - - -
DAWSON J:	I do not want to carry this on too far, but

if a fee is not fixed by reference to the

cost of the service, it does not bear a relationship

to the service.

MR GRIFFITH:  Your Honour, in our submission, if it is

fixed by a relationship which is less than

the total cost of the service, that is

sufficient to be a fee for service. There is

no need to have a - - -

CIT17/l/JM 29 11/10/88

Air(2)
DAWSON J: If, for instance, it were 10 cents, the fee,

would you say it was a fee for services? It

bore obviousty no relationship at all to

the cost of the service.

MR GRIFFITH:  Ten cents, we would say, is just a nominal

-~-fee and one would just say that it is just a

charge, Your Honour.	One could not say it is
a tax.

DAWSON J: Just a charge?

MR GRIFFITH:  Your Honour, 10 cents.would be just a

nominal fee, Your Honour. One would submit

that in those circumstances one could not

characterize a 10 cent fee as a tax.

DAWSON J:  Whenever it is less than the amount of the

service, the cost of service, it is a nominal

fee.

MR GRIFFITH:  Your Honour, we submit there should be no

difficulties about characterizing a fee less

than the cost of service as being characterized

as a fee for service and that it is an amount,

Your Honour, which is less than the cost of

the service provided. I appreciate Your Honour's

difficulties, but our submission is, Your Honour,

there does not have to be a direct relationship

so that one can say a fee for service is a fee

which covers the complete cost of the service.

DAWSON J:  You would agree that if it were just a noI11inal

amount it would not be a fee for service?

MR GRIFFITH:  It could be regarded as a fee for service.

We would say that if it was just a nominal amount, it would not be a tax.

DAWSON J:	I am asking you would it be a fee for service, when it bore no relationship at all to the cost
of the service?
MR GRIFFITH:	If it bore no relationship?
DAWSON J: Yes.
MR GRIFFITH:	In that case, Your Honour, it might not be a fee for service.

DAWSON J: All right then, well, ,where do you draw the

line when you say it ceases to be something
which, because it is not the cost of the service,
where it ceases to be something that is not

a fee for ser~d_,:e, an<l ½~comes a fee for service?

MR GRIFFITH:  Your Honour, if it is plainly a fee which is

in excess of the cost of the service -

CIT17/2/JM	30	11/10/88
Air(2)

DAWSON J:	No, short of the cost of the service.
MR GRIFFITH:	Your Honour, short of the cost of the

service, it is a question of characterization.

If there are reasons to suppose the fee is fixed

referable. to the cost of the service, then

-~one looks at the circumstances as they are known

and determines whether or not it is possible to
characterize that fee as being a fee which is

referable to the cost of service. If

one has no information at all, or if the

information one has makes it plain that there is

no such relationship, in that situation, Your Honour,

then one would not be able to say it is a fee for

service. It is our submission here, Your Honour,

that it is made plain by the scheme of the

section itself, and then that is confirmed,

Your Honour, by the second reading speech in reference to the American legislation that we

have referred to, that there is such a relationship.

(Continued on page 32)

CIT17/3/JM	31	11/10/88
Air(2)

DAWSON J:  The American legislation provides for the

amount to be paid into a special trust account,
the trust account to be reviewed from time to time

and the fee to be adjusted in accordance with

actual costs.

MR GRIFTITH:	Yes.
DAWSON J:	There is nothing of that sort here.
MR GRIFFITH:	No, Your Honour, but we submit that one does not

have to have a scheme for 100 per ceflt cost

recovery by way of payment to a special fund for the purpose of having a fee for service. We submit there is no authority to that effect,

Your Honour, and it in fact goes against - - -

DAWSON J:  I find difficulty with the ·concept, bearing in

mind that you can, of course, recoup costs

by imposing a tax.

MR GRIFFITH:  Yes. One problem, of course, Your Honour,

is that under section 81 of the CONSTITUTION all

moneys raised by the Commonwealth must be paid

into consolidated revenue and yet at the same time

section 53 of the CONSTITUTION contemplates the difference between a tax and a fee for service,

and both would go into consolidated revenue.

DEANE J:	Is that so? It does not contemplate a dichotomy.
You seem to concede that it does, but if you
look at it it assumes that a fee for service
may linguistically be a tax.
MR GRIFFITH:	Your Honour, we submit that section 53 does

recognize that there may be fees for service.

DEANE J:	But what I was saying to you is you seem to be
conceding against· yourself that there is a dichotomy
between a fee for service and tax.  Section 53
seems to presume the contrary.

MR GRIFFITH:	That may be so, Your Honour, but for the purpose of meeting my learned friend's contention,
Your Honour, it is our submission that in this case that it is not a tax, that the $5.00 levy is not
a tax and - - -
DEANE J:	But is not the point of section 53 that if it is a
fee for service you do not have to worry about whether it is a tax or not, presuming that section 53 carries over to section 55?

MR GRIFFITH:  That would be right, Your Honour. Yes,

Your Honour is right to say - l accept the

dichotomy against myself.	Yes, that would be so,
Your Honour.

C1T18/l/HS	32	11/10/88
Air(2)

In GENERAL PRACTITIONERS SOCIETY V THE

COM:MONWEALTH, 145 CLR 532, at page 562 Justice Gibbs

said in the first full paragraph on page 562:

The amount of an exaction may, I think,

be relevant to the question whether it

is a fee for sercies, since an

exaction may be so large that it could

not reasonably be regarded as a fee.

My brother Aickin, in his judgment in

the present case, draws attention to the

difficulties that may arise under s.55

of the CONSTITUTION when a Statute

gives power to make regulations prescribing

the amount of a fee but does not expressly

impose any limit on the amount that may

be prescribed. As at present advised,

I consider that an Act which gave power by regulation to impose a tax would

itself be an Act imposing taxation.

