Finemores Transport Pty Ltd v New South Wales

[1978] HCA 16

HIGH COURT OF AUSTRALIA

Barwick C.J., Stephen, Mason, Jacobs, Murphy, and Aickin JJ.

FINEMORES TRANSPORT PTY. LTD. v. NEW SOUTH WALES

(1978) 139 CLR 338

16 May 1978

Constitutional Law (Cth)

Constitutional Law (Cth)—Freedom of interstate trade commerce and intercourse—Stamp duty imposed on certificate of registration of motor vehicle—Whether exigible in respect of vehicles used in interstate trade and commerce—The Constitution (63 &64 Vict. c. 12), s.92—Stamp Duties Act, 1920 (N.S.W.), s. 84G—Motor Traffic Act, 1909 (N.S.W.) s. 5B (1).

Decisions

1978, May 16.
The following judgments were delivered: -
BARWICK C.J. The plaintiff is engaged in commercial transport. In the course of its business it operates motor vehicles registered by the State of New South Wales as "interstate vehicles" restricted to use in interstate transport operations. (at p340)

2. The plaintiff seeks declarations, in substance, that the State may not lawfully demand the payment of stamp duty in respect of the issue of the certificates of registration of such vehicles: that is to say, that s. 84G of the Stamp Duties Act, 1920 (N.S.W.), as amended, ("the Act") cannot validly apply to the issue of such certificates. The plaintiff claims in this respect the protection of s. 92 of the Australian Constitution. (at p340)

3. The question in the case is whether the exaction of stamp duty upon the issue of a certificate of registration of an "interstate vehicle" is a relevant burden on the plaintiff's interstate transport operations, themselves admittedly a part of trade, commerce and intercourse between the States within the operation of s. 92. (at p340)

4. The basic principles by the application of which this matter is to be resolved may be briefly and categorically stated. (at p340)

5. Transport for reward across State lines is part of that trade, commerce and intercourse which is constitutionally declared to be absolutely free: Australian National Airways Pty. Ltd. v. The Commonwealth (1945) 71 CLR 29 . That freedom is invaded if that activity is inhibited or burdened by any act of any legislature or of any executive. Essential to the activity of interstate transportation is the use of the roads which lead to the crossing of State lines. A tax, as distinct from a recompense for services rendered or provided, exacted in connexion with the registration of such vehicles so that they may be so used is such a burden: Hughes &Vale Pty. Ltd. v. New South Wales (No. 2) (1955) 93 CLR 127 . (at p340)

6. Interstate transportation is to be free of such burdens. That trade and commerce has been deliberately placed in what might be described as a privileged position. It is not to be relatively free, no more burdened than comparable intrastate activities: but absolutely free. Thus, as it has long been decided, s. 92 cannot be limited to protection against discriminating burdens. (at p340)

7. It is the operation of a statute, including a statute imposing taxation, which is the determinant of there being or not being a relevant burden, not the subject matter of the statute. The operation of the statute includes all it relevantly does, but remote and merely consequential results or effects of the operation of the statute are not to be regarded as within that operation. (at p341)

8. Here, there is no question that the amount of duty chargeable under s. 84G of the Act is a tax. No considerations such as found favour with a majority of justices in support of the road tax in Hughes &Vale Pty. Ltd. v. New South Wales (No. 2) and Armstrong v. Victoria (No. 2) (1957) 99 CLR 28 , are involved in this case. The impost of s. 84G is for the purpose of raising revenue. It is not related to any consequence upon the roads of their use by motor vehicles. (at p341)

9. Again, it is clear in this case that the use of the subject vehicles will be exclusively in the course of interstate transport. Indeed, the registration of the vehicles confines them to such use. Also, it is beyond question that the vehicles may not be so used without being registered under the Motor Traffic Act, 1909 (N.S.W.), as amended. (at p341)

10. The vehicle is registered in the records of the Commissioner of Motor Transport: Motor Traffic Act, s. 12 (1). The Commissioner may issue a certificate of registration and a label to be affixed to the vehicle denoting its registration. Application for the registration of the vehicle must be made. A fee charged on registration to cover the administrative cost of registration perhaps may not amount to a tax on the use of the vehicle: but, as I have said, a tax exacted on registration of the vehicle is a relevant burden. (at p341)

11. The stamp duty is payable by the person in whose name a motor vehicle is registered for use on the roads: that means, in this case, by the plaintiff in respect of its vehicles used exclusively in the course of interstate trade, commerce and intercourse. (at p341)

12. Although s. 84G requires the amount of the duty to be sent to the Commissioner for Road Transport along with the application for registration of the vehicle, the duty on the issue of the certificate becomes a debt due to the State Crown and is recoverable in the courts from the person in whose name the certificate of registration is issued. (at p341)

13. According to the text of s. 84G and the Second Schedule to the Act, the tax is payable on the issue of the certificate of registration. It has been pointed out that there is no statutory obligation on the person in whose name a vehicle is registered to possess a certificate of registration. It is also said that the person in whose name the vehicle is registered is neither required to apply for such a certificate nor to accept it when issued. So much for the purpose of argument may be granted. But, having registered the vehicle, the Commissioner may issue such a certificate. Thus, without any act on the part of the person to whom the certificate may be issued, other than an application to register the vehicle, the tax becomes payable by him: it is exigible "on the issue of the certificate". The Commissioner controls the issue. (at p342)

14. The certificate, when issued, is not an instrument of title to the vehicle, nor does the statute make its contents evidence in any relevant respect. (at p342)

15. Transportation between the States of goods and people, but perhaps particularly of goods, is of the utmost concern to all States. This is particularly so in a country as widespread as Australia with noticeable diversity of available resources. Such transportation is essential if States are to be able to obtain those things which they do not have or do not produce and to be able to market their produce, primary and manufactured. It goes without saying that the cost of transportation is basic to the ultimate cost of the goods carried, such cost thus being a significant factor in the promotion or discouragement, as the case may be, of the trade in the goods carried. Imposts placed on transport necessarily snowball in the costing process. They are not finally paid by the transport operator but by the consumer of the goods. It is thus of the utmost importance to all States that no imposts be placed directly or indirectly on interstate transport. In that regard at least, that form of trade, commerce and intercourse, as I have indicated, must be absolutely free. (at p342)

