Hughes and Vale Pty Ltd v New South Wales (No. 2)

[1955] HCA 28

93 CLR 127

HUGHES AND VALE PROPRIETARY LIMI-

TED AND ANOTHER

THE STATE OF NEW SOUTH WALES AND Constitutional Law (Cth.)-Freedom of inter-State trade commerce and intercourse-

State Statute-Validity-Prohibition of public vehicles operating in the course and for the purposes of inter-State trade on State roads without licence-Appli- cation for licence to be refused if official satisfied as to certain vaguely expressed matters-Conditions applicable to licence if granted- Reasonable charge' for use of roads-Impermissible matters to be taken into account in fixing-Whether power to make any charge for use of roads-Imposition of tax on vehicles at time of application for registration and at time of each renewal-Offence to drive etc. vehicle on public street without paying tax-Applicability to vehicles used exclus- ively for the purposes of inter-State trade etc.-The Constitution (63 &64 Vict. c. 12), 8. 92-State Transport (Co-ordination) Act 1931-1954 (No. 32 of 1931- No. 48 of 1954) (N.S.W.), 8. 3 (3), Third Schedule-Motor Vehicles Taxation Management Act 1949-1951 (No. 34 of 1949-No. 57 of 1951) (N.S.W.), SS. 4, 5, 6-Motor Vehicles (Taxation) Act 1951 (No. 56 of 1951) (N.S.W.), 8, 2.

Section 12 of the State Transport (Co-ordination) Act 1931-1954 (N.S.W.) provides that no person shall operate a public motor vehicle in the course and for the purposes of inter-State trade unless such vehicle is licensed under the Act. A " public motor vehicle" is defined by S. 3 as meaning, inter alia, a motor vehicle used in the course of any trade or business. Section 17 relates to the granting of licences, the licensing authority being the Commissioner for Motor Transport. Sub-section (4) provides that the commissioner may refuse the application if satisfied that (a) the applicant is not a fit and proper person to hold the licence or (b) the vehicle is not properly constructed or adequately equipped or is otherwise unfit or unsuitable for the licence or (c) the operation of the vehicle, if the licence were granted, would create or intensify conditions giving rise to-(i) unreasonable damage to the roads or (ii) danger to persons or vehicles using the roads; or (iii) unreasonable

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interference with other traffic on the roads. Sub-section (4A) provides that, except as provided in sub-s. (4) of the section, the commissioner shall grant the application. Sub-section (2) provides that the commissioner may deter. mine what terms and conditions (being terms and conditions of a regulatory character) shall be applicable to or with respect to a licence, including the use of such motor vehicle as to whether passengers only or goods only or goods of a specified class or description only shall be thereby conveyed and as to the circumstances in which and the days and times on which such conveyance may be made or may not be made (including the limiting of the number of [No. 2].

passengers or the quantity, weight or bulk of the goods that may be carried on the vehicle). The proviso to sub-s. (4A) provides that where the commis- sioner grants an application he may, in addition to any conditions imposed under sub-s. (2), impose conditions necessary for the preservation of public safety, the regulation of traffic and the preservation and maintenance of the roads and the use and enjoyment by the public of the roads. Section 22 provides for the issue of a permit to operate the vehicle for a specified journey pending the decision of the commissioner whether or not to grant an appli- cation for a licence. He may refuse to issue the permit if satisfied that the operation of a vehicle, if the permit were granted, would create or intensify conditions giving rise to (i) unreasonable damage to the roads or (ii) danger to persons or vehicles using the roads or (iii) unreasonable interference with other traffic on the roads; otherwise he must grant the permit. If he grants a permit he may impose any conditions he could have imposed if such permit

Held that the licensing provisions of the Act were invalid as infringing S. 92 Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] (1955) A.C. 241 (1954) 93 C.L.R. 1, referred to.