Ifs. 16C(2) were construed as meaning

that there was no limit to the amount of

the fee that might be prescribed, it might

well follow that the HEALTH INSURANCE

AMENDMENT ACT 1977 would be an Act imposing

taxation and that the remaining provisions

of that Act would be invalid. What is

to be prescribed under s. 16C(2) is clearly

the amount of a fee - the section expressly

so indicates - and unless the words of the

section were unambiguous the Court would

not ascribe to them in meaning which enabled

so large an amount to be preseribed that

the exaction could properly be described as

a tax with the consequence that the

other provisions of the amending statute

became invalid.

(Continued on page 34)

C1Tl8/1/HS	33	11/10/88
Air(2)
MR GRIFFITH (continuing):

The Parliament cannot possibly have

intended such a result, and the maxim

ut res magis valeat quam pereat should

be applied. In my opinion the intention

that can be gleaned from the provisions

of s. 16C(2) is that the amount to be

prescribed shall be such that the amount

payable remains a fee. In the present

case no amount has been prescribed, and

the amount of $10 is not so large as to

give the exaction the character of a tax.

DAWSON J:  I do not quite understand that last sentence.

You can have a small tax as well as a large tax -
this is just repeating what was said earlier that

certainly if it goes above the cost of the

services, it is a tax.

MR GRIFFITH: 

Yes, well, Your Honour, perhaps His Honour

was expressing with the same imprecision the
thought which we were desiring to express to
Your Honour in answer to Your Honour's query

but we would submit that the proper approach to these questions of characterization is to look for a relationship between the fee and the

service so that one can see whether it can be

plainly said that the amount of the fee cannot

reasonably be regarded as having a relationship

and, as we understand Justice Gibbs' judgment,

he was indicating that one significant factor
is that if one has a fee, in that case of $10,

it is net so difficult, then, to regard it as

being of such an amount that it - - -

DAWSON J: The only relationship we have here is the

minister's assertion.

MR GRIFFITH: Well, Your Honour, the second reading speech

specifically states the purpose of the fee is to

recoup part of the costs of immigration clearance.

Now, the regulation-making power, in our submission,

must be construed subject to that purpose and, in

any event, Your Honour, quite apart from the reference

to the maximum,that it is better for a thing to have

effect than to be - - -

DAWSON J: But, you see, you could impose a tax to recoup

part of the cost of services.

MR GRIFFITH: Well, yes, Your Honour, but in our submission

it is clear, in this case, that it is intended to

impose a fee ref er able - ·· ~ ·

DAWSON J:  It may be intended but nothing in the law points

to any relationship between the fee and the cost of

services.

C1Tl9/l/SH 34 11/10/88

Air(2)

MR GRIFFITH: Well, Your Honour, if Your Honour is not

able to find a reasonable relationship in that

way so that the regulation-making power would

then be read down to a fee which must be fixed

reasonably referable to the relevant service,

in that case, Your Honour, in our submission,

the regulation-making power should be read down

so as to fall within constitutional power. So

one would get to, in our submission, much the same position, that, really, Your Honour, the

problem then is to say that the regulation-

making power would enable a tax to be imposed.

DAWSON J: What if the minister changed his mind and decided

to use the money for something else?

MR GRIFFITH: Well, Your Honour, the money goes into

consolidated revenue. The issue is whether the

amount raised can be said to be - if one puts it

simply, Your Honour - amount being - a reasonable

relationship being not substantially more than

the amount expended referable to the service.
That is a loose way of expressing it but, in our

submission, if that is the case, there can be no difficulty about it and, indeed, Your Honour, in

this case, when one sees a second reading speech

for a repeal of this fee, th·e

$10 fee is retained as a tax, Your Honour, so far

as departure is concerned but the note is that

there is a notional setting off.

DAWSON J:  Precisely. They cover the same expenses

in the end by imposing a tax.

MR GRIFFITH: Well, Your Honour, that is for the legislature.

I think that was the submission I was making when

we, sort of, bifurcated to these issues, Your Honour,

that, we submit, it is for the legislature to

determine whether it be done by a plain tax, as

it has in the departure tax or whether there be a

fee designed 10 tecoup part of the costs of providing

the service for inn:nigration by way of a fee

referable to service.

(Continued on page 36)

ClT19/2/SH	35	11/10/88-
Air(2)

DAWSON J:  You see, I am searching for the difference

between a fee for services and a tax, if there is

a difference?

MR GRIFFITH:  Your Honour, firstly, we would submit that

it has been accepted in the CHICKORY BOARD, for

-- example, and when ever a tax is defined, that

a tax does not include a fee for services.	Now
that is a different point from the section 53

point, but that is part of the definition of tax.

Now necessarily it means, Your Honour, that the

Court must characterize any particular impost

as to whether or not it regards it as a fee for

service when otherwise it would be a tax because

if it is a fee for service then it is not a

tax within the conventional definition. Now,

Your Honour, that may mean doing the best one may do with it as,for example, in the CHICKORY

BOARD case but that is an ordinary process for

the courts. Now here, Your Honour, there is

a demurrer and there is a limited amount of

material before the Court. Now if,at the end of the day,the Court has difficulties because there

is insufficient information available to say

that there is a relationship to establish that

the amount recovered is less than the amount spent,
well perhaps the case could go off, Your Honour,

and there could be an inquiry into that matter.

But, in our submission, there are enough

indicia already present to indicate that the

expenditure is greater than the amount recovered

and we would submit that that is sufficient for

the purpose of characterization. I appreciate

Your Honour has difficulties when it is a lesser

sum but our submission is that it is sufficient

to be a fee for service if otherwise the amount of
the prescribed fee is fixed referrable to costs

without necessarily recovering all of them and

albeit that the amount goes into consolidated

revenue.

BRENNAN J:  Mr Solicitor, before you resume the course of

your argument, can I just ask you one further

question. What is the relevance service which is

provided to Australian citizens returning from

abroad?

