Airservices Australia v Canadian Airlines International Ltd - [1999] HCA 62

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

AIRSERVICES AUSTRALIA APPELLANT

AND

CANADIAN AIRLINES INTERNATIONAL LTD RESPONDENT

Airservices Australia v Canadian Airlines International Ltd
[1999] HCA 62
2 December 1999
C22/1998

ORDER

Adjourn further hearing of appeal to a date to be fixed.

In the absence of agreement between the parties as to the form of the orders:

(a)on or before 4 February 2000 each party to file and serve on the other party short minutes of the orders it contends should be made;

(b)on or before 18 February 2000 each party to file and serve on the other party written submissions concerning the orders to be made.

On appeal from the Federal Court of Australia

Representation:

D J S Jackson QC with J C Sheahan SC for the appellant (instructed by Mallesons Stephen Jaques)

J C Campbell QC with A S Bell for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 14 April 1999 and 15 April 1999.

J C Campbell QC with S J Gageler for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 3 May 1999.

Interveners:

D M J Bennett QC, Solicitor-General for the Commonwealth with G Witynski and G R Kennett intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)

D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General of the State of Victoria (instructed by Victorian Government Solicitor)

R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell intervening on behalf of the Attorney-General of the State of Western Australia (instructed by Crown Solicitor for the State of Western Australia)

B M Selway QC, Solicitor-General for the State of South Australia with M Panagiotidis and L K Byers intervening on behalf of the Attorney-General of the State of South Australia (instructed by Crown Solicitor for the State of South Australia)

B T Dunphy, Acting Solicitor-General of the State of Queensland with G R Cooper intervening on behalf of the Attorney-General of the State of Queensland (instructed by Crown Solicitor for the State of Queensland)

Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

AIRSERVICES AUSTRALIA APPELLANT

AND

MONARCH AIRLINES LIMITED RESPONDENT

Airservices Australia v Monarch Airlines Limited
2 December 1999
C23/1998

ORDER

Adjourn further hearing of appeal to a date to be fixed.

In the absence of agreement between the parties as to the form of the orders:

(a)on or before 4 February 2000 each party to file and serve on the other party short minutes of the orders it contends should be made;

(b)on or before 18 February 2000 each party to file and serve on the other party written submissions concerning the orders to be made.

On appeal from the Federal Court of Australia

Representation:

D J S Jackson QC with J C Sheahan SC for the appellant (instructed by Mallesons Stephen Jaques)

J C Campbell QC with A S Bell for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 14 April 1999 and 15 April 1999.

J C Campbell QC with S J Gageler for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 3 May 1999.

Interveners:

D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General of the State of Victoria (instructed by Victorian Government Solicitor)

B T Dunphy, Acting Solicitor-General of the State of Queensland with G R Cooper intervening on behalf of the Attorney-General of the State of Queensland (instructed by the Crown Solicitor for the State of Queensland)

Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

HIGH COURT OF AUSTRALIA

GLEESON CJ,
GAUDRON, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

AIRSERVICES AUSTRALIA APPELLANT

AND

POLARIS HOLDING COMPANY RESPONDENT

Airservices Australia v Polaris Holding Company
2 December 1999
C24/1998

ORDER

Adjourn further hearing of appeal to a date to be fixed.

In the absence of agreement between the parties as to the form of the orders:

(a)on or before 4 February 2000 each party to file and serve on the other party short minutes of the orders it contends should be made;

(b)on or before 18 February 2000 each party to file and serve on the other party written submissions concerning the orders to be made.

On appeal from the Federal Court of Australia

Representation:

D J S Jackson QC with J C Sheahan SC for the appellant (instructed by Mallesons Stephen Jaques)

J C Campbell QC with A S Bell for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 14 April 1999 and 15 April 1999.

J C Campbell QC with S J Gageler for the respondent (instructed by Allen Allen & Hemsley) at the hearing on 3 May 1999.

Interveners:

D Graham QC, Solicitor-General for the State of Victoria with S G E McLeish intervening on behalf of the Attorney-General of the State of Victoria (instructed by Victorian Government Solicitor)

Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Airservices Australia v Canadian Airlines International Ltd
Airservices Australia v Monarch Airlines Limited
Airservices Australia v Polaris Holding Company

Administrative law – Aviation – Civil Aviation Authority – Charges levied by CAA for use of services and facilities – Whether charges were reasonably related to expenses incurred in provision of services and facilities – Whether particular charges required to relate to particular services – Whether charges amounted to taxation.

Constitutional law – Acquisition of property – Statutory liens imposed on leased aircraft where lessee had accrued charges remaining unpaid – Discharge of liens by payment of charges and penalties by lessors – Whether such liens constituted the acquisition of property otherwise than on just terms.

Constitutional law – Taxation – Statutory authority – Provision of services to be paid for by users – Whether law effecting indirect subsidy between users of services a law imposing taxation.

Constitutional law – Executive government – Statutory authority – Provision of services to be paid for by users – Whether financial structure permitted by ss 81 and 83 of the Constitution.

Statutory interpretation – Statutory instrument – Construction to be adopted where two alternative constructions available.

Liens – Statutory liens imposed on property to secure debts of lessee – Whether acquisition of property otherwise than on just terms.

Words and phrases – "fee for service" – "just terms" – "reasonably related" –"taxation" – "value".

The Constitution, ss 51(xxxi), 55, 81, 83.
Civil Aviation Act 1988 (Cth), ss 66, 67, 68-81.