Section 18 of the Act provides that every licence shall be subject to a con- dition that the holder in respect of each journey pay to the commissioner a reasonable charge for the use by the vehicle of public streets over which it travels and for an appropriate part of the cost of administration of the Act. The amount charged was to be assessed on a scale to be laid down from time to time by the commissioner who was to take into account and not to exceed a scale to be recommended by an advisory committee set up by the Act. Both the committee and the commissioner in determining the scale were required to have regard to all relevant matters including the cost of construc- tion and maintenance of roads, the depreciation and obsolescence of roads, the necessity or desirability for the widening or re-construction of roads, the wear and tear caused by vehicles of different weights, types, sizes and speeds, the moneys available for the purpose of construction, maintenance, widening and re-construction of roads from sources other than charges imposed pursuant to sub-s. (4) of the section, and the amount expended or proposed to be expen- ded from the Country Main Roads Fund established under the Main Roads Act 1924-1954. The scale was to be applied equally to all persons in respect of all public motor vehicles of the same description or weight passing over the

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same route and under the same circumstances but the charge payable was not to exceed the corresponding charge payable by vehicles of the same description and weight engaged in intra-State trade passing over the same route and under the same circumstances. The Motor Vehicles Taxation Management Act 1949- 1951 (N.S.W.), with which is to be read and construed the Motor Vehicles (Taxation) Act 1951 (N.S.W.), provides for the imposition of tax on motor vehicles at the time of application for registration and at the time of each renewal thereof. The owner of any unregistered vehicle or of any registered vehicle on which tax due has not been paid, who uses or drives the vehicle or permits it to be used or driven on a public street is liable to a penalty. Under the Acts, tax is calculated on the unladen weight of the vehicle and in the case of a heavy vehicle amounts to a considerable sum. Vehicles using oil fuel

Held that S. 18 of the State Transport (Co-ordination) Act 1931-1954 was invalid and that the Motor Vehicles Taxation Management Act 1949-1951 and the Motor Vehicles (Taxation) Act 1951 could not validly apply in respect of vehicles used exclusively in or for the purposes of inter-State trade commerce

Per Dixon C.J., McTiernan, Williams, Webb and Fullagar JJ. The States may make a fair and reasonable charge for the use made of roads by vehicles engaged in inter-State trade etc. Per Kitto J. The States may make no charge for the use made of roads by such vehicles. Per Taylor J. In cases where by reason of their weight and construction such vehicles are calculated to work destruction of such a nature to such roads that they ought not to be on them at all the States may validly prohibit the use of such roads by such vehicles. In these cases it is legitimate for the States as a condition of relaxing such pro- hibition to stipulate for the payment of a charge. In all other cases, however, the States may make no charge for the use of the roads by such vehicles. DEMURRER.

On 22nd December 1954 Hughes &Vale Pty. Ltd. and Keith Flynn commenced an action in the High Court of Australia against the State of New South Wales, the Honourable Ernest Wetherell, the Commissioner for Motor Transport, the Commissioner for Main Roads and John William Goodsell.

The plaintiffs' statement of claim was as follows :-1. The first named plaintiff is a company duly incorporated under the laws of the State of New South Wales, and is entitled to sue in and by its corporate name. 2. The defendant, the Honourable Ernest Wetherell, is the Minister for Transport of the State of New South Wales, and, as such, is the Minister responsible for the administra- tion of the State Transport (Co-ordination) Act 1931-1954. 3. The defendant, the Commissioner for Motor Transport, is a body cor- porate, and is the body charged with the administration of the

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A. above-mentioned Act. 4. The defendant, the Commissioner for

Main Roads, is a body corporate, and, with the defendants the Commissioner for Motor Transport and John William Goodsell, is a member of the Advisory Committee constituted by S. 18 (5c) of the said Act. 5. The first-named plaintiff carries on business as a carrier of goods by road, and operates the public motor vehicles of which it is the owner on journeys from Sydney, in the State of New South Wales, to Brisbane, Melbourne, and Adelaide in the States [No. 2].

of Queensland, Victoria, and South Australia, respectively, and from each of the said cities to any one or more of the others. The said plaintiff does not operate its said vehicles for the carriage of goods on intra-State journeys in any of the said States. 6. The second-named plaintiff carries on business as a carrier of goods by road and operates the public motor vehicle of which he is the owner on journeys from Sydney, in the State of New South Wales, to Brisbane, Melbourne, and Adelaide in the States of Queensland, Victoria, and South Australia, respectively, and from each of the said cities to any one or more of the others. The said plaintiff does not operate his said vehicle for the carriage of goods on intra-State journeys in any of the said States. 7. This cause is one within the original jurisdiction of this Honourable Court, in that it involves the interpretation of the Constitution of the Commonwealth of Australia.