16. The submission of the defendant is that the tax is no more than a stamp duty, a duty upon an instrument, and that any effect its payment has upon the operation of the plaintiff's vehicles in interstate commerce is remote and merely consequential. In other words, that a burden upon interstate trade and commerce is not within the operation of the Act. (at p342)

17. But it seems to me to be undeniable that an interstate transport operator cannot use his vehicles on the roads of New South Wales in the course of interstate trade and commerce without having paid the stamp duty exigible on registration of the vehicles for use on those roads: it is intended by the Act that it be paid by the person who by registration of the vehicle obtains the right to use it on the roads. As I have already mentioned, the fee payable on registration or renewal of the registration of a vehicle, calculated as specified in s. 3 (4) of the Motor Car Act 1951 (Vict.) was held to be a tax and inapplicable to vehicles used exclusively in interstate trade and commerce. That fee was payable on registration and renewal. The stamp duty here is payable on registration, i.e. on the certificate issued on registration and relating exclusively to the registration. (at p343)

18. Something was sought to be made of the fact that the duty under s. 84G was only payable upon the issue of a certificate of registration on an initial registration in the name of the applicant for registration and not on the renewal of that registration. But there is no substance in the suggestion. There is no rule that interstate transport may be taxed once but not annually or repetitively. If the right conclusion is that the payment of the duty is a relevant burden, it cannot matter that it has to be paid once only. (at p343)

19. Though in this case it will appear that I think the section itself operates to impose a burden on interstate trade and commerce, it is as well to bear in mind the words of Isaacs J. in The Commonwealth &Commonwealth Oil Refineries Ltd. v. South Australia (1926) 38 CLR 408, at p 423 : "The prohibitions of ss. 90 and 92 of the Constitution may be transgressed not merely by a direct and avowed contravention. They are transgressed also by a statute - whatever its ultimate purpose may be, and however its provisions are disguised by verbiage or characterization, or by numerous and varied operations lengthening the connective chain, or by otherwise paying titular homage to the supreme law of the Constitution - if it operates in the end by its own force so as to do substantially the same thing as a direct contravention would do, either in attaining a forbidden result or in using forbidden means. The relevant constitutional prohibitions include both means and results. It is no justification for using forbidden means that permissible results are sought, nor for securing forbidden results that lawful means are employed." The application of these remarks is perhaps nowhere as salutary as in relation to commercial interstate transportation. (at p343)

20. Section 84G provides that the stamp duty shall be paid by the person in whose name the certificate of registration is issued: that person is the person who applies to register the vehicle. A person who registers a vehicle exclusively for use in interstate trade and commerce is included in those by whom the Act requires the duty to be paid. That the plaintiff and those in the transport industry in a like case should have to pay the duty as part of the process of registering their interstate vehicles so that they may lawfully be used on the roads in the course of interstate trade and commerce is, in my opinion, no mere consequence of the imposition of the duty. It is within the intended operation of the section. The burden of its payment falls proximately and not remotely upon the plaintiff in its capacity as a registrant of an "interstate vehicle". The case is quite unlike that of manufacture dealt with in Grannall v. Marrickville Margarine Pty. Ltd. (1955) 93 CLR 55 . Its payment is not a mere antecedent to the inception of interstate trade: Reg. v. Anderson; Ex parte Ipec-Air Pty. Ltd. (1965) 113 CLR 177 . (at p344)

21. It was submitted by the plaintiff that, because the amount of the duty was to be sent with the application for registration, the payment of the duty was made a pre-condition to the registration. I doubt this interpretation of the relevant statutory provision. It seems to me that the Commissioner would be bound to register the vehicle, though the amount of the duty did not accompany the application for registration. Perhaps he might withhold the certificate of registration. But, in any event, upon its issue at his own instance, the duty would be recoverable. (at p344)

22. However, if the payment of the duty were a pre-condition of registration, the conclusion that the payment of the duty was a burden upon interstate transport would, in my opinion, be unarguably patent. But, though the payment be not such a pre-condition, it is none the less, as I have indicated, an inadmissible burden on interstate trade and commerce because within the operation of the Act. (at p344)

23. In my opinion, s. 84G, in so far as it includes certificates of registration of interstate vehicles, places directly and not remotely a burden on the interstate commercial transportation of the plaintiff. Accordingly, the section cannot validly operate to require the plaintiff to pay the duty in respect of the issue of certificates of registration of "interstate vehicles". Declarations to give effect to this conclusion ought, in my opinion, to be made. (at p344)

STEPHEN J. I have had the advantage of reading the reasons for judgment of the Chief Justice. I agree with each of the propositions which his Honour describes as basic principles by the application of which this case is to be decided. The application of those principles to the present legislation and to the facts of this case lead me to conclude that the plaintiff should succeed. The duty here in question is a revenue-raising tax which the plaintiff becomes liable to pay (whether or not it be regarded as a pre-condition of registration) upon taking steps to secure the registration of its trucks. These steps it must take if its trucks are lawfully to use the roads of the State. The burden of the duty thus imposed is a real and direct burden upon interstate trade, one which is in no sense remote or consequential. The amount of the duty is quite unrelated to the extent of road use or to any notion of recompense for wear and tear of the roads of the State. The fact that the burden of duty is not periodic and regular in incidence is irrelevant. I would make the declaration and order sought in pars 17 (2) and 17 (6) of the plaintiff's amended statement of claim. (at p345)

