Harper v Minister for Sea Fisheries & Ors; Harper v Minister for Sea Fisheries

[1989] HCATrans 130

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No Ml0 of 1988

B e t w e e n -

GEOFFREY ALAN HARPER

Plaintiff

and

MINISTER FOR SEA FISHERIES,

DIRECTOR OF SEA FISHERIES

and THE STATE OF TASMANIA

Defendants

Case Stated

MASON CJ
BRENNAN J
DEANE J
DAWSON J
TOOHEY J

Harper(2)

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 7 JUNE 1989, AT 10.19 AM

(Continued from 6/6/89)

Copyright in the High Court of Australia

Cl T 1 / 1 /RB 410 7/6/89

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No M3 of 1989

B e t w e e n -

GEOFFREY ALAN HARPER

Plaintiff

and

MINISTER FOR SEA FISHERIES,

DIRECTOR OF SEA FISHERIES

and THE STATE OF TASMANIA

Defendants

Case Stated

MASON CJ
BRENNAN J
DEANE J

DAWSON J

T05HEVJ

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 7 JUNE 1.989 , .. AT JO .19 AM

(Continued from 6/6/89)

Copyright in the High Court of Australia

ClTl/2/RB	411	7/6/89
Harper(2)

MASON CJ:	Yes, Sir Maurice?
SIR MAURICE:	Your Honour, the passage from Your Honour's the Chief Justice's judgment in NEW SOUTH WALES V
THE COMMONWEALTH is at page 471 -that I was
talking about yesterday - where at the last
paragraph on the page Your Honour says:

For these reasons it is my opinion that

the power conferred by section Sl(xxix)

extends to matters or things geographically

situated outside Australia. The view

appears to accord with what was said by

Justice Evatt and Justice McTiernan in

BURGESS' case -

And, Your Honour goes on -

And it applies with special force to the

territorial sea and its solum because, as

I have already observed, their control

and regulation is an aspect of the

external sovereignty of Australia and

Australia's external relationships with

other nations.

Now, Your Honours, I do not wish to read any

of the other passages that we have set out.

Your Honours, therefore, we say this law is valid

as a law under Sl(xxix), the external affairs

power. The question is not a question of antecedent

title - it is a question of power, that is all.

So, we say, the Parliament can pass a law if it

wishes within the ambit of the power over external

affairs giving the States these rights. That is

the first arm on which we would.::Wi?h_to put it.

The second way, Your Honours, we have relied

on sections 61 and Sl(xxxix) and we have referred

Your Honours to the authorities in which the

Court held that what the SEAS AND SUBMERGED LANDS

ACT did was to indicate a domestic content or

effect or consequence of international sovereignty.

Now, Your Honours, then there was an agreement

between the various executives of the Corrrrnonwealth

and the States and in pursuance of that agreement,

whereby the FISHERIES ACT was amended and the

COASTAL WATERS ACT was passed and so on, one had

a redistribution of the - I am not saying the rights -

but of the effect of the declaration of Australia's

sovereignty as it was announced or declared in the

SEAS AND SUBMERGED LANDS ACT domestically and we

say, Your Honour, that that would be within

Sl(xxxix) and section 61.

ClTl/1/JH	412	SIR M. BYERS, QC	7/6/89
Harper(2)

SIR MAURICE (continuing):  Could I just put it an alternative

way? Alternatively, of course, Your Honour, once

one had a power exercised under section 51 (xxix)

declaring Je domestic consequences of sovereignty

as this Court said was the SEAS AND SUBMERGED LANDS

ACT, one could use, in our respectful submission,

section Sl(xxxix) to redistribute the consequences

so as to allow the States a greater hand in the

management and control of the sea bed and its

resources, and - such a law

could then be seen as supported solely by

section Sl(xxxix) in relation to the legislative

power.	Now Your Honour, that is all we want to
say - - -

BRENNAN J:  How do you say that that redistribution is an

external affair, or an incident to the

external affair?

SIR MAURICE: Well, I would say the grant of a title is an

external affair. I do not say all the Commonwealth

laws are external affairs. We would say the

COAS'i'AL POWERS. ACT is obviously not a law about

external affairs, it is a law under Sl(xxxviii)

or nothing, but I do not want to address any arguments

to Your Honours about that. But, what I am concerned,

Your Honours, to address an argument to is the

TITLE ACT, and it is an external affair for the

reason I have mentioned, we would say, with respect

Your Honour, and alternatively supported by

Sl(xxxix) for the reason I have mentioned.

Now, Your Honours, can I just before I leave

that, since we do not wish to say anything about

the STATE POWERS. ACT, bearing in mind the previous

arguments before the Court, can I just say something

about my learned friend, Mr Charles' argument?

Your Honour, he says that the - one of his

arguments is that the territorial sea is a Commonwealth

place. Now, we would say, of course, that is just

not correct. You cannot possibly say that it is a

you can say that the land mass of Australia, over	place acquired for public purposes, any more than
which Australia has sovereignty is also a Commonwealth place, so that you could govern
the whole of Australia under section 52(i) on the
view that my learned friend contends for in point
of reason.

ClT2/l/FK	413	SIR M.BYERS, QC	7/6/89
Harper(2)

SIR MAURICE (continuing):  So we say that is just without

foundation. Then Your Honour, we have also

said of course that this Act has got nothing

to do with transfers of sovereignty. It is

impossible to imagine that international

status can be got rid of in some way. What

is concerned with is title and State powers.

Now Your Honour, then my friend says,

and this is all I want to say about it, that

for some reason the SEAS AND SUBMERGED LANDS

ACT is impossible of repeal or	the title
is impossible of acquiring back.	Now Your

Honour there is no reason he advanced for that except for an unfounded assertion, with

great respect, that it is a prohibitive cost.

But of course even in relation to the States
there would be a question as to what the
cost was, but certainly there would be no

question in relation to the territories,

where there would be no obligation to give

just terms.

So we would submit, with respect, that

there is no basis for advancing that proposition,

and in any event it cannot be said really to be an objection to the grant to say that you

cannot repeal it.	Your Honour ,that is all I need I
. '

think,to say about it, but we would say you

could repeal the SEAS AND SUBMERGED LANDS ACT

and you could repeal and acquire back.the title.

There would be a question of compensation, that

is true, but that is not a matter which is

insusceptible of legal exercise or power, nor
is the unsupported assertion of my learned friend

a matter that Your Honours of course will

take into consideration about the cost.

Now I do not want to say anything more

about my learned friend's argument on validity,

if Your Honour's pleases - I think I have

covered it. Now Your Honour, we then go over to

page 5. What we are saying here - page 5

really, I suppose, does not matter in the sense

that we talk about the TITLES ACT - how it

vests land three miles out from the base lines

in Tasmania.

CIT3/l/CM	414	SIR M. BYERS , QC	7/6/89
Harper(2)

SIR MAURICE (continuing):  And then we say a levy related

to extraction of a resourceinwhichyou have an

interest is obviously not an excise and a fee for

access to an abalone in which you own the fishery,

if that is the assertion,is not an excise.	Nor
would a fee which would be a recoupment of

expenses of management be an excise. There seems

little before the Court to support the fee as

related to expenses of management but Your Honours

of course remember that this fishery is managed

under the agreement and it is supported by the

Commonwealth FISHERIES AMENDMENT ACT.

Now, Your Honours, even if one cannot say

with certitude whatever might be the fate of

oysters and other molluscs about abalone under

some common law doctrine, one can say that

Tasmania has the right to manage the fishery and

it can recoup its expenses in that sense. So that

is a fee for its services. Really, Your Honours,

that is what we were saying on page 6.

The only other matter to which we wish to go

is this, Your Honours - if Your Honours have the

SEAS AND SUBMERGED LANDS ACT which I understand

was handed to Your Honours in a pretty little

cover, Your Honours will observe that section 16(l)(b)

says that:

The preceding provisions of this Part -

(b) do not limit or exclude the operation

of any law of a State ..... except in so far as

the law is expressed to vest or make
exercisable any sovereignty or sovereign
rights otherwise than as provided by the preceding

provisions of this Part.

(Continued on page 416)

ClT4/l/DR _	415	SIR M. BYERS, QC	7/6/89
Harper(2)

SIR MAURICE (continuing): If Your Honours go to subsection (2),

A law of a State or of the Northern Territory

shall not be taken to be within the words

...... (b) of sub-section (1) -

(a) by reason that the law makes provision with

respect to, or touching or concerning,

any sea-bed or subsoil that is declared by

Division 1 to be within the sovereignty of the Crown in right of the Commonwealth, or

the living or non-living resources of any such
sea-bed or subsoil, if proprietary rights

in respect of that sea-bed or subsoil have

become vested in the Crown in right of the

State.

Your Honours, the point in my mentioning that

is this: what my lea.med friend, Mr Charles, has

really said is that the TITLES ACT, by implication,

repeals the SEAS AND SUBMERGED LANDS ACT because,

he is saying, "You've given away your sovereignty",

or, "You've diminished your sovereignty in some way.

Therefore the second Act is an implied repeal of the

first." Your Honours, what we say about that is it

is clearly not so intended. I suppose that is all

I want to say in relation to that .

Your Honours, the only other thing I want to

say, I would think, in relation to the matters

mentioned on pages 5 and 6 is that on the continental

shelf the SEAS AND SUBMERGED LANDS ACT, section 11 -

this was referred to on page 6 - vests the right

to -

It is by this Act declared and enacted that the

sovereign rights of Australia as a coastal
State in respect of the continental shelf of

Australia, for the purpose of exploring it and exploiting its natural resources, are vested in

and exercisable by the Crown in right of the

Commonwealth.

.We would say that in so far as you are concerned

with title on the continental shelf, or rights of

exploitation thot1gh l'ested in the Commonweal th and

any State law vesting any such right in the State
would be inconsistent and invalid. That is the

only point one really wants to make about that.

(Continued on page 417)

CITS/1/JM	416	SIR M. BYERS, QC	7/6/89
Harper( 2)

SIR MAURICE (continuing); Could I just say one last word

about duties of excise and this, perhaps, is

directed to the observation that fell from

Your Honour Mr Justice Brennan and Your Honour

Mr Justice Deane. What we would respectfully

submit is this: the notion of what is an excise
has agitated this Court for a considerable period

of time and it derives in substance from the notion of an external tariff, hence customs,

and the internal free trade area, excise and

bounties, thus controlling the capacity of any

State to interfere with or distort the economic

freedom posited by the free market and requiring

the possession of these powers in the Commonwealth.

Your Honours, if one were to say - apart

from fees for service, and that is a different

question - if one were to say that the State

had a right as a custodian of the finite resources

to guard them and renew them and thus restrict

a general right - as I think Your Honour

Mr Justice Deane put it, appropriate the general

right -and, in substitution therefore grant particular

rights for unlimited amounts, because in theory

that would have to be the case, then what that

would do, in our respectful submission, would

firstly introduce a new notion into the way this

Court has heretofore looked at duties of excise

and could operate so as to disturb the free market.

For example, even if one State had a lobster fishery and, they being a very scarce resource,

it put a very high fee to fish for em. Even if

there were no other State that had lobsters in

this coastal sea that would mean, Your Honour,

that the people would have to go to buy the natural

resource at very high prices and that could disturb

the economic evenness of the internal market,

a fortiori, if you had two States, one with a

high price and one with a low price, because

that again would mean a rush of people to the

low price. (Continued on page 418)

417           SIR M. BYERS, QC 7/6/89

Harper(2)

SIR MAURICE (continuing):  In our respectful submission,

the notion of excise is designed to keep the

free market free of economic distortion and that,

in our respectful submission, would be

consistent with the views this Court has advanced

from time to time. The only other thing I want

to say, Your Honour, is that obviously when

imported goods have gone into domestic trade,

for example, cigarettes or imported liquor and so

on, and you are taxing the sale, that is clearly

a duty of excise. That is all we wish to say,

if the Court pleases.