MR GRIFFITH:  Your Honour, it is necessarily incidental

we say, Your Honour, of the clearance process for

all persons returning overseas to be cleared.

Really we make the point in the first sentence of paragraph 2 of our contentions, Your Honour, that it is necessary to determine the status of

persons entering Australia from ovGrscas, whetl:-s.:.r

they are Australian citizens entitled absolutely

to be here or not. That is the process.

ClT20/l/SR	36	11/10/88
Air(2)

BRENNAN J:  I appreciate that, but is it then, following

from that submission, the proposition that

citizens who are returning to Australia from

overseas may appropriately bear the costs of

ensuring that those who are not citizens returning

---- to Australia from overseas are not admitted?

MR GRIFFITH:  Your Honour, it is a question of classifying

the group,with respect,to whom the amount of
the cost is to be borne. We submit, Your Honour,
that it is permissible for the legislature to
take as the group people arriving as air passengers
from overseas and to say, in respect of that group,

it is appropriate to pay a fee.-

DAWSON J:	What do they get for their money?
MR GRIFFITH:	Your Honour, they get processed through the

airport and enter Australia as my learned

friend,Mr Meagher,pointed out. They produce their

passport, their quarantine certificates, get

processed, Your Honour, and are cleared through

immigration.

GAUDRON J:  The import of what you say, Mr Solicitor, must

be that the service provided to each person does

not necessarily bear a relationship to the fee

paid by that person?

MR GRIFFITH: Yes, that is so. We do not submit, Your Honour,

that one must look at the particular service

for each person, cost it out and establish as

an absolute fact that the fee charged is no more

than that cost. Our submission -

(Continued on page 38)

ClT20/2/SR	37	11/10/88
Air(2)

GAUDRON J:	For that person?
MR GRIFFITH:	For that person.

GAUDRON J: Well,you must go further though in this case, must

you not, and deal with the fact that not every

-person who is getting the service, that is, the migration clearance, is paying a fee?

MR GRIFFITH:  Well, Your Honour, we submit there is no

difficulty about that because - - -

GAUDRON J:  If I could just say; your relationship becomes

quite tenuous at that stage, does it not?

MR GRIFFITH:  Well, we would submit not, Your Honour.

It may be a matter that ultimately turns on -

perhaps if the Court thought that was a relevant

issue - establishment of the total costs of all

these matters and breaking it up. In our submission,

that should not be the appropriate mechanism of

inquiry.

GAUDRON J:  But the consideration is a fee for service.

The consideration is not establishing an impost which in aggregate does not exceed the actual cost to the Cotmnonwealth?

MR GRIFFITH:  Yes. Well, the particular service in respect

of a person who is an Australian citizen would

not include the cost of a visa overseas. Now, we

submit that that makes no difference to the

capacity to characterize the $5.00 fee here

as being referrable to the immigration service provided in respect of that person who happens

to be an Australian citizen. The fact that some

of those persons may have particular aspects of

their arrival which requires more service than

others, in our submission, is not sufficiBnt to

destroy the overall characterization of the
universal $5.00 fee referrable to all persons arriving, whether Australian citizens or not, as being a fee for service.

GAUDRON J: And is that because the amount collected does

not in sum exceed the cost to the Commonwealth

of the service provided to the class?

MR GRIFFITH:  Your Honour, if it was established that the

total recovery was, say, substantially in excess

of the costs, in our submission, that could be

a basis to assert that the fee is not a fee - - -

GAUDRON J:  But do you need any other criterion for its

been a fee for service than that it is less tha~

the cost to the Cormnonwealth of providing the

services in toto?

ClT21/l/MB	38
Air(2)
MR GRIFFITH:	Well, we would submit, Your Honour, for the purposes of judging what is part of a legislative
scheme to make a necessary provision for the
provision of services for persons entering Australia,
whether they are citizens or not, that is sufficient

-_-and, we would submit, beyond that one leaves it to the discretion of the legislature to provide an

overall workable mechanism for the provision of

these services and for the recovery of all or part

of the costs of the provision of those services,

so long as one does not thereby have the imposition

of a fee which is established to bear no relationship

by being in excess of those costs.

BRENNAN J:  Mr Solicitor, could I just ask you one further

question and I promise I shall not interrupt you

further.

MR GRIFFITH:	Do not make any promises, Your Honour.
BRENNAN J:	If I, being an Australian citizen, come off a

plane that has come from overseas and walk through

the terminal and if anybody wants to see my passport

I will hold it up but otherwise - or I am just

going to walk, nobody can stop me.	Now, what
offence have I cotmnitted?

(Continued on page 40)

ClT21/2/MB	39
Air(2)

MR GRIFFITH: Well, somebody will stop you, Your Honour.

BRENNAN J: Of course.

MR GRIFFITH:  Yes.

BRENNAN J: In other words, what service am I being given by

thf~ immigration clearance?

MR GRIFFITH: Well, Your Honour, perhaps one way of putting

it is that if you are not cleared through these processes,

you can be put on a plane and sent back again because you

have not entered Australia.

BRENNAN J: Can I, as an Australian citizen?

MR GRIFFITH:	One would have to establish that fact, Your Honour.
BRENNAN J:	I would not, would I?

MR GRIFFITH: Well, as a matter of practicality, it would have

to be established.

BRENNAN J:  I would have thought the onus would be upon the

person who sought to exercise the power of deportation.

MR GRIFFITH:  It migl:i:be a question of Your Honour's capacity to

take proceedings to see that that onus was discharged but

in that context I appreciate Your Honour's way of putting it.

BRENNAN J: Yes, but it seems to me to be a very curious notion

that one can say that there is a fee for service which

consists of the government satisfying itself that it has

no power to interfere with the freedom of somebody to do

something.