GLEESON CJ AND KIRBY J. Between December 1990 and December 1991 Compass Airlines Pty Ltd ("Compass") carried on business as an Australian domestic airline. It had facilities at Cairns, Brisbane, Sydney, Melbourne, Adelaide and Perth, and flew on routes between those cities. The business failed. In December 1991, Compass went into provisional liquidation. The aircraft operated by Compass were leased. The respondent Canadian Airlines International Ltd owned an aircraft which was leased to Compass. The respondent Monarch Airlines Ltd was the lessee of two aircraft which were subleased to Compass. The respondent Polaris Holding Company owned two aircraft which were leased to Compass.
At the relevant time, Div 2 of Pt VI of the Civil Aviation Act 1988 (Cth), ("the Act") contained provisions relating to the imposition of charges for services and facilities provided to airline operators. The legislation also created a statutory lien over aircraft to secure payment of such charges.
At the time Compass went into provisional liquidation, it owed the Civil Aviation Authority ("the CAA") substantial amounts in respect of charges and penalties payable in respect of the operations of each of the leased aircraft. The CAA invoked its statutory liens. Each respondent paid, under protest, the charges and penalties claimed to be owing in respect of each aircraft. The amounts paid were as follows:
Canadian Airlines  $2,888,740.97
Monarch  $5,002,187.86
Polaris  $5,239,058.07
Upon receipt of those payments, the CAA discharged the liens it asserted. The amounts were paid pursuant to agreements which entitled the respondents to recover the moneys, together with interest, if it were to be held that, as against the respondents, the liens did not validly secure payment of the charges, or for any reason the liens, or the charges, or both, were, in whole or in part, illegal, void or unenforceable.
Each respondent commenced an action in this Court, claiming repayment of sums collected in reliance on the Act. The actions were remitted to the Federal Court of Australia.
The proceedings were commenced against the CAA. That body's functions, and rights and liabilities, so far as presently relevant, were later assumed by Airservices Australia, which was substituted for the CAA as a party. The relevant statutory provisions referred to the CAA, called "the Authority".
At first instance, Branson J upheld the contention of the respondents that the charges contravened s 67 of the Act, in that they amounted to taxation[1]. There were other issues in the case, some of which her Honour decided in favour of the appellant, and some of which she found unnecessary to decide. Repayment of the moneys, together with interest, was ordered. The Full Court of the Federal Court (Beaumont, Wilcox and Lindgren JJ) dismissed an appeal, agreeing that the charges contravened s 67[2].
[1]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534.
[2]Airservices Australia v Monarch Airlines Ltd (1998) 152 ALR 656.
On the appeal to this Court, the respondents, in addition to supporting the conclusion of the courts below, pressed a number of additional arguments. In particular, they contended, as they had argued below, that, even if the charges were validly imposed upon Compass, the statutory liens were constitutionally invalid.
It is convenient to deal first with the argument which succeeded before Branson J and in the Full Court and, for that purpose, to examine the relevant statutory provisions.
The legislation
The Act established the CAA as a body corporate[3], and conferred upon it a number of functions relating to civil aviation and, in particular, the safety of civil aviation. Those functions included[4] providing air route and airway facilities (which included[5] visual and non-visual aids, communications services, and meteorological observations), air traffic control services and facilities, a rescue and fire fighting service, a search and rescue service, and an aeronautical information service. The functions were to be performed under the direction of the Minister[6].
[3]s 8.
[4]s 9.
[5]s 3.
[6]s 12.
Part VI of the Act, dealing with the subject of finance, contained a number of provisions designed to ensure that the CAA would operate on a commercial basis. The CAA was obliged to develop and maintain a corporate plan[7]. When preparing the plan it was obliged to consider, amongst other matters, the need to maintain a reasonable level of reserves, the need to maintain the extent of the Commonwealth's equity in the CAA, the need to earn a reasonable rate of return on its assets (other than assets wholly or principally used in the performance of regulatory functions or the provision of search and rescue services), the expectation that it would pay a reasonable dividend, and any other appropriate commercial considerations[8].
[7]s 43.
[8]s 45.
Section 56 of the Act provided for the payment of an annual dividend to the Commonwealth. There was evidence that the CAA's charges, to which detailed reference will be made below, were set so as to produce a forecast 7.5 per cent (real) rate of return on the capital employed by the CAA. That was regarded as representing the opportunity cost of the investment in assets of the CAA. It was explained that, in the absence of such a return, the investment would represent a subsidy to the aviation industry. However, the evidence also showed that this return of 7.5 per cent was not a major component of the CAA's charges. The CAA had a large turnover compared to its assets, and the return on capital employed did "not make a substantial difference to the Authority's cost structure".
The key provisions of the Act, for present purposes, were those contained in Div 2 of Pt VI. They provided:
"66(1)      In this section:
'charge' means:
(a)     a charge for a service or facility provided by the Authority; or
(b)a fee or other charge in respect of a matter specified in the regulations, being a matter in relation to which expenses are incurred by the Authority under this Act or the regulations, including, but without being limited to, a fee or other charge in respect of, or for an application for:
(i)the grant, issue, renewal or variation of a certificate, licence, approval, permission, permit, registration or exemption under this Act or the regulations; or
(ii)the grant or variation of an authorisation, or the cancellation, suspension, variation or imposition of a condition, relating to anything referred to in subparagraph (i).
(2)     Subject to this section, the Board may make determinations:
(a)fixing charges and specifying the persons by whom, and the times when, the charges are payable; and
(b)fixing the penalty for the purposes of subsection (8).
…
(8)Subject to subsection (9), where a charge is not paid within the period determined by the Board, being a period beginning on the day on which the charge became due and payable, the person liable for the charge is liable to pay the Authority, in addition to the charge, a penalty, calculated upon the unpaid amount of the charge from the day on which the charge became due and payable, and compounded.
(9)The penalty shall not exceed a penalty equivalent to 1.5%, or such other percentage as is prescribed, of the unpaid amount of the charge for each month or part of a month during which it is unpaid …
67     The amount or rate of a charge shall be reasonably related to the expenses incurred or to be incurred by the Authority in relation to the matters to which the charge relates and shall not be such as to amount to taxation.
68     There shall be a Register of Statutory Liens, which shall be maintained, and shall be open to public inspection, as prescribed.
69     (1)    Subject to section 76[9], where:
[9]Section 76, which is not presently material, provided for certification of amounts payable and unpaid, and limited the effect of a lien to the certified amount.
(a)at the end of the payment period after a charge became payable in respect of an aircraft, the charge is not paid; and
(b)at the end of that period, a statutory lien is not in effect in respect of the aircraft; and
(c)     the charge or penalty in respect of the charge remains unpaid;
then, if an appropriate officer so directs at any time, the Registrar shall make an entry in the Register in the manner prescribed and, upon the making of the entry, there is vested in the Authority in respect of the aircraft a statutory lien covering the following:
(d)     the charge or penalty;
(e)any penalty that becomes payable in respect of the charge after the entry is made;
(f)     any further outstanding amounts in respect of the aircraft.
…
70     (1)    Where a statutory lien has been registered in respect of an aircraft and until the lien ceases to have effect, the following provisions of this Division apply, in spite of any encumbrance in respect of the aircraft and any sale or disposition of, or dealing in, the aircraft or an interest in the aircraft, and whether or not the Authority has possession of the aircraft at any time.
(2)    For the purposes of priorities amongst creditors and the purposes of the distribution of the proceeds of a sale made under section 73, the statutory lien has effect as a security interest in respect of the aircraft ranking in priority:
(a)after any security interest (other than a floating charge) in respect of the aircraft created before the time of registration of the statutory lien, to the extent that that security interest covers a debt incurred before that time; and
(b)before any security interest not falling within, or to the extent that it does not fall within, paragraph (a).
71     (1)    In the case of an Australian aircraft, if an outstanding amount covered by the statutory lien is unpaid at the end of 6 months after the day on which it became an outstanding amount or the day on which the lien was registered, whichever is the later, an authorised officer may, having regard to all the circumstances, including the steps, if any, taken by any person to pay the whole or part of the outstanding amounts covered by the statutory lien, cancel the certificate of registration of the aircraft in the register of Australian aircraft maintained under the regulations.
(2)    If the certificate is cancelled, the aircraft shall not be re-registered until the statutory lien ceases to have effect.
72     If an outstanding amount covered by the statutory lien is unpaid at the end of 9 months after the day on which it became an outstanding amount or the day on which the lien was registered, whichever is the later, an authorised officer, or a person authorised in writing by such an officer to do so, may at any time, subject to section 79, seize the aircraft, and:
(a)     shall take reasonable steps to give notice of the seizure to:
(i)such persons as, in the opinion of an authorised officer, have a security interest in the aircraft;
(ii)each person who is any of the following, namely, an owner, operator, lessee, hirer, charterer or pilot in command, of the aircraft; and
(iii)such other persons as are prescribed; and
(b)may keep possession of the aircraft until all outstanding amounts covered by the statutory lien are paid.
73 (1) If an outstanding amount covered by the statutory lien is unpaid at the end of 9 months after the day on which it became an outstanding amount or the day on which the lien was registered, whichever is the later, the Authority may at any time, whether or not the aircraft has been seized under section 72:
(a)sell the aircraft as prescribed, whether by public auction or private contract;
(b)make and execute all instruments and documents necessary for effecting the sale; and
(c)give full and effective title to the aircraft free of all encumbrances, leases and contracts of hire.
(2)    Before selling the aircraft, the Authority shall take reasonable steps to give reasonable notice of the sale to the persons referred to in paragraph 72(a)."

The Board is the board of the CAA[10].
[10]s 3.
The charges
The charges said to have been payable by Compass were for air traffic services ("ATS"), rescue and fire fighting services, and meteorological services.
Two separate ATS charges were fixed. The first was in respect of terminal navigation services. The second was in respect of en route services. The terminal navigation charge related to facilities and services which included the provision, maintenance and operation of air traffic control services, including radar, within 55 kilometres of an aerodrome with an operating control tower, and navigational aids used in take-off, approach and landing of aircraft. The en route charges covered the provision, maintenance and operation of air traffic control information, and support and flight navigational aids, outside 55 kilometres from an aerodrome with an operational control tower.
The rescue and fire fighting charge related to the provision by the CAA of rescue and fire fighting facilities and services at airports and elsewhere.
As to the meteorological services, these were provided by the Bureau of Meteorology, which charged a lump sum fee to the CAA. The CAA in turn fixed charges which were intended to recover the amount paid to the Bureau.
The subject charges were fixed by a determination, dated 26 June 1991, purportedly made under s 66(2) of the Act. They were classified as "landing charges", which were charges "payable in respect of use by aircraft of facilities or a service relating to an aerodrome", en route charges, which were said to be "in respect of the use by an aircraft of air route and airways facilities and services operated or provided in Australian territory", and meteorological charges, which were said to be "[i]n respect of the use by an aircraft of meteorological facilities and services operated or provided in Australian territory". The en route charges and the meteorological charges were payable on each landing.