MASON J. The plaintiff, Finemores Transport Pty. Ltd., is engaged in the business of interstate road haulage and operates a number of trucks registered in New South Wales exclusively for that purpose. Late in November 1976 the plaintiff applied to have registered a new Kenworth prime mover for use exclusively in the course, or for the purposes, of interstate trade and commerce. However, the first defendant, the State of New South Wales, acting through its servants or agents, refused to register the motor vehicle until an amount of $1,000, said to be payable on account of stamp duty in respect of the certificate of registration, was paid to the third defendant, the Commissioner of Stamp Duties (N.S.W.). The plaintiff paid this amount under protest, together with $115.15 registration fees, and now seeks to recover the stamp duty and other amounts paid as stamp duty on the certificates of registration of other vehicles owned by it and used exclusively for the purposes of interstate trade and commerce. By its statement of claim the plaintiff seeks a declaration that s. 84G is invalid or alternatively that it is inapplicable to vehicles used or intended to be used exclusively in the course of, or for the purposes of, interstate trade or commerce. The defendants have demurred to the statement of claim. (at p345)

2. The stamp duty demanded by the defendants was payable under s. 84G of the Stamp Duties Act, 1920 (N.S.W.) ("the Act"). This section was introduced into the Act in 1962 as s. 84A, but following the inclusion of a second s. 84A by Act No. 110 of 1974 the section with which we are concerned was renumbered s. 84G by Act No. 75 of 1975. Section 84G (1) provides that for the purposes of the Act a "Motor Vehicle Certificate of Registration" means

"a certificate of registration issued in respect of a motor vehicle in accordance with the provisions of the Motor Traffic Act, 1909, as amended by subsequent Acts and the regulations thereunder whether such motor vehicle certificate of registration has been issued pursuant to a new registration or transfer of registration but does not include - (a) any such motor vehicle certificate of registration issued to the person in whose name such vehicle was last registered (whether in New South Wales or elsewhere) before the issue of such motor vehicle certificate of registration; or (b) a duplicate motor vehicle certificate of registration; or (c) a motor vehicle certificate of registration issued pursuant to a transfer of a motor vehicle under Regulation 29 of the Regulations under the Motor Traffic Act, 1909, as so amended; or

(d) a motor vehicle certificate of registration of a class exempted under the regulations from the provisions of this section." (at p346)

3. Pursuant to sub-s. (2) ad valorem duty is charged at a scheduled rate on a motor vehicle certificate of registration in respect of the value of the motor vehicle, subject to an exemption in favour of a person who is engaged principally in the trade or business of buying or selling motor vehicles and who is the holder of a licence under the Second-hand Motor Dealers Act, 1956. The Second Schedule contains an item for a motor vehicle certificate of registration which prescribes an amount of duty of $2 "for every $100 and also for any fractional part of $100 of the value of the motor vehicle", and which names "The person in whose name the certificate is issued" as the person primarily liable. By s. 38 (1) the person primarily liable "is personally liable to the Crown for the payment of the duty so chargeable on such instrument immediately upon the first execution thereof, and every such person may be sued for the amount of such duty as for a debt due to the Crown", and "Instrument" is defined in s. 3 (1) to include "every written document". (at p346)

4. Section 84G then provides that the value of a motor vehicle is the value stated in writing by the applicant for a certificate of registration as the market value at the time of the application (s. 84G (3)) and further provides that the Commissioner of Stamp Duties may require the applicant to furnish further evidence of value and may adjust the duty charged accordingly (s. 84G (5)). Collection of the duty is covered by sub-s. (4) which is in these terms:
"(4) An amount equivalent to the duty chargeable under this Act on a motor vehicle certificate of registration shall be forwarded with the application for the certificate of registration or transfer thereof. The duty so chargeable may be denoted by an adhesive stamp which is to be affixed and cancelled at the time of issue of such certifiacte." (at p346)

5. The effect of these provisions, if valid, was to place Finemores in a situation in which, on applying for the registration of a new truck or on the transfer of an existing registration from another person, it became liable to pay or be sued for an amount of stamp duty for the certificate of registration which issued. (at p346)

6. Certificates of registration are issued under the Motor Traffic Act, 1909 (N.S.W.) and the regulations made thereunder. Section 5B (1) of that Act provides:

"Every motor vehicle (other than a motor vehicle exempted from registration by or under this Act) shall be registered before being used or driven upon a public street."

It is an offence to drive or permit a motor vehicle to be driven upon a public street if the vehicle is unregistered (s. 6 (1) (c) (v)). (at p347)

7. It is crucial to the plaintiff's argument that this section makes registration a precondition of use and that the inevitable consequence of registration is the issue of a certificate of registration which attracts the liability to duty in the manner and circumstances which I have discussed. The Commissioner of Road Transport is under a mandatory duty to issue a certificate of registration upon registering a vehicle by virtue of reg. 6 of the Motor Traffic Regulations ("the Regulations") although the purpose or utility of such a certificate is not clear; it is not evidence of ownership and there appears to be no provision in the Motor Traffic Act or any other Act requiring the production of such a certificate by the driver of the vehicle, or any other person for that matter, at any subsequent time. (at p347)

8. Regulation 13 (1A) provides:
"The Commissioner shall not, except as provided in clause (1) of this Regulation, refuse registration or renewal or transfer of the registration of a motor vehicle used or intended to be used solely in the course and for the purposes of interstate trade or commerce." (at p347)

9. The effect of this provision is that, subject to the condition that the vehicle "is suitable for safe use and the vehicle and its equipment comply with the conditions material in or prescribed under Schedule F" (reg. 13 (1)), the Commissioner is obliged to register vehicles used or intended for use in interstate trade and commerce whether or not the application for registration is accompanied by an amount equivalent to the duty chargeable in accordance with s. 84G (4) of the Act. Schedule F contains detailed regulations prescribing "Construction and Equipment of Motor Vehicles", including lamps and reflectors, dimensions of vehicles, trailer couplings, ground clearance, mudguards, brakes, etc. (at p347)