MR GRIFFITH:  Your Honour, we say that that is a reasonable

incidental part of satisfying itself as to persons who

are not entitled to be there. It was said

by Chief Justice Barwick, Your Honour, that every nation

has the right to determine the persons who will be

permitted to come and remain here. Now, it must be, as

part of that process, Your Honour, that there is a

capacity to consider each and every person arriving in

Australia to decide which description they fit into.

DAWSON J:  No doubt there is the capacity and no doubt there

are costs associated with it but they are administrative

costs. What you are searching for is the service.

It is unlike even an inspection fee where there is

an obligation to ensure the quality or whatever it might

be of a product and that is established by an inspection

which costs money, but it is not like that.

MR GRIFFITH:  Your Honour, there is an administrative service to

filter out persons when they arrive to determine whether

or not they have a right to enter Australia. In the case

of Australian citizens, it may be said they have an absolute

right to enter. But the service, in reality, whether it

ClT22/l/PLC	40	11/10/88
Air(2)

is spelt out specifically by the provisions of the Act or

not, is to determine whether or not those persons come

within the description. If they do, well then, they

freely enter. If they do not, well, perhaps they would
enter but they would enter with difficulty, but that

basically remains the service, Your Honour.

-Perhaps at this stage we have sufficiently made the

point which we make by reference to the several authorities

at the foot of paragraph 2, that it is for the legislature

to determine the mechanism for the particular exercise of a

matter falling within power. That is illustrated conveniently

by the ALEXANDRA PRIVATE GERIATRIC HOSPITAL case, (1987)

162 CLR 271, in particular, the judgment of the

Acting Chief -Justice and Justices Wilson, Brennan, Deane

and Dawson at pages 282 and 283. There, at page 283,

Their Honours said:

But it is not for the Court to determine that

argument or to pass upon the wisdom or the

suitability of the particular scheme that the

legislature has chosen to institute, so long as

the Court is unable to say that it lacks a

sufficient connexion to the head of power.

There is, similarly, the well-known statement of

Justice Kitto in HERALD AND WEEKLY TIMES LTD, 115 CLR 418,

at page 436 and especially at page 437 where His Honour

says:

Yet it is impossible, in my opinion, to avoid the conclusion, even upon consideration of the most extrerm illustrations of the working of the provisions, that together they form a means,

and are enacted as a means, for effectuating a

desired end which is within power, namely that

of ensuring freedom of competition between

television services. How far they should go

was a question of degree for the Parliament to
decide, and the fact that the Parliament has chosen
to go to great lengths - even the fact, if it be

so, that for many persons difficulties are created

which are out of all proportion to the advantage

gained - affords no ground of constitutional

attack.

(Continued on page 42)

ClT22/2/PLC 41 11/10/88

Air(2)
DEANE J: Is not the problem a slightly different one here,

Mr Solicitor, in that what we are concerned with

here is whether an act is shown to be exempt from

the safeguards of sections 53 and 55? Well now,

if that is so, surely it is not a matter for the

Court to say, "The connection may or may be there."

The question is whether, from the moment it was

initiated, the law was capable of being definitively

-~-classified as not a law with respect to taxation

but a law imposing fees for services?

MR GRIFFITH: Well, that may well be so, Your Honour. One

can only use these authorities so far as they go

and I think Your Honour is correct to say that.

But, Your Honour, we would submit that when it

comes to the issue that it is asserted that it is

not a fee for services, but that it is plainly a

tax which contravenes section 55, in that case,

Your Honour, there is an onus upon those asserting

that to establish, in effect, that it is not a fee

for services. It is on that basis, Your Honour,

that the demurrer is being put before the Court

merely on the basis of the pleadings.

Now, Your Honour, it is our primary contention

that the Court should approach and characterize on

that basis. Now, if the Court were of the contrary

opinion, well then it might be said that there was insufficient material to say one or another beyond

that which is there, including the second reading

speech. In that case, Your Honour, our submission

would be that the plaintiffs would not, for that

reason,. be entitled to succeed.

DEANE J: Well, what would you say to the proposition that

before you come within section 53, the exemption in

section 53, the Act must at least define with some

precision the relevance services?

MR GRIFFITH:  We would submit that that is not implicit in

section 53, Your Honour. It is a matter of - - -

DEANE J: Well, in other words, that you cannot say it is a

fee for services unless you are told what the services

are and unless you are told something about how the

fee is to be related to those services.

MR GRIFFITH: Yes, Your Honour, we would submit that one cannot

say that the Act necessary must spell out all that is

to be referred to to establish that it is a fee for

service, and that would seem to be consistent with

the approach of Justice Gibbs in the GENERAL PRACTITIONERS'

SOCIETY case, in our submission.

DEANE J:	You see, the problem here is, when you look at this
section it leads you away from services in one sense.
I mean, if you were to say to a refugee, "What is
an Australian irmnigration clearance worth?" He would
probably laugh if you spoke in terms of the value
of the stamp in terms of the physical labour of the
person putting it on, but even if you could get to the

ClT23/l/VH	42	11/10/88
Air(2)

physical labour of the person putting it on, the

Australian citizen will laugh when he is told it

includes the cost of a consul-general in Turkey

issuing visas. I mean, one is just left to

speculate what on earth the Act is talking about,
if one reads, "a fee for immigration clearance,"

as being not a cost of the clearance but as a fee

~-for somebody's services in providing it.

(Continued on page 44)

ClT23/2/VH	43	11/10/88
Air(2)

MR GRIFFITH:  Your Honour, there are some clues from the

minister's speech on the repeal, particularly,

and also in the enactment.

DEANE J:  I have a little bit of a problem in terms of

__ section 53, with looking at something that

-happened 12 months after the Act was enacted.

MR GRIFFITH:  Yes. I think when it was enacted is also

spelt out, Your Honour, but I appreciate Your Honour's

problem.

DEANE J: Yes, that is the passage that Mr Meagher referred

us to?