The relevant provisions of the determination were as follows:
Landing charges
"Landing charges" for "avtur" aircraft were imposed by cl 1. The determination's interpretation clause defined "landing charge" to mean a charge "payable in respect of use by aircraft of facilities or a service relating to an aerodrome". "Avtur aircraft" was defined to mean an aircraft powered by an engine or engines using aviation turbine kerosene. Clause 1 provided:
"1. In respect of each landing of an avtur aircraft at an aerodrome referred to in Column 2 of Item 1 in Table 1 below, a charge for services and facilities at the aerodromes referred to in Column 2, calculated at the rate per 1,000 kilogrammes weight specified in Column 3 of that item, is applicable."
Item 1 provided, in Column 2:
"Column 2
Aerodrome/Facility
1. Terminal navigation facilities and services, being such facilities and services relating to an aerodrome specified in Schedule 1."
Schedule 1 specified the following 32 aerodromes:
"SCHEDULE 1
Aerodromes Where a Charge is Payable for the Use of Terminal Navigation Facilities and Services
Adelaide  Karratha
        Albury  Launceston
        Alice Springs              Mackay
        Archerfield                 Maroochydore
        Avalon  Melbourne
        Bankstown                   Moorabbin
        Brisbane  Mount Isa
        Cairns  Parafield
        Camden  Perth
        Canberra  Port Hedland
        Coffs Harbour            Proserpine
        Coolangatta                 Rockhampton
        Darwin  Sydney
        Essendon  Tamworth
        Hobart  Townsville
        Jandakot  Wagga Wagga"
Column 3 provided for a rate of $3.65 per 1,000 kilograms "weight". The term "weight" was defined in the interpretation clause to mean "the maximum take-off weight" (MTOW).
Clause 2 provided:
"2. In respect of each landing of an avtur aircraft at a place, being a place other than an aerodrome at which an Aerodrome Control Service is available at the time of the landing, within a control zone associated with an aerodrome referred to in Column 2 of Item 2 in Table 1 below, a charge for services and facilities at the aerodromes referred to in Column 2, calculated at a rate per 1,000 kilogrammes weight specified in Column 3 of that Item, is applicable."
Column 2 of Item 2 was in the same terms as Column 2 of Item 1, but the rate in Column 3 was less: $1.83 (compared with $3.65).
Clause 3 provided:
"3. In respect of each landing of an avtur aircraft at an aerodrome referred to in Column 2 of Item 3 in Table 1 below, a charge for services and facilities at the aerodromes referred to in Column 2, calculated at the rate per 1,000 kilogrammes weight specified in Column 3 of that Item, is applicable."
Column 2 of Item 3 specified the following:
"Fire fighting and rescue service, being such a service relating to an aerodrome specified in Schedule 2."
Schedule 2 specified the following 21 aerodromes:
"SCHEDULE 2
Aerodromes Where a Charge is Payable for Fire Fighting and Rescue Service
Adelaide  Launceston
        Alice Springs              Mackay
        Avalon  Melbourne
        Brisbane  Norfolk Island
        Cairns  Perth
        Canberra  Port Hedland
        Coolangatta                 Rockhampton
        Darwin  Sydney
        Devonport                   Tamworth
        Hobart  Townsville
        Karratha"
Column 3 provided for a rate of $2.40 per 1,000 kilograms weight.
Landing charges for "non-avtur" aircraft (defined as "an aircraft other than an avtur aircraft") were dealt with in cl 6 as follows:
"6. In respect of each landing of a non-avtur aircraft at an aerodrome referred to in Column 2 of Item 1 in Table 2 below, a charge for services and facilities at the aerodromes referred to in Column 2, calculated at the rate per 1,000 kilogrammes weight specified in Column 3 of that item, is applicable."
Column 2 of Item 1 provided:
"Column 2
Aerodrome/Facility
Terminal navigation facilities and services, being such facilities and services relating to an aerodrome specified in Schedule 3."
Schedule 3 specified the following six aerodromes:
"SCHEDULE 3
Aerodromes where Landing Charges are Payable in Relation to Aircraft other than Avtur Aircraft
Adelaide  Brisbane
        Hobart  Melbourne
        Perth  Sydney"
The rate in Column 3 was $3.65 per 1,000 kilograms weight.
Clause 7 provided:
"7. In respect of each landing of a non-avtur aircraft at an aerodrome referred to in Column 2 of Item 2 in Table 2 below, a charge for services and facilities at the aerodromes referred to in Column 2, calculated at the rate per 1,000 kilogrammes weight specified in Column 3 of that item, is applicable."
Column 2 of Item 2 specified:
"Fire fighting and rescue service, being such a service relating to an aerodrome specified in Schedule 3."
Column 3 specified a rate of $2.40 per 1,000 kilograms weight.
Clause 10 provided:
"Availability of Services and Facilities
10. A charge, referred to in paragraphs 1, 2, 3, 4, 5, 6, 7, 8 or 9 above, is not payable unless, at the time of the landing of the aircraft, the facilities or services to which the charge relates are available for use by the aircraft."
En route charges
Clause 11 provided:
"11. In respect of the use by an aircraft of air route and airways facilities and services operated or provided in Australian territory, a charge is payable on each landing –
(a)in the case of a flight by an avtur aircraft weighing 20,000 kilogrammes or less between two aerodromes in Australian territory, in accordance with the following formula:
C = R₁ x D/100 x W
(b)in the case of a flight by an avtur aircraft weighing more than 20,000 kilogrammes between two aerodromes in Australian territory, in accordance with the following formula:
C = R₂ x D/100 x √W
(c)in the case of a flight by an aircraft weighing 20,000 kilogrammes or less between a place outside Australian territory and a place in Australian territory, in accordance with the following formula:
C = R₃ x D/100 x W
(d)in the case of a flight by an aircraft weighing more than 20,000 kilogrammes between a place outside Australian territory and a place in Australian territory, in accordance with the following formula:
C = R₄ x D/100 x √W
where:
C is the amount in dollars of the charge payable
R₁ is a rate of $3.60
R₂ is a rate of $16.15
R₃ is a rate of $2.85
R₄ is a rate of $12.75
D is the distance travelled by the aircraft expressed as the great circle distance in kilometres –
(i)between two aerodromes in Australian territory; or
(ii)between the first point of entry to an Australian Flight Information Region and the first aerodrome of destination in Australian territory;
(iii)between the point of entry to an Australian Flight Information Region and the next point of departure from an Australian Flight Information Region.
W is the weight of the aircraft expressed in tonnes.
√W is the square root of the weight of the aircraft expressed in tonnes."
Meteorological charges
For reasons that appear below, these may be disregarded.
The decisions in the Federal Court
At first instance, Branson J dealt with the respondents' claim that there had been a contravention of s 67 of the Act by considering two questions. First, her Honour asked, in relation to each charge, whether the amount or rate of the charge was reasonably related to the expenses incurred or to be incurred by the CAA in relation to the matters to which the charge related. Secondly, she asked whether the charges were such as to amount to taxation. Subject to one qualification, she answered both questions in the affirmative. The qualification concerns the first question insofar as it related to meteorological charges. Her Honour's answer to the second question required a conclusion that there had been a failure to comply with s 67, and that those charges, and the related penalties, had not been validly imposed.
In the Full Court, a somewhat different approach was taken, although the same final conclusion was reached.
It is necessary at this point to refer to some of the evidence in the case, and to the criticisms of the charges advanced on behalf of the respondents. The following summary is taken substantially from the reasons for judgment of Branson J.
The respondents' challenge to the determination commenced with the contention that, by identifying in the determination the services and facilities for which charges were imposed, the Board "fixed the parameters within which it [had to] be able to cost-justify its charges". The Board had to fix charges at a rate reasonably related to the expenses incurred in providing those particular services or facilities.
As to the terminal navigation charges, it was argued that those were not reasonably related to the MTOW of the aircraft in respect of which the services were provided. The differences in charges as between aerodromes was said to be arbitrary and unrelated to the expenses incurred. The expenses incurred in providing services differed substantially between aerodromes but the amount or rate of the charges did not reflect those differences.
Similarly, as to the rescue and fire fighting services, it was said that the expenses incurred by the CAA differed substantially between aerodromes but the rates did not differ. (Compass, it may be noted, flew relatively large aircraft and used only a relatively small number of aerodromes. An airline operator using the whole of the CAA network might not be greatly concerned about this issue, but it was significant for Compass.)
The amount of the en route charges was determined by reference to the MTOW of the relevant aircraft, the distance flown by the aircraft, and the rate of charge fixed by the determination. It was argued that the expenses incurred by the CAA in providing en route services were not related to the MTOW of the aircraft, and that the expenses incurred by the CAA differed substantially between routes and airways, whereas the amount or rate of the charge was constant. In particular, it was said that aircraft on international flights were charged a lower rate per kilometre travelled in Australian territory than aircraft travelling between aerodromes in Australia, and they only paid the charge in respect of flights coming into Australia and not in respect of flights leaving Australia.
As to the meteorological charges, it was said that such services were used more frequently and extensively by aircraft with a lower MTOW than by aircraft with a higher MTOW, and that aircraft on international flights were treated more favourably for reasons similar to those given above.
This is not a comprehensive account of the respondents' complaints, but it serves to indicate their general tenor.
There was evidence as to the process by which the charges fixed by the determination were calculated. The total outgoings of the CAA for the 19911992 year were estimated. The total value of the CAA's assets was calculated, and 7.5 per cent of such value was added to the estimated outgoings. The resultant figure, less interest, was treated as the cost of the CAA. This was then broken down to the cost of each service, and the aggregate of the revenue from each service covered the cost of the CAA.
The evidence of Mr Barnes, the witness who explained the process, was summarised by Branson J as follows[11]:
"As to the breaking down of the total costs of the CAA into the costs of the services and facilities for which charges were to be determined, Mr Barnes agreed that the information systems available to the CAA in 1991-92 did not allow this task to be undertaken with 100 per cent accuracy. The problem was with respect to property related costs and asset related costs. As to that Mr Barnes stated as follows:
'… the significance of that problem needs to be put into perspective by considering the cost structure of the organisation. Of the $700-$800 million annual cost of the CAA back at that time, a little over 60 per cent of that was salary costs and related costs. The asset and property related costs were probably of the order of $100-$130 million out of that $800 million. So while it was a reasonable amount of money, it was relevant primarily to those areas which used assets. I should explain that the safety regulatory area of the organisation used very little assets, and in 1991 we were able to identify, with reasonable confidence, the cost of the safety function of the organisation, because they were a relatively minor user of the organisation's assets. The difficulty we faced was with the operational side of the organisation, which was Rescue and Firefighting Service, Channel Navigation and En Route Air Traffic Control, and we needed more information about an appropriate basis by which to split costs between those. We had some information, in that the standard categorisation of the assets of the organisation did line up, to some extent, with the organisational groups and the services that the organisation provided … What we were still uncertain about was some common property costs and various other things.'
Mr Barnes gave evidence that the attribution of indirect and support costs to all operational services was based on a 1988 cost allocation study. He stated that the relationship of indirect and support costs to direct costs was assumed to continue to be in the same proportion as established by the study, taking into account organisational and other charges since the study was conducted and an adjustment arising from another 1988 study of the cost relativities of the CAA's operational services. Mr Barnes gave evidence that between 1988 and 1991 he had been monitoring the work done on a cost allocation model and also the general budget position of the various operating arms of the CAA. He said that he was aware that there had not been any major changes in the nature of the services provided or in the way in which they were provided. As to minor changes, he stated that they were taken account of as marginal changes.
… Mr Barnes asserted that he was confident that in 1991-92 the aggregate of the en route charges and the terminal navigation charges recovered the right amount of money but that it was not until 1992 that he had sufficient information to be confident about the split between en route services and terminal navigation services. He agreed that virtually all system support costs of air traffic services were recovered by the en route charges. This evidence is in accord with that given by Dr Fitzgerald.
As to the international en route charge, Mr Barnes acknowledged that it was only payable on the inward leg of a flight. He stated that that was a matter of administrative convenience as it reduced paper work for the industry. The costs being charged for, he said, were the costs of both the inward and the outward legs. As to the amount of the international en route charge, Mr Barnes gave his understanding as being that it was –
'intended to recover the additional costs which could reasonably be related to international flights, which was the full costs of air traffic control dealing with offshore airspace sectors and a reasonable share of communications costs that were used primarily by aircraft on international routes'."
[11](1997) 72 FCR 534 at 561-563.
An economist, Dr Fitzgerald, gave evidence of economic principles said to be relevant to the setting of charges by an entity such as the CAA. He said that it was consistent with such principles for the CAA to have set out to recover its total costs from its users as a group. He also said that to achieve the most economically efficient outcome, while fully recovering the CAA's costs from its users as a group, charges for services should take account of user demand characteristics. Prices to different users should be set in inverse proportion to the sensitivity of their usage to price, a method known as "Ramsey pricing". This, he said, promoted efficiency, and was widely regarded as the best practice for pricing monopoly services. Provided each category of user pays at least marginal cost for each unit of service, no cross-subsidization is involved. In the light of those principles, he considered the CAA's pricing policy was reasonable. However, as Branson J observed, the issue was whether it complied with s 67.
Dr Fitzgerald also addressed the actual allocation of costs between services made by the CAA. All system overheads were attributed to en route services. This, he said, was in accordance with correct economic principles. He said that setting charges as a function of MTOW was, from the point of view of an economist, reasonable. For freight aircraft, payload and economic capacity to pay were directly related to MTOW. For passenger aircraft, capacity to pay was indirectly related to MTOW.
A witness, Mr Gemmell, gave evidence as to the cost of rescue and fire fighting services and air traffic services.
Putting to one side the matter of meteorological services, and the charges for such services, the evidence satisfied Branson J that the amount or rate of each of the subject charges was reasonably related to the expenses incurred or to be incurred by the CAA in relation to the matters to which the charge related.
Her Honour rejected the contention that it was not reasonable to include a rate of return on assets or funds employed, noting in that respect the statutory context in which s 67 appeared. She also noted that it was not contended that the particular rate of 7.5 per cent was inappropriate.
It is unnecessary for present purposes to go into the detail of her Honour's reasoning in relation to the remaining charges. She accepted that it was not sufficient that the totality of the charges should be reasonably related to the totality of the expenses incurred by the CAA; the amount or rate of each charge must be reasonably related to the expenses incurred or to be incurred by the CAA in relation to the matters to which that charge related[12]. However, the matters to which the charges related were the categories or groups of services identified in the determination, not, for example, the services provided to an individual aircraft in respect of a particular flight. Furthermore, the relationship between charges and expenses could be established on a network basis. Her Honour said, for example, in relation to terminal navigation charges[13]:
"Nothing in s 67 of the Act, in my view, compels a conclusion that the CAA was not entitled to determine a rate of charge in relation to the provision of facilities and services at a number of aerodromes, subject, of course, to the requirements that such rate be reasonably related to the expenses incurred or to be incurred by the CAA in relation to the provision of such facilities and services and not be such as to amount to taxation. That is, in my view, s 67 of the Act does not compel location specific charging unless such charging is the only way to meet the explicit requirements of the section."
[12]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 566.
[13]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 569-570.

