Capital Duplicators Pty Ltd & Anor v Australian Capital Territory
[1992] HCATrans 59
IN THE HIGH COURT OF AUSTRALIA
Registry No CS of 1990 B e t w e e n -
CAPITAL DUPLICATORS PTY LTD
and LUHAZE ACT PTY LTD
Plaintiffs
and
AUSTRALIAN CAPITAL TERRITORY
and COMMISSIONER FOR
AUSTRALIAN CAPITAL TERRITORY
REVENUE
Defendants
Demurrer
MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON TUESDAY, 3 MARCH 1992, AT 10.18 AM
Copyright in the High Court of Australia
| Capital(2) | 1 | 3/3/92 |
MR D.M.J. BENNETT, OC: May it please the Court, I appear
with my learned friend, MR R.C. REFSHAUGE, for the
plaintiffs. (instructed by Macphillamy Cummins &
Gibson)
| MR D.F. JACKSON, QC: | May it please the Court, I appear with |
my learned friend, MR L.S. KATZ, for the
defendants. (instructed by M.H. Peedom, Chief
Solicitor, Australian Capital Territory)
MR G. GRIFFITH, OC, Solicitor-General for the Commonwealth:
If the Court pleases, I appear with my learned
friend, MR G.K. BURTON, intervening for theAttorney-General of the Commonwealth in the
interest of the defendants. (instructed by the Australian Government Solicitor)
MASON CJ: Yes, Mr Solicitor?
MR GRIFFITH: If the Court pleases, I have had discussions
with Mr Pauling and subject to the Court's
convenience it might well be more economical oftime if the Commonwealth was last in argument.
MASON CJ: Very well.
MR T.I. PAULING, OC, Solicitor-General for the Northern
Territory: May it please the Court, I appear with my learned friend, MR G.R. NICHOLSON, on behalf of
the Attorney-General for the Northern Territory intervening in the interests of the defendants.
(instructed by the Solicitor for the Northern
Territory)
| MASON CJ: | Mr Bennett. |
| MR BENNETT: | Your Honours, I hand up a short supplementary |
outline.
| MASON CJ: Thank you. Yes, Mr Bennett. |
MR BENNETT: | Your Honours, this case raises a very short constitutional point under section 90. | The |
question concerns the meaning of the word
"exclusive" in that section. The problem, of course, is that in 1900 there were no territories
and the conception of a territory in 1900 was nodoubt very different from what we now have in the
self-governing territories. The problem, therefore, is to apply the words of section 90 to
the current situation.
The short simple way of putting this case,
unaided by any authority, would simply be to say
section 90 says that the power to impose duties of
excise is exclusive. Exclusive means no one else
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can exercise it, and therefore one has to ask, "Is the Australian Capital Territory Government someone
else in relation to the Commonwealth Parliament?"
That is the short simple way of looking at it.
The principal authority cited against the
plaintiffs' contention, and indeed, to a lesser
degree, references in other cases, are cases where
prior to the existence of self-governing
territories courts looking at section 90 have used
words to the effect, "Well, section 90 is clearly a
division of powers between the Commonwealth and the
States, therefore 'exclusive' is talking about the
Commonwealth as opposed to the States." Such
remarks, of course, have to be read in their
context. They were not remarks made at a time when it was present to the minds of those making them
that there might be a.self-governing territory. If
there had been, it may well be that the judges who
decided Nott's case, and other cases with similar
references, would have said that the word
"exclusive" means, exclusive of self-governing
polities within the Commonwealth. Had they used
such a phrase, they would have been no doubt the
other way. There mere fact that the word "State"
was used, at a time when the States were the only
self-governing polities is, in our respectful
submission, not determinative of the question which
faces the Court today.
Now, the case which we submit is the most
helpful is the decision of this Court in
Hematite Petroleum where two of Your Honours
specifically referred to the purpose of section 90.
Your Honours, that case is reported in 151 CLR 599
and the first passage I want to briefly take
Your Honours to is the passage in the judgment of
Justice Deane at page 661. Your Honours will see
at the bottom of that page His Honour says this:
In the context of the foregoing, the provision of s. 90 of the Constitution that the power of the Commonwealth Parliament to
impose duties of excise shall be exclusive
cannot properly be seen as part of a merely
arbitrary division of legislative powers
between the Commonwealth and the States. To
the contrary, that provision - or some other
means of ensuring uniformity of excise duties
throughout Australia - was a necessary
ingredient of any acceptable scheme forachieving the abolition of internal customs
barriers which was an essential objective of
the Federation and for ensuring that the
people of the Commonwealth were guaranteed
equality -
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et cetera. Now, one asks rhetorically how is that objective achieved if the Australian Capital
Territory and the Northern Territory are entitled
to impose excise duties on commodities but the
States are not.
There is a passage to the same general effect in the judgment of Your Honour the Chief Justice at
page 632 where, in the second full paragraph on
that page, at about point 3, Your Honour says:
That the object of the power was to
secure a real control over the taxation of
commodities provides strong support for a
broad view of what is an excise -
but the same phrase, "real control over the
taxation of commodities", meaning a real control in
the Commonwealth legislature is, in our respectful
submission, what section 90 is about.
The case which is most frequently cited
against this proposition and, indeed, the only case
in which there has been any real reference to the
problem, although in a very different context, is
Notts Bros v Barkley, which is a case we will have
to spend a few minutes on, 36 CLR 20.
Like many of the English cases, and the other cases which operate in this area, it seems to have
been concerned largely with the rule about sub-
delegation. Indeed, in the judgment of the Chief
Justice and Justice Higgins, at page 24, section 90
is not mentioned.
If Your Honours go to page 24, Your Honours
will see that the third submission, which
Your Honours can take as the relevant one, treated
there by Mr Justice Isaacs as being a section 90
argument, is simply, at point (3):
that sec.8 of the Act was invalid as amounting to a delegation of legislative power to an administrative officer;
and the answer, at point 9 of the page, is:
As to (3) - this point is concluded against
the plaintiff by the decision in Powell v
Apollo Candle Co.
However, Justice Isaacs, with whom
Justices Starke and Rich agreed, dealt with it as a section 90 submission. It is dealt with in one
page, and one page only, being page 29. Before
taking Your Honours to that page in detail, I
should show Your Honours what the Act did. The
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relevant provision is set out on page 20, at the provides, in effect, that if the Minister is satisfied of certain matter, the Minister may publish a notice in the Gazette specifying a
beginning of the report, in a footnote, where
section 8 of the Customs Tariff (Industriescountry whose exchange rate has changed and:
Upon the publication of the notice, there
shall be charged, collected and paid to the
use of the King, for the purposes of the
Commonwealth, on all goods specified -
an excise. So the provision did not empower the Minister to impose the excise; it fell short of
that. It merely provided that the Minister should declare certain matters whereupon the Act would
take effect. Justice Isaacs dealt with that this
way, at page 29:
We were greatly pressed to say that the
Parliament had delegated its power of taxation by investing the Minister with arbitrary power
to declare the tax. That, apart from
sec. 90 -
in dealing with the delegation section -
is a cardinal error. Parliament, in
committing such power to a Minister, is in no
sense abandoning any of its power. It has the
fullest control, not only by legislation, but
also by the ordinary operation of responsible
government - a factor not seldom overlooked -
it has complete control over such
administrative acts. Any unnecessary or improper exercise of power entrusted to a
Minister can be checked or reversed.
Of course, that can be done in two ways. It
can be done first of all through the direct parliamentary control through the Westminster
system over a minister, which is I think what is
being referred to, and it also of course relates to
the power of legislation. One could add it is the legislation itself in the form which imposes the
duty. His Honour goes on:
The Privy Council, it was thought, had for ever settled that question in Powell v Apollo
Candle Co -
the case I will take Your Honours to in a moment.
That case decided that in almost analogous
circumstances - any difference telling in
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favour of the validity of the present Act -
the tax was imposed, not by the administrativeaction authorized by Parliament, but by
Parliament itself, its law operating upon the
administrative event.
As Your Honours will see when I go to Apollo, that
was a case where the Act said the subordinateauthority could impose and levy the tax.
His Honour deals with that by saying:
almost analogous circumstances - any
difference telling in favour of the validity
of the present Act -
so it would seem that His Honour would have been of
the view that even an express delegation to the
minister would have been valid because of the
nature of the minister and the nature of thedelegation, but in this case of course, where the
wording was that the duty was imposed by the Act,
there was no problem. His Honour goes on at
point 5:
It was sought to distinguish that case from
the present by the terms of the first
paragraph of sec 90 of the Constitution -
which he sets out.
The word "exclusive" was relied on to support
the view that no administrative act whatever
can be made a factor in creating liability to
customs duties. So impracticable a position is not within the contemplation of sec 90. it
was framed for a well-known purpose, which
appears on the face of the section read in its
collocation. The word "exclusive" means simply exclusive of State Parliaments,
"exclusive" as opposed to concurrent,
"exclusive" in the sense in which that word is
to limit the ambit of Commonwealth found in secs 52 and 107. It was not intended parliamentary power but to make that power
exclusive on the subject matter. It has no
function of hampering the Parliament in
utilizing the necessary offices of theExecutive Department as an aid in effecting its objects.
Now, we submit it is taking that passage out of context to say that it involves the conclusion
that section 90, when it refers to "exclusive", is
only referring to exclusive of the States. It must mean exclusive of any other body which takes it
outside direct Commonwealth power. The question is, 6f course, where does one draw the line? One
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could imagine a number of different scenarios. One could imagine at the beginning an Act which simply
said that the Administrator of Christmas Island is
authorized to impos& an excise on guano. There one
has a discretion conferred upon a public servant,
who is subject to ministerial direction, who does
not have plenary authority in relation to the
territory, and one might regard that as a direct
delegation.
The next step, I suppose, is where one says
that one creates a self-governing legislature but,
nevertheless, delegates to it an express power as the delegate of the Commonwealth Parliament. Thethird level, the present level, is one which, we
submit, is clearly on the other side where one has
a self-governing legislature with power to
legislate for the peace, order, and good government
of the Territory which is, in every sense of the
word, a new polity, certainly one created by the
Commonwealth but one which operates under a
self-government charter, including the words,
"peace, order, and good government", and one
empowers that to do it. There, we submit, one has
passed across a line; one is no longer delegating,
one is rather permitting or one is transferring a
power which someone else now exercises, not as the
delegate of Parliament but in its own right.
Now, to make that last proposition good I need
to take Your Honours very briefly to the English
case referred to by His Honour and, indeed, the two
predecessor cases because it is a trilogy in which
the same proposition was firmly established, and
this has never, in my respectful submission, been
challenged since the last years of the last
century. The first case is Reg v Burah, 3 AC 889, a case in 1887. I only need to refer Your Honours to one very short passage and that is at page 904.
The issue here was whether an Indian legislative
authority had power to delegate, and the argument
was because the Indian Parliament, or the Indian particular Parliament for the district, was a
delegate of the English Parliament the maxim
delegatus non potest delegare forbade it from
enacting delegated legislation. That was dealt
with, very briefly, at page 904 and in the
paragraph beginning two-thirds of the way down the
page, in the fourth line of the paragraph, the
Privy Council said this:
The Indian Legislature has powers expressly limited by the Act of the Imperial Parliament
which created it, and it can, of course, do
nothing beyond the limits which circumscribe
these powers. But, when acting within those
limits, it is not in any sense an agent or
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delegate of the Imperial Parliament, but has,
and was intended to have, plenary powers of
legislation, as large, and of the same nature,
as those of Parliament itself.
I hav.e given Your Honours a reference to the the Indian Councils Act 1861, (24 & 25 Viet Cap
Act. I will not take Your Honours to it. It is
LXVII) but Your Honours need not go to that. That Act shows two things of importance: the first is
that the councils have power to legislate for the
peace, order, and good government. That is
section 23. The second is that in section 21 there
is a power of disallowance reserved to the Imperial
Parliament, both features which appear in theAustralian Capital Territory self-government
legislation.
The same result was reached in the second of the cases, Hodge v Reg, (1884) 9 AC 117, which I
can go to more briefly. At page 132 in relation to
the Canadian Parliament the same statement was
made. It is at line 6 on the page where Their Lordships say at page 132:
They are in no sense delegates of or acting
under any mandate from the Imperial
Parliament. When the British North America Act enacted that there should be a legislature
for Ontario, and that its legislative assembly
should have exclusive authority to make laws
for the Province and for provincial purposes
in relation to the matters enumerated in
section 92, it conferred powers not in any
sense to be exercised by delegation from or as
agents of the Imperial Parliament -
contra, of course, to the minister in Nott's
case -
but authority as plenary and as ample within
the limits prescribed by sect. 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow.
The British North America Act again contained the
same two provisions: a peace, order, and good government provision, and a power to disallow
legislation. That was in section 56.
Closer to home, the third of the three cases, the one which is regarded as the principal
authority, is Powell v Apollo Candle Company,
(1885) 10 AC 282. There are two passages I should
refer Your Honours to. At page 284 the challenged
provision is set out at about point 4, and if
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Your Honours see on page 284 against the word
"dutiable" in the left-hand margin at point 4 the
words:
the Governor is authorized to levy a duty upon
such article at a rate to be fixed -
et cetera. So the governor is authorized to levy the duty, and the old delegatus non potest delegare
argument was raised. The New South Wales Constitution at the time had a peace, order, and
good government clause and a power of disallowance
reserved to the Imperial Parliament.
At page 290 the Privy Council was able to deal
with the submission with commendable brevity, and
they said at point 2, after referring to Hodge and
Burah:
These two cases have put an end to a
doctrine which appears at one time to have had
some currency, that a Colonial Legislature is
a delegate of the Imperial Legislature. It isa Legislature restricted in the area of its
powers, but within that area unrestricted, and
not acting as an agent or a delegate.
And they apply the principles and hold the
legislation to be valid. Now, as if that were not enough, that has been referred to by Justice Wilson
in this Court in R v Toohey ex parte Northern Land
Council, 151 CLR 170 at 279. His Honour there was
dealing with the status of the Administrator of the
Northern Territory and the extent to which
regulations made by him could be challenged, but in the course of this case at page 279, His Honour set out section 5 of the Self-Government Act applicable
to the Northern Territory, which says:
"The Northern Territory of Australia is
hereby established as a body politic under the
Australia." Crown by the name of the Northern Territory of
That provision appears virtually identically in the
Australian Capital Territory (Self-Government) Act,
section 7. His Honour goes on:
This section is of fundamental and
far-reaching importance. It brings into being
a new self-governing polity under the Crown.