MR GRIFFITH: Yes, Your Honour. But, we would submit that

the approach should be, that we contend for,

that the Court should regard the obligation upon

those seeking to establish if it is not a fee

for service, to make out positively that case and

establish it. That has been our approach,

Your Honour, on the demurrer. Now, if the Court

regards that view as mistaken, in our submission,

Your Honour, the question of whether or not

a fee is a fee for service is not to be determined

referable solely to the face of the legislation

and that in that case, Your Honour, the Court,

if it was in a state of dissatisfaction because

the material was not before it, we would submit,

necessarily would need to remit the case for

evidence on those issues. But I think we have made it sufficiently clear that our submission

is that that should not be the course which is

followed.

The decision of this Court in ORIENT STEAM

NAVIGATION V ,GLEESON is quite a useful decision as to the aspect of imposing obligation upon an

operator bringing persons to Australia. That

is reported in (1931) 44 CLR, 254. That concerned

a provision in the IMMIGRATION ACT which enabled

a company to be fined if the company was merely

an agent of a vessel that had on it a prohibited

innnigrant. So that there was no requirement for

any mens rea, but merely the fact that the

person on the boat was a prohibited innnigrant.	At
page 260 Justice Dixon referred the contention
that the penalties were imposed:

merely because they stand in some legal

or business relation to the ship from

which a prohibited innnigrant enters the

Connnonwealth.

He refers to the contention that:

such a law is not sufficiently connected

with irrrrnigration to come within the power.

CIT24/l/JM	44	11/10/88
Air(2)

At page 261, about two-thirds of the way down,

he says:

In my opinion the power of the Parliament

enable it to impose upon the ships agent	to make laws with respect to immi9ration does
who is authorized on its behalf to perform the duties imposed by laws in force in the
port, an absolute liability to a penalty upon
entry of an immigrant from the vessel.

Justice Evatt was of the same opinion at page 264.

So that in that case there was a recognition of

the power to impose extensive obligation upon those

bringing immigrants, or prohibited immigrants

to Australia.

In BURTON V HONAN, (1952) 86 CLR 169, at

page 179 the Chief Justice said:

These matters of incidental powers are

largely questions of degree, but in

considering them we must not lose sight
of the fact that once the subject matter
is fairly within the province of the

Federal legislature the justice and

wisdom of theprovisions which it makes

in the exercise of its powers over the
subject matter are matters entirely for

the legislature and not for the Judiciary.

We have already submitted the fact that the
clearance extends to Australians and non-Australians,

in our .submission, does not result in the requirement

being beyond power.

(Continued on page 46)

CIT25/2/JM	45	11/10/88
Air(2)

MR GRIFFITH (continuing): Turning to our third proposition,

we submit quite separately from the aliens' power

and the immigration power the requirment that an

international air operator carry persons to

Australia, collect and pay a fee for the provision

-~- of services in respect of the entry lies within the section 5l(i) of the CONSTITUTION.

This is a proposition shortly put but, in our submission, it does apply here and we refer to

AUSTRALIAN NATIONAL AIRWAYS PTY LTD V THE

COMMONWEALTH, (1945) 71 CLR 29,where the various

judgments of Their Honours, in our submission, are

plain authority that the carriage of passenger

services - in that case, interstate but we would submit no difference in respect of international

passengers - is part of international trade and

commerce. So, for example, at page 57, the

Chief Justice said:

The Act, being a law with respect to

inter-State transportation, is, in my

opinion, a law with respect to trade

and commerce among the States.

And there are similar and strong expressions in

the judgments of Justice Starke at pages 76 and 77,

Justice Dixon at pages 82 and 83, in particular,

at page 83, where Justice Dixon says:

But I am not prepared to accept the

hypothesis and to give effect to it

as restrictive of the trade and commerce

power. On the contrary, I shall act

upon the opinion that, if not all

inter-State transportation, at all

events all carriage for reward of goods

or persons between States is within

the legislative power, whatever may

be the reason or purpose for which the

goods or persons are in transit.

I am, therefore, of opinion that

so much of the AIRLINES ACT as relates

to inter-State air services is within
the commerce power and that, apart, of

course, from the effect of s. 92, which

must be separately considered, its validity

so far may be supported as an exercise of

that power.

GAUDRON J:  On the assumption that that were the only power

to support the imposition of the obligation, would
you not also have to find a service provided to

the airline operators?

ClT25/l/SH	46	11/10/88
Air(2)

MR GRIFFITH: In our submission, Your Honour, it is

sufficient that there is a service provided

to the passenger that the airline operator

brings to Australia. It remains that the

amount is levied referable and, we submit,

-~- primarily payable by the person to whom the service is given and that all that is provided

is an effective mechanism for the complete

collection and passing on of that fee. In

that situation, our submission is that there

is no obligation that the service, as part

of the requirement for validity, be performed

by the person who merely acts as the agent for

collection, who is obliged to collect and to

pass on an amount equal to 100 per cent of the

fee which that person is obliged to collect.

(Continued onpage 48)

ClT25/2/SH	47	11/10/88-
Air(2)

GAUDRON J:	Yes, I understand.
BRENNAN J:	You say the obligation is to receive what

is paid or to recover what is payable?

MR GRIFFITH:  Your Honour, there is an obligation to receive

-~$5.00 from each and every passenger brought to

Australia. Now if the question is, what if that

passenger refuses to pay the air operator, the

answer is, Your Honour, the air operator then has

a choice, either to bring that passenger to

Australia without having collected the $5.00

when subsection (3) will then impose a primary

liability on the air operator, or not to bring

that passenger to Australia, whereby the

air operator will suffer no obligation to pay

the $5.00. Now, in our submission, Your Honour,

that aspect of choice available to the air operator

does not have any adverse effect so far as the effectiveness and validity of the scheme there

provided. The purpose of the scheme is to

ensure, in an effective manner, that $5.00 is

paid and collected by the air operator as agent

for the Commonwealth, referable to each and

every passenger.