10. Once registered, however, it seems that the non-payment of the stamp duty would allow the Commissioner to cancel the registration of the vehicle, whether it was to be used in interstate trade and commerce or not, under reg. 13 (3) (e). Nevertheless, this does not in any way relieve the Commissioner of the duty of first registering the vehicle and reg. 13 (3) (e) is directory only; the Commissioner is not under any obligation to cancel the registration. Furthermore, the validity of the power of the Commissioner to cancel the registration of a vehicle used, or intended to be used, exclusively for interstate trade and commerce for non-payment of stamp duty must depend on, rather than in any way be determinative of, the validity of the impost itself. (at p348)

11. The defendants rely on the fact that the payment of the stamp duty is not a condition precedent to the issue of a certificate of registration, the fact that the Commissioner must issue the certificate if the conditions prescribed in the regulation are satisfied whether the duty is paid or not, to support an argument that the impost is too remote from interstate trade and commerce to fall within the prohibition contained in s. 92 of the Constitution. This argument is no answer. It is the liability to pay the stamp duty and not actual payment which on the plaintiff's case is the relevant burden. One cannot obtain a certificate of registration without attracting the liability to pay stamp duty upon it. As one cannot use the motor vehicle on a public street unless it is first registered and the issue of a certificate of registration is the inevitable consequence of registration, then it is true to say one cannot use the vehicle for interstate trade and commerce without incurring liability for stamp duty. There is an immediate connexion with use of the vehicle and the impost as long as the chain of mandatory requirements remains unbroken. (at p348)

12. What I have said assumes that use of a motor vehicle on a public street in this context can form part of interstate trade and commerce. It is well established that interstate transport of persons or goods by road or air is interstate trade and commerce. The distinction drawn in R. v. Vizzard; Ex parte Hill (1933) 50 CLR 30, at p 51 between trade, commerce and intercourse itself and motor vehicles as "aids or implements to effect the thing . . . not the thing itself", that is, viewing motor vehicles as mere "integers of traffic", was finally rejected by the Judicial Committee in Hughes and Vale Pty. Ltd. v. New South Wales (No.1) (1954) 93 CLR 1, at pp 22, 23; (1955) A C 241, at pp 294, 296 when they adopted the words and reasoning of Dixon J. in his dissenting judgment in McCarter v. Brodie (1950) 80 CLR 432 . (at p348)

13. The plaintiff relies heavily on the decision in Hughes and Vale Pty. Ltd. v. New South Wales (No.2) (1955) 93 CLR 127 to support its argument that s. 84G of the Act is invalid, at least in so far as it applies to the certificate of registration of a vehicle used exclusively in interstate trade. In Hughes and Vale Pty. Ltd. (No.2), it will be recalled, two levies were imposed on the operation of (inter alia) interstate road transport; a ton-mile tax and an annual surcharge. The levy presently under consideration in so far as it applies to interstate trade and commerce is in my opinion indistinguishable from the annual surcharge imposed under the Motor Vehicles (Taxation) Act 1951 and the Motor Vehicles Taxation Management Act 1949 which was held invalid in Hughes and Vale Pty. Ltd. (No. 2). The defendants take as one point of distinction between Hughes and Vale Pty. Ltd. (No. 2) and the present case the fact that the impost in the earlier case was an annual levy whereas in the present case the liability to stamp duty occurs only when registration is sought in a new name, usually on a change in ownership. This difference does not provide a sound basis for distinguishing Hughes and Vale Pty. Ltd. (No. 2) as there is no relevant legal difference in the burden which is imposed as a precondition to use of the motor vehicle only once in respect of each person in whose name it is registered and a burden which is recurrent annually thereafter. A tax of the kind dealt with in Hughes and Vale Pty. Ltd. (No. 2) could not be justified simply because it was not imposed annually but, say, only every third year. The infrequency of occurrence of the liability is not in point. The basic flaw in the stamp duty imposed in the present case is that liability to pay it is a precondition to use of a vehicle intended for exclusive use in interstate trade and commerce. The duty does not fall within the exceptions recognized by Dixon C.J., McTiernan and Webb JJ. in Hughes and Vale Pty. Ltd. (No. 2) (1955) 93 CLR, at p 175 where their Honours pointed out that a charge imposed as a real attempt to fix a reasonable recompense or compensation for the use of the highway and for a contribution to the wear and tear which the vehicle may be expected to make will be sustained in conformity with the freedom s. 92 confers. Their Honours went on to discuss the possibility that the tax might be justified on the ground that it was not a charge upon the commercial use of vehicles at all; that it was no more than a tax on the mere ownership of motor vehicles, a tax based on property as such. As to this, their Honours said (1955) 93 CLR, at p 182 :

"In the case of a piece of property which can have only one use and that transport, for example a use in the carriage of goods by road, that is not perhaps a basis for validity which it is easy to make out. But, be that as it may, the truth is that the incidence of the tax, though in terms it is levied on 'motor vehicles', is upon their use. It is a condition of registration without which they cannot be used on roads of the State."

Payment of the stamp duty in the present case is not, strictly speaking, a "condition of registration". However, liability to the tax is an inevitable consequence of registration in the appropriate circumstances. (at p350)

14. The defendants point to the fact that the stamp duty only applies the first time that a certificate of registration is issued to a person in respect of a vehicle as supporting their argument that the duty is not imposed on use of the vehicle but on the certificate of registration per se, as a document, as indicia of title or evidence of change of ownership. This argument cannot be sustained. Although the purpose and utility of the certificate of registration remains obscure it is certainly not a document of title. The expression "registered owner", which is often used, has no legal significance. The certificate has no part to play in establishing the ownership or identifiaction of a registered vehicle. The identification of a registered vehicle is covered by reg. 14, which requires number plates to be issued and affixed to the motor vehicle, and reg. 46 (1) which deals with "registration labels". Registration labels "shall issue to the owner of the vehicle" under reg. 46 (1) but as the applicant for registration is not necessarily the owner, and as the Act and the regulations do not provide a procedure whereby the applicant's ownership can be determined, there is no certainty that this injunction will be obeyed. The registration label must be affixed to the vehicle in conformity with the requirement of the regulations (reg. 53 (2)). All this goes to show that the functions which might otherwise be performed by a certificate of registration are in fact performed by the number plate and registration label. I conclude that, as the certificate of registration has no vital role to play in the registration process independent of its liability to stamp duty, the relevant effect of its existence is only to attract liability to that duty. (at p350)