Of necessity, it required the appointment of a representative of the Crown in right of that polity, to administer the government thereof
and perform the traditional vice-regal
functions. Section 6 invests the Legislative
Assembly with power to make laws for the
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peace, order and good government of the
Territory, a power which in my opinion,
subject to the limits provided by the Act, is
a plenary power of the same quality as, for
example, that enjoyed by the legislatures of
the States. The constitution of the Territory as a self-govarning community is no less
efficacious because it emanates from a statute
of the Parliament of the Commonwealth than was the constitution of the Australian colonies as self-governing communities in the nineteenth
century by virtue of an Imperial statute.
And he refers to Hodge and Powell and, in my
respectful submission, the propositions established
by those cases are really beyond doubt.
So if the test is, as we submit it is,
might call the extended doctrine of Nott,
delegation; if the test is, is the subordinate body what one
acting as a subordinate or as a delegate of the
then the legislation may be valid. But if it is a
self-governing polity, not acting as a delegate,then in our respectful submission it falls on the
other side of the line, it becomes someone else, to
use the phrase I put in the submissions, and
section 90 operates to prevent the legislation.
I have referred briefly in paragraph 5 of the
original submissions to the decision in
Commonwealth v Carkazis, 23 ACTR 5. That is a
decision of Chief Justice Blackburn sitting in the
Supreme Court of the Australian Capital Territory
and it is significant that he draws the same
analogy that is drawn in these cases and rejects a submission that there was no power in the then ACT
Government to sub-delegate. It is a decision under
the Seat of Government legislation. But he refers
to Dignan's case as rejecting the proposition thatone cannot have delegated legislation and he refers
again to the status of the Territory. There, under a form of administration which did involve the words "peace, order, and good
government" but which vested it in the Governor-
General. It is an indication of the significance
of the words of delegation.I should very briefly just mention a case
relied on by my learned friend, Mr Pauling, on
behalf of the Northern Territory and this is
referred to in paragraph lf of the new submissions.
He relies on a decision of Mr Justice Sikri in
Delhi Municipality v Mills, a case in the All India
Reports. I do not want to spend a lot of time on this. I simply want to point out in relation to
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that case that it dealt with provisions of the
Indian Constitution which are totally different to
our provisions.
Might I just hand up to Your Honours the relevant provisions of the Indian Constitution
which my learned friend submits correspond to
section 90. The passage my friend relies on in the
case - I will just read it to Your Honours, it is a
very short passage. It concerned the powers of the
Government of the Corporation of Delhi to impose
certain forms of taxation and His Honour said:
Apart from authority, in my view
Parliament has full power to delegate legislative authority to subordinate bodies.
This power flows, in my judgment, from
Article 246 of the Constitution. The word "exclusive" means exclusive of any other
legislature and not exclusive of any
subordinate body.
My friend relies on that in relation to section 90. documents I have just handed to Your Honours,
Your Honours will see, first, it is in the part of
the Constitution headed, "Relations between the sections 245 and 246 for the division of powers.
Your Honours will see, in 246(1):
Parliament has exclusive power to make laws
with respect to any of the matters -
in -
the "Union List" -
and -
Parliament, and, subject to clause (1), the Legislature of any State also, have power to
make laws with respect of any of the matters -
in -
the "Concurrent List" -
and -
State has exclusive power to make laws for
such State -
in the matters in
the "State List" -
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and there were then three lists, the Union List,
the Current List and the State List.
Obviously, when one is construing the word
"exclusive" there, one is construing it in the
context of a division of power between State and
Union. It is completely different to section 90.
Indeed, it is of some significance that when one
looks at the other sections of the Constitution
which used the word "exclusive", it talks about
exclusive of the States. That does not appear in
section 90.
So, if anything, one has an expressio unius
the other way. But, certainly, one does not get
any help from the Indian case where the
Constitution is quite different. I should add that the power there, the power delegated to the Delhi
Council, was, in any event, not a plenary power.
It did not have power to make laws for the "peace,
order, and good government". What was delegated was an express power in relation to taxation. So we would submit that case really does not assist
Your Honours at all.
So to summarize on the first aspect of the
case - that is what I might call the non-section 52 aspect of the case - it is my respectful submission
that there is no reason for reading the word
"exclusive" as meaning exclusive of the States. A more rational meaning, and one more in accordance with the general policy of section 90, is to read it as exclusive of anyone else, or perhaps any
independent self-governing polity.The mere fact that a particular polity may be
it does not make it a
subject to a disallowance or may be created by the relevant sense. Certainly
delegate. We would submit if one looks at the purpose of section 90, the purpose of enabling the
Commonwealth to control something, that purpose is simply not achieved if one says, "Well, the Commonwealth can control it indirectly, because it can always disallow legislation or it can repeal
the Australian Capital Territory (Self-Government)
Act or it can amend it".That is not the sort of control which is being
talked about. The sort of control Justice Isaacs referred to and the sort of control which we submit
is relevant is direct governmental control as part
of economic planning. Once one applies that test and looks for the need for uniformity there, there
is simply no reason for treating a self-governing
territory as different from a State.
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| DAWSON J: | What would happen if there were an express provision saying, "the peace, order, and good |
| MR BENNETT: | Your Honour, it would be a question of construction then as to whether that power was |
| to an independent legislature. One would have to | |
| look at it separately. If that simply appeared as | |
| one of the powers conferred, or in addition to the | |
| peace, order, and good government power in the Act, | |
| that would not be sufficient to make it a delegate. |
But if the legislation said, for example, "the
legislature of the Territory, in effect as personae
designatae, shall have power to impose duties" and
that power was under the control of the Minister
for Territories in the same way as any other
delegated power, then, in my respectful submission,
that would simply be a delegation and it would be
valid.
Questions of construction would then arise, but the ultimate question, we submit, is: is it
done as delegate? That phrase, "as delegate", is
not taken from any case. It is simply that one
must draw a line somewhere, one must apply some
sort of test.
| DAWSON J: | What is the test of delegation? |
MR BENNETT: | The test is a simple test of agency. doing it for agent for? | Is one |
So it is really the act of
the Commonwealth Parliament. We know from Nott's
case, where the minister makes declarations which
are relevant to it, it is done as delegate in that
sense. Or is it something done by a body which is
given the plenary powers and does not act as
delegate? It is to some extent a verbal
distinction, but we would submit a real distinction.
The law of agency, perhaps as applied in the
governmental context, is, we would submit, the
appropriate test to apply. One has to search for a test. It may be there are other tests one could usefully apply. That appears to us, with respect,
to be the most convenient. It is the one which best accords with the policy of section 90 as
defined by the Chief Justice and Justice Deane in
Hematite.
| BRENNAN J: | Can a taxing power be delegated in such a way |
that the proceeds of the exercise of the delegated
power neither find their way into consolidated
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revenue, nor are subject to the appropriations
power?
| MR BENNETT: | As to the first, yes. | As to the second, there |
might be more difficulty with that. There are
cases which suggest that one is entitled, when one
imposes a tax, to direct payment in a particular
direction. One is simply, I suppose, leaving out the intermediate step of paying it into
consolidated revenue and out of it. If the
Commonwealth has power to say an excise shall be
imposed, and then to say, by a separate Act, the
proceeds of that excise shall be paid from
consolidated revenue to a territory government, why
should it not have power to put them in the one
piece of legislation?
So far as the appropriation's power is
concerned, there may be a difficulty. But again,
the mere fact that the money is directed in a
particular direction would probably not be
decisive. The test section 90 looks to is not so much where the money goes as the power to impose
it.
| BRENNAN J: | Oh no, I would not have thought that section 90 |
covered my question at all. It was directed rather to the notion of the extent of the power of
delegation.
| MR BENNETT: | Your Honour, the power of delegation is really |
a separate question from who it is paid to. The
Parliament can delegate its powers so long as it retains the ultimate control over them, and there are many cases since Apollo Candle and since Dignan
which have laid that down. There would seem to be no reason why that would not apply to a taxation
power so long as the ultimate control is maintained
in the Parliament, and really so long as the power
is clearly an act of delegation, so the ultimate
act is the act of the Parliament itself.
That is really the test. One cannot say that a piece of Australian Capital Territory legislation
is in any sense an act of the Commonwealth
legislature. One can say that a piece of delegated legislation by a Minister or by any other person
delegated is an act of the Commonwealth
legislature. Indeed, there are cases where theCommonwealth legislature has picked up State legislation, and one can look to the Judiciary Act
and one can look to the Commonwealth places
legislation as examples of that. But again, the
ultimate source of the imposition is the
Commonwealth act, whereas that is not the case
here, because the creation of a self-governing
polity means that there is one step removed. There
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is a relevant step between the act of the allegedly
subordinate legislature and the act of the
Commonwealth legislature.
The second aspect of the question is that
which concerns section 52, and as we apprehend the
way the issue is raised against us, two separate
matters are put in relation to section 52. The first seems to be that section 52 picks up section 90 and makes it subject to this Constitution, which includes section 122. May I just put that in stages. Section 52 provides that:
The Parliament shall, subject to this
Constitution, have exclusive power -
in relation to certain matters. One is the seat of government, one is Commonwealth places, one is
certain public service departments and one is other
matters declared by this Constitution to be within
the exclusive power. The only matter that seems to fall within placitum (iii) is section 90. So the
argument against us is "Well, section 52 picks up
section 90, confers exclusive power, but does so
subject to this Constitution. When legislation is enacted under section 122 that therefore can
override section 90." We submit that is simply incorrrect, for a number of reasons.
The first is that the words, "subject to this
Constitution" are, we submit, words which are introduced into section 52 for the purpose of admitting the exclusory provisions of the
Constitution such as, for example, section 92; such as, I suppose, prohibitions in section 117 and
section 116 and so on. Those exclusions apply to
section 52. In so far as they are restrictions on
Commonwealth power, section 52 picks them up. And,
indeed, there are two cases which provide examples
of that. I do not suggest that these cases lay down any principle supportive of what I am saying,
they are simply examples of that operation of the words, "subject to this Constitution". They are Pemberton v Commonwealth and Le Leu v Commonwealth,
respectively in 49 CLR 382 and 29 CLR 305. They are both cases involving the exclusion in section 85. That involves some specific limitations of Commonwealth power in relation to
departments which were taken over, and those
specific exclusions were held to apply to the
exclusive power.
But it is quite a different thing to suggest
that the words, "subject to this Constitution" are
intended to limit the exclusivity by reference to
other broad constitutional powers. The argument has to be that there are two types of Commonwealth
| Capital(2) | 15 | 3/3/92 |
power, exclusive and non-exclusive, and that where
one has an intersection between them the words,
"subject to this Constitution" require, in some
sense, the subordination of section 52 to
section 122.
Now, may I just illustrate that. One has, if
this argument is right, two areas: one has the
power to legislate for territories, which is one
circle, and one has an intersecting circle which is
power to impose an excise. Within the area of
intersection one has power to impose what we might
call a territorial excise, to have a law which is
both a law in respect of a territory and a law in
respect of an excise. The argument then says, "Well, section 122 authorizes matters within that
area of intersection, section 52 authorizes matters
within that area of intersection, but section 52,
although it says it is exclusive, makes that
subject to this Constitution" and, therefore, one
prefers the non-exclusive power in section 122 and, therefore, one can excercise it. In our respectful submission, that argument is fallacious. It is
fallacious because there are not two sorts of
power, exclusive and non-exclusive, there is only
one sort of power but there is a separate provision
that certain powers in that exercise is exclusive.
Now, if one looks at it that way one achieves
a completely different result. One still has the intersecting circles but one has a mandatory
provision in section 90 which says that the power
to impose excises is exclusive. That mandatoryprovision must operate, we would respectfully
submit, as much within the area of intersection as
in the rest of the circle, and section 52 when it
says, "subject to this Constitution" is not
intending to subordinate the exclusivity, it is
subordinating the power. In other words, the
words, "subject to this Constitution" qualify the
power, they do not qualify the exclusivity of thepower. If the Constitution has a limitation on• power, that applies in section 52, but where the Constitution confers a power one does not construe that by virtue of these words as overriding the exclusivity. The other aspect is this, that if one assumes, contrary to my submissions, that there is power in section 122 to authorize a self-governing
legislature to impose an excise, and I stress that is contrary to the other arguments I am putting, but if one does find such a power in section 122 then, in my respectful submission, one would not construe it as being exercised by mere general
words, one would have to find, as Justice Dawson put to me earlier, some express provisions making
| Capital(2) | 16 | 3/3/92 |
it clear that, notwithstanding the exclusivity in
section 90, the Commonwealth under the Territories
power was delegating such a power. One would not expect to find it done, as it were, by a side wind
in a general grant of power, but I stress that is a
subsidiary argument to the main one.
DEANE J: But, even if it not be delegation, the powers of
the ACT Assembly are carved out of the powers of
the Parliament.
| MR BENNETT: | Yes. |
| DEANE J: | And what section 90 does is not to make the powers |
of the Parliament exclusive of another body.
"Exclusive" qualifies powers, so it makes the
powers of the Parliament exclusive of powers which
are not powers of the Parliament.
| MR BENNETT: | Yes, but that does not, in my respectful |
submission, answer the problem.
DEANE J: Well, it puts a question beside it.
| MR BENNETT: | It puts a question, Your Honour, but we would |
submit that the effect of the three nineteenth
century decisions and the more recent cases
applying them, is that once one creates a new
self-governing polity, there is a degree of
separation; there is this bringing into existence
of a new entity with its own independent powers and
discretions and the relationship to the old, while
it may remain for certain purposes, does not make
its Acts subordinate legislation of the first. It
is analogous perhaps to the way an Imperial Act
created the Commonwealth of Australia; one would
not suggest that legislation of the AustralianParliament, even in 1901, was in any way delegated
legislation or subordinate to the
Imperial Parliament.
| DEANE J: Yes, but it does raise the question that if |
section 90 says relevant powers of the Parliament
are exclusive, what does that say in relation to
powers carved out of the relevant powers of the
Parliament? On one approach, it says nothing at all.