BRENNAN J: His obligation is to receive what is paid and

to do whatever is appropriate, and I presume

lawful, to ensure that the money is paid?

MR GRIFFITH:  Your Honour, any operator could take a

casual approach and say, "I am only taking those

people who pay $5.00. You can please yourself,

won't do anything t_o force you, but you dot1 1 t get on my plane". He can, say, Your Honour

everyone can come on my plane, whether they pay

or not, but then, of course, there is the

consequence of the obligation. We submit thatthat

consequence is a necessary, appropriate and

reasonable ingredient for an effective scheme

to ensure that there is $5.00 paid by each person

who receives the service and that money, in due

course, is paid on to the Commonwealth in an
administratively effective way.	And it is not just

administratively effective to collect the $5.00, but

administratively efficient to secure that there

is a payment of $5.00 in a way that does not

interrupt the orderly provision of the services

and it is not difficult, Your Honour, to imagine

the alternative. I think my learned friend suggested, there could be an officer of the Australian Government posted at every departure

gate collecting the $5.00 there. Well, one can

imagine that that is not realistic, quite apart

from the issues of whether people had $5.00 and

when you consider the questions of different

currencies and that sort of thing and the cost of

collection, the other obvious choice would be

ClT26/l/SR	48	11/10/88
Air ( 2)

to have someone stationed at the point of entry

to say, "Pay your $5.00 here .. " ;£ you do not get it

"You get back· on the plane and go back from

whenc~_ you came". Now, with respect, it is

submitted, that that is an entirely unrealistic

mechanism to suggest for the collection of the

-~fee and would have, of course, adverse effects,

not only on incoming passengers by way of delay

and unexpected obligations being imposed upon them, but also on the air operators who would

then have to deal with the persons who were not

granted entry. ·

BRENNAN J: It can scarely be done with Australian citizens?

MR GRIFFITH:  Your Honour, so far as Australian citizens

are concerned, well there could be great

difficulty there, Your Honour, because their

obligation is to pay. One would suppose if they

refused to pay, as a matter of reality, no more

can be done than you take their name and address

and proceed by way of summons because they have

not paid it - for the $5.00 as a civil debt.

But as to whether an enthusiastic administrator
would seek to keep them in the airline until

it was paid it would be a matter of procedure.

But discussion of those choices, Your Honour,

indicate that, we would submit, in reality that

if there is to be a payment of a $5.00 fee, the

mechanism provided is administratively the most

obvious and convenient and one which begets of

no ready alternative.

(Continued on page 50)

C1T26/2/SR	49	11/10/88
Air(2)

'MR GRIFFITH (continuing):  We say that in the context of

submitting that the service itself need not, in

our submission, be one which is rendered to the

air operator who reminds liable under subsection (3)

if they fail to collect from the person who

-~provided it. Confirmation of the aspect of

the reach of the trade and commerce power in

respect of overseas air travel is seen enhanced

in REG V HALTON; EX PARTE A.U.S. STUDENT TRAVEL,

(1978) 138 CLR 201. That dealt with then

regulationsunder the air navigation regulations
requiring tariffs for charges by the holders
of licences to operate international air services

to be submitted to the secretary. It was held

that that regulation was a law in respect of
trade and commerce and that it was not confined

to travel on sectors which began or ended in

Australia. In that case His Honour Justice Stephen

at page 207 said:

Nor can it, in my view, be doubted but that

the Commonwealth has ample power to legislate

with respect to aspects of travel, wherever

geographically occurring, which have a

sufficient connexion with travel by air

between Australia and overseas. Reliance only

upon the trade and commerce power conferred

by s.Sl(i), without need for recourse to the
external affairs power in s.Sl(xxix), will
provide a source of power to legislate with
respect to on-carriage beyond the first

overseas stopping place, in this case

Kuala Lumpur, at least where the example of

international trade or commerce in question

is one involving, as in this case, ultimate

destinations themselves lying beyond that

first overseas stopping place and where what

is legislated for is, as is. again this case,

the arranging in Australia of travel to those

ultimate destinations. How much more

extensive the power may be calls for no

present investigation. It is enough to	conclude that the power is emple to authorize
the regulation of charges to be paid for in Australia in respect of travel to or
from Australia on all sectors of flights to
overseas destinations.

Justice Jacobs agreed at page 209 and the other

members of the Court agreed with Justice Stephen. the same issue as to the question of whether or not the fee can be characterized as a fee for

_serv:i.('9_, we do rely upon section Sl(i) as

supporting the legislative scheme of the Act.

When one considers some of the comments made by

ClT27/l/MB	50	'MR GRIFFITH, QC 11/10/88
Air ( 2)

my learned friend on page 2 of his contentions

as to various inconsistencies which he points out

as to the operation of the scheme, we would submit

that tested against the trade and corrnnerce power

such matters become, in our submission, of no

-~-relevance. If we could then pass over the part

of our contentions dealing with the acquisitions

power, we get to paragraph 7 dealing with taxation

which, to some extent, has really been covered

by our discussions on the first part of our

submissions. We clearly submit that it is

a fee for service imposed upon persons entering Australia and if so characterized it cannot

amount to a law with respect to taxation within
the meaning of section 55, solely on the basis

that it imposes a liability to collect and pay that amount upon an international air operator.

(Continued on page 52)

ClT27/2/MB	51	MR GRIFFITH, QC 11/10/88
Air ( 2)

MR GRIFFITH (continuing):  I have referred to the judgment of

Justice Gibbs in the GENERAL PRACTITIONERS' SOCIETY, and I think we have sufficiently made the point that

we would make as the nature of the regulation-making

power here having, in our submission, an implied

limitation to the prescriP.tion of fees which do bear•

a valid relationship to the service provided so that

--they may be characterized as a fee for service or, alternatively, referable to constitutional power where

one would read down by reason of section 15.