The plaintiffs' claim :-1. A declaration that the State Transport (Co-ordination) Act 1931-1954 is beyond the powers of the Parliament of New South Wales and is invalid. 2. A declaration that S. 3 (3) and the Third Schedule of the State Transport (Co-ordination) Act 1931-1954 is beyond the powers of the Parliament of New South Wales and is invalid. 3. A declaration that SS. 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 28, 37, and 38A, are beyond the powers of the Parliament of New South Wales and are invalid. 4. A declaration that the following sections as deemed to be amended by S. 3 (3) and the Third Schedule of the said Act, viz. 12, 16, 17, 18, 22, 28, 37, 38A and the following sections of the said Act, viz. SS. 13, 14, 15, and 21 are beyond the powers of the Parliament of New South Wales and are invalid. 5. A declaration that the Motor Vehicles (Taxation) Act 1951 is beyond the powers of the Parliament of New South Wales and is invalid. 6. A declaration that the Motor Vehicles Taxation Management Act 1949-1951 is beyond the powers of the Parliament of New South Wales and is invalid.

By their defence delivered on 18th January 1955 the defendants pleaded as follows :-

The defendants in answer to the whole of the statement of claim say as follows :-(a) That the roads and streets within the State of

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New South Wales over which the plaintiffs and other persons engaged in like businesses travel are different from the roads and streets existing at the time of the establishment of the Commonwealth and at the time of the imposition of uniform duties of customs and excise in respect of some of the methods of construction, some of the surfaces thereof and, in many cases, the precise routes followed. (b) That since the establishment of the Commonwealth and the imposition of uniform duties of customs and excise, considerable sums of money have been expended in respect of the said roads and streets by the State of New South Wales and by authorities and local governing bodies of such State from the Consolidated Revenue Fund, the Main Roads Funds, loan funds, Commonwealth grants and otherwise for the resumption of land for such roads and streets, for the construction, re-construction, widening, and strengthening of roads, streets, bridges, and culverts, and for the surfacing and maintenance of such roads and streets. (c) That from time to time in the future further considerable sums of money will be required to be expended for the said purposes.

On 25th January 1955 the plaintiffs demurred to the defence on the following grounds The State Transport (Co-ordination) Act 1931-1954 is beyond the powers of the Parliament of New South Wales and is invalid. 2. Section 3 (3) and the Third Schedule of the said Act are beyond the powers of the Parliament of New South Wales and are invalid. 3. Sections 12, 13, 14, 15, 16, 17, 18, 19, 21, 22, 28, 37, and 38A are beyond the powers of the Parlia- ment of New South Wales and are invalid. 4. The following sections as deemed to be amended by S. 3 (3) and the Third Schedule of the said Act, viz. 12, 16, 17, 18, 22, 28, 37, and 38A and the following sections of the said Act, viz. 13, 14, 15, and 21 are beyond the powers of the Parliament of New South Wales and are invalid. 5. The Motor Vehicles (Taxation) Act 1951 is beyond the powers of the Parliament of New South Wales and is invalid. 6. The Motor Vehicles Taxation Management Act 1949-1951 is beyond the powers of the Parliament of New South Wales and is invalid.

J. D. Holmes Q.C. (with him G. D. Needham), for the plaintiffs. We object to leave being granted to other States to intervene. The Privy Council treats interveners as parties see Attorney- General for Ontario v. Israel Winner 1. In that case the plaintiff company, which would have been the natural appellant, was not even represented in the Privy Council. In Hughes &Vale Pty. Ltd. V. State of New South Wales [No. 1] 2 the view was taken on the

1(1954) A.C. 541, at pp. 547, 551, 2(1955) A.C. 241 (1954) 93 C.L.R. 554, 556, 557, 558, 561. 93 CLR 132

application for special leave that the interveners in this Court were parties in the Privy Council. Section 12 of the State Transport (Co-ordination) Act 1931-1952 as amended by the State Transport (Co-ordination) Amendment Act 1954 is a simple prohibition upon operating a vehicle in the course of or for the purpose of inter-State trade without a licence. Section 17 (2) states the matters to which the commissioner is to have regard when he is considering an application for a licence. If he is not satisfied on any of the matters [No. 2].