MR BENNETT: Well, it does, Your Honour, because the power
cannot be transferred to another person. The Commonwealth would be acting contrary to section 90
if, for example, it were to confer the power of the
States. Suppose it were by a simple Act of
Parliament to say the States may impose excises and
assume on its true construction that it was not
empowering him to do it as its delegates; it wassimply transferring the power.
| Capital(2) | 17 | 3/3/92 |
| DEANE J: | I think I follow the way you put it. While I am |
interrupting you, do you rely at all on sections 80
and 81 of the Constitution? It is bringing you
back to what Justice Brennan asked you.
| MR BENNETT: | Yes, it is. Your Honour, subject to all the |
risks of adopting an argument on my feet, I
would - - -
| DEANE J: | I was not suggesting you put an argument; I was |
just asking - - -
| MR BENNETT: | No, but, Your Honour, I would with respect put |
that argument, although it is not in the
submissions, that those sections demonstrate that
part of the purpose of section 90 is to ensure that
the proceeds of the excise pass into the
consolidated revenue fund and that is an additional
reason why this legislation is invalid. It may be
that one could in some way notionally have a direct
payment where notionally the money goes to
consolidated revenue, but is applied directly. But even if that is so, that is not done here. The proceeds here are paid directly to the Australian
Capital Territory's fiscus, and I would adopt that
as an additional reason why this legislation is
invalid.
Your Honours, the other aspect of the second
argument is the one which turns on the language of
section 52(i) which deals with the seat of
government, and what seems to be suggested is that
there can be a passing of power to legislate in
relation to the seat of government to the
Australian Capital Territory Parliament. corresponding passage of power to impose an excise.
One simply treats as parallels placitum (i) and
placitum (iii).
The short answer to that, of course, is that
the Australian Capital Territory (Self-Government) Act is not an Act under section 52(i) at all. It is enacted solely, we would submit, under
section 122. Might I just remind Your Honours.of a
couple of short passages which make that point
clear.
In Spratt v Hermes, 114 CLR 226, there are
passages in a number of the judgments which make it
quite clear that the relevant legislation is
enacted under the Territory's power. That, of
course, concerned previous legislation governing
the Australian Capital Territory, but the doctrine,
we would submit, is quite clear.
Sir Garfield Barwick said at page 241 at the top of
the page:
| Capital(2) | 18 | 3/3/92 |
In particular, I see no relevant consequence
in the fact that the seat of government is to
be found within the Australian Capital
Territory or in the fact that the Parliament
and the Executive Government there 8xercise
powers which are federal in their nature. In my opinion, the power to make laws in respect
to the Australian Capital Territory is derived
from s. 122; in relation to the present
matter I do not think that anything is added
to or subtracted from that power bys. 52(i).
Mr Justice Kitto said the same thing at page 258;
Mr Justice Taylor at page 262 to 263, andJustice Owen at page 282. They all made it quite clear that the relevant power is in section 122.
BRENNAN J: Is there a territorial identity between the
Australian Capital Territory and the seat of
government?
| MR BENNETT: | No, Your Honour. | That is made clear by |
Worthing v Rowell & Muston Pty Ltd, 123 CLR 89.
Your Honours will recall this was one of the two
cases which led to the passing of the Commonwealth
places legislation, and there are a number ofreferences in that case to the distinction between
the two. Sir Garfield Barwick at pages 96 to 97,
starting with the last words on page 96, said:
In my opinion, the seat of government is a
place, required by the Constitution to be
geographically situated in relation both tothe City of Sydney and the territory of the
State of New South Wales as well as to
territories of the Commonwealth. It must not
only be so situate, but must be vested in and
belong to the Commonwealth. The expression "Seat of Government" as found in the
Constitution of the United States ..... clearly refers to a physical area of land.
He refers to some cases there. It seems to me that the word "place" is used
ins. 52 somewhat in contradistinction to a
territory acquired by the Commonwealth to
which s. 122 has relevance. The difference between a place and a territory is perhaps
more than one of degree or extent. A territory of necessity is comprised of an area of land usually of considerable extent but, as well, in general already subject to some
political arrangements. But this distinction
is not necessarily, in my opinion, definitive
of any difference in the extent of therelevant legislative power of the
| Capital(2) | 19 | 3/3/92 |
Commonwealth, a matter into which I find it
unnecessary to go.
Justice Menzies, at the bottom of page 114 at about
point 7, against the words "the United States" in
the left-hand margin where they secondly appear,
said:
In my opinion the Australian Constitution likewise contemplated that Parliament should
determine that a place is to be the seat of
government ands. 52(i) is a grant of power to
make laws with respect to that place. This
latter power is a power separate and distinct
from the power to make laws for a larger
area - the Australian Capital
Territory - under section 122 of the
Constitution. The acknowledged existence of the full power of Parliament to make laws for
the larger area has, it seems, made it
unnecessary to define the limits of the power
conferred bys. 52(i) to make laws for the
seat of government of the Commonwealth.
And Justice Windeyer, at page 124, said the same
thing. So it seems to be assumed that seat of government is some narrower term. It has never
been clearly defined in any case in this Court
exactly what it comprises. No doubt it covers the land on which Parliament stands. It may cover some immediate precincts. It may or may not include this Court. It probably includes the land on which
departments of government stand. It may or may not include some area around them. It almost certainly
would not include Tharwa and Hall. Where one draws
the line one does not know. But certainly, the problem has never arisen because legislation for
this Territory has always been enacted under
section 122, and that has been made clear in
Spratt's case.
So it is not correct to say that the
Australian Capital Territory (Self-Government) Act
is in any sense legislation under section 52(i).
It may well be that an interesting question would
arise as to whether that placitum permits the grant
of self-government alone in the absence of
section 122. It may well be that it does not
because of the exclusive nature of the power.
Indeed, that would be what we would submit would be
the consequence, but it is a consequence of no
particular significance because section 122 is wide
enough to permit the legislation to be made.
In relation to Commonwealth places, we would
submit that the law laid down in Worthing is still
applicable to Commonwealth places in the
| Capital(2) | 20 | 3/3/92 |
territories. Because the provisions of
section 52(i) are exclusive, one can do what was
done in the Commonwealth places legislation and
adopt State laws as part of Commonwealth law, as is
done in the Judiciary Act - and indeed that was
suggested by this Court in Worthing's case and in
Phillips' case, which is the other case which led
to that legislation - but the Commonwealth places
legislation does not refer to territories.
There is a very live question which, subject
to something I will say in a moment, has not been
determined - it certainly has not been determined
in this Court - as to whether a Territory
government can legislate in relation to
Commonwealth places within the Territory. We would submit that the better view is that it cannot,
because the power to legislate with respect to
Commonwealth places is exclusive under section 52.
There is a reference to that in an article in
the Federal Law Review, which I have not given
Your Honours reference to except in the
submissions. It is an article by Mr Rose entitled
The Commonwealth Places (Application of Laws) Act
in volume 4 of the Federal Law Review at page 263 and 268, where Mr Rose refers to the question but does not answer it.
There is also a decision of the Supreme Court
of South Australia in Reg v Holmes, 93 FLR 405,
which I hand up to Your Honours. The only relevance of that case for present purposes is that
the Chief Justice makes it clear that theCommonwealth places legislation is valid for the
reason given in Worthing, where this Court
suggested how the problem of Commonwealth places
could be overcome.
It is a passage at the bottom of page 406. I
will not take Your Honours to it in detail, but it
does show that one may avoid the exclusivity problem in section 52 by Commonwealth legislation.
If the Commonwealth legislation picks up State law,
then one has validly enacted oneself. It is not someone else who is exercising the exclusive power.
That, we submit, is the appropriate way of looking
at it.
I should disclose to Your Honours that there
is - when I say "disclose", it is in my learned
friend Mr Pauling's submissions - there is a
decision of the acting Chief Justice,
Mr Justice Muirhead, in the Northern Territory,
where His Honour reached a conclusion contrary to
the submission I am putting. That is Pryce v King.
King, (1985) 37 NTR 19. It is in 63 ALR.
| Capital(2) | 21 | 3/3/92 |
That involved a person who was charged with a
traffic offence under Northern Territory law within
the precincts of Darwin airport, which was a
Commonwealth place. The argument which I am
putting to the Court was made on her behalf and
made unsuccessfully. The passage which, in my respectful submission, is the ratio and which
contains the error, appears at page 23 where
His Honour said this at line 15:
Whilst the Northern Territory (Self-
Government) Act certainly granted plenary
powers to the Territory government, it did not
alter the status of the Northern Territory as
a Territory qua the Constitution -
that is plainly correct -
ie, this Territory did not assume the status
of a State in the federal system -
We do not dispute that.
The Act and the Northern Territory
Government's subsequent legislative powers
were brought into effect by reason of s 122 of
the Constitution -
That is correct.
Section 52(i) of the Constitution applies to
Commonwealth places within State territory,
not to land within a Territory as such.
We would submit it applies to Commonwealth places,
wherever they are situated.
The Traffic Act was an exercise of the plenary
power granted by the Commonwealth Parliament
to the Territory Government to make laws for
peace, order and good government and had its source in the grant of power by the
Commonwealth. The s 52(i) argument does not, in my opinion, apply.
It is really that last sentence and a half, that
because it had its source in the grant of power by
the Commonwealth, exclusivity is not breached.
There is no further reasoning in support of that
conclusion, and we would respectfully submit that
it is wrong, that once the self-governing polity is
set up, the exclusivity does operate. That is a
consequence of the submissions which we make.
For those reasons, Your Honours, it is our
respectful submission that the question which has
been referred to the Court should be answered
| Capital(2) | 22 | 3/3/92 |
favourably to the plaintiffs. The question appears - the matter referred in an order made by
Your Honour the Chief Justice in which the following question is referred. It is an order of
18 December:
Does section 90 of the Commonwealth
Constitution operate so as to preclude the Legislative Assembly of the Territory from exercising the power to impose duties of
excise -
and we submit that question should be answered in
the affirmative. May it please the Court.
MASON CJ: Yes, Mr Jackson.
| MR JACKSON: | Your Honours have our written submission |
already, I think, and may we say the first approach
to the question, in our submission, is to look at
the language of the Constitution itself. What wewould submit in that regard is that it does not
suggest that the exclusivity which is contemplated
by section 90 means to the exclusion of anyone
other than the States. And if one accepts that
position for the moment, what emerges from that, ofcourse, is that in section 90, as in section 122,
as in section 51, as in section 52, and in a number
of places in the Constitution, one simply sees the
legislative power of the Commonwealth referred to
as being the power of the Parliament.
Your Honours, if that is the case, there would
seem no reason, in our submission, why the general
principle as to the power of Parliament, which is
evidenced by cases such as Powell v Apollo Candle
Company and also by Cobb & Co v Kropp, namely that
the Parliament may utilize the organs which it
chooses to enact the legislation provided that it
retains itself its power over the legislation why
principles of that nature are not applicable. And, Your Honours, if one does accept the primary proposition that section 90 does not exclude anyone other than the States then the position, in our
submission, is that unless one were to overrule
Nott v Barkley, then the result would be that the
decision in that case would be equally applicable
to the present case.
Your Honours, could I start - if, in dealing
with the question, one looks at the Constitution
itself, the exclusivity contemplated by section 90
means to the exclusion of anyone other than theStates.
If one goes to section 51, section 51 seems
clearly to be conferring legislative power on the
| Capital(2) | 23 | 3/3/92 |
Commonwealth and the legislative power that it is conferring there is one which when one comes to
taxation is expressed to be a power which has a
relationship - if I can put it that way neutrally,
Your Honours - to the States. It says, "taxation",
but so as not to discriminate between States or
parts of States. It does not speak of anything
else.
If one goes to section 52, section 52 also
uses the expression "the Parliament shall have
power to make laws", using the word "exclusive", of
course. When Your Honours see that, the term
"exclusive of the powers of the States" in
section 52 - the term "exclusive" in section 52 has
been treated as being exclusive of the powers of
the States. May I give Your Honours a reference in that regard. What Your Honours will see in Worthing v Rowell & Muston Pty Limited,
(1970) 123 CLR 89, and at page 109 at the bottom of
the page, Justice Kitto said - it is the last
paragraph on that page:
For the carrying out of this scheme two
provisions needed to be made and they are
found ins 51 ands 52 respectively, the one
setting out the matters upon which the
Parliament of the Commonwealth has
non-exclusive power to make laws, theParliaments of the States retaining their
pre-existing powers but commonwealth laws on
those matters prevailing by force of s 109
over inconsistent State laws, and the other
drawing together the matters upon which -
and His Honour expresses it in this way -
power is vested in the Parliament of the
Commonwealth and denied to the Parliaments of
the States.
Now, His Honour's observation was one in the course of a judgment which, in the result, was
dissenting, but a similar observation can be found
in Justice Menzies' reasons for judgment at
page 113, and His Honour formed one of the
majority. Your Honours will see the paragraph commencing in the middle of page 113 where
His Honour said:
Section 52 is a provision of the
Constitution which has not been the subject of
a great deal of judicial exposition.Primarily it is, of course, a grant of
legislative power to the Parliament. It has,
however, a secondary aspect; to the extent to
which it grants legislative power to the
| Capital(2) | 24 | 3/3/92 |
Parliament, it denies legislative power to the
Parliaments of the States.
Now, Your Honours, if one moves from section 52 to
section 89, what one sees in sections 89 and 90 is
that section 89 itself is a position dealing with
the events to occur until the imposition of uniform
duties of customs and Your Honours will see that
the purpose of section 89 is to effect a
distribution, in effect, of revenues collected by
the Commonwealth and a distribution as between the
Commonwealth on the one hand and the States on the
other.
Your Honours, if one goes then to section 90, what one sees is that section 90 contains not one
but two paragraphs. The first paragraph is the one to which reference has already been made, but when one goes to the second paragraph what one will see
is that it speaks of the effect of the exclusivity
contemplated by the first paragraph upon the laws
of the States which have, up to then, been in
operation. And, Your Honours, that in oursubmission supports the general proposition we are
advancing, that the exclusivity contemplated by
section 90 means exclusive of the States, or
exclusive of the powers of the States.
Your Honours, if one goes then to sections 93,
94 and 95, what Your Honours will see is that those
provisions deal with regulation of the situation of
the States and a State in the period after theimposition of uniform duties of customs.
Your Honours will see that the expression "the
imposition of uniform duties of customs" is the expression which is used as the trigger for the
exclusivity provision of section 90. That is to be
found in the opening words of it. Those provisions
together give an indication, in our submission,
that what was said by the two members of the Court
in Worthing's case is an accurate description of
the effect of the exclusivity. Your Honours, the whole tenor of those
provisions, we would submit, is that they are
discussing a relationship between the Commonwealthand the States and that impression, Your Honours, is conveyed also, we would submit, by section 107 which again uses the expression "exclusively" and
it uses it in a context where there is an exclusive vesting in the Parliament of the Commonwealth and a
withdrawal from the Parliament of a State.