MASON CJ:  Yes, thank you, Sir Maurice. Yes,

Mr Solicitor for Western Australia?

MR PARKER:  If it please the Court, may I pass up an

outline of the submissions we would make?

MASON CJ:	Thank you.
MR PARKER:	If it please, Your Honours, may I say that I would only propose to develop these submissions to
the extent that they have not already been done so
by my learned friends for Tasmania and the Commonwealth so that I would expect not to be very
long in what we want to put.

The first submission deals with the effect

of the TITLE ACT, apart from its relevance to

matters of domestic law. In our submission, it

has this further and significant relevance and

consequence and we seek in the submission to

emphasize that there being some difference in

international practice concerning the nature of

sovereignty over the territorial sea, it is

undoubtedly an exercise of the external affairs

power for the Commonwealth to legislate to

assert and to make clear something that perhaps

was not done in the 1973 Act - the SEAS AND

SUBMERGED LANDS ACT, that Australia's

sovereignty includes the capacity to confer

proprietary interests in the sea bed and the

subsoil.

(Continued on page 419)

ClT7/l/JH	418	SIR M.BYERS, QC	7/6/89
Harper(2)

MR PARKER (continuing): That difference in international

practice, .and we have given a reference to

O'Connell's work on The International Law of the

Sea at a number of pages which would reveal the

essence of that too, Your Honours. That difference

may, on examination, be substantially due to

differences in the domestic law of nations as to

the attributes in those respective nations of

sovereignty. The law of nations does vary somewhat

as to that - the sovereignty that it has over its

own land mass.

In the case of Australia and the common law

countries there can be no doubt, in our submission,

that sovereignty includes dominion and the

capacity to confer proprietary interests in the

sea bed. The Canadian and the American cases that

we have cited confirm that, and the conventions to

which we have given a reference, being confirmatory

of, in our submission, the accepted body of

international opinion and law, confirm that it is

the sovereignty of a nation over its land mass that

is extended as a matter of international comity, to

the territorial sea.

The second to the sixth submissionsreflect

what has been put to Your Honours in the

PORT MACDONNELL case, and I would not propose to go

again over any of that ground. Paragraph 7 has

been adequately dealt with; so substantially have

paragraphs 8 to 9 that, in addition to what has

been put by my learned friend Mr Bale, could I

simply draw attention to the fact that the

proposition that the territorial sea is a place

acquired within the meaning of section 52(i)

is inconsistent with two related matters.

Firstly, it is directly inconsistent with

observations of some Justices in the SEAS AND
SUBMERGED LANDS case, particularly those of

Your Honour the Chief Justice, at page 475 in

135 CLR, and Justice Jacobs at page 486, where

there are passages which recognize the continued

capacity of the States to legislate

extraterritorially in respect of the territorial sea ,

a proposition which, of course, cannot stand with the notion that the territorial sea was

a place acquired.

ClT8/l/FK	419	7/6/89
Harper)2)

:MR PARKER (continuing):  As in that circumstance there

would be an exclusive legislative capacity

in the Commonwealth. And it is also

inconsistent with the decision in PEARCE V

FLORENCA,135 CLR 507, which followed almost

immediately after the SEAS AND SUBMERGED

LANDS decision, in which all but one

Justice accepted the continued validity

of State fishing laws in the territorial

sea which, for this reason already given,

is necessarily inconsistent with any exclusive

legislative capacity of the Commonwealth in

that area.

Paragraph 10 has been adequately dealt

with. Paragraph 11, could I simply say this,

with respect to it. On the present state of

authority concerning the external affairs

power, as we would see it, the views of

Justice Stephen in KOOWARTA still hold sway.

The law must, in his view, be in relation to

a matter of international concern as a

necessary, but certainly not the only requirement

for validity.

In this connection, the point of international

concern here is whether Australia asserts

sovereignty, not how, as a matter of domestic

law, that sovereignty is exercised by the

legislatures of the Australian Federation.

Turning now to paragraphs 12 and 13; this

is really an alternative submission to the

position put by Tasmania - a submission which

does not depend upon the abalone being fixed to the sea bed - it matters not whether they

are, for this submission, and it assumes that

the public right of fishing in the territorial

sea extends to include abalone.

Could I commence by reading, in addition to the passages that have been read to the Court

by my learned friend, Mr Charles,from the

ATTOP.NEY-GENER.AL FOR B.RITISlL COLUMBIA

(1914) AC153. May 1 just read briefly

from pages 167 to 168, in the middle of the last

paragraph on page 167:

It remains to consider the consequences as

regards fishing rights. These are, in their

Lordships' opinion, the same as in the ordinary case of ownership of a lake or river

bed. The general principle is that fisheries

are in their nature mere profits of the

soil over which the water flows, and that

the title to a fishery arises from the right

to the solurn. A fishery may of course be

CIT9/l/CM 420 MR'PARKER, QC 7/6/89

Harper (2)

severed from the solum, and it then becomes

a profit a prendre in alieno solo and an

incorporeal hereditament. The severance

may be effected by grant or by prescription,

but it cannot be brought about by custom,

for the origin of such a custom would be an

unlawful act. But apart from the existence

of such severance by grant or prescription the fishing rights go with the property in the solum.

The authorities treat this broad principle as

being of general application. They do not

regard it as restricted to inland or

non-tidal waters. They recognize it as giving

to the owners of lands on the foreshore or

within an estuary or elsewhere where the tide

flows and reflows a title to fish in the

water over such lands, and this is equally the

case whether the owner be the Crown or a

private individual. But in the case of

tidal waters (whether on the foreshore or in

estuaries or tidal rivers) the exclusive

character of the title is qualified by
another and paramount title which is prima

facie in the public.

And if I could just remind Your Honours, without

reading it again, the passage my learned friend,

Mr Charles did refer to at page 171, that this

public right of fishing involves no right to the solum, no title or inEerest in the solum

itself. And that is dealt with in the middle

of page 171.

From that case and those passages and the

others that were read yesterday, we would put
the position this way.

(Continued on page 422)

CIT9/2/CM

421   7/6/89

Harper(2)

MR PARKER (continuing): First, and this is almost an aside,

with reference to my learned friend Mr Charles's
submission about the effect of section 4(2)(a) of
the TITLES ACT, there is no title in the sea bed

arising from a public right of fishing. It is entirely a matter of being free to fish in the

sea without using the sea bed, which is what was

dealt with at page 171 of the report. So that,

in our submission, section 4(2)(a) has no operation

at all in respect of a public right to fish in the

territorial sea.

An effect of the STATE TITLE ACT, in our submission, is that Tasmania has a proprietary

interest in the fishery in the territorial sea

surrounding Tasmania because it has title proprietary

right to the solum. The exclusivity of that fishery

was subject to the right of the public to fish. That

public right, so far as concerrsabalone, has

effectively been abrogated by the Tasmanian fisheries'

laws as it may be by legislation but not by

prerogative action.

Pages 170 and 171 of .the Canadian case have

<lealt specifically with tha½ as Your Honours will

remember. It follows, in our submission, that

Tasmania has a proprietary interest in the fishery

from which the public has been excluded, as a

matter of law, and the fee then, in our submission,

is imposed for the right to take abalone in that

fishery. This fee is paid for a most valuable

right made far the more valuable by the exclusion

of the public right to take abalone. ·

As an aside, could I just remind Your Honours - I will give you the reference to the passages in the

agreed materials which would indicate that that

right is seen to be so valuable today that it is
trading at $900,000 - the sale of a licence, the

right of entry is being sold at some $900,000.

(Continued on page 423)

ClTl0/1/DR	422	7/6/89
Harper(2)

MR PARKER (continuing): At tab 6 of the. agreed materials,

that table which Your Honours saw yesterday,

the third column is the entry price in hundreds
of thousands and in 1988, the second half of the

year it was $850,000; in the first half of this

year it is quoted as $900,000. At page 13

of the agreed facts, paragraph 21, the second
paragraph just confirms that that column is what

I have indicated it to be.

So that there is unquestionably for this

fee of some $18,000 a year currently a right

which is seen to be of enormous commercial value

to the limited few that enjoy it. For that reason,

relying on the passage that has already been put

to Your Honours from AIR CALEDONIE, we would

respectfully submit that this fee should be seen

as a fee for a privilege and a real and·genuine

privilege and therefore not a duty of excise.

The position may also be put somewhat similarly

even if it were the case that Tasmania did not

own the fishery and this alternative position,

of course, applies equally within the terrritorial
sea as beyond, that here to protect its valuable

resource a dwindling valuable resource, the

legislative scheme has been established which

includes the abrogation of the public right to

take abalone and the licensing on a very limited

and controlled basis of a few to be able to do so. and in view of the decision in AIR CALEDONIE is

properly able to be seen as a fee for the privilege

to fish abalone as one of that small group and to
the exclusion of the public generally and therefore

a valuable privilege worth far more than is paid for

it.

(Continued on page 434)

CITll/1/JM	423	7/6/89
Harper( 2)

MR PARKER (continuing):  It could also be said that the fee

to a limited degree reimburses the public of

Tasmania for the privilege of fishing for abalone

now denied them. And, we would add that, in so

far as this is dealing with the potential to

catch abalone beyond the territorial sea and,
in so far as those abalone are the Commonwealth's

to exploit by virtue of section 11 of the SEAS

AND SUBMERGED LANDS ACT, that Tasmania is acting

here under a joint arrangement with the

Commonwealth so that there is no denial at all

of the Commonwealth's position in respect of

those abalone.	If I could turn now to
paragraph -

BRENNAN J:	That may be so, but does that answer the question of whether it is a duty of excise?
MR PARKER:	In our submission, the proposition that it is

here a fee for a real and genuine privilege

enables it to be characterized as not a duty of

excise.

Paragraph 14(a) poses a question that has

not been previously considered in a context such

as this, possibly because this sort of context

must arise extremely rarely and cannot easily be

seen	likely to arise again except in the
context of fishing.	The essential question is

in the dialogue of duty of excise, when does

production commence?

Your Honours will realize that this is not

a case of the commercial breeding and husbanding

in secure waters and then the processing of

abalone with a view to the production of abalone

meat and shell. In such a setting production
may well be seen to commence from the point that

there is controlled breeding and the cycle of the

abalone from then on is subject to the continuous

process that has been got under way under the

guidance or encouragement of manly intervention. (Continued on page 425)

ClT12/l/JH	424	7/6/89
Harper(2)

MR PARKER (continuing):  The position, we would submit,

may be seen to be different where the abalone

are in their natural condition, in their natural

habitat, entirely to that point without

interference from humans. The Tasmanian

fishery laws in question focus attention on the

act of taking such abalone. The relevant subject-

matter is the reduction of these naturally occurring

abalone into possession, merely by releasing

their suction grip on the sea bed. No alteration

is made to the abalone at all, it is merely reduced into possession so far as the statute is concerned.

The essence of production, as the dictionaries

would have it, takes you to "produce", that is,

to bring a thing into existence from its raw

materials or elements. We would submit that

it cannot readily be said that merely to take

the abalone in its natural condition from its

natural habitat, merely to take it into possession

is doing anything in the course of the production

of abalone meat or shell, the commodities which

are the commercial purpose of this venture.

Of course, it is done obviously with a view

to production but actual production, in our
submission, would more naturally be seen to commence

when they are shut and then the subsequent processing

continues. This taking of this natural creature,

still in its natural habitat, merely reducing

it into possession is, of course, different

from the harvesting of crops or the shearing of sheep for wool. Crops are the product of the commercial tilling of the soil, sowing,

cultivating to maturity and then harvesting.

So that the harvesting can be seen to be

taking place in the course of an established

process of production. In addition, by harvesting,

the crop is usually severed from the plant so

that its natural state is necessarily altered

as part of that process of production. Likewise,

with shearing sheep, the sheep are the product
of stock that are bred and maintained in captivity

with a view to producing wool and meat. Shearing

can be seen to be a step in an established production

process.