BRENNAN J:  You do not suggest that subsection (3) is supportable

as itself imposing a fee for service to the airlines?

MR GRIFFITH:	Oh no, Your Honour, we say it is supportable as being part of the necessary appropriate or reasonable
part of the scheme imposing the fee upon the person
who is arriving. In effect, Your Honour it is
a mechanism to ensure that the person who is primarily
liable will pay to the operator as, we say, agent for collection and no more. In our submission, although
subsection (3) does involve an obligation upon the
air operator to pay$5. 00 referable to a passenger who is not a prescribed passanger who does not pay the $5.00 to the air operator, in our submission, the proper characterization of that provision is one to .
ensure that the proper operation of subsection (1), is
not one designed to impose any real obligation of the air operators; it is to ensure compliance, and in that
way,we submit, it is a reasonable part of the overall scheme within power not to impose a primary liability.

Now, for those reasons we submit that the imposition

for the fee for the six months from 1 January to

30June this year was within power. We would say, again,

if the Court does feel that the issue of characterization
of being a fee for service is to be determined by
matters external to the provision of the Act on which

information is not presently before the Court, it

would seem then that the procedure of dermurrer adopted

by the parties to determine this issue of validity

could then to be said not one suitable for the final

disposition of the issue and it would be necessary

then, in our submission, for the matter to be perhaps

remitted to -anot.l-ier court for findings· of fact as to what we submi;

·is the appropriate- relatiooship. But we do submit that the Court is a1

to. consider the fee in t.11.is case on the basis that the anmmt of

fees collected is less - perhaps substantially less -

than the cost of the services which are provided.

If the Court pleases.

MASON CJ: Thank you, Mr Solicitor. Yes, Mr Meagher?

MR MEAGHER:  If I may first take the Court to my learned friend's

contn:ti.ons_	1--:- to A.1 1 we respectfully submit that the
purpose of the fee is irrelevant.	As to A.2, the

fallacy in A.2, in our respectful submission, is in

ClT28/l/VH	52	11/10/88
Air(2)

the second sentence where it talks about the
imposition of an irrnnigration clearance fee upon
those persons or upon an international air operator.

This is the whole point, there is no clearance fee

imposed on us; there is no service provided to us;

there is a tax on us for services provided to other

----people.

(Continued on page 54)

ClT28/l/VH	53	11/10/88
Air(2)

MR MEAGHER (continuing):  As far as paragraph 3 is

concerned, the mere addition of section 5l(i)
of the CONSTITUTION does not really solve
anything because if there is no fee for

services under the the migration or the aliens'

powers, likewise there is no fee for services

under 5l(i) and if there is a tax, it is another

form of taxation under the earlier power.s
and is still another form of taxation i.mder 51 (i) .

So it does not get round the section 53 or section 55

points.

If one goes to paragraph 7 in part C of the

submissions, the correctness of the first sentence
is, of course, contingent on the correctness of

the second one and then we are back to where we

started about fees for service and taxation.

Now, may I go to some questions Your Honour

Mr Justice Brennan asked which my learned friend,

the Solicitor, dealt with. As far as 1 and 2 is

concerned, Your Honour asked what one would have

have thought had been a very simple question,

namely, who is the creditor. My learned friend

said that the creditor is the Crown.

It is far from clear whether that is correct or it is not correct, because it does not say "pay to the

Crown", it does not say who a payment is to be to

apart from the agent for collection and it does
not use the sort of language which we find in

subsection (4) which is traditional in creating

Crown debts, in other words, to say it is a debt

due to the Commonwealth. That sort of language

if not used. It really is a matter of very great

mystery and puzzlement who the creditor is and,

depending on what is the correct answer to that

question, as to which one simply does not know,

is the correct answer to Your Honour's next

question, namely, if some village Hampton

refuses to pay the impost, what can the airlines

do about it?

(Continued on page 55)

ClT29/l/SH	54	11/10/88
Air(2)

MR MEAGHER (continuing):  Of course, if my learned friend

the Solicitor is correct and it is Crown debt,

it is difficult to see what title the airline

operators would have to sue - they

would have to sue in the Crown because an

agent cannot sue in its own name. They would

have to use the Crown name and it would have

to get the Crawnls permission to do that and, of

course, all those are very formidable difficulties

and if the upshot of it is that it cannot-do it

in its own name then it makes the subsection (3).

impost on it very much more like a tax.

A related question is the question of agency.

The learned Solicitor did talk about the airline

operators being agents for the Crown. That is a very

curious form of agency. There is nothing whatever

in section 34A which says that they are Crown agents.

There i s nothing w h i ch h in t s a t any ab i 1 i t y for th em

to procure legal relationship to come into

existence between the Crown and the passenger

and there are some very surprising results

because if, indeed, the airline operators were
the true agents of the Crown then presumably
the Crown would have a liability to reimburse them

for the costs of any efforts they made to recover

the fees referred to in subsections (1) and (2), a

matter on which so far the Crown has displayed considerable hositility.

Likewise~ in answer to another

of Your Honour Justice Brennan's questions,

my learned friend, if I understood him, said

the primary liability is the liability in

subsection (1). The would seem, in our respectful

submission, to be a very odd reading of the Act,

when no liability is really mentioned there.	The
pifmary liability, in our submission, on any

ordinary questions of construction is clearly that

set out in subsections (3) and (4).