15. The defendants seek to draw some support for their proposition that the stamp duty is legally imposed by s. 84G simply as a duty imposed on a document from the majority decision in Associated Steamships Pty. Ltd. v. Western Australia (1969) 120 CLR 92 where the provisions of the Stamp Act, 1921-1968 (W.A.) requiring receipts to be issued for moneys received and imposing duty on them were held valid. McTiernan J. (1969) 120 CLR, at p 107 thought that "It is not necessary in order to say that trade is 'free' that the trader should be free from an obligation imposed by a statute to give receipts to his customers or that the receipts he issues should be dutiable". Kitto J. (1969) 120 CLR, at p 109 distinguished the "legal freedom - freedom from restraints and burdens imposed by or under laws" which is guaranteed by s. 92 from "immunity from the more remote, de facto, disadvantages which may ensue when laws have operated according to their terms". His Honour went on to say (1969) 120 CLR, at p 110 :
"The present case seems to me to present less difficulty than some and indeed to afford a classic example of a law to which s. 92 has nothing to say since the only direct operation of the law is to impose a burden upon an intra-State act, with consequences, but no more than consequences, for inter-State trade. What, in the plaintiff's business, constitutes trade, commerce or intercourse among the States? Only the interState transportation of goods. To say that it is the interState transportation of goods for reward adds nothing, except that the plaintiff receives money for performing its acts of inter-State transportation . . ." (at p351)

16. Menzies J. agreed with Kitto J. and Windeyer J. also held the legislation under consideration valid. Windeyer J. said (1969) 120 CLR, at p 112 :

"But this Court has said more than once that for s. 92 to destroy legislation, it, the legislation, must in its operation create a real and direct impediment to something which is of the essence of trade between the States, such as the movement of things from State to State."

His Honour considered that the stamp duty under consideration was merely a fiscal burden making trade less economically profitable than otherwise it would be, which did not discriminate between interstate and intrastate trade, and therefore "not of itself an impairment of the freedom which s. 92 assures". (at p351)

17. Barwick C.J. and Owen J. dissented. The Chief Justice considered whether the stamp duty was really a duty upon a document or instrument or a tax upon the interstate activity. His Honour thought that in the case where the receipt which was made dutiable was a written acknowledgement brought into existence under compulsion of the Stamp Act, 1921- 1968 (W.A.) and not created as a document required to be used commercially at all the duty could not be regarded as merely a duty upon an instrument but is in reality a duty upon the activity. (at p351)

18. Owen J. (1969) 120 CLR, at p 114 was of the opinion that the stamp duty under consideration was bad because, in his opinion, "the receipt by the plaintiff of moneys charged by it for freight for carrying goods interstate is an essential element in the interstate trade which it carries on". (at p351)

19. It seems to me that nothing in the majority judgments in Associated Steamships (1969) 120 CLR 92 leads to the view that s. 84G of the Act presently under consideration validly applies to interstate traders. The essence of the interstate trade in this case, as in Associated Steamships, is the interstate transportation of goods but the burden in this case is imposed on that very activity and in my opinion imposes a real and direct burden on it. (at p352)

20. To some it may seem surprising that s. 92 confers an immunity on those engaged in interstate trade from liability to a tax which is imposed without distinction or discrimination on all those who register motor vehicles, whether the vehicles are engaged in or intended to be engaged in interstate trade or not. It is to carry the protection given by s. 92 to the interstate trader very far indeed and to place him in a very privileged position. I have always doubted whether s. 92 was intended to do more than protect interstate trade from burdens of a discriminatory kind of which North Eastern Dairy Co. Ltd. v. Dairy Industry Authority of N.S.W. (1975) 134 CLR 559 provides a convenient example. But I acknowledge that the cases have taken the section a good deal further and in conformity with the doctrine enunciated by the Court, the correctness of which has not been challenged in this case, I can only conclude that the duty imposed by s. 84G cannot validly operate to impose a stamp duty on a certificate of registration which issues in respect of a motor vehicle used, or intended to be used, exclusively for the purposes of interstate trade and commerce. By virtue of s. 144 of the Act s. 84G must be "read and construed so as not to exceed the legislative power of the State" and so it is clear that s. 84G is a valid enactment of the New South Wales legislature to the extent that it operates in fields other than interstate trade. For these reasons I would make the declaration and order sought in pars 17 (2) and 17 (6) of the amended statement of claim. (at p352)

JACOBS J. I find myself compelled by authority, of which no review has been sought, to conclude that the stamp duty purported to be charged under s. 84G of the Stamp Duties Act on any certificate of registration of a motor vehicle pursuant to a new registration or transfer of registration cannot validly be so charged where the vehicle is used or intended to be used solely in the course of and for the purposes of interstate trade and commerce. Registration of a motor vehicle is a condition precedent to use of that vehicle on the roads of the State. A certificate of registration issues pursuant to the Motor Traffic Act and regulations as an inevitable consequence of registration. Its coming into existence is merely an incident of registration. It is sought to charge a stamp duty upon the certificate as an instrument. In these circumstances the stamp duty can only be regarded as in substance a tax imposed upon registration. It is true that it is not imposed upon every registration but only upon every new registration or transfer of registration; but it does not seem to me that this can make any difference. A fee upon registration can consistently with past decisions be justified as an incident of a registration which itself is no more than regulatory. But when the permissible necessity for registration is taken as the occasion for the imposition of a charge which cannot be regarded as a mere incident of that registration then the charge itself cannot, in the light of the decided cases, be validly imposed in respect of the registration of vehicles used or intended to be used solely in the course of and for the purposes of interstate trade and commerce. The charge is open to the same objection as the taxes and charges under the Motor Vehicles Taxation Management Act, 1949 (N.S.W.) and the Motor Vehicles (Taxation) Act, 1951 (N.S.W.) held in Hughes and Vale Pty. Ltd. (No. 2) (1955) 93 CLR 127 not to be validly applicable to vehicles engaged in interstate trade and commerce and the fees held not to be validly applicable to such vehicles in Nilson v. South Australia (1955) 93 CLR 292 and Pioneer Tourist Coaches Pty. Ltd. v. South Australia (1955) 93 CLR 307 (at p353)