McHUGH J: Mr Solicitor, why is not the taking so closely

connected with the production in the sense that you have been speaking about that it should not

be regarded as levied upon production, just

as in the same way as in LOGAN DOWNS the tax

on the ownership of the horses and the cattle,

was seen to be a tax upon production?

ClT13/l/ND-	425	7/6/89
Harper(2)

MR PARKER:	Yes, well, there is no absolute answer to that. It is a matter of judgment, of line drawing and, in
our submission, in the  circumstances of this case
and the very limited activity to which the statute
addresses itself and the peculiar circumstances of
that, it is open and, we would submit, it may
properly be said that this ought to be seen to be
on the side of the line that is anterior to any
process of production rather than part of the production
process or so closely connected to it that it should
be treated as part of it.

Perhaps, further, Your Honour, if I could say

that when considering whether the concept should be

held to include merely reducing abalone into
possession still in the sea there is no obvious

constitutional, social or political consideration

that would require or encourage that the widest

possible understanding be given to the concept of
the duty of excise in section 90.

Your Honours are already familiar with the

public and political debate concerning the effect
of the exclusive taxing right, with respect to
duties and customs and excise, and Your Honours
are well aware of the differing views that have

been taken as to the possible constitutional purpose

of section 90. These factors, in our submission,

so far as policy may be a relevant consideration,

tend against expansion of the practical operation of

section 90.

We would submit, therefore, that the taking of

abalone in the circumstances raised in this case

should not be held to be production but anterior

to production. Paragraph 14(b) raises the question -

and it was one that was put in the course of

argument yesterday, as well - whether for the

purposes of section 90 the taking of fish at sea,

if it be production, is home production or local

production. We have given Your Honours references

to some of the main places in the reports that have

goods, or home production, should be seen to be at	sought to emphasize that a tax on locally produced
the essence of the nature of a duty of excise.
The most recent of those, GOSFORD MEAT~ includes the views of Your Honour the Chief Justice and
Justice Deane, as well as Justice Murphy, in respect
of that.

(Continued on page 427)

ClT14/l/DR	426	7/6/89
Harper(2)

MR PARKER (continuing)_:  That question, if I could

interpolate here in response to a matter raised

yesterday, I think, by Your Honour Justice Deane,

has not, in our submission, been foreclosed or

determined by the decision in DENNIS HOTELS.

DEANE J:  It depends what you mean by home manufacture,

does it not? My connnents to the Solicitor for

Tasmania were that as I followed it he was using
"home manufacture" not only in terms of

Australia but also in the narrower sense of within Tasmania. It was the second proposition that seemed to me to be quite contrary to the

reasoning in DENNIS HOTELS.

MR PARKER:  I see. Well, I misunderstood-tha interchange yesterday, sir. We are dealing for the moment

with home production of Australia so that

Your Honour's concern would not be relevant to

us. I was simply going to give Your Honours

references to the reasons of Sir Owen Dixon at

page 540, Justice Windeyer at page 598,

Justice Mctiernan at page 550 and

Justice Menzies at page 582 in DENNIS,

where two of them expressly leave open the

question whether a tax is essentially one on home

production and the other two expressly take the

view that it is.

DEANE J:  Except, whatever view one takes of the nature

of the territorial sea, it is scarcely conceivable,
is it, that if one wereto accept the home production and

the national senses of critical importance to

an excise duty, then one would say that the

territorial sea was not at home.

(Continued on page 478)

C 1 T 15 / 1 / JH	.	427	7/6/89
Harper(2)

MR PARKER:  Our submission poses that very question

whether that step should be taken. It has, of

course, not yet been taken in any case. We would

see the question perhaps as posed in_the context

of the CONSTITUTION framed against a background

that the Comroom,;realth and the States ended at

low water mark ana chat therefore, in our

submission, fishing in the territorial sea would

be seen to be something beyond Australia and the

view would certainly 1:e open that it is therefore

not local production if one is merely taxing an

activity in that sea which is the position we are

dealing with in this legislation. It is quite

different, 9erhaps, once the catch is landed;

different considerations arise.

A question arises whether so far as it is

relevant to section 90 whether the subsequent

accretion of the territorial sea to the

Connnonwealth has,in some way for the purposes

of section 90)notionally extended the boundary
of what is home to the edge of the territorial

sea and even if that has occurred, for relevant

purposes, the question still arises in so far as

for some purposes abalone here may be taken

beyond the outer edge of the territorial sea.

BRENNAN J: Are abalone customable goods?

MR PARKER:  I have not looked in the legislation to answer

that, if it please, Your Honour. We would certainly

put the submission that the Tasmanian FISHERIES ACT

is not imposing a duty of customs because it is

merely attaching duty to the activity of taking abalone in the sea and does not in any way draw

legislative attention to the importation of

abalone into Australia. The submission that I had

in mind to answer here was, I think, that of

my learned friend., Mr Charles, that if this was not

a duty of excise then it was a duty of customs.

(Continued on page 429)

CIT16/l/JM	428	7/6/89
Harper(2)

MR PARKER (continuing): In our respectful Jbmission,

that submission seems almost to proceed from

an assumed premise that if there is a tax on

goods or a tax on an activity relating to goods,

then it must be either a duty of excise or a

duty of customs. We would respectfully question

that premise and suggest that there is no necessary
reason to conclude that between duties of excise
and duties of customs all possible taxes on or

in relation to an activity connected with goods

must be able to be categorized.

In our respectful submission, the more proper

approach is to determine what is the meaning

and nature of a duty of excise and the meaning

and nature of a duty of customs and to test the

particular impost against those meanin@ and that

in the result, in our submission, there may be

a number of duties that have some connection

with goods or with activities concerning goods

which are neither.

McHUGH J:  In the C.O.R. case, I think, Mr Justice Starke

took the view that the customr and excise covered

all taxes upon - - -.

MR PARKER:  There have been a few expression to that end,

if it please Your Honour, but it is certainly

not, as we would understand it, the prevailing

view or a view, certainly, that has been established.

We would respectfully submit that that ought

not to be the view adopted and that when one

is looking to identify whether a particular

legislative impost is a duty of excise or a duty

of customs, there is room to see that some imposts

may be neither, even though relating to goods

or to some activity such as the taking of goods,

as we have here.

DEANE J:	Mr Justice Windeyer, in DENNIS HOTELS, spelt
out the same view as that which Justice McHugh
refers to in quite clear terms.
MR PARKER:	I believe that is right, Your Honour, but we

could go for quite a time going through the

alternative views. My attention has been drawn

to Justice Menzies, at page 582, in DENNIS HOTELS

who puts the other view, the view that we would

put, and so on. If it please Your Honours they

are the submissions we would put.

(Continued on page 430)

ClT17/l/ND	429	7/6/89
Harper(2)

MASON CJ:  Yes, Mr Solicitor for Victoria.

MR BERKELEY:  I hand up 10 copies of our outline. Our first

submission is that it is not necessary for the

decision of this case that the Court should have

to consider the validity of the COASTAL WATERS

legislation. As far as the TITLES ACT is

concerned that is because, as it will appear as I

develop my submission, the question of who owns

the sea bed or what is in it is irrelevant to

the consideration of whether or not the licence
fee in this case is an excise.

I have to go back a little bit, and that is this, we can concede for practical purposes that

either the Crown in the right of the State, or the

Crown in the· right of the Commonwealth has ownership

of the sea bed underneath tidal and coastal waters

and in the abalone which, in one way or the other, are

stuck to it or in it. Now, the situation in

England and therefore in Tasmania always was that

the Crown owned the sea bed under coastal and tidal

waters, and to the right to take fish from it, but

that was always subject to the right of the public

in England, and therefore in Tasmania, to take fish
from the sea, and apparently that included the

right to take oysters and therefore abalone.

(Continued on page 431)

C1Tl8/l/FK	430	7/6/89
Harper(2)

MR BERKELt.-Y (continuing): This statement appears in volume 18

of Halsbury under the title "Fisheries" at

paragraph 836:

The common law right of members of the public

to fish within the exclusive fishery limits
of the British Islands and in tidal rivers
is still exercised in respect of oysters,
mussels and cockles in certain areas
where the rights of fishery have not been vested

in individuals or corporation.

And then it goes on to refer to franchises
granted prior to Magna Carta which could not

be granted afterwards because of the provisions

of that Act. And it may be a distinction in

relation to the Scottish cases that apparently

Magna Carta was not part of the law of Scotland

so that it was always possible to grant private

franchises to take oysters and so on and the
question in the Scottish cases is whether the

Crown had title to the sea bed and to the mussels and in that respect, it was said the law was the

same in England as in Scotland, but that says

nothing about the public's right in England

and Tasmania to take oysters out of coastal and

tidal waters.

So that what we have in this case is a

situation where the public have a right to take

abalone out of coastal and tidal waters around

Tasmania. That right is taken away from them by an Act of the Tasmanian Parliament and a

limited number of people are,pursuant to the Act of parliament, granted the right to take abalone in exchange for a large fee and whether or not

the title to the land vests in the Commonwealth

or the State is, in our submission, an

irrelevant fact.

I should say, in relation to the passage in

Halsbury, we were not able to find much

authority to support it, but there is some

slight indication in the statement which appears

in a case called CORPORATION OF COLCHESTER V

BROOKE and that is, amongstother places,-

in 115 ER at 519 page 534. Now we do not

need, in our submission, the STATE POWERS ACT

either because, in my submission, the State of

Tasmania has ample power to regulate a fishery-

pass laws regulating a fishery of this kind.

The stated case shows that 95 per cent of the abalone occur within the territorial seas and

that the 125 persons engaged in fishing abalone

are all residents of Tasmania. In my submission,

CIT19/l/CM	431	7/6/89
Harper(2)

that is a sufficient nexus with the State of

Tasmania to support this legislation, subject to any question of inconsistency and no question of inconsistency appears to arise. There are not two fisheries in this case;

one within the three-mile limit and one

without. There is one fishery, in our submission,

95 per cent of which is within territorial

limits.

That brings us to section 90 of the CONSTITUTION

and I have used the expressions "excise" and

"quasi excise" and by excise I mean the type of

impost which was referred to in PETERSWALD V

BARTLEY, that is a tax upon production or

manufacture, which is quantified by reference

to the value or the quantum of goods produced

or manufactured and that, in our submission, is

what is meant in the cases when the Court refers

to a tax which is in form an excise, but as

early as the COHMONWEALTH OIL REFINERIES, Mr

Justice Isaacs pointed out that the CONSTITUTION -

or prohibition in section 90, was not to be

evaded by changing the form of the tax, and if

in substance the tax was an excise, it was

withtn the prohibition of section 90.

(Continued on page 433)

CIT19/2/CM	432	Mit.BERKELEY , QC	7/6/89
Harper(2)

MR BERKELEY (continuing): If one looks at, say, land tax,

which is :MATTHEWS V THE CHICORY BOARD, in our

submission, nobody at the constitutional conventions

would have said that a land tax is an excise. But a

land tax may well have the sarreeffect as an excise

and therefore, because of the nature of the

CONSTITUTION and the rule developed by this Court,

at least as early as the C.O.R. case, those

taxes are within the prohibition of section 90 but where a tax is not in form an excise, but

is what we call a quasi excise, one has to ask

the question:  does it have the same effect as an

excise? That requires one to answer the question,

which is not every often answered in the cases:

what effect is an excise supposed to have? Or,

if one likes: what purpose is section 90 supposed

to serve?

From time to time there have been dicta in

the cases that section 90 was intended to give
the Commonwealth control over the economv,
but it has been pointed out there are mariy other
ways of controlling the economy which are not
exclusively the province of the Commonwealth.

Our submission is that this question was really

set at rest by COLE V WHITFIELD, although what

was said there was directed to the constitutional

prohibition contained in section 92 and it was

put by the Court as a statement of the purpose of

section 92. That group of sections in chapter 4

of the CONSTITUTION, which includes sections 90 and 92,

in our submission, were all intended to serve the

same purpose, that was to make Australia one free

trade area and to prevent States in one way or the

other giving effect to the Statei free trade or

protectionist policies; in section 90 by fiscal

means and in section 92 by other means.