However, in relation to the meteorological services, her Honour saw a problem. She expressed that problem, and her conclusion, as follows[14]:
"The applicants grounded a further attack on the meteorological charges upon the differential established by cl 12 of the determination between meteorological charges for domestic flights and domestic legs of international flights and international flights.
Mr Barnes gave evidence, which I accept, that aircraft on international routes were only charged in relation to flights terminating in Australia for administrative simplicity, but that such charge covered both the inward and the outward flights. The adoption of this administrative procedure does not, of itself, in my view, offend any aspect of s 67 of the Act.
Only limited evidence was called as to the manner in which the meteorological charges for international flights were fixed. Mr Barnes gave evidence that they were fixed at a figure which reflected the proportion of the old en route charges in respect of international aircraft which related to meteorological services. His evidence was that the determination was the first which included a separate charge for meteorological services. Nothing in the evidence indicates how the proportion of the old en route charge which related to meteorological services was determined. The contention made on behalf of the applicants is, in effect, that there is no justification for the lower rates of meteorological charges in respect of international flights, and that the rates of charges fixed in respect of domestic flights were therefore not reasonably related to the expenses incurred or to be incurred by the CAA in relation to the matter to which the charges relate, as such charges resulted in domestic operators subsidising international operators on international flights.
Mr Gemmell's concession that in 1991 the CAA would have been unable to work out the cost of providing meteorological information to particular users, by which I understand him to include particular categories of users, and the failure of any witness to articulate a rationale for the differential between the meteorological charges paid in respect of international flights and domestic flights suggests against such charges bearing a reasonable relationship to the expenses incurred by the CAA in relation to the matters to which the charges relate. The applicants' attack on the meteorological charges assessed against Compass Airline, in my view, succeeds on this ground."
[14]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 575-576.
The special leave to appeal to this Court was framed so as to exclude the subject of charges for meteorological services. Accordingly, the decision of Branson J on that matter, which was confirmed (albeit for different reasons) by the Full Court, stands. There is no appeal against the conclusion that those charges were invalid.
Branson J then went on to consider whether the charges in question were such as to amount to taxation, in contravention of s 67. She held that they were. The critical question, she said, was whether they could be regarded as a payment for services rendered[15]. It was at this point that the network approach to costing, and the lack of sufficient relationship between the value to Compass of the services provided to Compass and the charges for those services, was regarded as critical. For example, in relation to the terminal navigation charges, Branson J said[16]:
"… the fact that the level of the terminal navigation charges was determined by reference to the costs of maintaining facilities and services at 32 aerodromes whilst Compass Airlines aircraft landed at only six of those aerodromes, means that a 'discernible relationship', as that expression was used by the High Court in the Air Caledonie case, between the amount of the charges and the value of the relevant facilities and services to Compass Airlines is not, in my view, able to be identified."
[15]cf Air Caledonie International v The Commonwealth (1988) 165 CLR 462 at 467; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 501, 507.
[16]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 578.
In the Full Court of the Federal Court the leading judgment was that of Beaumont J. Although his Honour came to the same conclusion as Branson J, his reasons were different. In particular, Beaumont J took a different approach to the interpretation both of s 67 of the Act and of the determination.
As to s 67, Beaumont J considered that it expressed a single composite idea, and that it contained, not two separate and disparate requirements, but one single requirement. In that respect, he considered that, when s 67 spoke of the expenses incurred "in relation to the matters to which the charge relates", the matters in question were not the services and facilities provided by the CAA viewed, together, as a network, but the specific or particular services and facilities for which a charge of the kind imposed was payable by the operator of an aircraft using those services and facilities[17]. This interpretation of the first limb of s 67 gave it an operation consistent with the authorities on the difference between a tax and a fee for service, which, in his Honour's view, emphasized the need for a relationship between the amount of the fee and the value of the particular services provided to the person required to pay the fee. It will be necessary to return to the concepts of value and cost in this proposition.
[17]Airservices Australia v Monarch Airlines Ltd (1998) 152 ALR 656 at 681-683.
Beaumont J read the determination in a manner consistent with the meaning he gave to the first limb of s 67. The charges, he considered, were imposed for particular facilities and services, relating to particular aerodromes, and not for the services and facilities relating to all aerodromes listed in a given schedule, considered as a network, regardless of whether an individual operator used all such aerodromes.
Beaumont J was also of the view that the reference in s 67 to "expenses" excluded the possibility of allowing an element of profit, even in the form of a rate of return on capital.
Whilst accepting that, in order to satisfy the relationship required by s 67, and to avoid taxation, it was unnecessary that there be a precise correlation between charges and expenses, his Honour regarded it as necessary that "the amount, or rate, of the charge for a service or facility may be seen, when objectively viewed, to have been fixed in good faith so as to approximate the amount of the expenses incurred or to be incurred in relation to that service or facility"[18]. There had to be "an honest attempt to match the amount of a charge with the amount expended in providing the specific service for which the charge [was] levied"[19]. Beaumont J summarized his conclusions as follows[20]:
"The consequences of the Authority's failure to attempt to match, even on a 'by and large' basis, the amount or rate of a charge with the specific facility or service for which the charge is raised is reflected in the following figures and statistics. For the financial year ending 30 June 1991 more than 80% of the Authority's income came from aircraft operations. Of that total revenue, domestic jet aircraft were the source of 47%, international operators 31%, and non-jet aircraft only 4%. Yet for each of the years for which statistics are given (ie 1985-89 inclusive), the number of hours flown by GA aircraft (which were mostly non-jet) far exceeded the number of hours flown as part of domestic airline activity, and the number of GA aircraft movements (ie take-offs and landings), far exceeded the number of movements attributable to domestic and international airline activity combined.
In short, no attempt was made to match, even in approximate terms, the amount of a charge with the expense of providing a specific service as s 67 contemplated. In the result, the amount or rate of each of the charges under challenge was not 'reasonably related' to the relevant 'expenses'. Nor were they a 'true' fee for service. Accordingly, the charges also amounted to taxation, contrary to the constraints imposed by s 67.
None of this is to suggest that air safety is not important or that 'Ramsey' pricing principles lack merit. Section 67 says nothing to that effect and is simply silent on these questions. Rather, s 67 addresses an entirely different consideration, namely the relationship between the expense incurred, or to be incurred, in providing a particular service or facility to an individual operator and the amount or rate of the charge payable by the operator for that service or facility. The thrust of s 67 is that, in this scenario, the relationship must be such as not to be seen as excessive, or (really the same thing) not to amount to taxation. In fixing its charges, the Authority, instead of considering the relationship between the expense and the charge on the individual operator basis mentioned, sought to adopt a 'network' approach and to apply the 'Ramsey' principles to all its charges so as to minimise the cost that might be passed on by the operator to individual passengers. There is nothing in the language or evident purpose of s 67 to justify this course. In essence, the Authority's approach was flawed because it assumed that s 67 did no more than provide that its charges must be generally 'reasonable' rather than reasonably related to relevant expenses, a very different concept."
[18]Airservices Australia v Monarch Airlines Ltd (1998) 152 ALR 656 at 685.
[19]Airservices Australia v Monarch AirlinesLtd (1998) 152 ALR 656 at 685.
[20]Airservices Australia v Monarch Airlines Ltd (1998) 152 ALR 656 at 685-686.
Wilcox J agreed with Beaumont J. Lindgren J found it unnecessary to express a preference between the views of Branson J and those of Beaumont J on the meaning of the first limb of s 67, but agreed with both that there had been a contravention of the second limb.
The judges of the Federal Court found it unnecessary to consider the arguments concerning the constitutional validity of the statutory lien.
Compliance with s 67 – reasonable relationship of charges to services