2. The decisions which I have lastly mentioned purported to apply the decision of the Privy Council in Hughes and Vale Pty. Ltd. (No. 1) (1954) 93 CLR 1; (1955) AC 241 , which overruled what are commonly referred to as the Transport Cases. However, it should perhaps be borne in mind that in the various pieces of legislation which could not after Hughes and Vale Pty. Ltd. (No. 1) be regarded as valid it sufficiently appeared that their purpose and effect was to prefer the railways of the particular State as an interstate transport operator over road transport operators engaged in trade and commerce into and out of other States. The legislation imposed a licensing system whereunder the interstate carriage of goods by road could be prohibited. Thereby the legislation could operate directly to prohibit interstate trade and commerce. Under the legislation creating the licensing system held invalid in Hughes and Vale Pty. Ltd. (No. 1) there was provision for a condition of a licence to be payment of a tax based on tonnage/mileage but the tax was an incident of the licensing system and "it is not in doubt that the object of these charges was to protect the railways in New South Wales from competition, as part of a system for 'coordinating transport'": see Hughes and Vale Pty. Ltd. (No. 1) (1954) 93 CLR, at pp 7-8; (1955) AC, at pp 247-248 (at p354)

3. Although a tax upon the registration of vehicles used or intended to be used in the course of and for the purposes of interstate trade and commerce as well as upon all other similar vehicles registered to use State roads could operate so as directly to prohibit the use of the vehicles in the course of or for the purposes of such trade and commerce, I would not be inclined to think that it did so operate unless the facts and circumstances disclosed that this was so. But those cases to which I have referred, decided after Hughes and Vale Pty. Ltd. (No. 1), determined that they did so operate, and the conclusion did not depend upon an inference from the scale of the charges that the object thereof was that of protecting the railways in New South Wales from competition including competition in interstate trade and commerce. In the present state of the authorities it must be concluded that the stamp duty cannot be validly levied. (at p354)

1. MURPHY J. If the tax imposed by the Stamp Duties Act, 1920 (N.S.W.), as amended, were confined to motor vehicles to be used in interstate trade and commerce, s. 92 of the Constitution would be contravened as the stamp duty would be a fiscal impost on interstate trade and commerce. The statutory complexities of the registration and issuing of certificates would not detract from this conclusion. However, this tax is imposed in respect of the registration of all such vehicles without discrimination, whether intended for interstate or intrastate trade and commerce or both, except that, in favour of interstate trade and commerce, the legislation exempts from tax a vehicle registered by the same person in another State. Other States have similar provisions. (at p354)

2. A person who engages solely in interstate trade and commerce is not freed of all taxes in relation to that trade and commerce, even those which are imposed without any reference to (but which extend to and include) interstate trade and commerce. (at p354)

3. The early case of Fox v. Robbins (1909) 8 CLR 115 establishes the correct approach to s. 92. A Western Australian Act imposed a retail licence fee of 2 pounds per year for the sale of wine produced in that State and 50 pounds per year for the sale of wine produced elsewhere. The Court consisted of Griffith C.J. and Barton, O'Connor, Isaacs and Higgins JJ. Griffith C.J. said (1909) 8 CLR, at pp 119-120 :

"This provision (s. 92) would be quite illusory if a State could impose disabilities upon the sale of the products of other States which are not imposed upon the sale of home products . . . . . . the Act of Western Australia now in question, in so far as it makes a discrimination against wine the product of fruit grown in other States of the Commonwealth in favour of wine the product of fruit grown in Western Australia, is contrary to the Constitution . . . The consequence is that no greater burden or restriction can now be laid upon the sale of other Australian wines in Western Australia than that laid upon the sale of Western Australian wine."

Barton J., in agreeing, said (1909) 8 CLR, at pp 123-124 :

"To impose one charge on the sale of the wines of other States, while allowing the sale of Western Australian wines at another and a lower fee, is discrimination of a kind which if lawful in this case is lawful in a thousand others - for this is a question of power. By burdens of this kind and that, whether under the name of licence fees or under any other name, the operation of inter-state free trade could be so hampered and restricted as to reduce the Constitution in that regard to mere futility. . . . There is no difference in substance or effect in its bearing on inter-state commerce between a burden such as this and a duty collected at the borders of the ports of one State on the products of another. In either case that commerce is restricted which the Constitution says shall be free; and in either case the disability may be made so great as to render the product unsaleable, and therefore virtually to prohibit its introduction. In a word, however the enactment may be phrased, it is inter-state protection, not inter-state free trade. . . .

I must not for a moment be taken to cast any doubt on the capacity of a State to tax, together with its own products, goods produced in other States, when brought into it for sale or consumption. When the inter-state transit is over and they have become part of the mass of property within the State, any goods may be taxed, no matter whence they have come. But they must be taxed alike with all other such goods in the State. The tax must be general, and laid equally on all goods of the kind to be taxed, whether their State of origin be the taxing State or another. And what I say of taxes applies to other imposts and burdens." (at p355)

4. O'Connor J. also founded his judgment on the discriminatory effect of the tax against interstate trade and commerce (1909) 8 CLR, at p 126 :
"It is clear that the Constitution does not permit a State by such discriminating charges to place at a disadvantage the goods of other States passing into it for sale." (at p355)

5. Isaacs J. said of s. 92 (1909) 8 CLR, at pp 129-130 :

". . . if any of the provisions discriminate adversely to other States, it does impair that freedom, because it deters the residents of the State from selling or consuming, and therefore from purchasing and importing, the products of the other States. . . .