When, u. GOSFORD MEATS, it said that in the case

of a quasi excise one has to look at thep:-actical operation of the law, in our submission, that is

what the Court intended:  you have to see if

this - it always has to be a tax. Assuming it is

a tax, the Court has to ask itself: is this a

tax which defeats the purpose of section 90? Tbat

is, does it give sare . .protection or discrimination

as b~tween local and interstate goods, or local

and imported goods, or local goods as against

local substitutes. We put forward in oaragraph 6

of our outline what we submit are at least relevant

facts in this case. It draws attention to the

facts, the surrounding circumstances,about which

~here does not seem to be much dispute that this

is a valuable natural resource; it is in danger of
destr~ction; steps ought to be taken to protect

the fishery and a quota system has been introduced.

CIT20/l/JM 433 7/6/89

Harper(2)

It is the quota system that is the purpose

of this legislation, not the exaction of the

fee. A consequence of the quota system is that

each licensee shares in a very valuable monopoly

and that is one ground of distinction between this

case and cases like HOMEBUSH FLOUR MILLS. In

HOMEBUSH FLOUR MILLS, anybody that wanted to pay

the fee was entitled to take part in the activity.

The licence had no value; there was no monopoly.	It
was pointed out the purpose - it is 56 CLR at
pages 412 and 413. Sir Owen Dixon considered
what was the purpose of the State Act.	That was

the relevant fact: what purpose was the State Act

intended to serve? It was intended to serve a

purpose forbidden by section 90, that is, when

one looked at the sale and the resale provisions,

all those elaborate provisions, the sole purpose

of them was to raise the fee for the benefit of

the State Treasury.

(Continued on page 435)

CIT20/1/JM	434
Harper(2)	7/6/89

MR BERK.ELY (continuing):  Now, that is not the situation

in this case. The licensing system was brought

into existence for the purpose of conserving

the resource, not for the purpose of collecting

the licence fee. And, one can test it very

simply if this Court says the licence fee is

ultra vires the State of Tasmania, one can be

sure that next year the quota system will still be

there. May I put forward a couple of analogies?

Let us suppose there is a type of kangaroo

which is in danger of extinction and the taking of

it is utterly prohibited. And then, after four or

five years, the herds replace themselves and they

need culling and the conservation department calls

for tenders, some shooters, to cull 5000, or

10,000 kangaroos. And, two of those tneders are

accepted; each shooter pays a sum of money for
the right to shoot 500 kangaroos and to take the
carcasses and to sell them to a pet food factory.

We would say the amount paid under that tender has got nothing to do with section 90, it cannot be

excise.

There is an Act of Parliament in 1982 passed

in Victoria; it is section 291 of the MINES ACT. Up to that time, up to 1982, all the minerals in the ground, except petroleum and gold and silver,

belonged to the owner of the land. In 1982, the Victorian Parliament passed an Act of Parliament which vested all minerals including coal in the

State of Victoria. And, where the coal was already

being mined there were provisions for

compensation but if the coal was not being mined,

there was no compensation; it was taken away

from the owner of the land and vested in the State.

And some time, in five or 10 or 15 years, it may be

that the State will grant to somebody the right to

lease or licence to mine that coal.	We would say
that is not an excise.	The payment, if it is a

payment by the tonne will be a royalty. There is a

distinction between an excise and a royalty. There

may be borderline cases where it is hard to say

which is which but there will always be cases on

each side of the line. Our submission is, that

when one looks at this impost and its practical

operation, this is more akin to royalty than to

licence.

It is not a licence as a matter of form

because it is on the last year's quota and it is

a lump sum irrespective of how much is taken and,

indeed, none may be taken. But, it is not a quasi

excise because it has no effect upon production,

it has got no effect on supply and it has got no

effect on demand. The evidence in this case

ClT21/l/JH	435	7/6/89
Harper(2)

indicates there is a world market for abalone

and the price is fixed and the abalone divers

get the prevailing price, whatever it is, and

the whole of the quota is taken. Now, excises

work in one of two ways: either, the excise is

passed on to the consumer, wholly or in part,

and becomes part of-the retail price and

eventually there will be a marginal consumer

who will not buy at that price and thus the
excise reduces the demand; or, it is not passed

on to the consumer but becomes a cost to the

producer and the marginal producer will be driven
out of business or produce less. In either way
the excise is a burden upon production.

But, it is quite clear in this case, that the licence fee is not a burden upon production.

Everybody takes their full quota and the full

quota is sold at the market price, whatever that

happens to be, irrespective of the amount of the

licence fee. It may be that there would be a

licence fee which was so prohibitive or

circumstances in which the licence fee would have

a consequence and a consequence forbidden by

section 90. But, the fact is, if one looks

at the circumstances surrounding this case, this

licence fee does not have those consequences.

(Continued on page 437)

ClT21/2/JH	436	7/6/89
Harper(2)

MR BERKELEY (continuing):  Now, in view of the elaborate

arguments that were put to Your Honours about much

of this legislation, may I give way to the temptation

to cite what was said by Lord Dunedin in (1925) AC 716.

His Lordship says:

My lords, this is a case of great importance

not only to the parties themselves, but for

the effect which your Lordships' judgment may

CJ have on future cases. Indeed -

the Court of Appeal -

embodied in their judgments an appeal for

guidance so toucing as to recall the prayer

of Ajax ..... "Reverse our judgment if it

please you, but at least say something clear

to help in the future."

If the Court pleases.

MASON CJ: Thank you, Mr Solicitor. Mr Solicitor for

South Australia.

MR DOYLE:  Do Your Honours have the outline for South Australia?

MASON CJ: Yes, Mr Solicitor.

MR DOYLE:	If the Court pleases, the only point which I seek to develop is that contained in paragraphs 8 and 9
and paragraph 14 relating to the waters beyond
territorial waters and I, with respect, would join
in the submission just made, that the case can be
answered on that basis without the need to consider
the validity of the STATE TITLE ACT. In our submission,
first of all, an excise is a particular type of tax.
While it is unlikely that a comprehensive definition
of tax will ever be arrived at, it is clear on the
cases that certain things are not taxes and so the
Court has said that a fee for a service is not a
tax.

It seems to be, in our submission, generally

accepted, that a charge for property, in effect, or
the right to exploit property which is called a
royalty, is again not a tax. In our submission, what

this case poses for this Court is an important and

quite fundamental issue of whether the payment here is also a payment which can be put in that area and simply regarded as not a tax. And if it is not,

then one never really gets to the question of an

excise because one does not begin with a thing that

can be identified as a tax.

In our respectful submission, there is no tax here and so whatever this payment may be it is not

an excise. We submit that follows, first of all,

ClT22/l/DR	437	7/6/89
Harper(2)

from the factual proposition that fish do represent

a finite and valuable resource. It is important to

bear in mind, as the law of excise is to be

determined on considerations of substance and not

form, that it is not a resource which, as it were,

was created by the Act of Parliament. one can say,

as to a liquor licence~ 'Well, even if you call that

a resource, which is straining language, nevertheless,
the right as it were only comes into existence"- and

you can only say a resource exists -'~ecause Parliament

has forbidden people to sell liquor unless they have

the licence."

But, here we have the fish which exist in the

sea and whatever Parliament says or does not say,

there is something there which is a resource. And

so, in our submission, it is not a mere matter of

form and it is not, in any sense, straining words to

say that the fish in the sea represent a resource.

So we start, in our submission, from that factual

premise.

(Continued on page 439)

C1T22/2/DR_	438	7/6/89
Harper(2)

MR DOYLE (continuing):  Then when you look to see what

Parliament has done, in our submission,what it has

done is something that is fairly simple. It has

terminated the right to take fish for sale in

the relevant waters, and that flows, if I can just

give the Court the references without reading from

them, from section 9(1J, from regulation 4, from

regulation 8 and from section 3A(c). So, in the

relevant waters around Tasmania,Parliament has

simply and completely terminated the right to take

fish for sale. It has also given to the

Executive Government of Tasmania the management of

that resource, that is, the sea fish, and so has

given to the executive control of the resource

and the management of it and the ability to control

the access to it.

In our respectful submission, a fee for access

to that resource, when it is a fee for access for

connnercial purposes, because that is when you need

the licence if you are taking fish for sale, that is

clearly more akin to a charge or a royalty than to

a tax, and while we cannot advance a concept

expressed in precise words that enables one to

say in advance when fees will be properly characterized

as charges for access to a resource in our submission

the combination of the facts and what the law has

done here enables one to say quite confidently that

that is what we are looking at and it is simply not

a tax.

DAWSON J:	Why is it any different to a liquor licence, for
instance? You now, says the legislation, cannot
do something which you could do before except with
a licence and we are going to charge you for it; well, that is exactly what happens with a liquor licence.
MR DOYLE:	In our respectful submission, the difference is that, approaching it as a matter of substance and not mere form, that the liquor licence, as it were, first of
all could not be called a resource, and so it is
very difficult to use property analogies in relation
to it, but secondly, the licence has value and could
be regarded as the grant of access to something only because of Parliament's prohibition, and if
one accepted what Your Honour is putting to me, then
we realize that the law of excise would be transformed
because Parliament could simply say, ''You cannot do a
thini: and then,'~ere is the fee you pay for the right
to do it; this is not a tax, therefore not an excise."

So we do not submit that that can be done, but we

also deny that the argument we are advancing leads to

that conclusion and that where you can identify

something which exists apart from what Parliament does,
such as fish in the sea or a resource which exists

quite apart from any legislative Act, then if

ClT23/l/FK	439	7/6/89
Harper(2)

Parliament has taken control of that resource,

one can meaningfully talk of a charge for access

to the resource and not mere - - -

DAWSON J: That really depends on there being something there

in the physical sense.

MR DOYLE: Yes, it does, Your Honour. This argument is not

completely limited to that. One other analogy that

did occur. to me, and, I am relying on, I may be wrong,

but I understand that in Canada the government
handles the sale of liquor~ Now, if in a particular
area of Canada the government said to a particular

person ,"W·ell you can run liquor shops in this area

and we will have 10 per cent of the profits," again,

in our submission, one would not call that a tax

because the whole business of selling liquor in

Canada is run by the government. One, in my

submission, would characterize that as some kind

of franchise fee.

So, the submission I am putting does not depend

entirely on there being a physical or tangible thing,

but it is a submission which endeavours to, in some

way, distinguish between government charges or

exactions which are taxes and those which, while backed

by legislation and in a sense compulsory, are to be
put into another category, and we submit that it
neither strange language nor is it really an unusual

concept to talk of the fee here as a fee or as a

government charge fen:· the access to that resource.

(Continued on page 441)

ClT23/2/FK	440	7/6/89
Harper(2)

MR DOYLE (continuing): Perhaps another relevant factor here is that we are talking of something that

would readily be called a public resource.

McHUGH J: If the government ts,ced say, taking coal from

would say, but arguably, it would be an excise.	a person's land, well, I do not know what you the coal in itself and then taxed it, you would
say "No"?

MR DOYLE:  Yes, but again, it is an area where it may be

difficult to give absolute answers but, in our

submission, if that is what the government does then one does not have an excise. It may be in

a particular case that for one reason or another

one would conclude that Parliament has merely

endeavoured to do in two steps what it cannot

do in one. But, in our submission, if the contrary

approach were taken, then one would engage in some

kind of, perhaps, pursuit for. I.f we take coal,

one would say, "Well, if it is something that at

common law was in the Crown, fees on this will not

be an excise. If it is something that did not

start off with the Crown then no matter how long
ago the Crown took property in it, the thing is

an excise"and, in our submission, while one can perhaps understand the Court would be cautious about accepting the submission we are putting

in sweeping terms, in the end, if we take another

example, if Parliament said that no person could

fell timber on his land for commercial purposes

and said to fell timber on your own land you

required a licence, and further said that with

the licence would come quotas and a fee for that

right, then the very same issue would arise: are

we looking at an excise, in effect, Parliament

levying a tax on a man felling his own timber, or
have we got to the situation that Parliament has

in effect said, "Growing timber is a public or

national resource and even though it is on a

man's land and at common law belongs to him, a

charge is now to be made for access to that resource."