Now, Your Honours, not all things withdrawn
from the Parliaments of the States were vested exclusively in the Commonwealth because of the prohibitions in the Constitution but, Your Honours,
| Capital(2) | 25 | 3/3/92 |
section 107 again supports the implication that
section 90 is speaking of an exclusivity from the
legislative powers of the States and, Your Honours,
so too - although one must take it in its context -
is section 111, when it speaks of the Parliament of
a State surrendering any part of the State to the
Commonwealth and then, in due course, the part of the State becoming subject to the exclusive
jurisdiction of the Commonwealth.
Now, Your Honours, the submission we have been
making in relation to the Constitution is supported
by the course of decisions, in our submission, in
relation to section 90 itself and, indeed, the
course of decision in relation to section 90, in
our submission, is really quite opposed to the
contention on behalf of the plaintiffs.
Your Honours, if I could go first and briefly
to the case to which my learned friend referred,
Nott Bros & Co Ltd v Barkley, 36 CLR 21. The case is of importance, Your Honours, because, in dealing with section 90, what is clear from the decision is
that the Court took the view that the exclusivity
referred to in section 90 means only that the
States are excluded from the power. Your Honours,
could I go first to page 29, and Your Honours will
see at page 29 in the third line, the question
numbered (3) was described by Justice Isaacs as
being:
Sec. 90 of the Constitution -
and Your Honours will see - this is the passage to
which my learned friend referred but I wish to
refer to it again for a number of reasons - the
first is that in the first-half of the passage, in
effect, on page 29, His Honour rejects the
proposition that if one puts section 90 to the
side, that the operation of the power to make laws
with respect to taxation is a power which cannot be dealt with in the way contemplated by cases such as Apollo Candle. Now, Your Honours, one sees that in the
passage which commences in the third line on the
page and then goes to about half-way down the page
and, Your Honours, that clearly contemplates, in
our submission, that the power is one which need
not be exercised by the Parliament itself.
Your Honours, if I could pause for a moment in
dealing with that case to go to the
(Self-Government) Act, what one sees in relation to
the (Self-Government) Act is that, if one goes, for
example, to section 35 - Your Honours, perhaps I
should say one thing: if one goes first to
| Capital(2) | 26 | 3/3/92 |
section 22 Your Honours will see the power there
expressed, the legislative power in section 22(1).
Your Honours, certain matters are excluded and they
are listed in section 23(1). One also sees, Your Honours, that if one goes to section 35 that
there is a power of disallowance by the
Governor-General in section 35(2). Your Honours, I
should say that there is an inconsistency provision
in section 28.
Your Honours, if I could, having referred to
those provisions, just say that if one goes back to
the observation made by Justice Isaacs in
Nott Bros, at page 29, about a third of the way
down the page, where His Honour observed:
Any unnecessary or improper exercise of power
entrusted to a Minister can be checked or
reversed -
Your Honours, one might say look, in the present
case, at the provisions of the Australian Capital
Territory (Self-Government) Act, and look also to
the fact, which is something which underlies but is
not really mentioned in our learned friend's
submission, that whilst it may be something which
it would be politically undesirable for the
Commonwealth to do, there is no question about the
Commonwealth's power, pursuant to section 122,
itself to amend or change the terms of the
(Self-Government) Act or to provide for somedifferent method of self-government for the
Territory. So that, Your Honours, the power remains a legislative power of the Commonwealth. Your Honours, if I could go then back to the
same page of Nott Bros. and to the second part of
it, what Your Honours will see is at three-quartersof the way down the page, His Honour says:
The word "exclusive" means simply
exclusive of State Parliaments, "exclusive" as opposed to concurrent, "exclusive" in the
sense in which that word is found in section
52 and 107. It was not intended to limit the
ambit of Commonwealth parliamentary power but
to make that power exclusive on the subject
matter.
His Honour goes on to say:
It has no function of hampering the Parliament
in utilizing the necessary offices -
et cetera. Now, Your Honours, if that is the case and if "exclusive" means that, why, we would ask
| Capital(2) | 27 | 3/3/92 |
hypothetically, does not the principle from
Apollo Candle then come to operate?
Now, Your Honours, one should note about
Nott Bros. members of the Court - there were five members of
that the observations made by
the Court - but it seems plain enough, we would
submit, that when the other two members of the
Court who delivered reasons for judgment, the
Chief Justice and Justice Higgins, spoke ofquestion 3 - and this is at page 24, Your Honours -
they described question 3, about a quarter of the
way down the page, as being:
that section 8 of the Act was invalid as
amounting to a delegation of legislative power
to an administrative officer;
and then they say about that, towards the bottom of
the page:
As to (3) - this point is concluded against
the plaintiff by the decision in Powell v
Apollo Candle Co.
Your Honours, involved in that, we would submit
with respect, must have been a rejection, albeit
without feeling the need to say a word about it, of
the proposition concerning section 90 to thecontrary.
Now, Your Honours, turning then from that
case, one of the observations which has been
frequently adopted in relation to the function to
be performed by section 90 is that of
Sir Owen Dixon in Parton v Milk Board (Viet.),
(1949) 80 CLR 229 at page 260 and observations to a
similar effect have been adopted. Could I take
Your Honours to that passage. It appears at
page 260 and it is about a quarter of the way down
the page. May I preface what I am about to say by saying this. The observations contains two elements: one concerning the ambit of the notion of
excise in the context of the purpose of section 90
as broadly speaking a financial control. On that
issue views might differ as to the correctness of the observation. Your Honours, the second aspect of it, however, is where His Honour discusses the purpose of section 90 in terms of exclusivity, and
what His Honour says is this:
In making the power of the Parliament of the
Commonwealth to impose duties of customs and
of excise exclusive it may be assumed that it
was intended to give the Parliament a real
control of the taxation of commodities -
| Capital(2) | 28 | 3/3/92 |
and then he goes on to say to the part for present
purposes relevant:
and to ensure that the execution of whatever
policy it adopted should not be hampered or
defeated by State action.
Your Honours, that passage has been adopted, as I said, on a number of occasions. May I take
Your Honours very briefly to an observation of
Chief Justice Barwick in that regard in
Western Australia v Chamberlain Industries Pty Ltd,
(1970) 121 CLR 1, at page 17. Your Honours will
see that His Honour adopted that passage at page 17
commencing about three-quarters of the way down the
page, where His Honour said:
No doubt Sir Owen Dixon felt similarly when he
was able in Parton v Milk Board (Viet) to
conclude -
et cetera, and then His Honour set out the passage.
| TOOHEY J: | The difficulty with some of these passages that |
you are taking us to, Mr Jackson, is that they have
to be taken in context, and they are clearly
looking at a Commonwealth-State relationship. But
do any of them go so far as to lay down
exhaustively the operation of section 90 in a way
that forecloses the matter so far as the present
argument is concerned?
| MR JACKSON: | Your Honour, I suppose the answer is no, in the |
sense that the issue has not been before the Court
before, the precise issue. But may I say, with
respect, that there is really no suggestion
anywhere in the cases, we would submit, to support
the proposition that exclusivity means other than
exclusive of the operation of State power, and allthe indications there are are to the effect of what
I am now submitting.
Your Honours, there are various dicta, of
course, of the kind to which I am now referring,
and why I am seeking to refer to them is to say that if one looks at what dicta there are - and
this is not the only one, of course, it is
expressed in different ways in different cases -
what I am seeking to say is that if one looks at
all the dicta they all support the proposition that
when section 90 speaks of exclusive it means
exclusive of the powers of States, and nothing
more. That is put in different ways in different
cases, but that is the proposition I am seeking to
get to.
| Capital(2) | 29 | 3/3/92 |
I do not want to go through the case ad nauseam, but may I take Your Honours very briefly
to the passages that do support that.
Your Honours, I wanted to refer to that case simply
because it is identified but not set out in another
observation of Chief Justice Barwick. One sees the
proposition referred to in a number of places in
Dickenson's Arcade Pty Ltd v Tasmania, (1974)
130 CLR 177. At page 185, in the second paragraph
on the page, Your Honours will see that in
Chief Justice Barwick's observations in that
paragraph, from the start of it to about a third of
the way down the page he says he adopts what he
said in Western Australia v Chamberlain Industries,which is the case to which I just referred, the
passage to which I just referred.
Then, Your Honours, at page 199 one sees the issue referred to by Justice McTiernan, commencing
a little above half-way down the page, His Honour
says:
Dixon J. (as he then was) said in the Milk
case -
and then he sets out the long passage.
At page 218, at the bottom of the page,
Justice Gibbs, in a passage which goes through to
about a third of the way down the next page, refers
to the observations of Mr Justice Dixon in Parton v
Milk Board and, at page 222, a little past half-way
down the page, says:
The Constitution is a federal constitution,
ands 90 is intended to effect a distribution
of the power to impose taxation between the
Commonwealth and the States.
| BRENNAN J: | But if you go back to what Chief Justice Barwick |
said at page 185, and there is reference in the
sentence before the one to which you drew attention, to the unity of the national economy, it
rather makes the point that Justice Toohey was
making to you a moment ago, does it not?
MR JACKSON: Well, Your Honour, the point about it is this,
that it is clear that there is an exclusive control
of customs and excise and one of the purposes of
doing it is to influence the economy of Australia,
that is one of the purposes of having the power.
Now, if one says that and if one says, at the same
time, that the power is one to be exercised by the
Commonwealth then, Your Honour, it is a question of
the manner in which the power is to be exercised.
So far as the States are concerned, the States have
no power. So far as the Territories are concerned,
| Capital(2) | 30 | 3/3/92 |
the Commonwealth has all the power. If something
happens which, in the Commonwealth's view, would
not influence the economy of Australia in a waywith which the Commonwealth is happy, then it has
the power under section 122 to - I am sorry, I am not expressing myself very clearly in relation to
the Territories. The Parliament can do, in relation to the Territories, in effect, whatever it
chooses to achieve the aim of having the economy of
Australia influenced.
Now, Your Honours, it may well be that in
respect of a territory the Commonwealth takes the
view that there should or should not be incentives
one way or another imposed in relation to the
carrying on of particular activities in a
territory. That is something that it can do by the
utilization one way or another of the Territory's
power. One of the stages to self-government, in cases where it is possible for a territory to have
self-government, it may say, "Well, we will allow
the Territory Parliament to make laws which deal
with the topic but, of course, the laws are alwaysthe laws which are subject to the power of the
Parliament under section 122".
| BRENNAN J: | So the Northern Territory Government, for |
example, could make Darwin a free trade port?
MR JACKSON: Yes, Your Honour.
| BRENNAN J: | And goods which entered there would, under the protection of the relevant Commonwealth |
MR JACKSON: Well, they could have, Your Honour, yes.
BRENNAN J: Without constitutional limitation at all events?
| MR JACKSON: | That is so, Your Honour. |
| BRENNAN J: Administratively it could be controlled, but not |
constitutionally?
| MR JACKSON: | Indeed, Your Honour, yes. And, Your Honour, |
there is no particular difficulty with the
proposition, we would submit. There may well be -
one has to look at it from the point of view of not
just encouraging but also inhibiting, and it may
well be that, in appropriate cases, for example a
power to impose excise could be used to inhibit the
carrying on of particular activities within a
territory. Your Honour, one does not always, in the government of a territory, have to exercise the
powers of government against things regarded as
being undesirable in the heaviest way. It is
| Capital(2) | 31 | 3/3/92 |
possible sometimes to discourage in other ways and,
Your Honour, the point I am simply seeking to make
about that is that it is within power to do it and
it may be quite appropriate to do it in relation to
a territory.
In the Australian Capital Territory it might
well be desirable not to encourage the carrying on
of particular rural activities, for example; it
might not be thought to be desirable to permit the
carrying on of forestry activities which would take
a long time in areas that might become needed for
housing, for example; and there are various ways of
doing that. And when one sees the expression
"uniform duties of customs" used in the
Constitution it is speaking in the context of the
States.
Your Honours, I was referring I think to
page 222 in that case to the dictum of
Justice Gibbs, where he said that section 90 was
intended to effect the distribution of the power to
impose taxation between the Commonwealth and the
States. Then, Your Honours, at page 230,
Justice Stephen, commencing a little above half-way
down the page, said:
The degree of certainty which has been
conferred upon the phrase, at least in
relation to that point on the journey of goods
from producer to consumer beyond which a tax
is no longer viewed as an excise, has been
hard won and should not lightly be disturbed
in this important aspect of constitutional law
concerned with the delineation of the boundary
between State and federal legislativecompetence in the taxation of the citizen.
That is another observation to the same effect.
Then at page 238, Your Honour the Chief Justice, in
the passage commencing about a third of the way down the page said:
In place of the doctrine of implied
prohibitions -
and so on, and Your Honour referred to there
being -
an appreciation of the constitutional
significance of the denial to the States of
legislative power with respect to duties of
customs and excise duties -
and then proceeded to quote the passage from
Parton v Milk Board.
| Capital(2) | 32 | 3/3/92 |
Your Honours, one sees observations to the
same effect in Hematite Petroleum Pty Ltd v
Victoria, (1983) 151 CLR 599.
| MASON CJ: | Mr Jackson, it seems unnecessary to take us to a |
repetition really of the same idea in a number of
judgments. Perhaps you could hand in a list of the
authorities where we could see the relevant pages.
| MR JACKSON: | Certainly, Your Honour. | I was going to give |
Your Honours the pages of these except for one, and
that was a particular observation of
Justice Murphy, and I wondered if I might do that
perhaps in relation to this case.
MASON CJ: Yes.
| MR JACKSON: | Your Honours, the other pages are pages 615 to |
618 in the judgment of Chief Justice Gibbs,
Your Honour the present Chief Justice at page 631,
and then at page 637, the last paragraph on the
page, Justice Murphy said, in relation to
section 90:
Section 90 provides that, on the
imposition of uniform duties of customs, the
power of the parliament to impose duties of
customs and excise, and to grant bounties on
the production or export of goods, shall
become exclusive (that is, of the power of the
States).
A similar observation was made by His Honour in
Gosford Meats Pty Ltd v New South Wales,
(1985) 155 CLR 368, at page 387.
| McHUGH J: | Mr Jackson, what would be the policy reason for |
differentiating between excises imposed by
Territories and those imposed by States?
| MR JACKSON: | Your Honour, the difference, really, is this, |
that so far as the States are concerned there are,
I suppose, really, two reasons for removing the
power to impose duties of excise from the States.
Perhaps I should say there is really one reason,
one suspects, for removing the power from the
States and that is that in the end, whilst the
Commonwealth could at any event under
section 5l(ii) impose duties of excise, to remove
the power from the States avoids any possibility of
there being conflict.