The respondents, in seeking to uphold the ultimate conclusion of all of the judges in the Federal Court, have filed a notice of contention supporting the conclusion on additional grounds. In particular, the respondents challenge the reasoning of Branson J, insofar as it was favourable to the appellant, in certain respects.
Sections 66 and 67 were repealed by the Civil Aviation Legislation Amendment Act 1995 (Cth).
Section 67 operated as a limitation on the power conferred by s 66. It was modelled on a provision in the Air Navigation Act 1920 (Cth), s 26(2)(ca), which was introduced in 1974[21], which conferred a power to make regulations concerning fees and other charges "but not being fees or charges the amounts or rates of which exceed amounts or rates that are reasonably related to the expenses incurred by Australia in relation to the matters in respect of which the fees or charges are payable or that otherwise amount to taxation".
[21]Air Navigation Act 1974 (Cth), s 6.
In its terms, s 67 imposed two requirements, one expressed positively, and the other negatively. Whether each of those requirements amounted, in practical effect, to a mirror image of the other would depend upon the grounds advanced, in a given case, for contending that the requirements were not satisfied. In some cases, there would be substantial overlapping between the considerations relevant to the first limb and those relevant to the second limb. However, it would be wrong to say, as a universal proposition, that the two limbs could never raise separate issues. The second limb is related to, and should be understood in the light of, s 55 of the Constitution.
The inclusion in the amount or rate of a charge of an element designed to include a profit margin, or return on capital, was not inconsistent with either the first or the second limb. In that connection it is to be borne in mind that, in the present case, there was no challenge to the reasonableness of the figure of 7.5 per cent, (assuming any such margin to be permissible), and the evidence showed that it represented only a small element of the charges. Section 66 must be read in the light of other parts of the legislative scheme, including s 56[22]. The CAA was intended to operate on a commercial basis. In the statutory context, there is no warrant for confining the language of s 67 in such a way that it meant that a charge was not reasonably related to expenses incurred merely because it returned a commercially reasonable profit. Similarly, in the context of considering whether an imposition is a tax, or a fee for services, there is no reason why a fee for services should be limited to a fee which merely seeks to recover expenses or outgoings[23].
[22]See also s 45.
[23]cf Harper v Minister for Sea Fisheries (1989) 168 CLR 314.
It may be accepted that the reference to expenses (incurred or to be incurred) was a reference to "amounts either disbursed or borne"[24]. Even so, what s 67 required was a reasonable relationship to expenses and, in turn, a relation between those expenses and the matters to which the charge relates.
[24]Semco Salvage and Marine Pte Ltd v Lancer Navigation Co Ltd [1997] AC 455 at 467 per Lord Mustill.
There is an issue as to the kinds of relationship comprehended by the language of s 67.
The references to "the charge" and "the matters to which the charge relates" direct attention to the language and scheme of the determination, read in the light of the definition of "charge" in s 66.
Section 66 defined "charge" as "a charge for a service or facility provided by the Authority". Central to the present dispute is the question of the level of particularity, or generality, at which the relevant service or facility provided by the Authority, for which a charge is imposed, is to be identified. The respondents contend that an examination of the determination shows that the Board imposed separate charges for the particular services or facilities used by separate aircraft in relation to each landing at a specified aerodrome. Separate charges, it is said, were imposed for each of the subcategories of air traffic services, and for the particular services and facilities used on a particular flight. Thus, charges were imposed upon Compass for the facilities and services provided each time one of its aircraft flew between, took off from, or landed at, one of the six airports to or from which Compass operated. Since the evidence showed that the expenses of the CAA, and the charges to recover those expenses, were related to the cost of providing services and facilities across a network which included many airports at which Compass did not operate, and in circumstances where there was a substantial difference between the cost of providing services and facilities as between various airports, then the necessary relationship required by s 67 did not exist. Put simply, the charges imposed upon Compass for the services and facilities provided to Compass were related to the expenses of providing services and facilities which included services and facilities at or in relation to airports between which Compass never operated and at which its aircraft never landed. Even assuming, for the purposes of the argument, that the CAA's charges were reasonably related to the cost of providing a network of services and facilities, they were not related to the cost of the particular services and facilities for which Compass, a user of only part of the network, was, according to the terms of the determination, being charged.
The appellant, supported by the Attorney-General for the Commonwealth, argued that the relevant charges and services were to be considered at a higher level of generality. It is true, so the argument went, that landing charges, for example, were imposed in respect of each landing of a particular aircraft at a particular aerodrome, and were said to be payable in respect of the use of facilities or a service relating to an aerodrome. Similarly the fire fighting and rescue service in question was said to be a service relating to a specified aerodrome. However, that method of imposing and calculating the charges payable in respect of an individual operation did not mean that "the matters to which the charge relate[d]" were to be identified with the same particularity as applied to their exaction.
The CAA, it was argued, is charged with the responsibility of providing a network of services and facilities across Australia. The cost of providing some of those services and facilities at particular locations may bear little relationship to the cost of providing similar services and facilities at other locations. However, as Branson J held[25], the matters to which the charge created by cl 1 of the determination related were the terminal navigation facilities and services at the aerodromes referred to in Column 2 of Item 1 of Table 1, considered collectively, even though the landing of an aircraft at a specified aerodrome was what triggered the charge. Similarly, cl 11 fixed four separate en route charges, payable on the landing of an aircraft, but each of the four charges was in respect of "the use by the aircraft of any part of the total Australian network of air route and airway facilities and services"[26]. On that approach to the identification of the relevant "matters", it was contended, the necessary reasonable relationship existed[27]. In Montchel Pty Ltd v Civil Aviation Authority[28], an interlocutory matter, Pincus J had construed and applied s 67 in a manner similar to Branson J in the present case.
[25]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 567.
[26]Monarch Airlines Ltd v Airservices Australia (1997) 72 FCR 534 at 567.
[27]cf Allwrights Transport Ltd v Ashley (1962) 107 CLR 662 at 668-669.
[28](1991) 31 FCR 445.
Leaving to one side its consequences for the taxation issue, the approach for which the appellant argues is to be preferred. Having regard to the nature of the statutory functions and responsibilities of the CAA, and to the interconnected nature of the services and facilities required in the interests of airline safety and efficiency, it is proper to identify the matters referred to in s 67 at the level of generality adopted by Branson J.
In Airlines of NSW Pty Ltd v New South Wales[No 2][29] Barwick CJ, rejecting a suggestion that the power given by s 51(i) of the Constitution did not sustain air navigation regulations in respect of their operation upon the safety of intra-State commercial air transport, said[30]:
"The plaintiff placed before the Court a great deal of evidence descriptive of the use and control of aerodromes, flight paths, controlled air space, navigational aids, systems of communication, and a number of other matters from which the clear conclusion must be drawn that the safety of air operations in Australia does not admit of any distinction being drawn between aircraft engaged in intra-State and those in inter-State or international air operations in connexion with all those matters which go to make up what I can compendiously call safety precautions and procedures. …
I think the conclusion from the evidence is little, if anything, more than what I would think is within the common knowledge and understanding of all who for one moment contemplate the situation."
[29](1965) 113 CLR 54.
[30](1965) 113 CLR 54 at 92.
The legislation imposed upon the CAA the responsibility of providing a network of services and facilities, and, in empowering it to impose charges, it should be taken to have empowered the CAA to approach the identification of the matters to which the charges related on a network basis. The legislation did not require that particular charges for particular services be viewed in isolation from the integrated character of the network of which, necessarily, particular services are part. In the nature of the services provided by the CAA, most of which are relevant or essential to the safety of civil aviation, it is artificial to isolate a particular service, to a particular carrier, at a particular airport, and treat it as disconnected from services provided throughout the network. Whatever might be possible in the provision of other public services, the nature of civil aviation demands integration of services for their safety and effectiveness.