Section 92 of the Constitution . . . prevents adverse discrimination from being lawful . . . " (at p356)

6. Higgins J. said of the Act (1909) 8 CLR, at p 131 :
"This involves a discrimination in favour of Western Australian products, and an infringement of the provisions of s. 92 of the Constitution in favour of absolute freedom of trade among the States." (at p356)

7. It is quite clear that the Court considered that a retail licence fee of $2 imposed in respect of wine coming from interstate was not a contravention of s. 92 provided that there was no adverse discrimination. In H. C. Sleigh Ltd. v. South Australia (1977) 136 CLR 475 , I took the view that because of the absence of adverse discrimination against trade and commerce among the States, the Business Franchise (Petroleum) Act, 1974-1975 (S.A.) did not contravene s. 92. (at p356)

8. There is no point in traversing the great number of cases on s. 92, many of which depart from the concept of adverse discrimination and were made at a time when the decisions of this Court were subject to appeal to the Privy Council. As this Court is not now bound by any decision of the Privy Council or by its own decisions, there is no reason why s. 92 should not be reconsidered. However, counsel for the State did not ask for any reconsideration of the previous decisions. (at p356)

9. The acquisition of a motor vehicle and registration provides one of the facilities for trade and commerce among the States. Equally, the acquisition or employment of other resources may be necessary or desirable. If the test of adverse discrimination is not applied, then, with all respect to what was said by Dixon C.J. and McTiernan and Williams JJ. in Hughes and Vale Pty. Ltd. v. New South Wales (No. 2) (1955) 93 CLR 127, at p 182 , there seems no reason why the acquisition or employment of all such resources, including the employment of persons, should not be free of all types of taxes and fiscal imposts. Those engaged in interstate trade and commerce would then be able to claim freedom from payroll taxes in respect of employees engaged in such trade and freedom from sales taxes in respect of goods used (e.g., stationery, petrol, tyres, packing materials, as well as vehicles) and logically, freedom from any tax on the receipts or profits of the trade or commerce. Section 92 was not intended to put those engaged in interstate trade and commerce in such a privileged position. (at p356)

10. The plaintiff cannot complain that although in one State the laws do not discriminate against it, the combined effect of laws of two or more States is that they do adversely discriminate against its interstate trade and commerce - because the laws of the several States (New South Wales and Victoria being relevant here) are drawn with exemptions to ensure that interstate trade and commerce is not subjected to any duplication in tax which will adversely discriminate against it. (at p357)

11. No attention was paid to the question whether in the absence of adverse discrimination the tax must not (together with other taxes) exceed what is a fair compensation to the State for the use of its roads. The plaintiff did not assert that the tax (together with road maintenance taxes which are applied on a weight and distance formula) was in excess of fair compensation to the State for the use of its roads; and the State did not seek to justify the taxes as being no more than a fair compensation for the use. As no attention was paid to this aspect, I will not consider it. In the United States, a similar tax to this, imposed by the State of Maryland, was held not to violate the Commerce Clause (see Capital Greyhound Lines v. Brice, Commissioner of Motor Vehicles (1950) 339 US 542 (94 Law Ed 1053) ). (at p357)

12. The State Act is valid and the declarations sought should not be made. (at p357)

AICKIN J. The relevant legislation is set out in the judgment of the Chief Justice and I do not repeat it here. I agree in the conclusion reached by the Chief Justice and with the substance of his reasons for concluding that the legislation cannot validly operate so as to require the plaintiff to pay the duty in question in respect of vehicles to be used exclusively in interstate trade, commerce or intercourse. I wish to add only some observations on the authorities. (at p357)

2. In my opinion the invalidity of the relevant legislation in so far as it applies to vehicles used in interstate trade commerce and intercourse is concluded by prior decisions of this Court. There are three decisions which are material. (at p357)

3. The first is Hughes and Vale Pty. Ltd. v. New South Wales (No. 1) (1954) 93 CLR 1; (1955) AC 241 ("Hughes and Vale (No. 1)"). It established two main points, the first of which was that the imposition of a ton/mile tax on vehicle and freight was invalid in so far as it applied to interstate trade, notwithstanding that the tax was uniform in its application to all motor transport. The second point was that a discretionary licensing system applying to all persons operating commercial vehicles was held to be contrary to s. 92 in so far as it applied to those operating in or in the course of interstate trade. (at p358)

4. The second case is Hughes and Vale Pty. Ltd. v. New South Wales (No. 2) (1955) 93 CLR 127 ("Hughes and Vale (No. 2)") which dealt with the amended New South Wales legislation, namely the State Transport (Co-ordination) Act, 1931-1954 and two of its provisions. Section 12 of that Act imposed a licensing system which enabled the Commissioner to refuse a licence on a number of very generally expressed grounds and empowered him to impose conditions relating to a wide variety of matters. That provision was held to be contrary to s. 92 in so far as it applied to vehicles engaged in interstate trade. Section 18 required that every such licence was to be subject to a condition that the holder paid to the Commissioner what was described as a "reasonable charge" for the use of roads at rates to be fixed by the Commissioner at a figure not exceeding that recommended by a committee, and that he and the committee were to have regard to a number of stated matters. The charge payable was not to exceed the charge payable in respect of similar vehicles engaged in intrastate trade over the same routes and in the same circumstances. That charge was also held to be invalid. The Motor Vehicles Taxation Management Act, 1949-1951 (N.S.W.) read with the Motor Vehicles (Taxation) Act, 1951 (N.S.W.) provided for the imposition of a tax on motor vehicles at the time of application for registration and at the time of each renewal thereof. That tax was based on the unladen weight of the vehicle and it was provided that vehicles powered by diesel fuel were to be taxed at double the ordinary rate. It was held by the Court that s. 18 of the State Transport (Co-ordination) Act, 1931- 1954 was invalid and that the Motor Vehicles Taxation Management Act, 1949-1951 could not validly apply in respect of vehicles used exclusively for the purposes of interstate trade commerce or intercourse. The majority of the Court however held that it was possible for the States to impose a fair and reasonable charge for the use of roads by vehicles engaged in interstate trade commerce and intercourse, but that the impost referred to did not answer that description. (at p358)