McHUGH J: Except, in Hematite, Mr Justice Mason expressed
the view that under section 5l(ii) the Commonwealth
could legislate so as to prevent the States from
imposing excise duties. Then I think
| Capital(2) | 33 | 3/3/92 |
Mr Justice Murphy expressed the same view in some
other case.
| MR JACKSON: | Your Honour, that is true, that is a |
combination of Sl(ii) and 109, but His Honour
the Chief Justice also said something rather
broader about it. The passage is at the bottom of
page 631 and the top of page 632 and, after
referring to - Your Honour said,"The possibility",
the last five lines on page 631 and then, at the
top of page 632:In any case, to make the power exclusive is to free its exercise from some of the political
controversies and constraints which would
inevitably surround any attempt by the
Commonwealth Parliament to pass inconsistent
legislation designed solely to override a
State law.
So, Your Honours, it serves not just a legal but
also a constitutionally political purpose, if I can
put it that way. So it takes away from the States the power to do it. So far as the States are concerned, the States
have no relevant power in relation to the
territories. That has the consequence that, in any
event, the only power in relation to the
territories is that of the Commonwealth. It is
then for the Commonwealth to choose whether there
shall be or shall be permitted to be any taxes of a particular kind, whether they be excises or not, in or in relation to the Territory.
So, Your Honour, the purpose, really, if one
is looking at it from a constitutional position, is
to ensure that only the Commonwealth may levy or
permit the levy of such taxes. Without seeking to
go into economic areas, that means that one polity,
the central polity, is the only body which has
course, choosing the rates at which they will be power to impose such taxes and that involves, of imposed and the particular circumstances in which they will be imposed. Your Honours, whilst no doubt one could argue, as it were, until the cows come home about the
desirability of uniformity on the one hand and disparate approaches on the other, this is an area where it is thought constitutionally desirable for there to be one. Your Honours, the other references
Your Honours will see in our written submissions,
except, I think, for a reference to Dennis Hotels v
Victoria, in the Privy Council, 104 CLR 529, at the
| Capital(2) | 34 | 3/3/92 |
bottom of page 631 and the top of page 632. The passage is, perhaps, a little tortuous when one
comes to understand it but the clear effect of it
is that it involves an acceptance of the
proposition that section 90 is speaking of
exclusivity from the powers of the States.
Now, Your Honours, the argument on behalf of the plaintiffs seeks to rely on the proposition
which has been advanced that a new, albeit
subordinate legislature with power to make laws for
its territories, does not act as a delegate of the
legislature which is establishing it. But,
Your Honours, we would submit that to use that
proposition in that way really seeks to turn it on
its head because the subordinate legislative power,
at least under our Constitution, derives its powers
because they are powers which the legislature,
which is establishing it, may validly either itself
exercise or permit a body established by it to
exercise.
Now, Your Honours have been referred already
to a power in Apollo Candle Co, 10 AC 282, and I
would also refer Your Honours to page 291 of that
in relation to the ability of a legislature to
confer on bodies established by it some of its own
power but, Your Honours, a more recent summary of
the position may be seen in Cobb & Co Ltd v Kropp,
(1967) 1 AC 141 at 157, and the Judicial Committee
there, in the passage commencing between letters C
and D, said that:
The legislature were entitled to use any
agent or any subordinate agency or any
machinery that they considered appropriate for
carrying out the objects and purposes that
they had in mind and which they designated.
They were entitled to use the Commissioner for
Transport as their instrument to fix and
recover the licence and permit fees. They were not abrogating their power to levy taxes and were not transferring that power to the
commissioner.
And then it goes on. And, Your Honours, if one looks at the qualification:
What they created by the passing of the
Transport Acts could not reasonably be
described as a new legislative power or
separate legislative body armed with general
legislative authority -
Your Honours, if one looks at the terms of the
enactment in the present case, the
(Self-Government) Act, any self-government Act
| Capital(2) | 35 | 3/3/92 |
passed in relation to a territory in Australia is
one which itself is subject to the exercise of the
powers conferred by section 122 until one gets to
the point where a territory has become a State.
Now, Your Honours, the remainder of what is
said there is directed to a particular submission
concerning the Queensland Constitution.
| BRENNAN J: | What do you mean by that? | Do you mean by being |
subject to section 122 the powers that are
conferred are capable of recall?
| MR JACKSON: | Yes, Your Honour. |
BRENNAN J: Is there any difference there from Apollo Candle
and that line of cases?
| MR JACKSON: | Your Honour, there is in the sense that if one |
is looking at the situation in Apollo Candle and
cases of that kind, what one had was a legislature,
namely, in the end the United Kingdom legislature,
not itself subject to any constitutional restraint
or particular written constitutional conferral of
powers, in relation to that, Your Honour, it then
establishes legislatures of what became
self-governing colonies. Now, Your Honour, in speaking about the question, whether it was or was
not a delegate, it was directed to a particular
question of the extent to which the United Kingdom
Parliament could delegate, in effect, its own powers.
BRENNAN J: That is not a point of distinction of
section 122, is it?
MR JACKSON: Well, Your Honour, it is in a sense, because
section 122 is a provision which remains in
operation and remains in operation in relation to
any Territory until it becomes a State and,
Your Honour, any power that is given to a
Territory, whether the power be given to a Territory Governor or Administrator - having no
council or legislature - or given to any of the various stages on the way perhaps to Statehood,
whatever sub-legislative body there might be, is a
power which in the end is subject to section 122
and that is a power of which the Parliament cannot
deprive itself. Your Honour, that is perhaps the
point I am seeking to make.
BRENNAN J: But that was the situation with the
United Kingdom Parliament.
MR JACKSON: Well, Your Honour, that issue did not really
fall to be decided and it may not have resulted in
| Capital(2) | 36 | 3/3/92 |
the answer that Your Honour puts to me, with
respect.
| BRENNAN J: | I can see the argument of distinction if there |
was a comparison, for example, with the Australia
Act, where the Parliament which was enacting the
law deprived itself of the power that it hitherto
had to recall laws of delegation or creation of
subordinate legislature. I just do not see the
difference at the moment with section 122 in thecontext of this legislation.
MR JACKSON: Perhaps I cannot put it beyond what I have said
but, Your Honour, if one is looking at those cases,
they really are not concerned with a question at
all of the nature presently in question here
because, Your Honour, if one assumes that section
90 does apply only to exclude the States and leavesis, one would think, no more than an exercise of power equivalent to that of the United Kingdom
the power with the Commonwealth, the exercise by
the Commonwealth Parliament of the power to createa body such as the ACT Legislature and to enact the
Parliament in enacting the Acts pursuant to which
the various colonies obtained self-government.
And, Your Honours, their enactments would not cease
to be valid, because our learned friend's argument
has to make section 90 do a lot of work and it
really means that section 90 means that only the
Parliament and the Parliament as such, can exercise
the power directly to impose duties of excise. Now
Your Honours, if one says that it does not mean
that, it is then necessary for them to go to some
kind of half-way house and that is where they seek
to call in aid the notion of the new Parliament not
being a delegate. But the purpose of the whole
issue of delegation was directed to something else
in those cases.
Your Honours, we would submit that it really
has never been doubted - and Nott Bros is an
ability for the Parliament to delegate or to use indication of it - but the general notion of the other bodies to exercise its legislative power,
subject to its own powers, that those notions are
applicable to the Commonwealth and, Your Honours,
section 90 uses the expression "the Parliament", as
do sections like section 51 and 52, and the notionthat the term "the Parliament", when used in section 90 or in section 122, would mean that the Parliament could not confer legislative power on subordinate legislative bodies seems curious, we would submit, when that notion has not been applied to other provisions which confer legislative power on the Parliament.
| Capital(2) | 37 | 3/3/92 |
Your Honours, the next thing we would say is
that there is no reason why the power in
section 122 should be treated as being in some way
limited by the presence of section 90, particularly
when the Constitution itself contemplates in
section 121 that new States may be admitted and
they are likely to have been Territories before
admission.
| McHUGH J: | Mr Bennett's argument does not seem very |
attractive when you think of Territories placed
under Australia's control, perhaps external
Territories, mandated Territories. If you gave
them some form of self-government, it would mean
that the legislatures of those external Territories
could not impose customs duties. It would all have
to be done from Australia.
| MR JACKSON: | Your Honour, if one accepts the proposition |
that there may be Territories of various kinds, as
indeed there have been, some external, some
internal, in the case of the Territories,
Territories of both kinds, but let us say
particularly those which either have become States
or are to become States or Territories which, in
the end, become self-governing in their own right,
nations in their own right, then what one would
expect there to be is a kind of development ofstages of government; first of all, perhaps some
kind of government by decree by someone appointed
by the Commonwealth, then some form of
representative government and then some form of
responsible government.
Your Honour the Chief Justice, in Berwick Ltd
v Gray, (1976) 133 CLR 603, at page 607, referred
specifically to the ambit of the power of
section 122 in that regard. The relevant passage is the last paragraph on page 607, where
Your Honour dealt with the ambit of the power in relation to the various forms of government,
including power: to enable Parliament to endow a Territory with separate political, representative and
administrative institutions, having control ofits own fiscus. Your Honour had in the previous paragraph referred to the fact that:
There is in the Constitution no counterpart provision to s 81 which requires moneys raised
under a law made by the Parliament pursuant to
s 122 to be paid into a Territory revenue
account rather than into Commonwealth
consolidated revenue.
| Capital(2) | 38 | 3/3/92 |
Then Your Honour's reasons for judgment in the case
were agreed in by the other members of the Court,
with separate reasons for judgment being delivered
by Justice Jacobs at page 611.
Your Honours, could I just say that in
relation to the Territories which existed at the
time of Federation, they are referred to,
Your Honours, at page 376 of Quick and Garran.
Your Honours will see that the Territories were
Norfolk Island, where the inhabitants were governed
by a resident magistrate and an elective council of
12 members, subject to the instructions of the
Governor of New South Wales; Lord Howe Island, administered by New South Wales; Fiji, a governor assisted by an executive and a legislative council, and New Guinea, an administrator assisted by an
executive council. Of course, at the top of the entry: Apart from New Zealand and the northern
Territory of South Australia, new States are
hardly likely to be formed except by the
sub-division of existing States.
So the possibility of there being new States was
contemplated at that time, meaning by that that the
possibility of there being ultimately some
self-governing new States being formed from a
Territory was contemplated.
The ambit of the section 122 power and its
width was also referred to in a short passage in
Northern Land Council v The Commonwealth, (1986)
161 CLR 1 at page 6. At the end of the. first
paragraph on that page, about half-way down, the
Court said:Such a law is clearly supported by the power to make laws for the government of
territories ..... for that is a plenary power
"unlimited and unqualified in point of subject matter".
Your Honours, somewhat similar questions have
been considered in the United States in three
decisions, and those decisions do not support the
plaintiffs' position in this case. I wonder if I
might take Your Honours to those very briefly. The first is the decision of the Supreme Court of that
nation in Binns v United States, (1904) 194 US 486.
One of the issues in that case was the validity of
a law of the Congress of the United States, the law
applying, however, only to the then Territory of
Alaska, and the issue which was raised was whether
the law was valid in the light of the requirement
of Article 1, section 8, that all duties, imposts
| Capital(2) | 39 | 3/3/92 |
and excises shall be uniform throughout the United
States.
Your Honours will see at the bottom of
page 487, in the last paragraph, the constitutional
provisions there set out, and then the opinion ofthe court commences at page 490, and the relevant
part is at page 491, about point 4. It is a
passage that commences at the paragraph "We shallassume" and goes through to the next page, about
point 9 on page 492. Your Honours will see, at page 491, in the paragraph commencing half-way down
is a about the fifth line, the method provided for
the page, there reference to the various forms
of government of the Territories permitted by theAlaska is set out. If one goes to point 6 on
page 492:
In the exercise of this power Congress, like
any state legislature unrestricted by
constitutional provisions, may at its
discretion wholly exempt certain classes of
property from taxation, or may tax them at a
lower rate than other property.
Their Honours go on to say:
In view of this decision it would not be open to doubt that, if the act had provided
for a local treasurer to whom these local
taxes should be paid and directed that the
proceeds be used solely in payment of the
necessary expenses of the government of
Alaska, its constitutionality would be clear -
and Their Honours really assume, in that case, that
the act would have been valid, the only then
question being whether requirement for payment tothe United States revenue made it invalid.
Your Honours, the second decision is also of the Supreme Court, and it is Inter-Island Steam
Navigation Co v Territory of Hawaii, (1938) 305 US
306. The relevant part of it appears in the opinion of the court at page 313, and Your Honours
will see the second new paragraph on that page
which Scommences with the word italicized, "Second"
and the issue which arose under that argument was
whether the legislation of the Territory, which was
legislation which it was assumed would conflict
with the negative aspect of the commerce clause,
that is a State could not legislate in those terms,
could the Territory do so, and what Their Honours
said, in the fourth-last line on page 313:
| Capital(2) | 40 | 3/3/92 |
Therefore, assuming - but not deciding - that
petitioner is engaged in interstate and
foreign commerce, Congress has exercised its
power in the present case by permitting the
Territory to act upon this commerce by the
imposition of the contested taxes.
And then, in the next paragraph:
Congress has the power to subject
petitioner to this tax by virtue of its
authority over the Territory, in addition to
its power under the Commerce Clause.
"Congress may not only abrogate laws of the
territorial legislatures, but it may itself
legislate directly for the local government.
And they go on to adopt the passage that:
it has full and complete legislative
authority -
and was not bound by the requirements of the
Commerce Clause and could, in effect, have allowed
the Territory to do so.
The third decision, Your Honours, is one of the United States Court of Appeal's, Sakamoto v
Duty Free Shoppers Ltd, (1985) 764 F 2d 1285.
Your Honours, this is a case in which a petition
for certiorari was denied by the Supreme Court.
That appears in 475 US 1081. Your Honours, the
issue in that case was again whether laws made by
the territory legislature which were laws which, if
made by a State, would have conflicted with the
negative aspects of the commerce clause could be
made by it, and it was held that they could.
Your Honours, the discussion commences on
page 1286, the paragraph numbered (2) in the right
column. It goes through to the end of
paragraph (3) on page 1288 in the left column, and
Their Honours say, for example, at the bottom of page 1287:
This court has never directly addressed the
applicability of the commerce clause's
negative implications to unincorporated
territories like Guam -
et cetera, and the conclusion at which they arrive
appears in the last six lines at page 1288
immediately above paragraph numbered (4).