It is true, as Beaumont J observed, that there is a difference between asking whether charges for services and facilities are reasonable and asking whether they are reasonably related to expenses incurred in relation to certain matters. However, the evidence at trial addressed the latter, and not merely the former, issue. It gave a rational explanation both for setting charges on a network basis, and for the manner in which, as between different kinds of operators and operations, charges were to be borne.
Both in this connection, and in connection with the taxation issue, it is to be remembered that, whilst it is in keeping with current practice to describe the CAA as a provider, on a commercial basis, of services and facilities, and to regard airlines as consumers or users of such services and facilities, there is an obligation, supported by international agreements, upon the Commonwealth to facilitate, regulate, and control air navigation, in the interests of the public as well as of operators and their customers, and many of the "services" for which Compass was being charged involved control and direction. It was open to Compass to choose to use only part of the CAA's network, but the language of the statute does not require the conclusion that the CAA was limited to charging on a basis which required segregation of costs attributable to particular aircraft on particular flights.
In their notices of contention the respondents argued that, even if the reasoning of Branson J on the issue considered above were to be accepted, nevertheless her Honour erred in the application of the first limb of s 67 in relation to her consideration of the significance of a number of factual matters.
The respondents' submissions in this regard involved, to an extent, a repetition of earlier arguments as to the approach to be taken to the meaning of s 67 and the determination. For example, in criticizing the use made of MTOW in working out the charges, it was argued that the system discriminated against larger aircraft and in favour of smaller aircraft (and hence discriminated against Compass). Insofar as such suggested discrimination was said to destroy the necessary relationship between charges and expenses, the argument is simply another way of expressing, or illustrating, the respondents' primary contention as to the meaning of the first limb of s 67. The same can be said of a number of the arguments advanced as to other matters of factual detail. However, it was also argued that the use made of MTOW went to the question of reasonableness. The same was said to apply, for example, to discrimination between international and domestic operators. As to overheads, it was said they were not known, or not sufficiently known, at the relevant time, for there to be a reasonable relationship between charges and expenses. These, and other issues raised in the notice of contention, were discussed in the evidence before Branson J and were taken into account in her conclusions on the reasonableness of the relationships which she addressed. No reason has been shown which would justify this Court in disturbing her Honour's findings on that issue.
It is necessary now to consider the second limb of s 67, and the subject of taxation.
Compliance with s 67 – imposition of taxation
By hypothesis, we are here concerned with charges for services, and facilities, provided by the CAA to Compass. This is not a case like Air Calendonie International v The Commonwealth[31] where there was an issue as to whether the compulsory exaction by a public authority could properly be described as a fee paid for the provision by the public authority of some service. A number of cases in which it was pointed out that no "particular" service was provided, for which an exaction could be regarded as a charge or fee, were cases in which either no service at all was provided to the person required to make the payment, or there was a colourable attempt to represent that the exaction was in consideration for services[32]. Furthermore, the question arises only because it has already been concluded that the amount or rate of the subject charge was reasonably related to the expenses incurred or to be incurred by the CAA in relation to the matters to which the charge related. If it were otherwise, there would be no occasion to consider the second limb of s 67. Nevertheless, the judges in the Federal Court regarded it as fatal to the ability of the CAA to demonstrate that the charges were not such as to amount to taxation that they were not related to the value to Compass of the particular services and facilities provided to Compass or to the cost to the CAA of providing those particular services and facilities. The corollary appears to be that, if an instrumentality of government provides services or facilities on a user-pays basis, but does not seek to relate its charges to the value of the services, or the cost of providing them, to particular users, then although its total revenues from that activity do not exceed its total expenses, (or total expenses plus a reasonable rate of return on capital), what is involved is taxation. Such a conclusion would be supported, in a different constitutional and legislative context, by the decision of the Supreme Court of Canada in Re Eurig Estate[33] that ad valorem fees for grants of probate were taxes. Such fees are common in Australia.
[31](1988) 165 CLR 462.
[32]eg Northern Suburbs General Cemetery Reserve Trust v The Commonwealth (1993) 176 CLR 555 at 588; Parton v Milk Board (Vict) (1949) 80 CLR 229; Swift Australian Co (Pty) Ltd v Boyd Parkinson (1962) 108 CLR 189; Logan Downs Pty Ltd v Queensland (1977) 137 CLR 59.
[33][1998] 2 SCR 565.
The Constitution, in s 53, contrasts proposed laws imposing taxation with proposed laws for the payment of fees for licences, or fees for services. However, there is no strict dichotomy. The problem is one of characterization. In Hematite Petroleum Pty Ltd v Victoria[34] a fee for a licence to operate an oil pipeline was held to be a tax. It was "an enormous impost laid directly by the legislature on three specified pipelines"[35]. It was a means of raising revenue from the production of oil. The language of s 67 in terms recognizes that a charge for a service or facility could be such, in the particular case, as to amount to taxation.
[34](1983) 151 CLR 599.
[35](1983) 151 CLR 599 at 647.
What is it that would give a charge the character of one which was such as to amount to taxation? The most likely possibility would be that the charge was "devoted to building up consolidated revenue"[36]. Compliance with the first limb of s 67 would go a long way towards negating that possibility. In the present case, the charges were not set so as to provide the Commonwealth with a source of additional revenue, and it was accepted that, if they were, they would be likely to fall foul of both limbs of s 67[37]. The critical matter is said to be the lack of relationship between the manner in which the charges were calculated and the value to Compass of, or the cost to the CAA of providing to Compass, the particular services and facilities which it used. The question is not whether this makes the charges unfair; the question is whether it makes them taxes. The answer to the question has wide implications for instrumentalities of government operating in an environment in which the users of services and facilities are expected to bear the cost of providing them, even where such users have no practical choice but to use the services and facilities, and where some of the "services" are in the nature of public regulation and control. Do charges bear the legal character of taxation because some individual users or consumers pay more than the cost of the particular services which they use? In Australia, postal services, transportation services, educational services, and health services, amongst others, and many facilities, are provided by governments, or government instrumentalities, in circumstances where charges are imposed which take account of such factors as price sensitivity or capacity to pay, or which seek to equalize costs between, for example, rural and urban consumers, or which in some other way exhibit characteristics similar to those of the charges presently in question. It is not to the point that such pricing of services may have an economic effect, equivalent, or similar, to taxation. What is presently in issue is whether what is involved is taxation within the meaning of s 67 of the Act which, in turn, is to be understood in a wider constitutional context.
[36]cf Harper v Victoria (1966) 114 CLR 361 at 377.
[37]The matter of return on capital has been dealt with earlier.
If it is necessary to concentrate upon the position of the individual user of a particular service, it is difficult to understand why one would prefer either of two different tests: the value of the service to the user, or the cost to the provider, in deciding whether there was taxation. In Asiana Airlines v Federal Aviation Administration[38] the United States Court of Appeals considered a challenge to the validity of charges imposed by the Federal Aviation Administration for services provided to aircraft which neither took off nor landed in the United States, but flew through United States air space. The Administration adopted a system of "Ramsey pricing", varying the share of total fixed and common costs allocated to a user based on the likely impact of such a cost change on that user's behaviour. This method of pricing was accepted as rational, but the Court held that it based fees on the value of the service to the user rather than on cost[39]. The relevant statute required that each of the fees be "directly related to the Administration's costs of providing the service rendered". The fees were held invalid. The case turned on the particular statutory provision, but it illustrates, in a context similar to the present, the difference between the cost of providing services and facilities and their value to an individual user or consumer.
[38]134 F 3d 393 (1998).
[39]134 F 3d 393 at 402 (1998).
Not all taxation has as its primary purpose the raising of revenue; and some forms of taxation are notoriously inefficient means to that end. An objective of raising revenue is not, therefore, a universal determinant. Even so, the presence or absence of such an objective will often be significant.
In this case:
. the charges were not imposed to raise revenue;
.the charges were undoubtedly charges for the provision of services and facilities;
.the charges were imposed to recover the cost of providing such services and facilities across the entire range of users;
.the charges for categories of services were reasonably related to the expenses incurred in relation to the matters to which the charges related;
.the services and facilities were, of their nature, part of an activity which must be highly integrated in order to be effective;
. there was a rational basis for such discrimination between users as existed.
In those circumstances, there is no warrant for concluding that the charges amounted to taxation on the ground that they exceeded the value to particular users of particular services or the cost of providing particular services to particular users.
It has not been shown that the subject charges were such as to amount to taxation.
Validity of the statutory liens
It was argued on behalf of the respondents, although not decided in the Federal Court, that, even assuming the charges and penalties in question to have been validly imposed upon Compass, the provisions of the Act relating to statutory liens (ss 68 to 75) were invalid for the reason that, although they were laws for the acquisition of property for a purpose in respect of which the Parliament has power to make laws, they did not provide for the just terms required by s 51(xxxi) of the Constitution. If that argument is made good then, under the terms of the agreements relating to the payments made by the respondents to the appellant, the appeals must be dismissed.
The effect of the lien provisions is similar to that of the regulations under which the Civil Aviation Authority of the United Kingdom may detain aircraft in respect of which charges are due and may, if such charges remain unpaid for a certain period, sell the aircraft[40]. The rationale underlying such provisions is not difficult to see. Aircraft operators, who may incur liability for charges and penalties, may have few assets within a particular jurisdiction at any given time except aircraft, and aircraft may leave a jurisdiction very quickly. As the facts of the present case show, charges in large sums can accumulate in a short time. The charges are for services related to the safety of aircraft, and those with a proprietary interest in aircraft, as well as the operators, receive a benefit from those services. They are in some respects akin to necessaries supplied to a ship. The regulatory regimes which apply in various jurisdictions are likely to be widely known to owners of aircraft who may be assumed to enter into transactions affecting title to aircraft in the light of such knowledge. It is not to the point that it is possible to imagine other steps which might be taken to provide security for payment of charges and penalties. The Parliament has decided upon this regime for Australia.
[40]See Shawcross and Beaumont, Air Law, 4th ed, vol 1, pars VI(18)-VI(19); Civil Aviation (Navigation Services Charges) Regulations 1998 (UK), regs 4(i) and (ii); Civil Aviation (Route Charges for Navigation Services) Regulations 1997 (UK), regs 4(1) and (9). There is, however, no constitutional provision equivalent to s 51(xxxi) to which effect must be given in the United Kingdom.
Rights in rem against ships, recognized by law or granted by statute, have a long history[41]. So, more specifically, do maritime liens[42]. The practical problems to which such rights are directed apply to aircraft in much the same way as they apply to ships.
[41]Owners of the Motor Vessel "Iran Amanat" v KMP Coastal Oil Pte Ltd (1999) 73 ALJR 559; 161 ALR 434.
[42]See Halsbury's Laws of England, 4th ed, vol 43(2), par 1901.
The principles which determine whether a law providing for a statutory lien, with the incidents specified in the Act, in support of a scheme of charging for services and facilities, is within the reach of the requirement of just terms stipulated by s 51(xxxi) have been considered in many recent cases. In Mutual Pools & Staff Pty Ltd v The Commonwealth[43] Brennan J[44], referring to earlier authority[45], pointed out that a grant of legislative power comprehends a power to enact provisions appropriate and adapted to the fulfilment of any objective falling within the power, and that s 51(xxxi) does not abstract the power to prescribe the means appropriate and adapted to the achievement of an objective falling within another head of power where the acquisition of property without just terms is a necessary or characteristic feature of the means prescribed. (In that context, "necessary" does not mean "indispensable".) That was the explanation of decisions that laws providing for the imposition of a tax, the compulsory payment of provisional tax, the seizure of the property of enemy aliens, the sequestration of bankrupts' property, the forfeiture of prohibited imports or the exaction of fines and penalties are not affected by s 51(xxxi). His Honour said[46]:
"In my view, a law may contain a valid provision for the acquisition of property without just terms where such an acquisition is a necessary or characteristic feature of the means which the law selects to achieve its objective and the means selected are appropriate and adapted to achieving an objective within power, not being solely or chiefly the acquisition of property. But where the sole or dominant character of a provision is that of a law for the acquisition of property, it must be supported by s 51(xxxi) and its validity is then dependent on the provision of just terms."
[43](1994) 179 CLR 155.
[44](1994) 179 CLR 155 at 179-180.
[45]Wragg v State of New South Wales (1953) 88 CLR 353 at 386; Burton v Honan (1952) 86 CLR 169 at 177; Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 27.
[46](1994) 179 CLR 155 at 180-181.
In Re Director of Public Prosecutions; Ex parte Lawler[47] a law providing for the forfeiture of a fishing vessel operating illegally in Australian waters was held not to contravene s 51(xxxi), even though the owner of the vessel was not complicit in the offence. The considerations relevant to whether the forfeiture of property of an innocent third party, where such property has been used in the commission of an offence, is "appropriate and adapted to the enforcement of the offence-creating provision"[48], are not identical to those relevant to whether the creating of a statutory lien over an aircraft is appropriate and adapted to the provision, on a commercial basis, of services and facilities such as those provided by the CAA. However, the test is the same.
[47](1994) 179 CLR 270.
[48](1994) 179 CLR 270 at 281. In the present context there is little difference between the test of "reasonably appropriate and adapted" and the test of proportionality. See Cunliffe v The Commonwealth (1994) 182 CLR 272 at 377, 396; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567.
Having regard to the relationship between the services provided by the CAA and the safety of the aircraft concerned, the reasonableness of a system which provides that those who operate aircraft must pay charges which, in totality, will defray the cost of providing the services, the possibility that operators will have few assets in the jurisdiction apart from aircraft, the mobility of aircraft, and the desirability of providing adequate security for liabilities incurred, it is at least as easy to draw a conclusion supportive of the legislation as it was in Ex parte Lawler.
Concepts of "innocence", lack of "complicity" or "culpability" are difficult to relate to the present issue. However, the position of the respondents was not isolated from the conduct of Compass. They had leased or sub-leased aircraft to Compass. By inference, they did so knowing that such aircraft would be flown on routes to, from and within Australia, attracting charges for services and facilities provided to all airline operators. They could be taken to know that such charges were not insubstantial. Unpaid, they would accumulate to very large sums. They could readily have ascertained that provision for statutory liens existed under Australian law as under the laws of other jurisdictions involved in civil aviation of a comparable kind. By inference, it would have been open to them to protect themselves (by contract, insurance, or facilities for auditing and reporting) against the kind of result that ensued. Without the provision of their aircraft to Compass, that company would not have been in a position to accumulate the very substantial charges which it did. We accept that s 51(xxxi) of the Constitution must not, in accordance with the authority of this Court, be given a pedantic or narrow construction. We also accept that the taking of property under a federal law is not removed from "acquisition" simply because it is described as "forfeiture". It is not the name, but the character of the taking, that controls the outcome of constitutional characterization. But, in this case, the statutory liens are valid. In our opinion they bear no similarity to outmoded notions of deodand. They were provided to secure the effectiveness of charges relating to aircraft which, of their very nature, could otherwise leave Australia with substantial debts unpaid and with no effective means for their recovery.