in S. 17 (4) he may refuse the licence. Otherwise, under sub-s. (4A) he must grant the licence. Under S. 18 (11), if circumstances alter in any way, he can vary the licence, and under S. 22 he can grant a permit, having regard to some more limited matters than in S. 17 (3), for a particular journey, but only while there is an application for a licence on the file. Conditions may be imposed on the operator in the licence. Those are described in SS. 15, 17 (2), 17 (4A), 18 (4) and in the subsequent sub-paragraphs. Section 12 is the critical provision. Unless the other provisions relax that into a provision of the appropriate regulatory character, the case is no different from the case considered in Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 1. The commissioner may refuse an application if he is satisfied that the applicant is not a fit and proper person to hold the licence. In forming that decision he is to have regard to the matters set out in S. 17 (3) (c)-the character, suitability and fitness of the applicant to hold the licence. That is not regulatory in the sense that has been stated in the cases, because it leaves to the official power to go beyond permissible regulation. There is no test or formula to which the official must conform in forming a judgment. No guide is given, either in sub-ss. (3) (c) or (4) (a) as to the limits of the matters stated for his consideration. If there are characteristics under which, on some scheme of permis- sible regulation, the State could disqualify an individual from holding a licence, then there should be discernible on the face of the legislation what that condition or quality is SO as to test whether the legislature has gone beyond the limits of its power. At least some test, sufficiently confined should be stated whereby the Court can test whether the legislature has gone beyond the limits of its power. A man may have a bad character from one point of view but not such as to disqualify him from engaging in inter- State trade. The applicant for a licence need not be the prospective driver. It might be a company or a firm. By reason of the fact that not merely vehicles in the course of inter-State trade use the roads it would be possible for the commissioner to consider that the

1(1955) A.C.24 ; (1954) 93 C.L.R. 1. 93 CLR 133

granting of any licences in respect of vehicles intended to be SO H. operated would intensify the conditions referred to in S. 17 4 (c). [He referred to McCarter v. Brodie 1; Hughes &Vale Pty. Ltd. V. State of New South Wales [No. 1] 2.] These authorities contem- plate that the rules upon which inter-State trade can be regulated consistently with the freedom guaranteed by S. 92 should appear in the statute. Section 17 (4) is deficient in this regard. The Privy Council in the Hughes &Vale Case [No. 1] 3 does not suggest that there can be wholesale prohibition of vehicles operating in inter- State trade but that vehicles which are to operate in inter-State trade in certain localities or over certain routes may be limited as to number or types on grounds of public safety. Section 17 (4) goes on a much wider basis than that. The argument put on S. 17 (4) covers both S. 18 (11) and S. 22. Section 17 (2) deals with the con- ditions which may be attached to a licence. The expression being terms and conditions of a regulatory character" presents difficulties of

construction. If it is to be taken in its literal meaning, it includes conditions which, though of a regulatory character, are still a burden upon the trade. They might be regulatory in the sense of being regulations, but yet exceed that form of regulation which is permis- sible. The first condition as to whether passengers only or goods only' will be conveyed makes no point of the appropriateness of the vehicle for the carriage of goods or of passengers. It is left completely within the discretion of the commissioner. The next condition "as to whether goods of a specified class or descrip- tion only will be conveyed leaves the way open for a policy of discrimination to be imposed on persons who engage in inter- State trade by forbidding or permitting the carriage of particular goods or classes of goods. Precisely the same result would be achieved as in the Hughes &Vale Case [No. 1] (4) was sought to be achieved by the imposition of different rates of mileage charges. The next condition as to the circumstances in which and the days and times on which such conveyance may be made " is open to the same criticism as also is the condition "including the limiting of the number of passengers or the quantity, weight or bulk of the goods that may be carried on the vehicle." The load could be restricted, whatever the vehicle is capable of carrying and travel restricted to one day a week. Under S. 17 (4A) power is given to impose conditions necessary for the preservation of public safety. There are already New South Wales' Acts dealing with traffic and

4(1955) A.C. 241; (1954) 93 C.L.R. (1954) 93 C.L.R. 1, at pp. 26, 29. 1(1950) 80 C.L.R. 432, at p. 467, 2(1955) A.C. 241, at pp. 300, 303 ; 3(1955) A.C. 241, at pp. 306-307 (1954) 93 C.L.R., at pp. 32-33. 93 CLR 134

A. with questions of public safety. It may be that special questions of

public safety may arise with respect to large vehicles, necessitating further regulation of such vehicles, but such regulation should appear in the legislation. The same may be said of the expression, "regulation of traffic", and again" use and enjoyment by the public of the roads." Section 15, which in terms authorizes the issue of a licence for a particular route or for a particular area, having regard to the rest of the Act, can be read as authorizing the issue of a [No. 2].