Now, Your Honours, in the course of the
discussion there is a discussion without there being a final passing on it of some difference
drawn between territories on the way to Statehood
| Capital(2) | 41 | 3/3/92 |
and those that were not, but Your Honours, whatever
be the applicability of that doctrine if it exists,
it could not apply to the Australian Capital
Territory.
Your Honours, we would submit that it is very
difficult to see any purpose being served by the
suggested limitation on Commonwealth power urged by
our learned friends. We have dealt with that question in our written submissions and,
Your Honours, we would submit the question should
be answered in the negative.
| MASON CJ: | Mr Jackson, having regard to the reliance placed |
by Mr Bennett on sections 81, 86, 87, it would seem
desirable to amend the question which I referred to
the Full Court, and if the reference to section 90
were deleted and there were substituted a reference
to Chapter IV, that would seem to cover the
question. In other words, it would commence, "Does
Chapter IV of the Commonwealth Constitution".
| MR JACKSON: | Yes. | Your Honour, could I just say in relation |
to that that no separate argument seems to have
been addressed by our learned friend based on, for
example, section 81, nor upon section 86 in the
sense of saying that the particular Act relied on in some way is a contravention of what is said by
those provisions. Your Honour, what seems to be
said, as we would understand the argument that has
been put, is that if one looks at those provisions
they provide some indication to the effect that the
term "exclusive" in section 90 is not referringjust to exclusive of the powers of the States.
Your Honours, if an argument is being
mounted - and perhaps I have misunderstood what is
being put by my learned friend - that in some way
section 81 or section 86 has that effect, then we
would, I think, like to have the opportunity to put
some submissions in writing in relation to that
because it is a rather larger and different
question.
MASON CJ: Well, I am not sure that your narrow view of the
argument presented by Mr Bennett is correct, so we
can get him at this stage to indicate precisely
what his submission is, and then you can determine
what your attitude is. Yes, Mr Bennett.
| MR BENNETT: | Your Honour, the submission is that the one |
aspect - it is in addition to the other
submissions, and it is that one aspect of what is
exclusively conferred in section 90 is that the
power to impose a duty of excise is limited to an
excise which will go into consolidated revenue. In
other words, that section 90 is tied, in effect, to
| Capital(2) | 42 | 3/3/92 |
the other provisions of Chapter IV dealing with
consolidated revenue, with the result that the
imposition of an excise by any body which is paidother than into consolidated revenue and to some
other body is something which is excluded by
section 90 by virtue of the other provisions. That
is the way we put it, Your Honour.
| BRENNAN J: | The implication of that is that the power to |
impose a duty of excise not of that character does
not reside in the Federal Parliament under
section 122.
| MR BENNETT: | The power to impose a duty of excise not of |
that character is effectively excluded by section
81 because - it is a combination of section 81 and
section 90. Section 90 says that only the
Commonwealth can impose an excise; section 81 says
that all revenues raised by the Commonwealth go
into consolidated revenue. So an excise which does
not go into consolidated revenue is simply excluded
by the combination of the provisions. If the Court
pleases.
| MASON CJ: | So you would seek to have the question referred |
amended in the way that I have suggested?
| MR BENNETT: | Yes, Your Honour. | The alternative would be |
that it would be dealt with with the question of
whether this particular imposition is an excise,
which has been reserved for the second part of this
case. It would seem more desirable for it to be dealt with in this part.
MASON CJ: Yes.
MR BENNETT: If Your Honours please.
TOOHEY J: Could I just be clear, Mr Bennett. Put that way,
then, you are not simply praying in aid sections 81
and 86 in support of the proper construction of
section 90, but you are going a step further than that?
| MR BENNETT: | Yes, Your Honour, although no doubt |
incorporating them as aids as well.
| MASON CJ: | What attitude do you want to take in respect to |
this, Mr Jackson?
| MR JACKSON: | Your Honour, it is a matter on which I think we |
would like to have the opportunity to put some
further submissions in writing to the Court. I say that, Your Honour, because the proposition that is
advanced by my learned friend does seem to be
inconsistent with what the Court per Your Honour
| Capital(2) | 43 | 3/3/92 |
said in Berwick v Gray, in the passage to which I
referred.
Your Honour, it may be that all we would seek
to do in that regard is rely on what is said there.
But it does seem, with respect, to be a quite separate and rather large issue which I would not
really like - - -
MASON CJ: | It is large in the sense of being important, there is no question of that. |
| MR JACKSON: | Your Honour, it is just a point I would not |
really like to seek to deal with on the run, as it
were. So we would seek to have the opportunity to - - -
MASON CJ: | You are at liberty to put in submissions in writing on that point but it would be desirable |
| that you lodge them with the Court as soon as convenient. | |
| MR JACKSON: | Your Honour, if I were able to have until |
Friday to do that, to the end of Friday?
MASON CJ: Yes, there is no difficulty about that.
| MR BENNETT: | Might we have seven days to answer that, if |
Your Honours please?
MASON CJ: Yes. Yes, Mr Solicitor for the Northern
Territory.
| MR PAULING: | Thank you, Your Honours. | We do not seek to |
add, preferring to go over the submissions we have
already put in writing. We took the liberty of being rather more expansive than usual in them in
the hope that they would be of some assistance.
There are some quick matters that I may deal with.
delegate, or delegated power, that might operate in argument, sought to draw a line somewhere between a Mr Bennett, in explaining the opening of his respect of a territory and, at the other end, a territory such as the Northern Territory, or to a lesser extent the Australian Capital Territory, suggested that at the commencement of the
with powers of self-government. And it was the framers of the Constitution, that this sort of progressive step forward might occur towards
statehood. And can I refer Your Honours to the debates of 28 January 1898, the constitutional debates, at page 257, and I will make copies of the
particular passage available. Mr Deakin is reported as saying:
| Capital(2) | 44 | 3/3/92 |
One point I wish to put to the leader of the
Convention has partly been anticipated, but
not wholly. This clause - clause 53 - defines
exclusive powers which are given to theParliament, and a later clause, clause 115, to
which the leader of the Convention has
alluded, refers also to an exclusive power of
legislation which is to be possessed by the
Federal Parliament for the provisional
government of territories, or, as they have
been happily termed, embryo States. What I am at a loss to discover is why two clauses
should be needed or placed so far apart.
Should not clause 115, as the power of
legislation there conveyed is an exclusive power, be included in clause 53, where the
exclusive powers are supposed to be found, and
not be relegated to another portion of the
Bill, where it seems to me, those powers are
at all events not equally in place?
MR BARTON. - It was thought advisable to leave
that provision regarding territories where it
is - under the head of "New States" - because
it refers particularly to that kind of
territory which afterwards develops into a new
State.
In Quick & Garran - I will merely give the page
reference if I can - I will take Your Honours
please to page 972, that part of the work that is
dealing with section 122. It is half the way down
the page:
GOVERNMENT OF TERRITORY. - The Parliament is
authorized to make laws for the government of
territory however acquired. Such territory
may be ruled by the Federal Authority, acting
not merely as a local government but as aquasi-sovereign government. It may rule the
territory as a dependency, providing for its
local municipal government as well as for its national government, in such a manner as may
seem politic, wise, and just, having regard to
its own interests as well as those of the
people of the territory.
Territories may either be ruled by a
Federal department charged to administer
Federal laws therein, or they may be granted
municipal institutions and territorial
legislatures, empowered to make ordinances not
inconsistent with the laws and Constitution of
the Commonwealth. Should such territorialordinances be contrary to Federal law, they
may be annulled by the Federal Parliament.
| Capital(2) | 3/3/92 |
And this really is the point that Your Honour
the Chief Justice made in Berwick v Gray, about the
Berwick v Gray about the devolution onto a
Territory of separate territorial administrative
institutions, that is separate political
representative and administrative institutions,
having control of its own fiscus. And might I say
that, on the point that Your Honour Justice McHugh
raised concerning an external territory that became
mandated to Australia and the problems that
Mr Bennett's interpretation would impose there, in
Berwick v Gray, Your Honour the Chief Justice has
referred to two passages from Spratt v Hermes;
those are the passages that convincingly make the
point that within the Constitution there is no
basis to draw a distinction between internal and
external territories.
The question about sections 81 and 86,
Your Honours, really picks up the idea of the
exercise of section 122 to create a territory
legislature with control of its own fiscus, because section 81 talks of money raised or received by the
executive government of the Commonwealth and where,
under section 122 - as it has in both the
Australian Capital Territory and the
Northern Territory - a body politic with plenary
powers is established, when they collect money they
do not do it as the executive government of the
Commonwealth, they do it in their own right as a
plenary government established under section 122.
So that section 81 simply has no application. It
is talking to an exercise by the Commonwealth
itself of actually raising and receiving moneys.
And similarly for other sections involved in
Chapter IV.
The question of a free port that Your Honour
Justice Brennan raised - the free port Darwin - of
course, would be covered by the fact that it would
come into collision with the provisions of the
Customs Act.
BRENNAN J: Quite so.
| MR PAULING: | If the Customs Act were repealed then there |
would be nothing to stop the Northern Territory
from doing something about it.
BRENNAN J: But you would claim a right to put a tax on
Humpty Doo rice, for example?
| MR PAULING: | Yes, Your Honour. | And a reason for that, when |
looked at in the scheme of things - we have, as I
have pointed out, Mr Deakin talking of embryo
States way back in 1898 - one imagines that there
are problems in the way of a particular
| Capital(2) | 46 | 3/3/92 |
geographical area becoming a State, either because
of its lack of development, lack of population,
lack of the resources that would be necessary if it
were to be constrained as States were - and the
States agreed to being constrained in that way - and that in that developmental phase there should
not be any restriction on the power of the body
politic that is created to raise taxes of any sort
and, indeed, before self-government the
Commonwealth had complete power, because it
exercised it in the Northern Territory at least, to
do just that - and before self-government here.
But there are practical reasons that we allude to
in our submissions that really make that point.
I might just also say that in Cobb & Co Ltd v
Kropp, on which we rely, might I indicate, because
it may have surprised some to see a reference in
our submissions to the Bill of Rights, but could I
give Your Honours the reference to the judgment of
the Full Court of the Supreme Court of Queenslandcomprised of Justices Stable, Gibbs and Hart. That
is 1965 QR 285. The appeal to the Privy Council was dismissed, but in there, and particularly His
Honour Justice Gibbs, it makes particular reference
to the Bill of Rights, or that provision of the
Bill of Rights, that required that taxation couldis implicit in the Privy Council's decision but not explicit. In fact, the Bill of Rights is not
only be levied if it was authorized by parliament.
referred to in their advice.
Could I finish on this matter, that it is
quite right to identify as the important element of
the whole issue raised here the meaning of the word
"exclusive" in section 90. Interestingly enough -
because we are contrasting section 90 and
section 122 and saying that a conferral of a taxing
power, including the power to tax goods, would not
offend against section 90 because it is done
pursuant to section 122 - section 122 itself does not use the term "exclusive".
Could I refer Your Honours to Frost v
Stevenson, 58 CLR 558, the judgment of His Honour
the Chief Justice. It is not on our list of authorities, Your Honour. The passage I want to read at 558 is simply this: Sec 122, relating to the government of territories, does not use the word
"exclusive", but the effect of sec 122 is that
the Parliament has exclusive power, by virtueof the Constitution, to make laws for the
territories to which the section applies.
| Capital(2) | 47 | 3/3/92 |
Your Honours, it is our submission that in looking
at the position of section 90 as it is in
chapter IV, dealing with States, looking at thedeliberate position of section 122 in respect of
new States, that it is quite plain that the
restrictions such as they are in chapter IV are not
meant to apply to Territories at all, although of
course, when, following the provisions of the
Constitution, a Territory such as the NorthernTerritory became a State, it then would, as part of that evolutionary process, voluntarily become bound
by those restrictions on its powers.
Until a territory becomes a State, the line
that Mr Bennett seeks to draw is not crossed while
so ever that territory, section 122, as Spratt
v Hermes so clearly points out, is an ample and
full power to do in the territory, or for the
territory, what it will.
| DEANE J: | Does chapter IV, on your submission, apply to the |
legislative powers of the Parliament under
section 122?
| MR PAULING: | No, Your Honour, not at all. |
DEANE J: That is contrary to what Chief Justice Dixon said
in LaJnshed v Lake, (1958) 99 CLR 141, but at
page 142 it seems to go a bit your way. At the
bottom of page 141 His Honour says that chapter IV
does apply to section 122.
| MR PAULING: | Yes, but at 141, His Honour is saying; |
To my mind s.122 is a power given to the
national Parliament of Australia as such to
make laws "for", that is to say "with respect
to", the government of the Territory. The
words "the government of any territory" of
course describe the subject matter of the
power. But once the law is shown to be relevant to that subject matter it operates as a binding law of the Commonwealth -
DEANE J: | At page 141, what I was looking at is where His Honour says: |
That necessarily refers to s.1 of the
Constitution and carries with it the provisions of Pts. I, II, III and IV of Chap.
I.
I am sorry, I misread it.
| MR PAULING: | Yes, it is, it is qualified as of chapter 1, |
Your Honours.
| Capital(2) | 48 | 3/3/92 |
DEANE J: But the next page, I notice, strongly supports
what you are saying.
MR PAULING: There he says:
The legislative power given bys 122 to the
federal Parliament is necessarily not a power
to make laws with respect to a subject matter
defined with reference to a description of
conduct, activity or head of law -
It is dealt with, Your Honour, in paragraph 7 of
our submissions, with respect. I do refer to a number of articles and the like. Would it be convenient to the Court if, after the Court rises,
I were to give them to the Court officer?
MASON CJ: Yes, it would.
| MR PAULING: | I do not refer to the forthcoming article by |
Mr Nicholson as though he were authority. I incorporated it in my argument because it lists the various sections of the Constitution that have been
touched on in the way we have set out.
Your Honours, those are our - - -
| MASON CJ: | Yes. Mr Solicitor, the Court would be advantaged |
if we could be provided with copies of the Business
Franchise ("X" Videos) Act of the Territory. We have some copies but it would be convenient, I think, if the Court were supplied with seven
separate copies.
MR PAULING: That is the Australian Capital Territory
legislation.
| MASON CJ: Yes. | I am not directing the remarks specifically |
at you but rather at the plaintiffs.
| MR PAULING: | Thank you, Your Honour. |
| MASON CJ: | Thank you, Mr Solicitor. | Mr Solicitor for the |
Commonwealth.
| MR GRIFFITH: | I hand the Court our short contentions. |
MASON CJ: Thank you. Yes, Mr Solicitor.
| MR GRIFFITH: | May I first raise with the Court the problem |
arising from the section 81 and section 86 point
now being relied upon by my learned friend,
Mr Bennett. I suppose it is a problem of section 78B in the sort of situation that has
arisen in Nationwide and Blank Tapes, but it would
seem that this would be another of these caseswhich come on before the Court where, in running,
quite independent arguments of validity are raised.
| Capital(2) | 49 | 3/3/92 |
| MASON CJ: | It rather suggests that section 78B ought to be |
repealed or amended in some way. It is obviously causing a great deal of difficulty.