To say that a forfeiture of an innocent third party's property is not within s 51(xxxi) because it is within s 51(x) is, with respect, to state a conclusion and not the reasoning for it. But the fact that a forfeiture so called, if it involves an acquisition, is within a power conferred by s 51 does not mean that it is outside s 51(xxxi). Section 51(xxxi) only operates to authorise acquisitions in respect of purposes in pursuance of which the Parliament has power to make laws. If there is no power to make a law on the topic, there can be no power to acquire, whether by forfeiture so called or otherwise. And to call an acquisition a forfeiture cannot alter the nature and substance of what is in truth an acquisition.
In his judgment Brennan J regarded the Court's decision in Mutual Pools[390] as doing no more than vindicating the customs laws, and in the same passage treated the fishery laws providing for forfeiture as if they had the same constitutional basis, without adverting to the special constitutional position of, the customs laws[391]. His Honour also took into account important policy considerations earlier stated by Mason J in Cheatley[392] when he referred to the difficulty of tracking the movement of vessels off the extensive coastline of Australia. His Honour said[393]:
"The need for drastic penalties to vindicate the laws governing customs and fisheries exists in part by reason of the difficulty in policing these laws and ensuring that foreign owners of vessels (or other conveyances) do not permit their use in breaching those laws. As Mason J pointed out in Cheatley[394]:
'The difficulty of enforcing compliance along the length of the Australian coastline called for a stern deterrent if observance of the provisions was to take place. There were obvious difficulties in laying obligations upon foreign owners and taking proceedings against them.'
These considerations demonstrate that the provision for forfeiture contained in s 106(1)(a) of the Act authorizing, as it does, the forfeiture of vessels owned by persons who are or might be innocent of any complicity in the offence which creates the liability to forfeiture is appropriate and adapted to the enforcement of the offence-creating provision. The forfeiture provision is therefore properly characterized as a law with respect to fisheries supported by s 51(x) of the Constitution. That power is not to be read down in order to protect the rights of private owners. I would recall the passage from Charles River Bridge v Warren Bridge[395] which I cited in my judgment in Mutual Pools & Staff Pty Ltd v The Commonwealth.
Section 106(1)(a) of the Act is not to be classified as a law with respect to the acquisition of property falling within s 51(xxxi). The guarantee contained in s 51(xxxi) does not affect the validity of s 106(1)(a)."
[390]Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155.
[391]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 277278.
[392]Cheatley v The Queen (1972) 127 CLR 291 at 311.
[393]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 280281.
[394]Cheatley v The Queen (1972) 127 CLR 291 at 311.
[395]36 US 341 at 431 (1837).
I would read this reasoning as involving an acceptance that, for its validity, the liability to the forfeiture had to be appropriately adapted to an "offencecreating" provision.
Deane and Gaudron JJ in Lawler acknowledged the uncertainties surrounding the application of s 51(xxxi) and expressed the opinion that some laws stand wholly outside s 51(xxxi)[396]. Their Honours quoted the following passage from the judgment of Gibbs J in Trade Practices Commission v Tooth & Co Ltd[397]:
"[I]t has been held that laws providing for the forfeiture of prohibited imports[398], the compulsory payment of provisional tax[399] and the application of the property of former enemy subjects reparations[400] are not within s 51(xxxi). Other laws to which s 51(xxxi) obviously does not apply are those for the imposition of tax, the sequestration of the property of a bankrupt or the condemnation of prize[401]. I am not sure that a completely satisfactory explanation has yet been given of the principles by which it is to be determined which laws do, and which laws do not, fall within s 51(xxxi). With great respect I doubt whether the suggestion of Dixon CJ in AttorneyGeneral (Cth) v Schmidt – that the section does not affect 'anything which lies outside the very general conception expressed by the phrase "use and service of the Crown"' – fully expresses the ground of distinction."
[396]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 284.
[397](1979) 142 CLR 397 at 408.
[398]Burton v Honan (1952) 86 CLR 169 at 180-181.
[399]Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 263, 270.
[400]Attorney-General (Cth) v Schmidt (1961) 105 CLR 361.
[401]Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373. As to imposition of a tax, see further: Federal Commissioner of Taxation v Barnes (1975) 133 CLR 483 at 494-495; MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 638-639; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 508-510; and, as to sequestration of the property of a bankrupt, The Tasmanian Dam Case (1983) 158 CLR 1 at 282.
Some of the examples that Gibbs J gave in the passage quoted can immediately be distinguished from this case. The observations of Dixon CJ in Schmidt's case[402] as to the scope of s 51(xxxi) repeat views of the kind that his Honour expressed in Burton v Honan[403] which I have already discussed. But in any event the forfeiture provisions which this Court held justified the transfer of the funds in Schmidt's case[404] had to be exercised under "various exigencies and perils [of war or imminent war]" which may provide a justification in such times for a special reading of s 51(vi) and s 51(xxxi). Neither the bankruptcy laws nor the prize laws could have effective operation unless there was power to deal with a bankrupt's property and to seize and deal with a prize.
[402]Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373.
[403](1952) 86 CLR 169.
[404]Attorney-General (Cth) v Schmidt (1961) 105 CLR 361.
Deane and Gaudron JJ in Lawler[405] did not doubt however that s 51(xxxi) operated as a constitutional guarantee and that the words "acquisition" and "property" should be construed liberally[406]. Their Honours also drew a distinction between laws in connexion with which just terms were an inconsistent or incongruous notion and laws where they were not.
[405]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.
[406]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 284-285. See also TheCommonwealth v Western Australia (1999) 73 ALJR 345 at 380-381 per Kirby J; 160 ALR 638 at 686-687.
Dawson J, in Lawler, said that confiscation of property connected with the commission of crimes was long part of the common law and had its origin in the doctrines of attainder and deodand and that property could be forfeited even if its owner was not involved in the crime[407]. The historical origins and implications of attainder and deodand must yield to the Constitution. But in any event they can afford little or no modern justification for the forfeiture of the property of innocent persons. The history of the deodand is summarised by Brennan J delivering the opinion of the Supreme Court of the United States in CaleroToledo[408]:
"At common law the value of an inanimate object directly or indirectly causing the accidental death of a King's subject was forfeited to the Crown as a deodand[409]. The origins of the deodand are traceable to Biblical[410] and pre-Judeo-Christian practices, which reflected the view that the instrument of death was accused and that religious expiation was required. See O Holmes, The Common Law, c 1 (1881). The value of the instrument was forfeited to the King, in the belief that the King would provide the money for Masses to be said for the good of the dead man's soul, or insure that the deodand was put to charitable uses. 1 W Blackstone, Commentaries 300[411]. When application of the deodand to religious or eleemosynary purposes ceased, and the deodand became a source of Crown revenue, the institution was justified as a penalty for carelessness[412].
Forfeiture also resulted at common law from conviction for felonies and treason. The convicted felon forfeited his chattels to the Crown and his lands escheated to his lord; the convicted traitor forfeited all of his property, real and personal, to the Crown. See 3 W Holdsworth, History of English Law 68-71 (3d ed 1927); 1 F Pollock & F Maitland, History of English Law 351 (2d ed 1909). The basis for these forfeitures was that a breach of the criminal law was an offense to the King's peace, which was felt to justify denial of the right to own property. See 1 W Blackstone, Commentaries 299"[413].
[407]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 289.
[408]Calero-Toledo v Pearson Yacht Leasing Co 416 US 663 at 680-682 (1974).
[409]Deodand derives from the Latin Deo dandum, "to be given to God".
[410]See Exodus 21:28 ("[i]f an ox gore a man or a woman, and they die, he shall be stoned: and his flesh shall not be eaten").
[411]See 1 M Hale, Pleas of the Crown 419, 423-424 (1st Am ed 1847); 2 F Pollock & F Maitland, History of English Law 473 (2d ed 1909); Law of Deodands, 34 Law Mag 188, 189 (1845); Finkelstein, The Goring Ox: Some Historical Perspectives on Deodands, Forfeitures, Wrongful Death and the Western Notion of Sovereignty, 46 Temp L Q 169, 182 (1973).