licence with a condition restricting the operation of the vehicle to a particular route or a particular area, or restricting it in the sense of prohibiting it from going into a particular area or along a particu- lar route. This section suffers from the same vice as S. 17 (2), in that no conditions are prescribed limiting the discretion of the official or marking out the manner in which that discretion may be exercised SO as to confine it within permissible limits. Section 18 (4) deals with the conditions under which levies may be made upon the operation of a vehicle in inter-State trade. It calls the condition a "reasonable charge" for the use of the road and for administra- tion. That is destroyed by what follows. Sub-section (5A) (a) shows that the charge is unrelated to the use of the road. If an intra-State trader carries cement free of a mileage charge from Albury to Sydney, then the inter-State trader carrying cement from Victoria over the same route from Albury to Sydney is free of the charge. That takes this so-called reasonable charge for the use of the roads into the same position as before, where it was simply an instrument of the policy of favouring Government railways or some goods as against others. The same considerations apply in respect of par. (b). The maximum which may be charged the inter- State trader is now related to the maximum which is payable, having regard to the goods carried, by the intra-State trader, so that if the latter is charged a lower fee, because the State favours the goods he is carrying or the railways are not interested in carrying them, the inter-State trader must be charged the lower fee. Section 18 (5E) directs the committee recommending the charges to have regard to all relevant matters including the construction as well as main- tenance of roads, the widening of roads and the loan moneys available from various sources. The committee is not told how it should treat any of these particular matters, and whether or not those matters, even if treated in any particular way, would lead to what is a reasonable charge for the use of the road is a matter which is left much too widely. Alternatively no charge at all may be made for the use of public roads as opposed to turnpike roads. Once a road is open to the public, it is there to be used by the public.

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That follows from the dedication of the road. [He referred Glasgow Corporation v. Barclay, Curle &Co. Ltd. 1.] At common law before 1900 the public had the right to pass over the highway. Section 92 gave the right to all citizens of Australia to pass over the highways in the course of inter-State travel or inter-State trade.

A turnpike road may be only open on payment of a fee, because it has not been dedicated to the public. [He referred to Attorney- General for Ontario v. Israel Winner 2.] In any event no charge can be made simply against traders as users of the highway. This Act only charges traders for using the highway. The weight of the vehicle, the damage it may do to the road, may be precisely the same, but if the journey is in the course of trade, the charge is levied, not otherwise. Section 14 3 provides that the application shall be accompanied by the prescribed fee. There is no limit as to what the prescribed fee may be and, whatever the prescribed fee may be in amount or to what purpose it may be put, or might have been put before the State Transport (Co-ordination) Amendment Act 1954, it is now clearly a tax because it is not for purposes of administration of the Act. Section 18 4 provides that the charge by way of condition in the licence is for the use of the roads and for the appropriate part of the cost of the administration of the Act. The prescribed fee under S. 14 (3) therefore has nothing to do with administration. It is merely a tax on persons applying to operate vehicles in inter-State trade into or out of New South Wales: and, therefore, a tax on inter-State trade. Regulation can include prohibition. [He referred to Melbourne Corporation v. Barry (3).] The tax charged under the Motor Vehicles (Taxation) Act 1951 with which is to be read the Motor Vehicles Taxation Management Act 1949-1951 is not simply a registration fee. It is a tax on the movement of all motor vehicles including motor vehicles in trade coming into New South Wales from other States and going out of New South Wales into other States in common with movement entirely within New South Wales. Tax is not payable if a vehicle is not used on the roads. [He referred to Willard v. Rawson (4).]

M. F. Hardie Q.C. and R. Else-Mitchell (with them K. J. Holland), for the defendants.

M. F. Hardie Q.C. The form of licensing provided by the State Transport (Co-ordination) Act 1931-1952 as amended by the State

1(1923) 93 L.J.P.C. 1. 2(1954) A.C. 541, at pp. 576, 577, 3(1922) 31 C.L.R. 174, at pp. 199, 4(1933) 48 C.L.R. 316, at pp. 324, 325, 327, 330, 331, 338, 339. 93 CLR 136

Transport (Co-ordination) Amendment Act 1954 is a permissible form of regulation. [He referred to The Commonwealth v. Bank of N.S.W. 1; McCarter v. Brodie 2; Hughes &Vale Pty. Ltd. V. State of New South Wales [No. 1] 3; Australian National Airways Pty. Ltd. v. The Commonwealth 4; Willard v. Rawson 5.] Having regard to the complexity of the inter-State transport industry, the legislature should not be required to specify, by Act of Parliament, the matters disentitling an applicant to a licence. [He referred to [No. 2].