DEANE J:	One problem in the provisions you have referred us
to is that they seem to seize upon the particular
abalone as items of commerce and impose the
prohibition by reference to that and exact the fee
by reference to that.  Am I correct that - and I
have just looked at the sections you have identified -
the right of the public to take abalone is not affected unless it be for commercial purposes.
MR DOYLE:	My understanding of the legislation, Your Honour,

is that there is a prohibition on the taking of

abalone for commercial purposes and so for your

own use you can take abalone but there is a limit

CIT24/l/JM	441	7/6/89
Harper(2)

to the number you can take per day. So for personal

use, as I understand the situation, there is a
limited right now to take abalone and the bag

limit, or whatever the correct term is, is contained

in regulation 17B(4) at page 162 of the book. Even

there a licence still appears to be required, it is

just that it is a non-commercial licence. So one can

say, in a sense, there is a right to take them

when it is not for commercial purposes, but it is

a very qualified and restricted right.

DEANE J:	Do you pay a fee for the non-commercial diving
licence?
MR DOYLE:	I think, Your Honour, it is a nominal - $15,

Mr Charles tells me.

DEANE J:  Thank you.

(Continued on page 443)

CIT24/2/JM 442 7/6/89

Harper(2)

MR DOYLE:	If I could perhaps just give another example which is one that would be familiar to South
Australians and which, just developing this
point about  Parliament making a charge for
access to a resource, in a number of parts of
South Australia market gardens and the like
rely very heavily on subterranean water gained
by bores. Now, there is no legislation,as far
as I am aware, in South Australia which vests
any kind of title in that water in the Crown
and so the man is taking subterranean water from his own land. At the moment, by law, you
require in most areas a permit to install a bore
and a metre is attached and if you take more than
a certain quantity of water then you pay what is,
in effect, an excess water rate; but, up to
that amount you pay nothing other thftn a fee for
use of the metre.

In our submission, if Parliament took the

further step of saying, "However much water you

take, that is from the first drop onwards, you

will pay so much per litre or so much per 'hecto~

litre", one would again, fairly readily say that

Parliament has taken the view that this

subterranean water is a public resource and that

those who are going to use it should pay for it.

And that is a stronger, in my submission, case

than the present one because we are talking of

charging a man a fee for taking something which is

really part of his own land because the water

simply lies in, as it were, undefined - well

relatively undefined -strata in the land. It is

in no sense in a stream or can in no way be

identified as anything like a stream. And yet, if

the submission I am putting is not sound, then

such a fee would seem to be an excise if the water

was used by a market gardener in the course of

producing vegetables unless one said that the
taking of water is not sufficiently part of the

production of the vegetables for it to be a fee

levied on a step in the production of goods. But, in our submission again, although it is

difficult to express in precise analytical

terms why that should be regarded as a fee for
access to a resource rather than a tax, our

submission is that it can readily be so

characterized and one applies the same sort of

reasoning. So, we would submit, that the Court in

this case should not approach the matter narrowly

in terms of property concepts and the problem

of doing that is that it really puts a premium

on legislative drafting because subject to the

Court saying that there was some kind of

legislative sham involved, if one puts a premium

ClT25/1/JH	443	7/6/89
Harper(2)

on proprietary rights, one produces a situation

where even if the legislation here is invalid,

presumably a different result could be

achieved by Parliament enacting a declaratory
section, either vesting title in all fish in it,

or vesting ownership of the fishery in it and

then coming back and saying, "Well, now we

really are dealing with something that is our

property, be it the fish or be it the fishery". And, in our submission, it would be unfortunate

if significant public issues such as this came

down to drafting devices like that and

unfortunate if the Court was put in the position

where it, in effect, had to start deciding whether

these things were shams which, as I mentioned a

moment ago in answer to Justice McHugh, tends to drive one back into a rather arid question as to

where the title began, presumably on the basis

that if the legislature alters it, that then

indicates it is some kind of sham and that you

test the thing as if the title was where it

always was at common law.

If that approach is accepted by the Court,

in our submission, the same approach holds good

for waters beyond the territorial sea. Even

though sovereignty in the sea bed and the

resources of the sea bed is in the Commonwealth,

the Parliament has taken control of the access to

and the use of that resource. And, were it not

enabled to do so by the Commonwealth legislation,

then it may well be that for the Tasmanian

Parliament to charge a fee for access to that

section 109. But, in this case as the Commonwealth Parliament has itself given to the Tasmanian	resource would be invalid or ineffective under resource, our submission is that again, one can
say quite readily, that the Tasmanian Parliament
has been enabled to charge a fee for access to
that resource, albeit in property terms, a
Commonwealth resource. And so, precisely the
same reasoning applies, although one has to bring in that additional step in it, to get around any
problem posed by section 109. And so, in our
submission, this is a case which raises for the Court the consideration of a fairly fundamental issue, namely whether there are types of
government imposts which can be categorized as
charges for access to resources which are a public resource and our submission is that there are such categories of impost, this is one of them and it
is not a tax at all.

ClT25/2/JH	444	7/6/89
Harper(2)

DAWSON J:  Is it an essential part of the

argt.1I1E11t that it be a finite resource, either

because of the imposition of the quota or

for some other reason, natural reasons perhaps? Is

that what distinguishes it from - - -

MR DOYLE:	No, Your Honour, I would not argue that it
is essential that it be finite because- I
suppose in one sense all resources are finite
but, in our submission, the same argument could
be applied even to a relatively abundant
resource as to which one could say well, it is almost inconceivable that this resource will
run out. There are perhaps two aspects to the submission.

First of all, that there is something that

one can readily call a resource, without

straining words, and, in our submission,

licences, such as liquor licences - it is
starting to strain words to call them a

resource, and then the second thing is that

one can say that the relevant legislature

has manifested an intention to take control

of the resourse in the public interest, and

they are the things that indicate, not, as it

were automatically or beyond any argument, but

they are the sorts of things that indicate
that you may well be looking at a charge for

access to the resource, as distinct from a

tax, which may then be a tax on production,

if it pleases the Court.

MASON CJ:	Thank you, Mr Solicitor.	Mr Solicitor for New
South Wales.

MR MASON:	May I hand up a precis of our submissions.
A few fresh points, Your Honours.  We too
proceed on the basis that this case can
resort to questions of the validity of the
and should be resolved without necessary
STATE TITLE ACT, but we certainly join with
the submissions that have been put previously as to the validity of that legislation.

In paragraph 2 we have collected a couple

of old authorities on the equation of oysters

to fish, notwithstanding their fixity to the

soil. The old one from ESPINASSE

can be treated perhaps as more accurate than

most decisions supposedly in that report,

because Mr Espinasrehimself was counsel

for the unsuccessful party.

CIT26/l/CM	445	7/6/89
Harper(2)

Your Honours, we would see, as we say in

paragraph 3, section 4(1) of the STATE TITLE ACT

as not affecting the public right of fisherY,

fishing that has been referred to in the cases,
because what is vested in the State by, in

effect, transfer from the Commonwealth Crown

or grant from the Commonwealth, is the same

right that would belong to the State if the sea

bed were the sea bed beneath waters of the sea,

hence the importance of the tidal aspect of the

title that is conferred upon the State and hence

the fact that the StateTITLE provision does not,

in its own terms, directly impact upon the

public right of fishery which the common law

would grant.

In paragraph 4 we part company with one

submission from our learned friend, Sir Maurice

Byers, in relation to the interpretation of

section 11 of the SEAS AND SUBMERGED LANDS ACT,

that is found at page 423 of the big book and

my learned friend, Sir Maurice,put in his '

submission the proposition that title to abalone

beyond the territorial sea is vested in the

Commonwealth. In our submission section 11

of the SEAS AND SUBMERGED LANDS ACT does not,

any more than section 4 of the STATE TITLE ACT, impact upon the common law rights to fish, even to take fish which may be impacted upon the

bed of the continental shelf.

(Continued on page 447)

CIT 26/2/CM	446	7/6/89
Harper(2)

:MR MASON (continuing):  We would draw some attention to page 431

of the big· ~ok; article 5.1 of the Convention on the

Continenta: ;helf which provides that:

The exploration of the continental shelf

and the exploitation of its natural resources

must not result in any unjustifiable

interference with navigation, fishing or the

conservation of the living resources of the

sea, -

So, in our submission, the Cormnonwealth is in the

same position as the States with respect to title to

the fish. Paragraph 6 is really a restatement of an

argument which we put at more length in the

PORT MACDONNELL case - and I do no more than note

that fact. The fact that the legislative authority

with the States have to regulate fisheries beyond

their boundaries is independent of any question of

title or sovereignty over the sea bed in the States.

Your Honours, paragraphs 7, 8 and 9 develop

propositions that have already been put and I do not

burden the Court with repeating our own way of
putting a point that has, in substance, been already

put to the Court. In paragraph l~we address a

matter in a slightly different way to what I think

has been put previously, in that the submission is

put that the fee charged by Tasmania can be treated
analogously with a royalty, independently of any
title vesting in Tasmania either to the fish or

even to the sea bed upon which the abalone are fixed.

In this regard, if this proposition is correct,

it differs from that advanced by the Cormnonwealth

in paragraph 12(e)(ii) of their submissions and by

my learned friend,Mr Charle~ at page 351 of the

transcript. We refer to a passage in STANTON's case,

which is the same passage that was read from the

Queensland State Reports by my learned frien~

Mr Bale, where Your Honours will recall that there

was a discussion - it is in 92 CLR 641 - about the

nature and incidence of a royalty and the statement

was added that:

Warren and piscary and such rights are not heard

of amongst us but conceivably there may be
things made the subject of royalty which belong

to ownership of land that cannot be considered

actually to be part of the soil.

As we understand rights of warren and piscary

they are rights to take game and fish which may be
conferred by the owner of the land on which they
are found, or over which they swim, but which do not

depend in any way upon the land-owner owning the

fish or the game at the time the rights are conferred.

ClT27/l/DR	447	7/6/89
Harper(2)

The ownership confers the capacity to control the

right to take the game or the fish and, thereby, the
capacity to grant the rights of warren or piscary.

And so, therefore, the fee charged for the g;i:-ant of

that righ~,is analogous to ·a royalty even though it

is charged in relation to the taking of game or fish

which do not, in any full sense, belong to the

land-owner at the time the right is conferred. This

capacity to control, which is of the essence in that

example of the right to charge the royalty, is, in

our submission, similar to the capacity to control

which is asserted by the State fishery legislation.

Again, whilst we would adopt the way my learned

friend,the Solicitor-General from West Australia,put

it, where he developed an argument that was linked

more directly upon the State title to the sea bed

and the right to the fishery that flowed from that

once the public's right was taken away, we would

put it also on this independent basis that the right

of control itself, exercised by the legislation,
could create a right to charge which is so closely

analogous to a royalty that it should be treated as

such and therefore not as an excise.

(Continued on page 449)

C1T27 /2/DK	448	7/6/89
Harper(2)

MR MASON (continuing):  Your Honours, paragraphs 11 and 12

collect some statements in the cases as to the
criteria of an excise. Assuming the Court
were against my earlier proposition and said

that this was a tax, I do not wish to read those

paragraphs but simply put them before the Court.

The only other thing I would add, Your Honours, and it is just with reference to this question about

home manufacture and the point put by Your Honour

Mr Justice Deane as to whether it is realistic or

not to look at the territorial sea as being within Australia or not, simply to remind Your Honours of section, 93(i) of the CONSTITUTION where a reference

is made there to:

duties of excise paid on goods produced

or manufactured in a State.