[412]See Hale [supra] at 424. Indeed, the abolition of the deodand institution in England in 1846, 9 & 10 Vict c 62, went hand in hand with the passage of Lord Campbell's Act creating a cause of action for wrongful death, 9 & 10 Vict c 93 (1846). Passage of the two bills was linked, because Lord Campbell was unwilling to eliminate the deodand institution, with its tendency to deter carelessness, particularly by railroads, unless a right of action was granted to the dead man's survivors. See 77 Hansard's Parliamentary Debates, Third Series 1031 (1845). See generally Finkelstein [supra] at 170-171.
[413]In 1870, England eliminated most forfeitures of those convicted of felonies or treason. 33 & 34 Vict c 23.
In his Lectures on Legal History, Sir Victor Windeyer discussed the primitive notions underlying the doctrine[414]:
"When a man was killed, even accidentally, by anything in motion, that thing, animate or inanimate, which caused the death had to be surrendered. It might be the sword with which he was slain, the ox that gored him, the cart that ran over him. This remarkable rule was a part of the law of England until 1846[415] until, indeed, it became difficult to apply when men began to be killed by railway trains! Much amusing learning came into existence concerning deodands, and some surprising articles were thus forfeited. But it is all long obsolete now. On the origin of these rules we can only speculate. The name deodand tells us that the forfeited article was given to God, according to Cowel 'for the pacification of His wrath'[416]. We know that during the Middle Ages the value of the deodand was often used for masses for the dead man's soul, and after the Reformation usually given to some charity. But deodands were probably a survival from superstitious times before Christianity. Originally, apparently, the kinsmen of the dead man received the deodand, perhaps as compensation for their loss, but more probably because it was itself an unclean and guilty thing which they must destroy. The matter drifts off into the realm of conjecture. But we may remember the words in the Book of Exodus[417]: 'If an ox gore a man or a woman, that they die; then the ox shall be surely stoned, and his flesh shall not be eaten; but the owner of the ox shall be quit'." [418]
[414]Lectures on Legal History (1938) at 19-20.
[415]See 9 & 10 Vic, c 62.
[416]Cowel's Interpreter, published by Manley in 1672.
[417]Exod xxi, 28.
[418]See also Holmes, The Common Law (1882) at 22-25.
To require the forfeiture of animals and inanimate things in modern times without regard to any culpability on the part of the owner smacks of hearkening to primitive notions of animism and anthropomorphism.
Neither the old learning on the topic of the deodand, nor the variety of opinions expressed in the quite different factual situation under consideration in Lawler[419], can be determinative of this case.
[419]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.
In Health Insurance Commission[420] the facts were that whilst a valid claim for fees payable by the Commission to a medical practitioner was pending in the Federal Court, the Act regulating the quantum of refunds payable for medical services was amended with the consequence that the values of the refunds were significantly reduced. The Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) held that the amending Act was not a law with respect to the acquisition of property but did so on a variety of grounds: Mason CJ, Deane and Gaudron JJ on the ground that the reduction was effected both as a genuine adjustment of competing claims between parties who stood in a particular relationship, and also as part of a regulatory scheme for the provision of welfare benefits from public funds; Brennan J on the ground that the right conferred by the Act was not "property" for the purposes of s 51(xxxi); Dawson J on the ground that the Commonwealth had not "acquired" property; Toohey J also on the ground that there was no "acquisition", and on the further ground that the operation of the amending Act lay outside the scope of s 51(xxxi); and McHugh J on the ground that the entitlement to payment was conferred subject to the condition that it could be altered or revoked by Parliament at any time.
[420]Health Insurance Commission v Peverill (1994) 179 CLR 226.
The Court also held that the amending Act did not contravene s 55 of the Constitution because the reduction of the value of a chose in action, or the substitution of a chose in action for a lesser amount for another chose in action, was not an imposition of a tax.
With respect, for myself, I would have thought that the second holding which accepted that the medical practitioner's claim was a chose in action contradicted any notion that he did not own property, the property being the debt payable by the Commission, and that, by reducing the value of that debt (by statute) there was effectively an acquisition of property by the Commission to the extent of the amount of the reduction of the debt. As to the relationship between the Commission and Dr Peverill, no matter what other complexion it might bear, it certainly included, as an element, the relationship of debtor and creditor and there is no reason in principle to distinguish between legislation to effect a welfare purpose and legislation to effect some other purpose (except for legislation relating to tax, customs and excise). And any acquisition must involve a disbursement of public funds.
The different facts and legislation, and the diversity of the reasons given by the Justices of this Court in that case are such that I would not regard it as dictating any particular conclusion in this case.
Before disposing of this case I would make some brief observations about some policy considerations as some members of this Court did in Lawler[421]. There are some obvious measures which might be taken to ensure that large debts for charges are not allowed to be run up by aeroplane operators, such as perhaps the requirement of a substantial bond or deposit in advance of permission to land or fly over Australia, or the withholding of permission to operate without payment in advance. There are no doubt other measures which would be effective to ensure payment. The point is that the special difficulties referred to in upholding the fishery laws are not present in the case of laws governing the use of airports.
[421]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.
In TheCommonwealth v Western Australia[422], I discussed the particular advantages enjoyed by government in dealing with, by reducing or sterilising, by executive action, people's property rights. No narrow view is in my opinion warranted of the constitutional guarantee contained in the acquisitions power. Ample breadth should be accorded to it, as a constitutional guarantee, indeed one of the very few explicit guarantees in the Constitution. In TheCommonwealth v Western Australia, Kirby J made observations to a similar effect[423]:
"The word 'acquisition' is not to be treated pedantically. It is not limited to the physical taking of title or possession in, relevantly, a State's 'property'. Nor is it to be confined by reference to traditional conveyancing principles and procedures."
[422](1999) 73 ALJR 345 at 398-400; 160 ALR 638 at 710-713.
[423](1999) 73 ALJR 345 at 382; 160 ALR 638 at 687.
There is no doubt that there has been an acquisition of property here to the extent that the lien purports to operate to reduce the value of the aeroplanes owned by the respondents. The statutory provisions upon which its existence depends purport to confer an absolute right upon the appellant to dispose of the aircraft and to pay itself part, or the whole of the proceeds, if required, to discharge the debt owed by the operator of it. The respondents are third parties not shown in any way to be complicit in the failure of the operator to pay the relevant charges. The failure to pay the charges does not involve in any way the commission of a criminal offence. There is no criminal or quasi-criminal sanction provided for in the legislation. Policy considerations of the kind referred to in the fisheries case of Lawler[424] are not present here. The seizure and sale of the aircraft are not necessary to vindicate the laws authorising the fees and charges under the Act. These are not laws concerned with taxes, excise or customs duties. The defence power is not, and could not be invoked in the circumstances of this case. One or more of these reasons might be sufficient to distinguish this case from those that I have discussed. I would however rest my decision on all of the matters to which I have just referred. The appellant accordingly had no right to exercise any of the powers purportedly conferred by the Act to take the benefit of a lien against the respondents and to exercise rights under it to defeat or diminish any of the respondents' property rights in and to the aircraft without providing for compensation on just terms to the respondents.
[424]Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.
On the view that I take of the case I do not need to decide any of the other questions that were debated.
I would dismiss the appeal with costs.

"Federal Communications Commission (1934)

Federal Energy Regulatory Commission (1930)
Federal Trade Commission (1914)

               Interstate Commerce Commission (1887)
               National Labor Relations Board (1935)
               Securities and Exchange Commission (1934)".

See also Breyer et al, Administrative Law and Regulatory Policy, 4th ed (1999) at 26.

The adaptation of the deodand institution to serve the more contemporary function of deterrence is an example of a phenomenon discussed by Mr Justice Holmes [in The Common Law (1881) at 5].