MR GRIFFITH: It is, Your Honour, and of course, one tries
to anticipate it by seeking to see what are the
constitutional points in advance, and summonses fordirection before a Justice of this Court seem to
assist. But, Your Honour, it remains that
section 78B is now a problem if my learned friend
relies upon these sections as an independent ground
for invalidity. His notice was confined to
section 90. I am in a position to deal with the argument so far as - - -
MASON CJ: But there is no difficulty in notifying the
States, is there?
MR GRIFFITH: No, Your Honour, there is no difficulty. It
is just a question about proceeding. I just point out that the provisions of the Act are what they
are, Your Honour.
Your Honour, so far as section 81 is
concerned, we would adopt the submissions of my
learned friend, the Solicitor-General for the
Northern Territory, and make the point that
sections 81, 82 and 83 deal with the consolidated
revenue of the Commonwealth and the Executive
Government of the Commonwealth, and we say that
does not bespeak at all of the situation in dealing
with the revenue of a subordinate legislature.
So far as section 86 is concerned,
Your Honours, we say that that is a section forming part of a scheme comprising sections 86 to 94 and,
if you like, section 112 and 113, dealing with the
question of collection of revenues on the
establishment of the Commonwealth, and dealing of
course with the accounting period required for fiveyears and more in respect of those revenues.
| DAWSON J: It is a machinery provision? |
MR GRIFFITH: It is a spent provision, we would say,
Your Honour, a machinery spent provision, so that
that is our answer to section 86, if that was
relied upon independently. Picking up Your Honour
the Chief Justice's remarks, possibly no party who
has not appeared here today would want to add
anything to that but -
| MASON CJ: | I should have thought it unlikely, Mr Solicitor? |
MR GRIFFITH: Yes, Your Honour. Your Honour, is it
appropriate to turn to our contentions now, or is
that an appropriate time?
| Capital(2) | 50 | 3/3/92 |
| MASON CJ: | We will adjourn now and we will resume at |
2.15 pm.
MR GRIFFITH: If Your Honour pleases.
AT 12.45 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.16 PM:
MASON CJ: Yes, Mr Solicitor.
MR GRIFFITH: If the Court pleases, turning to our
submissions, we submit that the object of
section 90 is to exclude the power of the States to
impose excises, not to limit the exclusive power
vested in the Commonwealth. May I refer the Court briefly to what Quick & Garran say at page 838 with
reference to section 90. Page 838 it is said:
It means that the power to impose customs and
excise is, subject to the Constitution, wholly
vested in the Federal Parliament as against
the States. It means that the power, being
granted to the Federal Parliament, is - fromthe moment of the imposition of uniform
duties - taken once and for all from the
States; and that the States can thenceforth
not legislate for that purpose in any way
whatever, even in the absence of Federal
legislation.
This, we submit, is what was said in the passage of
Justice Isaacs in Nott to which the Court have
already been referred twice or three times at
page 29, but we do make the point that at about
point 9 on page 29, what His Honour Justice Isaacs made clear was that:
It was not intended to limit the ambit of
Commonwealth parliamentary power but to make
that power exclusive -
of the States -
on the subject matter.
Immediately before that His Honour referred to
"exclusive" as being:
in the -
| Capital(2) | 51 | 3/3/92 |
same -
sense in which that word is found in sections
52 and 107.
And I note that at page 656 in Quick & Garran, the
same proposition with respect to "exclusive" in
section 52 is made by the authors as is made in the
terms just read from page 838.
The power over bounties, of course, is subject
to the limitation in section 5l(iii), that bounties
be uniform throughout the Commonwealth. The limitations on excise, on the other hand, arise
firstly under section 51(ii), where the prohibition
is on discrimination between the States or parts of
the States, and under section 99, where theprohibition is on giving preference to one State or any part thereof, or another State or part thereof.
We submit that these limitations say nothing
on the imposition of duties of excise in a
Territory. It follows that there is no textual
limitation in the Constitution, nor, we submit, is
there any basis of textual analysis or principle to
imply a limitation as to excise as expressed by
section 5l(iii) in respect of bounties.
This does seem consistent, we submit, with the
framework of the Constitution in what was intended,
namely, that the Commonwealth be vested with powers
exclusive of the States to determine tariff and and
excise policy. The power of course includes the power to impose uniform duties of excise, but there
also is a legislative choice available to theparliament, we submit to provide for excise taxes
in the Territories.
So that, referring to what Your Honour the present Chief Justice said in the Hematite case,
151 CLR 632, we submit that it is apposite to say,
in Your Honour's words: that the grant of an exclusive power to impose duties of customs and excise was intended to
give the Parliament a real control over thetaxation of commodities. With respect, we would submit that the end referred
to by His Honour Justice Deane at page 661,referring to means of ensuring uniformity of excise
duties throughout Australia, ..... large accepts that
there is a power in the Federal Parliament to
provide for uniformity of excise duties throughout
Australia. But we submit on the plain text of the
Constitution, that is not a Constitutional mandate.
| Capital(2) | 52 | 3/3/92 |
As has already been pointed out to the Court, ther.e may be particular reasons for special taxes
in the Territories, especially, but perhaps not
only, in the external Territories. What the
Constitution does not do, in our submission, is
prohibit taxes by way of excise being imposed in a
Territory which are not uniform with excises being imposed by laws of the Commonwealth applicable in the States.
There is no reason, we submit, to apply
section 90 as requiring that only the Parliament
itself can directly impose duties of customs and
excise. I will not repeat them but we make two points, in 1.1 and 1.2 of our contentions handed to
the Court to support textual analysis.
It is our submission that the powers of the
Territory legislature are an emanation of the
exercise of legislature power of the CommonwealthParliament. All Territory legislation, including
tax laws, are made by a subordinate legislature
which is a creation of Commonwealth law and, as
such, Territory laws are an expression of plenary
power under the Constitution exercised by the
Parliament.
The Commonwealth itself may exercise its
exclusive excise power by vesting it in a
subordinate legislature which is entirely under its
control.
| McHUGH J: | Do you draw any distinction as they appear to in |
the American cases between territories evolving on
the way to Statehood and territories which have not
yet reached or perhaps are never intended to reach
that stage?
MR GRIFFITH: | Your Honour, our submission is that the point of transition is when a territory, evolving as it | |
| may, or perhaps even coming from nowhere, if it | ||
| ||
| make its transaction and be entitled to the benefits and the burdens of constitutional | ||
| provisions with respect to its existence as a | ||
| State. But up to that point, Your Honour, we | ||
| submit that there is no basis in the Constitution for making any distinction in respect of | ||
| ||
| seem to be framed with that in mind, Your Honour. |
McHUGH J: Perhaps you can help me with this, Mr Solicitor.
Nobody has seemed to approach the matter in this
way: the Constitution is concerned with the powers
of the Commonwealth and the States and with thedemarcation of powers between the Commonwealth and
| Capital(2) | 53 | 3/3/92 |
the State. It has got nothing to say about the
powers of territories, it has only got to say that
it is concerned with what the Commonwealth can do
in respect of territories. In that context, what
could section 90 be referring to, other than the
demarcation of power between the Commonwealth andthe States? Is there some flaw in that way of
looking at it?
| MR GRIFFITH: | Your Honour, the whole part in which |
section 90 occurs, in our submission, is dealing
with that issue of fiscal relationship between the
Commonwealth and the States and we submit,
Your Honour, that the issue of fiscal operation of a territory is a matter just not adumbrated by the reach of that whole chapter, including section 90. The source of power in respect of the Territory, of
course, is wholly, we would submit, section 122,
unless there is reliance on section 52 which, for
the purpose of our submissions, we do not go to
section 52, Your Honour. We say section 122 is the source of this legislation.
| BRENNAN J: | Mr Solicitor, how does it work if, for example, |
the present excise Act places, say, a 15 per cent
duty on silicone chips manufactured as they may be,for all I know, in the Australian Capital
Territory, and the Territory Government then says,
"We impose an excise of 20 per cent on silicone
chips". Is that a case of inconsistency and, if
so, is the inconsistency dealt with by theprovisions of the relevant legislation which seems
to contemplate that provided you can comply with
both, then that is enough?
| MR GRIFFITH: | Your Honour, the question of inconsistency is |
perhaps one to be argued out by reference to the
terms of the particular legislation. I understand my learned friend Mr Pauling's submissions to be
that there was no possibility of the imposition of
a customs duty in the Northern Territory, not
because there is an absence of any reference to customs duty in the Northern Territory legislation
- there is no reference to it - but merely because
it is quite clear, Your Honour, that it would be
inconsistent with the Commonwealth customs
legislation.
Now, Your Honour, with respect, that in a
particular case would be a matter of construction
of the relevant legislation to see whether there
was an inconsistency. If there were not,
Your Honour, it may be possible to admit the
possibility that one could have a State imposition
in respect of a sale of goods within the State upto the point of final sale or, possibly,
Your Honour, when one looks at the terms of the
| Capital(2) | 54 | 3/3/92 |
Northern Territory legislation even on sale, once
more depending upon arguments of inconsistency
again with respect to Commonwealth sales tax
legislation and, Your Honour, in that case, we
would submit, that the resolution of any issues
which were to arise from that would be a matter forthe Parliament of the Commonwealth because it
could, by specific legislation, exclude that power
from the Territory.
It could, in the case of the Australian
Capital Territory (Self-Government) Act,
Your Honour, merely add duties of excise to the
list of excepted powers under section 23 of that
Act. It could provide in another way for exclusion or it could, Your Honour, otherwise exercise the
powers of the Parliament to amend or appeal, and
even of course, Your Honour, the power of
disallowance which is provided for in the existing
Act, section 35, could be exercised.So there are various mechanisms, but our submission is, Your Honour, that is a matter for
the exercise of the power exclusively vested in the
Parliament of the Commonwealth, to determine
whether or not to permit the continuation of the
situation which Your Honour postulates.
TOOHEY J: When you put it that way, Mr Solicitor, it is not
a constitutional question is it? I mean, is there
a constitutional question of inconsistency, or does
it merely go to the pragmatics of the situation and
the power of the Commonwealth to disallow or to
vary or repeal?
| MR GRIFFITH: | In the context of Territory, Your Honour, we |
say it is a textual issue, not a constitutional
one, but as we understand Your Honour has put
against us that there are constitutional
inhibitions; in effect, Your Honour, it is put
that the same result applies for excise as we would
power in respect of bounties - they must be uniform say is the case of the exercise of the Commonwealth
throughout the Commonwealth. We submit, Your Honour, that textually that is not so, and that the word "exclusive" left hanging in the first paragraph of section 90, in our submission, for the reasons advanced by my learned friends and also submitted by us in our submissions does not compel a different construction other than that foreshadowed by Quick and Garran and, we submit, accepted that by a clear majority of this Court in Nott.
| BRENNAN J: | It cannot be right to say that one of the |
purposes of section 90 is to create a uniform
economic regime throughout Australia.
| Capital(2) | 55 | 3/3/92 |
| MR GRIFFITH: | Your Honour, that can be right to a point, but |
what we submit - and this is the distinction we
make in the language used by His Honourthe Chief Justice with His Honour Justice Deane in the Hematite case between saying the mechanism for
that is to give the Parliament the real control.
But we say, Your Honour, in respect of territories,
it is a matter of control and for Parliament to
determine whether to apply this complete uniformity
which the Constitution does not mandate or whether, for particular reasons as they may seem appropriate
to the Parliament, to provide a separate mechanism
for the territories, always subject to the complete
control of the Parliament. As Justice Isaacs said earlier on page 29 in Nott - he was referring, of
course, to a particular case where there was
ministerial control - but what he did say was:
Parliament ..... is in no sense abandoning any of its power. It has the fullest control -
he says by legislation, and then he goes on to say: not only by legislation, but also by the
ordinary operation of responsible government. His principal proposition is that Parliament is not
abandoning its power, it has got control by
legislation. We submit, Your Honour, that this is an issue where the desired result of fiscal
uniformity, if you like, is one secured by
centralization of power, but not by compulsion of
result.
Of course there are arguments one can make why
economically it may be regarded as appropriate for
there to be in respect of excise the same mandated
result as is required for bounties, but we submit
that is not what the Constitution has done. It has vested complete power in the Parliament of the Commonwealth, and our second limb of submissions,
of course, is it is that power which has been exercised here. But the result Your Honour
mentions is attainable, but we say it is for the
Parliament to pursue the extent to which that is
unconditionally attained.
We would make a reference to Powell v Apollo Candle Company Ltd, 10 AC 282, to which the Court
has been taken by my learned friends. At page 289
it is made clear by the Judicial Committee that:
"The Indian Legislature has powers expressly
limited by the Act of the Imperial Parliament
which created it, and it can, of course, do
nothing beyond the limits which circumscribe
these powers.
| Capital(2) | 56 | 3/3/92 |
And then the point is made -
when acting within those limits it is not in
any sense an agent or delegate of the Imperial
Parliament -
and it is with reference to that that at page 291
it is said:
It is argued that the tax in question has been
imposed by the Governor, and not by the
Legislature, who alone had power to impose it.But the duties levied under the Order in Council are really levied by the authority of the Act under which the order is issued. The Legislature has not parted with its perfect control over the Governor, and has the power, of course, at any moment, of withdrawing or altering the power which they have entrusted
to him.
We would mention for the information of the Court
that the relevant section which was referred to at
page 289 is section 52 of Act 24 and 25 Viet which
provides in terms - and I will pass a copy to theCourt after the Court rises - but in terms of
saying:
Nothing in this Act contained shall be held to
derogate from or interfere with except as
herein before expressly provided the rightsvested in Her Majesty or the powers of the
Secretary of State for India in Council in
relation to the government of Her Majesty's
dominions ih India -
et cetera. So that there is a restriction on the relevant power of the legislature arising from the
Imperial Statute.