In a sense, that perhaps does not take the matter

any further, if one takes the broader view that if one starts from the SEAS AND SUBMERGED LANDS

case as defining the boundaries of a State, and·

one sees section 93(i) as providing some additional

guidance as to what is the concept of an excise,

then perhaps there is additional suport for the

proposition which he was advancing. If the Court

pleases.

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

MR DAVIES:  May it please the Court, I hand up some outlines

of our submissions.

MASON CJ:  Thank you. Yes.

MR DAVIES:  Your Honours, the submission in paragraph l(a)

which is developed in paragraphs 3 to 7 relies

on the validity of the STATE TITLE ACT to rest

title in the solum of the coastal waters in the

outline that we rely on sections 61 and Sl(xxxix).	State, and Your Honours will have seen from our
Without developing that argument at all, can I say that we accept Sir Maurice's common law
analogy of conveying ownership but we would not like our submissions to be associated with any
suggestion of implied power of nationhood which
may have crept into Sir Maurice's argument. We
submit that it is not necessary to go to that.

Your Honours, the argument in paragraph l(a)

then relies on the proposition that subject to

any public common law right of piscary, any rights

to the fishery arise from the solum and we have

quoted the passage which has been quoted to

Your Honours before from ATTORNEY-GENERAL FOR is that that arises from the solum.

CIT28/l/JM	449	7/6/89
Harper(2)

Can I g-ive Your Honours another reference

to that proposition? There are a series of
cases quoted in a footnote, which is footnote 1
to paragraph 601 in Volume 18 of the Fourth Edition
of Halsbury.

The argument then runs that that common law right

was terminated by the TASMANIAN FISHERIES ACT

and the regulations under it by creating new and

different rights even,as our learned friend the

Solicitor-General for South Australia has pointed

out, with respect to private fishing. The final

step of that argument is that because those rights

arise from ownership of the solum, they are in

the nature profits a prendre and the payments are

in the nature of royalties.

The second submission, which is that contained

paragraph l(b) and developed in paragraphs 8, 9 and 10

of our outline, submits in effect that if Tasmania

in that legislation asserts ownership of the fish

in the State fishing waters and as it is not inconsistent

with Commonwealth legislation, it would be within

power. We have given by way of analogy reference

to the judgment of Your Honour the Chief Justice

and the judgment of Sir Harry Gibbs in ROBINSON

where Your Honours held that the law vesting wrecks

in the State of Western Australia was a law for

the peace, order and good government of Western

Australia, and we say a fortiori in this case

because of the facts which we have set out from

the case stated •.

(Continued on page 451)

CIT28/2/JM 450 7/6/89

Harper(2)

MR DAVIES (continuing):  There was a contrary view expressed

in that case, as Your Honours will recall, by the Chief Justice Sir Garfield Barwick and by

Justice Murphy and the other member of the Court who expressed a view about the validity of that

law expressed it for a different reason, so the

difference seems to have been between

Your Honour the Chief Justice and Sir Harry Gibbs

on the one hand, and Sir Garfield Barwick ana

Justice Murphy on the other.

Your Honours, in any event we say that

there is a much closer connection in this case

for the reason we have just mentioned.

Your Honours, I would have to say that we concede

the difficulty in that argument that legislation

asserts absolute ownership in the fish and

perhaps it is better put than the way in which we

have put it in the outline by saying that what

it does is assert proprietary rights

consistent with ownership of the solum and

inconsistent with the existence of any common law

public right to fish. And that really leads

finally into our submission which is contained in

paragraph 14 of the outline which we think follows

submissions which have been made before and what

we are really saying there, in effect, is if the

legislation is for the peace, order and good

government of Tasmania for the purpose of
controlling the taking of a valuable public

resource, that is,for a genuine public purpose,

and if, as in this case, the Commonwealth not only

does not assert any contrary right, indeed, it
acknowledges a State's right by the STATE TITLE ACT

and by the arrangement under the FISHERIES ACT, the plaintiff cannot assert the absence of that

right in the State; and again, for that reason,

the payment is a payment in the nature of a royalty.

They are our submissions, may it please the Court.

MASON CJ:  Thank you, Mr Davies. Mr Charles?

MR CHARLES:  If the Court pleases. Your Honours, may I

deal first with the submission that in so far as

the abalone are to be found in territorial waters

they are, in some respects, externally produced

goods or that this is not an excise because it is

not on home production. In the first place,

Your Honours, the case stated demonstrates that as

to at least 95 per cent they are produced in

territorial waters. Now, as to those, the

argument the Court has heard from my learned

friend the Solicitor-General for Tasmania,is that

Tasmania claims it has the fee simple in the solum of those waters and we would say it would be

difficult on any view to say that that territory

ClT29/l/JH	451	7/6/89
Harper(2)

was external. Quite plainly the Commonwealth

has asserted sovereignty. Now, the second

matter that was raised by my friend in relation

to externality - if I can so put it - is that

it is really a matter of indifference as to

where the abalone, once taken, go; that it would

be open to the abalone divers to send them to the

mainland of Australia or, as we understood him,

to Chile if the diver so wished. In the first

place, Your Honours, that submission, we would say,

is wholly inconsistent, both with the facts

and with the case stated. If members of the Court

would be good enough to look at what the case

· stated says and, in particular, at paragraphs 14 to 17,

members of the Court will see that the plaintiff

acting here as representative has quite plainly got a Tasmanian business and the Court will see in paragraph 14(c) that he:

(Continued on page 453)

ClT29/2/JH	452	7/6/89
Harper(2)
MR CHARLES (continuing):

sells and supplies ..... abalone taken by him

to processors who carry on in Tasmania the

business of processing abalone and other

fish for market.

Then one sees in paragraph 16 that:

The processing of abalone in Tasmania produces two distinct marketable products:-

That paragraph 17:

Abalone are ~equired by State Fisheries

Regulations to be delivered by fishermen in

shell to a land based proces	who shucks
the meat from the shell and	o~esses it, and

sells the shell to overseas markets for processing to become "mother of pearl".

There is an absence of a totality of the facts in

the case stated relevant to this issue, Your Honours,

but I should say, and the parties would supply

evidence if the Court thought it were necessary

for us to do so, that the almost invariable

practice is for Tasmanian abalone divers, as one

would expect, to bring their catch on shore in

Tasmania. If I may be precise about my instructions,

I am told that there are five of the 125 licenced abalone divers who take their catch invariably elsewhere, usually on to the mainland of Australia,

and that there are less than five others who do not

bring all their catch into Tasmania for processing,
but, as one would expect, with an industry of

people fishing in territorial waters, the vast bulk

is. in fact, brought into Tasmania for processing.

That is made more understandable when one

looks at the regulations, Your Honours, because so far as the commercial abalone licence holder is concerned,

his licence at page 160 of the Sea Fisheries Regulations

requires him, and this appears in (c)(ii) on page 160

that:

the holder thereof shall deliver all

abalone in the shell in a fresh and wholesome
condition to premises registered under the

INDUSTRIAL SAFETY, HEALTH, AND WELFARE ACT 1977,

premises registered pursuant to section 120

of the PUBLIC HEALTH ACT 1962 -

another Tasmanian Act -

or premises registered under the Exports (Fish)

Regulations pursuant to the Commonwealth Acts.

ClT30/l/FK	453	7/6/89
Harper(2)

So far as a person is concerned who holds a

non-commercial diving licence, that situation is

covered at page 162, under regulation 17B:

that the holder thereof shall bring ashore

all abalone above high-water mark before

detaching them from the shell.

So that that person is required to bring all his

abalone on shore.

Accordingly, Your Honours, we would submit that

it is perfectly clear that the taking of abalone in
territorial waters is simply the first step in
Tasmanian abalone production, that it may properly

be characterized as that; production, that is to say,

both of meat and shell. Next, it is obvious enough

that the tax is levied in Tasmania and paid in

Tasmania. Now, we would submit, with respect, that

unless this Court says that the intendment of the

CONSTITUTION is that sea fishing is to be one

industry which cannot give rise to the existence of
an excise, then this licence fee is paid as the first

step in production and, if otherwise properly

characterized as an excise, we would submit, is one.

(Continued on page 455)

ClT30/2/FK	454	7/6/89
Harper(2)

MR CHARLES (continuing): If, on the other hand, Your Honours,

because the raw corrrrnodity - if I can so call it, the

abalone - is found to exist in the first place in

territorial waters outside Tasmania and is, therefore,

seen as being in the first instance external then

it would follow, we would submit, that KAILIS was

wrongly decided because that dealt with fish that

had been caught in the sea.

We would submit, that it follows that the

PIPELINE's case also was wrongly decided because the hydrocarbons came, clearly enough, from outside the

relevant area of Australia. In both cases there could

not have an excise on this argument. We would submit

that, basically, the issue is a false one, that it

is clear that a tax is being imposed on production

and we would rely for the logic, in support of that

argument, on what was said by Sir Owen Dixon in DENNIS HOTELS on this question. The reference,

Your Honours, is at 104 CLR 540. I do not take the

Court to it - I simply give the Court a reference.

Your Honours, in relation now, if I may turn to

it, to the nature of the public right that is

asserted in relation to the entitlement to fish in

tidal waters, Your Honour Justice Deane yesterday

asked my friend,the Solicitor-General for Tasmania

if the cases had been collected on this area. May'

I give the Court a short list of cases which bear

on this question. I do not propose to read from any

of them. If I could simply give the cases and the

references.

Firstly, Your Honours, GANN V FREE FISHERS OF

WHITSTABLE, (1865) XI HLC 191; 11 ER 1305 and we add references, Your Honours, to pages 1312, 1314

and 1316-1317. Secondly, the Irish case of

MURPHY V RYAN, ICLR second series 143; and in the
judgment of Mr Justice O'Hagan at pages 148-149.
Thirdly, Your Honours, GOODMAN V THE MAYOR OF

SALTASH, (1882) 7 AC 633, and in particular at

pages 646, 651-652 and 666. Next, THE LORD ADVOCATE V CLYDE NAVIGATION TRUSTEES,	(1891) 19 SessCas 174, at pages 182, 183 and 184.
May I also refer the Court to the footnote at
pages 177-178 in the opinion of the Lord Ordinary.

Then, Your Honours, there are the two

Canadian cases:  ATTORNEY~GENERAL FOR BRITISH COLUMBIA

V ATTORNEY-GENERAL FOR CANADA, (1914) AC 153 - I read

parts of that decision yesterday to the Court.

The relevant passages are at pages 168-169, 171,

172, 173-174 and 175. The second case, Your Honours,

ATTORNEY-GENERAL FOR CANADA V ATTORNEY-GENERAL

FOR QUEBEC, (1921) 1 AC 413, at pages 421, 422, 427
and 428. And lastly, Your Honours,

NEILL V DUKE OF DEVONSHIRE, (1882) 8 AC 135, at

pages 176-180.

ClT31/l/DR	455/456	7/6/89
Harper(2)

MR CHARLES (continuing): May I also give the Court a

reference to CHITTY'S Prerogatives of the

Crown at pages 142 to 144, where the question

is dealt with at some length. I should say,

Your Honours, that the passage that my learned

friend, the Solicitor for Western Australia,

read at length to this Court this morning

from the decision in (1914) AC 167-168. The

passage concerned dealt with non-tidal waters.

Now, Your Honours, may I turn to the nature of the public right itself. This Court has

clearly decided that at or before the passing

of the SEAS AND SUBMERGED LANDS ACT, the sub-soil of the territorial sea was within the sovereignty

of Australia. Now whether or not, Your Honours,

that carried with it any proprietary right in

abalone, we would say not, that right was subject

to a very well-established right in the public

to take abalone ,as seen from these cases. It is

referred to in some of the cases as a "trust".

We would say clearly that, until that right was

terminated, on no view could it be la.rceny for

members of the public to take the abalone.

Now, it would be our submission, that that right was held by, or that the beneficiaries

of the trust were members of the whole Australian

public and not members of the population of

any particular State. If this is, Your Honours,

to be regarded as a resourse, we would

respectfully submit it is an Australian resource

and not a Tasmanian one. Now the cases, and

particularly· most clearly the Canadian cases,

emphasize that the right is subject to regulation

and that regulation could include the imposition

of some form of administration fee or tax.