5. The tax in the present case precisely answers the description given by Fullagar J. to the tax on registration held invalid in Hughes and Vale (No. 2) (1955) 93 CLR, at p 214 :

"It may well be that there is no constitutional objection to a provision requiring the registration of motor vehicles, including motor vehicles which are originally registered in other States and enter New South Wales from other States. Again, it may well be that the requirement of registration will not be invalidated by the mere fact that a uniform fee is made payable on registration: all States require payment of a fee on registration, and, unless some affirmative reason appeared for regarding it as a real burden or impediment on inter-State trade, the exaction of a fee as a mere incident of registration may be said not to offend against s. 92: cf. Willard v. Rawson (1933) 48 CLR 316 . But the exaction imposed by the Management Act and the Taxation Act cannot be regarded as a mere incident of registration regarded as an object in itself. What is imposed by those Acts is a real and very substantial tax on motor vehicles. The levying of a pecuniary impost is the end in view, and the impost is made payable on registration only because that is a convenient means of ensuring its collection. When we look at the actual operation of the legislation in relation to commerce, we cannot, I think, avoid saying that it does impose a real and direct burden on the carrying on of commerce in a particular way. And, if that is so, it cannot, consistently with s. 92, operate in respect of the carrying on of inter-State commerce."

The fact that that tax was imposed on registration and renewal and that the tax now in question is imposed on registration and transfer of registration is a trifling and immaterial difference. Moreover the present tax is not distinguishable from the tax dealt with in Armstrong v. Victoria (No. 2) (1957) 99 CLR 28 ("Armstrong (No. 2)") which dealt with s. 6, especially sub-s. 4, of the Motor Car Act 1951 (Vict.). The words used by Dixon C.J., are directly applicable to the present tax (1957) 99 CLR, at p 60 :

"It appears to me that on a proper scrutiny of Pt II of the Motor Car Acts 1951-1956 (Vict.) and the second schedule it must be seen that no room exists for the grounds upon which it has been sought to reconcile with s. 92 the imposition upon vehicles exclusively engaged in inter-State commerce of the rates contained in sub-par. (b) of par. B of the schedule. (1) The exaction cannot be regarded simply as a fee contributing to the cost of registration a service in the interest of motor car owners and drivers and others so that it is nothing but an incident or adjunct of the traffic. (2) It cannot be treated as another contribution to the maintenance of the highways compensatory for the use made of them. (3) It cannot be justified as a tax upon the ownership or possession of a chattel considered independently of the use of the chattel in the carriage of persons or goods, including the inter-State carriage of persons or goods. (4) It cannot be treated as involving no appreciable burden upon the possession of a motor vehicle as a means of inter-State carriage and movement.

The truth is that the owner of a motor vehicle unregistered elsewhere is prohibited from driving it upon a Victorian highway in the course of inter-State commerce unless, in order to obtain registration, he pays an annual tax involving an appreciable burden, a tax which is heavier if he desires to carry passengers or goods or journey in the course of trade and increases with the size of his vehicle, that is to say with its carrying capacity. It is thus a tax the incidence and quantification of which is bound up with inter-State trade and commerce when it is applied to vehicles exclusively engaged therein." (at p360)

6. The fact that that tax was an annual charge is again an immaterial difference for it cannot matter that the burden is imposed once only as a necessary condition of the use of the vehicle at all and not again until the vehicle changes hands. That decision again demonstrates that a burden on interstate trade is no less a burden because it is nondiscriminatory in character. To the same effect as Armstrong (No. 2) are cases dealing with similar registration provisions in South Australia: Nilson v. South Australia (1955) 93 CLR 292 ; Pioneer Tourist Coaches Pty. Ltd. v. South Australia (1955) 93 CLR 307 . (at p360)

7. There is nothing in the present case which enables reliance to be placed on that part of the majority's decision in Hughes and Vale (No. 2) (1955) 93 CLR 127 which indicates that a genuine charge for the use of the road or roads may in an appropriate case fall outside the operation of s. 92. Armstrong (No. 2) provides an example of such a charge which was held to be valid as not being in conflict with s. 92 but an examination of the facts in that case shows how remote it is from the present and that no reliance can be placed upon it in support of the validity of the provisions now in question. (at p360)

8. I am therefore of opinion that the plaintiff should succeed in this action and that the appropriate declarations as to invalidity should be made. (at p360)

Orders

Declaration that s. 84G of the Stamp Duties Act, 1920 (as amended) of the State of New South Wales is inapplicable to the plaintiff in respect of vehicles used or intended to be used exclusively in the course of or for the purposes of interstate trade or commerce and that the duty imposed by the said s. 84G cannot be and has not been validly levied on any certificate of registration or any renewal thereof issued pursuant to the provisions of the Motor Traffic Act, 1909 (as amended), of the said State in respect of any vehicle of the plaintiff so used or intended to be so used.

Order that the defendants repay to the plaintiff all amounts paid by it by way of ad valorem stamp duty in respect of certificates of registration and renewals thereof issued pursuant to the said Motor Traffic Act to the plaintiff in respect of motor vehicles used in or intended to be used solely in the course of or for the purposes of interstate trade.

Order that the defendants pay the costs of the plaintiff of this application.