(Continued on page 56)

C 1T30/1	/HS	55	11/10/88
Air(2)

MR MEAGHER (continuing): As to specific cases, my learned

friend did mention one case which is of at least

passing int-erest and that is the ORIENT STEAJ1SHIP

case. That is a case where this Court held that

it was within the power of the Commonwealth to

impose a penalty irrespective of mens rea if

-~-a migrant escaped from a vessel. I do not think

Your Honours have with you a copy- of the IMMIGRATION

ACT 1901. If I may just read what section 13B

said:

That the master of a vessel on which a

prohibited immigrant or a person reasonably

supposed to be a prohibited immigrant is,

may, with necessary assistance, take all

reasonable measures to prevent the prohibited

immigrant from entering the Commonwealth

from the vessel in contravention of the

Act.

There is a similar but not precisely the same

provision in llC of the 1958 Act. In other words, what one has there is an

antecedent relationship, an antecedent legal

duty, on the master of the ship to see that the

brutes do not escape, as it were. Then it is

only a short voyage from that to say that if

they do escape there shall be strict liability.

That is clearly within power. There is no comparable

situation in relation to the present provisions,

in relation to section 34A.

(Continued on page 57)

ClTJl/1/ND	56	11/10/88
Air(2)

MR "MEAGHER (continuing):  Now, if Your Honours would be

good enough to go to our submissions, paragraph 4(e)

that is the point of the words, there being no

other or pre-existing relationship or duty. That

is the significant point of contrast between the

ORIENT STEAMSHIP set of facts and the present set

-~of facts. Finally, the reasons why, in our

respectful submissions, the fee on the airline
operators is not a fee for services, is (a) because
a fee for services is a fee payable by the getter

to the giver and that does not apply. And, (b),

because, as Your Honour, I think, Mr Justice Deane

pointed out, there are no discernible criteria
in the Act to show either exactly what services

we are talking about or (b) what is the relationship

between those services, whatever they are,and the

quantum of the money required in respect of them.

They are our respectful submissions ..

MASON CJ: Thank you, Mr Meagher. Yes, Mr Solicitor?

MR GRIFFI'IH:	With Your Honour's leave, after I sat down I turned up a reference I had in the back of
my mind to answer Justice Dawson's question as to
paym:n.t into consolidated revenue.  May I. with
leave,deal with that issue?
MASON CJ:	Yes.
MR GRIFFITH:	Due to a GENERAL PRACTIONERS SOCIETY V THE

COMMONWEALTH, (1980) 145 CLR 532, in particular

pages 560 to 562 - I did read to the Court the

passage in the first full paragraph on page 562
but in the earlier passage beginning at the
foot of page 560, Justice Gibbs refers to the

fee there, which was a fee requiring:

an eligible person who wishes to

become an approved pathology practitioner

gives the appropriate written

undertaking together with a fee of

$10 or of such other amount as is

prescribed, the Minister shall either
accept the undertaking, or refer the
question to a Medical Services Committee
of Inquiry.

And His Honour says:

ClT32/l/SR	57	11/10/88
Air(2)
MR GRIFFITH (continuing):

The fee when paid is not required to

be used for any particular purpose of the

Act; it is not paid into the Health

Insurance Fund ..... but is paid into

Consolidated Revenue.

His Honour then refers to the Chief Justice in

the MATTHEWS' case to section 55 and says:

The expression "laws imposing taxation"

must be intended to have the same meaning in

those two related sections, as Isaacs J

appears to have recognized in FEDERAL

COMMISSIONER OF TAXATION V MUNRO. Therefore

the fact that a law contains provisions for

the payment of fees for licences or fees for

services does not mean that it is a law

imposing taxation within s.55. I have

already held that the Act exerts a practical

compulsion upon some medical practitioners

to become approved pathology practitioners,

and this of course means that those persons

are practically compelled to pay the fee

to which s.16C(2) refers. I shall assume,

without deciding, that practical, as

distinct from legal, compulsion is enough

to constitute a charge a tax, just as it

is sufficient for the purposes of s.5l(xxiiiA).

I therefore may accept that the fee is a compulsory exaction by a public authority

for public purposes. However, in my opinion,

it is a fee for services. It is the price

which a medical practitioner, who seek~ to become an approved pathology practitioner,

must pay for the purpose of having his

undertaking considered by the Minister,

and either accepted or referred for inquiry

and report to a Medical Services Committee of

Inquiry. In other words, it is a charge for

the services performed in dealing with the

application. The fact that it is paid into

Consolidated Revenue does not prevent it from being a fee for services. The nature of such a payment is not determined by what is done

after its receipt. Further, the fact that

the service for which the fee is charged is
one which the practitioner is in effect
compelled to obtain does not in my opinion
alter the character of the fee or convert it

into a tax. An exaction may properly be

characterized as a licence fee notwithstanding

that the licence is one tl~at must ;:;.ecessarily

be obtained and the same is in my opinion true
of a fee for services; fees charged for

compulsory licences, or for holding plants

or animals in quarantine, might provide examples.

CIT33/l/JM	58	11/10/88
Air(2)

And then His Honour goes on to consider characterization referable, one thinks, from

the final sentence, to the amount of the

fee as much as any particular service provided.

(Continued on page 60)

CIT33/2/JM	59	11/10/88
Air(2)

MR GRIFFITH (continuing):  The other matter if I may mention,

with the leave of the Court, that I have been

instructed that the total amount budgeted to be

collected for the prescribed fee was projected to

-_-of immigration clearance. But, of course, that	meet the full cost and not just part of the cost
depends upon the number of arrivals and what is
included in the cost and perhaps underlines the
point of our alternative submission that if that
becomes a matter of inquiry, well, clearly then,
it is a matter for particular inquiry. If the
Court pleases.

MASON CJ:  Yes, thank you, Mr Solicitor. Do you wish to

make any response?

MR MEAGHER:  We wish to make no further submissions, may

it please Your Honour.

MASON CJ:  Thank you, Mr Meagher. The Court will consider

its decision in this matter a·nd will adjourn until 10.15 am tomorrow.

AT 12.24 PM THE MATTER WAS ADJOURNED SINE DIE

ClT34/l/MB	60	11/10/88
Air(2)