Now, with respect, to some extent our

submissions have been mistaken by those appearing

for the defendants and the intervenors. It has

never been our intention to assert that no one

could tax the taking of abalone in such a form

as would amount to an excise. Quite clearly

we must accept that if the Commonwealth chose

to impose a tax of that kind, which reflected

the value of the resource taken, quite clearly

it could do so - it has never been our intention

to assert the contrary. The question is

whether section 90 of the CONSTITUTION prevents

the States-from being able to do so as well, and

we would submit that if the right to the abalone,

to fish for the abalone, can be seen as a right

existing in the Australian public as a whole,

it is not in the slightest inappropriate that

CIT32/l/.CM	457	7/6/89
Harper (2)

it should be the Australian Government and not

the Tasmanian that makes the claim in the form of the tax for the use of the relevant resource.

Now, Your Honours, as to exactly what

would be involved in the submissions that have

been put by the various intervenors yesterday
and today, can we make the following submissions.

It has been repeatedly asserted, and I think with one major exception, that is my learned friend, the Solicitor-General from New South

Wales, certainly did not make this submission,

that the impact of either the TITLES ACT or

the Tasmanian legislation has been to terminate

that public right. That submission plainly

was not made by New South Wales.

We would submit that the Tasmanian legislation

properly viewed certainly does not terminate the existence of that right. The SEAS AND SUBMERGED

LANDS ACT does not do so, nor did the TITLE ACT

nor did the POWERS ACT, in our submission. We

would say that before the States can impose a

tax or charge a fee in such a way as to amount
to a royalty, what the Tasmanian Parliament would

have to have done would have been to terminate

that right; would have been to assert the

ownership in the abalone and then to cast their

fee at a royalty.

(Continued on page 459)

CIT32/2/CM	458	7/6/89
Harper(2)

MR CHARLES (continuing):  Each of those steps, in our

submission, involves some constitutional questions

and each of them, we would say, also involves

electoral questions. Firstly, will the Parliament

and, secondly, will the electors of the State

stomach the process, as it was put this morning,

of the cutting of land on a person's private property

being treated and proprietorship being asserted by

the State? We would submit that that is a process

which has to be undertaken and completed before

one can find the resource being properly regarded

as a resource of the State for which a royalty can

be charged. It is a process which, of course, has been gone through in a number of cases in

relation to minerals where ownership of gold,

metals of various kinds, has been asserted in

the State. It is our submission that that process

has clearly not been taken in the Tasmanian

legislation.

We would say,firstly, that if the public right

to fish for abalone belongs to the people of Australia

then there is at least a question whether it can

be terminated at all by the Tasmanian Parliament

especially as, we would submit, that was one of

the rights claimed for Australia in the SEAS AND

SUBMERGED LANDS ACT. For the view that there may

be at least a question whether the State is

entitled to make such an assertion, we would refer

to ·what was said in the Canadian case, the

ATTORNEY-GENERAL FOR CANADA V ATTORNEY-GENERAL FOR

QUEBEC, (1914) AC and the relevant passage appears at pages 427 to 428.

It would be our submission that that may mean

that the most that Tasmania can do, and what we

have never sought to argue it cannot do, is to

regulate and govern the management of the exercise

of that right by Australians, and usually, of course,

it will be Tasmanias wishing to fish for abalone.

We would submit that the entitlement to do that can

be found just as easily in the entitlement to

legislate for the peace, order and good government

of Tasmania as in the POWERS ACT, if that Act be

constitutionally valid.

(Continued on page 460)

CIT33/l/JM	459	7/6/89
Harper(2)

MR CHARLES (continuing):  Now, that would, in our

submission~ be all that the Tasmanian government

has purported to do, to regulate the exercise

of that right. Because, when one looks at what

the legislation provides, the Court will see

that at page 199 of the volume - if I may say

so, with respect to my learned friend the

Solicitor-General for South Australia, we had

some difficulty in following his submissions in

relation to relevant regulations because as we

followed it, one of the regulations upon which

he relied - I think it was regulation 8 - for

saying that the right had been terminated was

a general fishing licence. There is, in fact,

a non-cormnercial diving licence specifically provided for, and the form of which is seen,

at page 199 which entitles the holder to take

up to 10 abalone in any one day and the fee for
that is, I think I am correct in saying, $15.

It appears on the next page, that is on page 200 in point 4 under Part III, Miscellaneous Fees,

and there appears to be no basis upon which that

licence can be refused.

Now, that means that any person wanting to

fish for abalone, and do so not in a cormnercial

way, can take up to 3650 of them in any one year,

which is something like 3.6 tonnes. So that

the assertion that the right has been terminated,

we would say, is wholly inconsistent for a start
with the existence of a non-cormnercial diving

licence. Secondly, Your Honours, the legislation

provides for - - -

McHUGH J:  Well, Mr Charles, it is terminated in one

sense, is it not, because regulation 17A says that:

No person shall take any abalone in

State fishing waters unless he is the holder of -

one of two licences.

MR CHARLES:  I accept, Your Honour, that that is the form

in which the regulation is cast but this Court
is very familiar with the difference between a

regulation which terminates an activity and one

which controls or manages it.

ClT34/l/JH	460	7/6/89
Harper(2)

MR CHARLES (continuing.):  We would respectfully submit that

that is a perfectly appropriate form to ure,

to say that you cannot do this except in a certain

way. That is the process that has been gone

through here. If you want to engage in commercial
abalone fishing and exploitation then you have

got to get a licence, you are going to have to

pay a fee for it and we do not contest the entitlement

to charge a fee and that you have got to do so

in a certain way; that you have got to bring

the abalone onshore ; that you can only take a

certain amount.

All of these things, we would submit, are

wholly appropriate to the function of regulation
which the Privy Council said in the Canadian

cases is still perfectly permissible to the dominion

in circumstances consistent with the continued

existence of the right. I accept, of course,

that that is the form of the regulation. We

say that the State is perfectly entitled to insist

upon an administration fee, .a tax in that form,

as part of the process of administering that

scheme. Its right to tax, we submit, is subject

to the existence of section 90 in the CONSTITUTION.

We would submit that the State cannot claim

that this is otherwise than a tax. It is not

cast as a royalty in any form. It simply exists

as a very substantial fee, indeed. There was

a suggestion from my learned friend, the Solicitor-

General for Tasmania, that this was, in some

way, related to the husbanding of the resource

or to research in it. There is no evidence before

this Court that would justify any such assertion

being made or an assertion, that is to say, that
the amount exacted bore any relation whatever

to the amount spent by the State either on research

into abalone or into the administration of the

fishery in relation to abalone.

Indeed, the amount that is exacted is, if

$40,000 are paid by each of the 125 people who

hold such a commercial licence, that would bring

in a fee of something like 5 million. The Court

will be aware that the intention of the scheme

was that at least part of that may, in the case

of those who choose to follow that course, have

the previous year's amount set off against it

which would take one down to an amount exacted

of, let us say, 3 million dollars.

C1T35/1/ND	461	7/6/89
Harper(2)

MR CHARLES (continuing):  The State's budget paper suggested

that something like $30,000 to $40,000 a year is

in fact spent on research into abalone and that the

administration of abalone fisheries is something of the order of $200,000. We would submit it is

perfectly clear that what is involved here is

simply a scheme for the raising of money for the

States an4 I do not mean to suggest otherwise than

that one would expect that to be spent for the

good of the people of Tasmania. It is an entirely

a different thing to say that the money is bei_ng spent

for the purposes of looking after the resource

or of research into its future. There is no

evidence of that kind and we would submit it

could not be justified.

Your Honours, a number of arguments have

been put forward for suggesting that the States

should be entitled to impose a tax of the kind

that has been raised here. They might be called

the dwindling resource argument, or the quid pro quo

argument, or the every licensee shares a very valuable

monopoly argument that my learned friend, the

Solicitor-General for Victoria,stated this morning.

It has been said that the fishermen get a fee for

a real and genuine privilege. Your Honours, if

this is to become the law then a coach and four

will not be sufficient acconnnodation to provide

for all those who wish to travel through the

hole in the CONSTITUTION which has thus been provided,

we would submit.

In the first place, every connnodity is finite,

as indeed my learned friend, the Solicitor-General
for South Australia,said this morning. Hydrocarbons

are finite; abalone are finite but renewable if

they are given an opportunity of breeding in

appropriate fashion; timber, minerals are finite;
those which are subject to ordinary agriculture.

Wheat may be said to be finite in a differrent way; people may grow too much so that it may become

necessary to impose quotas. A valuable resource

is then provided for the person growing the wheat

by saying, "You have a licence to grow wheat

which others have not."

(Continued on page 463)

CIT36/1/JM	462	7/6/89
Harper(2)

MR CHARLES (continuing):  The possibility of the use of

some form of licensing as a device for enabling

the States to levy taxes in the form of excise

can be seen again in almost any of the

connnodities with which the Court has been asked

to deal in the past in the excise cases.

Alcohol is sold but licensed in the interests of

the connnunity for a variety of very good reasons.

Tobacco may be said to be dangerous to health

and should likewise be licensed. Petrol - what

one has apart from a dangerous connnodity - a finite

source of hydrocarbons. Milk must be safely

produced and supplied. One can find no end to the

limit of reasons that may perfectly properly be

given for saying that some people should have a

licence and everyone else should be excluded from

the field.

Now, it will be a very substantial step, we

would submit, for the Court to take to say that in

cases of that kind, where one finds any connnodity

that can be said to be finite, when one finds any

activity which it can be said should be licensed

and, therefore, to exclude others, that that is an

appropriate case for saying that a fee may be

imposed which would otherwise be an excise but which

is thereby taken out of that categorization.

We would next deal briefly with the matter that

was raised in a related context in relation to the

earnings of abalone divers. Reference was made to

the stated case and particularly to page 22 and

the Court was pressed with an argument.that it can

be seen how much is the value of the catch annually

to each diver. Now, we would submit, with respect,

that these figures provide no reflection whatever

of the net figure to each diver.

(Continued on page 464)

ClT37/1/JH	463	7/6/89
Harper(2)

MR CHARLES (continuing):  One of the matters which leads

to that is that the Court will see the entry price

is now an extremely high one. It will come as no

surprise at all, I am sure, to members of the Court

to know that not everyone has that sort of money

lying around ready to spend on an abalone diver's

licence and,consequently that large amounts of money , .

must be borrowed for the purpose of borrowing

abalone licences. Now, inevitably, there are high

costs of borrowed money, there are wages, there are

costs of equipment and depreciation, and there is

a short and hazardous working life involved - most

divers retire by the age of 40.

Such moneys as are earned, obviously enough,

are subject to high personal rates of tax. Now,

in those circumstances we would say simply that

the Court should treat with some reservation, if I

may say so, the figures that appear on page 22.

I would not have put the last argument to the Court had it not been for the emphasis that was previously

made on the apparently high amounts that abalone

divers earn. Your Honours, may I make a brief

submission in relation to section 61 and

section Sl(xxxix). It seemed to be suggested

this morning that one way in which the executive

was that by an exercise of the transfer of

power could be relied on for the purposes of the

proprietorship in the territorial sea and the

subsoil one found an assertion of Australian
sovereignty which therefore justified calling in

aid the external affairs power and the executive

power.

(Continued on page 465)

ClT38/l/HS	464	7/6/89
Harper(2)

:MR CHARLES (continuing):  We would say it would be a very

odd construction of the power granted in either

case to say that by giving away territorial

sea that you own, either to Tasmania or, for

that purpose, to Chile, one was making a proper

exercise of either power. Our respectful

submission is that this is an exercise

properly called an exercise in co-operative
federalism. It is an entirely different
question whether that properly attracts the

operation of either of those powers.