So it is our submission that, in this case, the exercise of powers in the terms of section 22
of the Australian Capital Territory
(Self-Government) Act, although being unqualified
in the terms of the section themselves, are
completely and utterly subject to the exercise ofthe legislative power of the Parliament and in that
way we submit that the relevant duty, if it is a
duty of excise in this case, which is the second
question before the Court, is one which is imposed
by the Parliament of Commonwealth and thus does
not conflict with section 90.
| GAUDRON J: | Does it discriminate? |
MR GRIFFITH: Well, Your Honour, we submit that the only
issue of discrimination which could arise would be
| Capital(2) | 57 | 3/3/92 |
discrimination between the States and, as a
territory tax, we submit that that issue could not
arise. If there was a question of discrimination
amongst the States, Your Honour, that would be a
question of enquiry, but we would say it could not
arise in respect of the excise imposed - - -
GAUDRON J: It is not discrimination against the States, is
it?
MR GRIFFITH: Well, it is amongst the States, Your Honour,
within the terms of section Sl(ii), or parts of a
State, or perhaps I should say between the States.
Section 99, of course, is slightly different in its
terms, using the expression "preference to anotherState or any part over another", but it is much the
same in consequence.
As to the suggested alteration of the question
by Your Honour the Chief Justice this morning, we
have no objections to the question being rephrased
to cover the matters covered by my learned friend
although, Your Honour, perhaps, having regard to
section 78B, it might be appropriate for the
plaintiffs to give such notice as has not been
given and reserve the right for any party to
indicate that it would desire at least to make
submissions on the wider issue.
MASON CJ: Well, I think notice should be given by the
plaintiffs under section 78B, although the
variation from the question is not large, but at
least the States ought to be given anotheropportunity of evincing any interest in the matter.
| MR GRIFFITH: | Your Honour, we would be the last to seek the |
Court to reconvene to find if there are going to be
any appearances and we would have thought there
would be no objection to the Court adopting the
practice of, perhaps, submissions wholly in
writing on this issue.
| MASON CJ: Yes, that may be possible, but what I do is |
indicate that I propose to amend the question in
the manner indicated in the absence of any
contention to the contrary.
MR GRIFFITH: Yes. If the Court pleases.
MASON CJ: Thank you, Mr Solicitor. Mr Bennett.
MR BENNETT: If the Court pleases. If I could deal with my
learned friends in inverse order, starting with my
learned friend, the Solicitor-General for the
Commonwealth. We fully accept what Your Honour has suggested in relation to section 78B. We will serve amended notices and what I had in mind was
| Capital(2) | 58 | 3/3/92 |
that we might indicate in those notices that, if
the States wish to make submissions, they should do
so by, say Friday week. We will have the notices out by the end of this week.
My learned friend referred to Powell v Apollo
Candle Company and, in my respectful submission,
the two passages to which he has referred are
referring to totally different things and cannot be
put together to reach the conclusion that is
reached.
Might I just take Your Honours to those passages, because it is an easy misunderstanding to
make in relation to the case. It is volume 10 of the Appeal Cases. Your Honours will appreciate the
argument in this case was a delegatus non potest
delegare argument. So there are two separate matters being discussed: the relationship between
the Imperial Parliament and the Indian legislature,
and the relationship one down the track between the
Indian legislature and the governor on whom some
powers were conferred. At page 289, they are
discussing the first of those. When it says:
"The Indian Legislature has powers expressly
limited by the Act of the Imperial
Parliament -
et cetera, that is talking about the relationship
between the Imperial Parliament and the Indian
Parliament. It is that which does not amount to a delegation.
At page 291, in the first full paragraph on
that page, they are dealing with a totally
different question. They are dealing with the relationship between the Indian legislature and the
sub-delegate, if one likes, the governor. It is
said there:
Legislature, who alone had power to impose it. been imposed by the Governor, and not by the It is argue.ct that the tax in question has
The legislature which alone had power was the
legislature which, under the Imperial Act, had
powers for the peace, order, and good government
but whose acts were subject to disallowance by the
imperial legislature.
But the duties levied under the Order in the Act -
ie, the Indian Act, not the Imperial Act -
| Capital(2) | 59 | 3/3/92 |
under which the order is issued. The Legislature -
ie, the Indian legislature
has not parted with its perfect control over
the Governor -
My friend is prepared to submit that that was
referring to the imperial legislature and its
control over the Indian body, and it is not talking
about that stage. So the point my learned friend makes, we respectfully submit, is invalid.
In relation to section 78B, may I just add
this before I leave it. We would say that the matter under section 78B is the ability of a self-
governing territory, specifically the Australian
Capital Territory, to impose an excise. The matter is not really the way one gets to the conclusion
under different sections of the Constitution. But,
as I say, we are happy to amend the notice to make
that clear.
Turning to the submissions of my learned
friend, Mr Pauling, there are only two matters I
want to raise. The first is he referred to difficulties in relation to external territories.
We would submit there are not any specific
difficulties confined to those territories. They
are more likely to be controlled centrally, as in
fact they are at the moment.
McHUGH J: But supposing Fiji had become one of the
territories of Australia?
| MR BENNETT: | Then, Your Honour, while it was a |
non-self-governing territory the Commonwealth
could, by its own Act, have created excises in
relation to it. When it became a self-governing
territory and was on the way to statehood, if one
be in the same position that the ACT and the likes, or an embryo State, if one likes, it would Northern Territory are in now.
| McHUGH J: | So it could not impose customs duty? |
MR BENNETT: | It could not then, no, but that could be done by the Commonwealth. | And it may be that the |
Commonwealth could authorize the local legislature
as its delegate to do it but, because of the Apollo
case and the other cases, merely conferring
self-government upon it and giving it plenary
powers is not authorizing it to act as its
delegate, it is the reverse.
| Capital(2) | 60 | 3/3/92 |
| MCHUGH J: You make a large jump then. | Let it be assumed |
that it is not a delegate, it can still be said
that it enacts an excise duty under the authorityof the Commonwealth, can it not?
MR BENNETT: | Your Honour, only in the same way that one would say, after Federation, that the Commonwealth | |
| Parliament passed laws under the authority of the | ||
| ||
| significance of the Apollo line of cases and, | ||
| indeed, to a large extent the importance of the way | ||
| self-governing dominions have become independent, | ||
| is that that line is regarded as an important one. | ||
| Once one grants plenary legislative powers and | ||
| creates a polity then, while there may or may not be some residual control remaining, the polity is | ||
| independent, its Acts are not one's own Acts any | ||
| more. |
McHUGH J: But in this particular piece of legislation the
Commonwealth can disallow legislation.
| MR BENNETT: | Yes, and that was so in all three of the cases |
referred to in the last century, each one of them
had that provision, and yet in each one the court
said that it was not a delegate.
| McHUGH J: | Can I just ask you this more general question. |
What can section 90 be referring to except the
demarcation of power between the Commonwealth and
the State? The Constitution has not got the
slightest interest in what the powers of the
territories are?
| MR BENNETT: | No, Your Honour, what that comes back to is |
which theory of constitutional interpretation one
then takes. I suppose a number of ways one can formulate the question. One can start by saying,
"What do the words mean?", taken in abstract, and
if one does that, in a strictly grammatical sense,
we would succeed because "exclusive" simply means
exclusive of anyone else and I went through that argument.
| McHUGH J: | On the literal meaning but you have got to |
divorce it from context, and the context is
powerfully against you.
| MR BENNETT: | The context merely shows the historical |
situation in which the section was put there, but
the second way one can do it is to say, "Well, what
was the original policy behind section 90 and which
interpretation most promotes that policy?" If one
says that, we submit the policy behind the
provision is to enable fiscal uniformity or
uniformity of control by the Commonwealth. That
| Capital(2) | 61 | 3/3/92 |
would be violated if a self-governing territory
were not limited to impose an excise.
Thirdly, one can ask one of the three
different formulations of the question, as to what
was in the minds of the founding fathers or what
one should impute to be in their.minds. One can
say, "What did they intend in relation to an excise
by a self-governing territory?" The answer to that
is very simple: they did not think of it. So that does not help. One can say, "What would they have intended if asked whether the excise power was to
be exclusive of self-governing territories?" We submit, if they had applied their minds to that
question they would probably have said the power
should be exclusive but, again, one cannot supply a
definite answer. And one can ask the question in the way that most suits my learned friends, which
we say is an invalid way of asking it, which is to
say, "What would they have intended if asked the
more general question: is the excise power intendedto be exclusive of territories?" We say that only asks them half the question without disclosing the
hidden premise, the minor premise, and while it is
the most helpful formulation for my friends, we
would submit it really depends on the assumption
that the founding fathers would not have been
conscious of the possibility of the type ofself-governing territory we now have.
Now, when one is faced with that situation,
one has a case where the words are neutral, where
one has a clear original policy, and where one
really has a conception not really thought through
at the time, the conception of a fully
self-governing territory with power to legislate
for peace, order, and good government.
McHUGH J: But your statement of the policies is somewhat
elliptic, is it not? The policy was to prevent the
States from interfering with uniformity of taxation.
| MR BENNETT: | We would submit, with respect, that is |
incorrect. We would submits the policy is to enable the Commonwealth to legislate uniformly and
no doubt, as part of that, to prevent interference
by such others who could interfere. At the time,
the only others who could interfere were the
States, so it is easy to say, as Quick & Garran
say, and as a number of the cases before
self-governing territories say, that it was
designed to prevent interference by the States.
The clearest expression of that is Parton's case
itself. If Your Honours to to the familiar passage
there, 80 CLR 260 about point 3, this is the
clearest example of what we would submit is the
| Capital(2) | 62 | 3/3/92 |
answer to Your Honour's question. Sir Owen Dixon
there says at about line 10, against the words "and
delivery" in the left-hand margin:In making the power of the Parliament of the Commonwealth to impose duties of customs and
of excise exclusive it may be assumed that it
was intended to give the Parliament a real
control of the taxation of commodities -
Just stopping there for a moment, that is the positive side of it; that is the purpose. Then, in
order to implement that, one adds the negative
side:
and to ensure that the execution of whatever
policy it adopted should not be hampered or
defeated -
now he adds the words -
by State action -
because at the time that was all that one could
contemplate as defeating it, but those words are
supernumerary to the central interpretation of the
provision. They really say nothing more than it
was desired that the policy should not be hampered
and the only people who could hamper it at the time
were the States.
McHUGH J: They are the only people who can do it now, if
you did not have section 90; the Commonwealth can
control the territories.
| MR BENNETT: | It has that power, Your Honour, but it might |
not in relation to another territory, I suppose, in
the future, have a power of disallowance. It would
always have the power, under section 122, to repeal
self-government, I suppose, or to amend the
self-government legislation. But that sort of
power was held not to be sufficient to make the body its delegate and, in my submission, it should
not be sufficient for this purpose. The fact that
the Commonwealth can achieve a result, if it sets
out to do so, by indirect means, is not the answer.
We would submit that section 90 simply means that
the Commonwealth Parliament is to retain direct
control over excises. The only excises which can be imposed are those imposed by it or by its agents
or delegates, which are in substance controlled by
it. Once it is imposed by someone in relation to
whom the Apollo line is drawn, if I may so describe
it, it ceases to be imposed by it. It is a very
short point, and of course one - - -
| Capital(2) | 63 | 3/3/92 |
BRENNAN J: Yes. Section 90 is dealing with the power of
the Parliament, not the power of the Commonwealth,
is it not?
| MR BENNETT: Yes. | If I used the word "Commonwealth" then |
rather than the Commonwealth Parliament, it was a
slip on my part, Your Honour.
My friend is going to provide, as Your Honours
are aware, a list of the various authorities which
refer to States. I therefore will not go through them for the reverse purpose any more than my
learned friend is going through them, and if
necessary I will deal with it in the submission,
but every one of them is one which can be answered
in terms of the answer which I just gave to
Justice McHugh.
Really what the courts are saying is that it
is the central control which is important, and when the courts refer to States not hampering, or States
not having the power, it is merely in the context
of "Well, they are the people who could have done
it at the time of Federation". But that word was
not put in section 90, and in my respectful
submission it should not now be implied.
I only want to refer to one of the cases in
reply that my friend referred to, and that is Cobb
& Co, because there is one passage in that which
puts the argument rather clearly, and that is the
passage at page 157. Cobb & Co is in (1967) 1 AC 141 at 157. This is part of the same point I was making in
relation to Apollo in answer to the learned
Solicitor-General for the Commonwealth. At
page 157, they are talking about the lower stage ofdelegation, the second stage, if one likes. After
the quotation at point 3, they say: The legislature were entitled to use any agent or any subordinate agency or any machinery ..... They were entitled to use the Commissioner for Transport as their instrument to fix and recover the licence ..... They were not abrogating their power to levy taxes and were not transferring that power to the commissioner. Here, they are certainly transferring the power and the Commonwealth Parliament is certainly not using the ACT legislature as its instrument to fix and recover licence fees.
| Capital(2) | 64 | 3/3/92 |
What they created by the passing of the Transport Acts could not reasonably be described as a new legislative power or separate legislative body -
and here it is. So one has a very clear contrast between what the Privy Council was suggesting might
have been different and the present case.
There are two other short matters. My learned
friend referred to the existence of Territories at
Federation. I may have misunderstood what he submitted. The fact is there were no Territories at the time of Federation. Quick and Garran refer
to the anticipation that there might have been four
Territories, which are Fiji, Lord Howe Island, New none then, and one wonders how much it was
seriously anticipated that those four Territories
at that stage would have been likely to have had
self-government.
The other matter is the United States cases.
I would submit that they do not really assist at
all, the provisions of the Constitution are very
different and it is dangerous to rely upon them.
But the important point about the United States cases is that none of them refer to the Apollo point and, indeed, Sakamoto expressly takes the
other position because - that is the case in 764 of
the Federal Reporter, 2d, page 1285, and I do not
think Your Honours need to go to it, but at
page 1287, in the first column, there is reference
to "the Governor of the Canal Zone as Congress's
delegate'," in the middle of the first column. The whole language which is adopted rather suggests that what is being discussed is a territorial legislature which operates as a delegate; that is,
the whole point of our submissions is that is not
the case in relation to the Australian Capital
Territory. May it please the Court.
| MASON CJ: Thank you, Mr Bennett. Yes, Mr Jackson? | |
| MR JACKSON: | Copies of the Act were asked for and the |
Business Franchise ("X" Videos) Act 1990, may I
give those to the Court.
| MASON CJ: Yes, thank you. | The Court will consider its |
decision in this matter and will now adjourn until
10.15 am tomorrow.
AT 2.53 PM THE MATTER WAS ADJOURNED SINE DIE
| Captal(2) | 65 | 3/3/92 |
Key Legal Topics
Areas of Law
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Constitutional Law
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Statutory Interpretation
Legal Concepts
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Jurisdiction
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Statutory Construction
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Appeal
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