We accept that, of course, the executive power

could be relied upon for a matter such as the

advancement of the CONSTITUTION, the betterment
of the nation State. In pursuance of treaty
obligations one could act in that way, or
for the purpose of celebrating Australia's

bicentenary. But, as the Court has said in a

number of cases such as DAVIS, there are a

number of limitations upon this, implied limitations,

and one must look at the purpose of what is

being done.

We would rhetorically ask the question: is it

in pursuance of Australia's power of sovereignty

to pass the two laws, the TITLE ACT and the

POWERS ACT? Is that purpose sanctioned by the

CONSTITUTION? Of course there is a power to

confer proprietary title, one would not question

that for a moment, but it is an entirely different
thing that, we would say with respect, has been

done in this case.

May I refer very briefly to the submission

made by Sir Maurice Byers? On page 2 in

paragraph 3 of my learned friend's written

submissions, where my friend submitted that:

(Continued on page 466)

CIT39/l/JM	465	7/6/89
Harper(2)

MR CHARLES (continuing):

Had the States established in the

SEAS AND SUBMERGED LANDS CASE (1975)

135 CLR 337 that their boundaries

included a 3-mile territorial sea and

sea-bed Australia's international status

and capacity would have been in no way

diminished.

We would say that the SEAS AND SUBMERGED LANDS ACT

case was decided in the way it was in part, at least,

because, otherwise, Australia's international status

and capacity would have been diminished if Australia

had not had that sovereignty over those territorial

waters. We say now that, to give away that

sovereignty, may likewise be to diminish that

sovereignty. For example, if the Commonwealth

in support of an obligation it may have in relation to rights of innocent passage is approached by some

foreign State exhibiting an intention to assert that

right of free passage, the Commonwealth will say,

"Yes, of course, we will organize it for you but we

will just have to check with the States first to make sure that they, to whom we have given title and apparent sovereignty of the waters are not using

it in some way that might be inconsistent with your

right to exercise that innocent passage.

We would say that what has been done here and,

in particular, by the passing of the TITLE ACT, goes

beyond co-operative management, an area in which the

States already had substantial power to legislate

for peace, order and good government of those States.

Your Honours, I have missed the time.

MASON CJ:  Yes. We will adjourn now, Mr Charles, and resume

at 2. 15 pm.

AT 12.47 PM LUNCHEON ADJOURNMENT

C1T40/l/SH	466	7/6/89
Harper(2)

UPON RESUMING AT 2.23 PM:

MASON CJ: Yes, Mr Charles.

MR CHARLES:  If the Court pleases, may I, with apologies, take

the Court very briefly back to the volume of

legislation and remind the Court of the terms of

the regulations at page 160 and page 162, sirnpJy

for this purpose: the Court will recall that the

holder of the ccmnercial licence is required to:

deliver all abalone in the shell in a fresh

and wholesome condition to premises.

And the non-commercial diving licence holder is required to bring abalone ashore:

above high-water mark before detaching

them from the shell.

Now, Your Honours, the only relevance to our

submission of those matters is that the Court will

notice that the obligation on someone who takes abalone is to bring them ashore. Now, we would

say that may have consequences both for the question

of whether it is relating to production inside a

State, and also, Your Honours, if a view were taken

that the taking of abalone in territorial waters was

in some way external, the Court will recall that

requiring the abalone taker to bring the abalone on

shore would have consequences in relation to

whether or not it was a customs duty.

Your Honours, I had been submitting just

before lunch that the 1980 arrangements went

beyond what might be called co-operative

management of the territorial waters. Obviously,

at least to some extent, the legislation and

particularly the TITLE ACT extends to a grant of

title to the States in those waters.

We would say, Your Honours, that at least the

main, if not the only purpose of a piece of

legislation -in that kind must be to extend the

State's revenue base. In other words, we would say,

it is for the purpose of meddling with the existing

constitutional revenue base, the division between

State and Commonwealth. Our submission would be that

that inevitably impinges upon the Commonwealth's

sovereignty in relation to those territorial waters -

how can you give away property without impinging upon

your sovereignty in relation to that area?

ClT41/l/FK	467	7/6/89
Harper(2)

MR CHARLES (continuing):  We would submit that that

introduces irrnnediately a difficulty in saying that
in some way that can be encompassed by a power

of nationhood or the executive power. It would be

our submission, that the very decision in the

SEAS AND SUBMERGED LANDS ACT case shows that the

fact that the Corrnnonwealth had property in those
waters, and in the subsoil under them, was some

justification for upholding the Corrnnonwealth

claims to sovereignty over those waters as against

the States.

In other words, Your Honours, we submit that

there is a close connection obviously between
sovereignty and proprietorial rights. Next,

Your Honours, in relation to the external affairs

power, can I make one ·:e::::r short submission, that

in the passage to whicn ::1y learned friend,

Sir Maurice Byers referred, in the judgment in that case of Your Honour the Chief Justice at

135 CLR 470, at page 471, after referring to the

externality - if I may call it that - of the

territorial waters, Your Honour said:

It applies with special force to the

territorial sea and its solum because,

as I have already observed, their

control and regulation is an aspect of

the external sovereignty of

Australia.

We would submit, with respect, that the giving away

of territory could not be so classified. Now,

Your Honours, if I may turn equally briefly to

section 123 and make this very short submission,

that the Solicitor-General for Tasmania has argued

that the effect of the TITLE ACT is to give

Tasmania a fee simple, full radical title, as we understood the submission, it would be our submission

that if that is correct then that supports our

argument that there has been an extension of the

boundaries of the State. (Continued on page 469)

C1T42/l/JH	468	7/6/89
Harper(2)

MR CHARLES (continuing): Next, Your Honours, in relation

to section 52(i), reference has been made to

WORTHING V ROWELL and REG V PHILLIPS, so I will

not repeat the references to the cases, and we
would accept that there are comments in judgments

in those cases which suggest that "place" as

a word is used, to some extent, in contradistinction

to "territory". In other words, that what occurs

in section 122 of the CONSTITUTION may not be

picked up by what is said in section 52(i).

We would submit, Your Honours, that the

Commonwealth may acquire territory, obviously,

in a large number of ways. They would include

Crown placement, purchase, conquest, declarations,

succession, surrender, just to name a few of

the possible ways and section 122 deals with

some of these - three, to be precise, that:

The Parliament may make laws for the

government of any territory surrendered

by any State to and accepted by the

Commonwealth, or of any Territory placed

by the Queen under the authority of and

accepted by the Commonwealth, or otherwise

acquired by the Commonwealth -

When one goes back one notices, therefore,

in section 122 a grant of plenary power to the

Commonwealth in each of those cases. By

section 111, one of them, the first of them,

is taken up and that is that:

The Parliament of a State may surrender

any part of the State to the Commonwealth -

and that is then made an exclusive grant of

jurisdiction by the concluding words of

section 111. When one then moves back to

section 52(i), one finds that the Commonwealth

is granted not merely plenary but:

exclusive power to make laws for the peace,

order, and good government of the Commonwealth

with respect to -

(i) The seat of government of the Commonwealth,
and all places acquired by the Commonwealth

for public purposes;

(ii)   is not relevant for this purpose and then:

(iii) Other matters declared by this

CONSTITUTION to be within the exclusive

power of the Parliament -

C 1 T43 /1 /ND- 469 7/6/89

Harper ( 2)

which, of course. by (iii) .

picks up the first of those matters referred
to in section 111 "Territory surrendered by a

State" and covers also the first of the matters

referred to in section 122.

We would submit it is clear in section 122

that the word "acquired" is used in the most

all-embracing fashion, "otherwise acquired by

the Commonwealth", consistently, we would submit,

with the view that has been taken in various cases

that "acquired" has a wide meaning. For example,

in the COMMONWEALTH V NEW SOUTH WALES, 33 CLR 1,

a vesting under section 85 of the CONSTITUTION

was regarded as an acquisition under section 52(i).

Our submission basically, Your Honours, is

that the intendment of sectin 52(i) is to give
the Commonwealth exclusive power to pass laws in

relation to all places, including territory acquired

by the Commonwealth by whatever means, and in other

words the critical matter is whether or not the

acquisition is for public purposes. We would submit

that for that one differentiates between an

acquisition for a purpose which is public as against

one that is private, say,· in a situation where

the Commonwealth for some commercial purpose is

engaged, as it might be, in a joint venture through

Telecom or something of that kind with an acquisition which does not have thatpublic character. If that is

so, we would submit it is perfectly clear that an

acquisition of territorial waters is for purposes

that were public; they were public, we would submit,

in the sense referred to by Mr Justice Murphy
in the SEAS AND SUBMERGED LANDS ACT case at page 502,

and Your Honour the Chief Justice at page 470 of the

report: public purposes such as defence, the

protection of innocent passage, customs, revenue,

immigration, drug trafficking and terrorism.

(Continued on page 471)

CIT44/l/JM ·	470	7/6/89
Harper(2)

MR CHARLES (continuing):  The last point, Your Honours,

that we would seek to make in our submissions

is this. One naturally agrees with anything

that Sir Maurie~ Byers has to say and in

Sir Maurice's written submissions on pages

. 5 and 6 in paragraph 12,the Commonwealth

has made the submission that:

the State has no property interest in the

fishery beyond the territorial seas.

lmy charge imposed on taking abalone beyond

the territorial sea which is not a fee
for service is a tax,and is invalid as an

excise.

We make the same submission and have made it

in our own written submissions. We would

submit that there is no basis for saying that

there is any service that is involved here.

There is no attempt to suggest that the fee is

relevant to management or in some respect a response

to a service. We would submit that, to the extent

that the area of the licence exceeds coastal
waters and goes into adjacent waters, that the

submission made is entirely correct and that the

fee is to that extent, a licence.

We would then submit that, if that is so,

even if the fee can be justified in any respect

in relation to the coastal waters, notwithstanding

the fact that it may be said that 95 per cent of
the abalone are to be found in territorial waters
rather than adjacent waters, because the licence

is to some extent an excise, the whole must fall

and that that has been decided in various cases

and the best example, we would submit, is

WESTERN AUSTRALia V CHAMBERLAIN. It is reported

at 121 CLR l, the passages upon which we would

rely would be those appearing at page 15 in the

judgment of Sir Garfield Barwick at page 21;

in Sir Frank Kitto at page 29; Sir Victor Windeyer

at page 40 Mr Justice Walsh.

(Continued on page 472)

CIT 45/1/CM	471	7/6/89
Harper(2)

MR CHARLES (continuing):  And, we would rely also on what

was said in the PIPELINES case, 151 CLR 599,

in particular in Your Honour the Chief Justice's

judgment at page 635. In our submission, if the

fee, wherever it impacts, if it can at any place

be said to be an excise, then the whole must

fall; that is the proper consequence of the effect

of section 90.	Those are our submissions,
if the Court pleases.	I have offered to mark,

out of 10, all the written submissions made by the

various interveners but I think now is probably

not the time to do so.

McHUGH J:  Mr Charles, WESTERN AUSTRALIA V CHAMBERLAIN

does not quite support your submission though,
does it? Because, in that case, the question was

whether the fee payable, the whole fee, was an

excise notwithstanding that other fees payable

by other people would not be an excise, but here, you have got the one fee aeP.lied to the one person,

part of it.

MR CHARLES:  Yes, Your Honour, as we read CHAMBERLAIN,

what is said was that the fact that it had a

distributive operation, that its impact on some of -

that the receipts could not be said to amount to

an excise, but, in other cases, it did not save it.

Now, we would say here that because the fee relates

to an area of operation where in some respects

it must have the character of an excise, the fact

that it may elsewhere, even in the largest part,

not be characterized as an excise, cannot save it.

And, it is in that sense that we seek to draw

assistance from that case. If the Court pleases.

MASON CJ:  Yes, thank you, Mr Charles. The Court will

consider its decision in this matter and will

adjourn until 10 .15 am· tomorrow.

AT 2.38 PM THE MATTER WAS ADJOURNED SINE DIE

ClT46/l/JH	472	7/6/89
Harper(2)