Hazeldon v. McAra 6 President etc. of the Shire of Tungamah V. Merrett 7 Attorney-General v. Magrath 8.] Ultimately a decision must be made whether an applicant is a fit and proper person to be granted a licence. The persons administering the Acts are best qualified to make the decision. Under S. 17 (4) (b) a licence can be refused if the authority is satisfied that the vehicle is unfit or unsuitable for the licence. A vehicle may be properly constructed and adequately equipped, but lack of repair may make it unfit for a licence. The meaning of 'unfitness " is illustrated in Reg. v. Australian Stevedoring Industry Board Ex parte Melbourne Stevedoring Co. Pty. Ltd. 9. Section 17 (4) (c) is related to S. 17 (3) (b). The words "proposed public vehicular traffic " in sub-s. (3) (b) throw light on the words "create or intensify " in sub-s. (4) (c). Parliament is directing the authority to consider the condition of the roads and their suitability to carry not only the stress and strain of the particular vehicle for which a licence is being sought but other vehicles for which a licence has been obtained or for which it is reasonable to anticipate that a licence will be sought in the future. The word "intensify", used in sub-s. (4) (c) is apt to express this idea. There is no validity in the argument that a decision by the commissioner to grant a licence means that he has already decided that there would be no risk of the creation or intensification of conditions of the nature referred to in sub-s. (4) (c). It would only be justifiable if words of sub-s. (4) were read as being equivalent to "the commissioner shall refuse etc.". The question of damage to roads, danger to persons and vehicles using them and unusual interference with other traffic on the roads changes from day to day, depending upon climatic

1(1950) A.C. 235, at pp. 311, 312; 2(1950) 80 C.L.R. 432, at pp. 461, 3(1953) 87 C.L.R. 49, at p. 86 (1955) A.C. 241, at pp. 293, 297, 4(1945) 71 C.L.R. 29, at pp. 94-96. 5(1933) 48 C.L.R. 316, at p. 325. (1949) 79 C.L.R. 497, at p. 641. 6(1948) N.Z.L.R. 1087, at pp. 1097, 7(1912) 15 C.L.R. 407, at pp. 414, 8(1907) 7 S.R. (N.S.W.) 851, at pp. 298, 303, 307 ; (1954) 93 C.L.R. 852, 853, 857 ; 24 W.N. 212. 1, at pp. 20, 23, 24, 29, 33. 9(1953) 88 C.L.R. 100, at p. 120. 93 CLR 137

conditions, floods, fires and matters of that nature. It could never be solved by saying in advance what conditions would justify the commissioner in refusing a licence, The matters dealt with in sub-s. (4) (c) are matters which have been raised in decisions of this Court as relevant matters for the States to deal with in the regulation of transport. The Federal Parliament could, by exercising its power to legislate on inter-State trade and commerce bring into existence an administrative tribunal which would have full and effective powers to give effect to rights of individuals under S. 92 of the Constitution. [He referred to Riverina Transport Pty. Ltd. V. Victoria 1.] If the Court was of opinion that any portion of S. 17 (4) was invalid it could be severed from the remainder of the Act. A licence would then have to be granted in every case. In the regulations published in the New South Wales Govern- ment Gazette on 28th January 1955 the prescribed particulars referred to in S. 14 (2) of the Act are prescribed by reference to a form contained in the schedule to the amended regulations. The regulations show the sort of information sought to be obtained from an applicant for the purpose of deciding whether he is a fit and proper person. There are a number of questions asked as to the proposed use of the vehicle, the route on which it is intended to operate, the day and times of the proposed journey, the purposes for which the vehicle is intended to be used, the place where goods and/or passengers are to be picked up, the place where goods and/or passengers are to be delivered or set down, whether it is proposed to carry goods or passengers from any place within the State of New South Wales to any other place within that State, whether it is proposed to operate the vehicle solely on inter-State journeys or solely on journeys within the State or on both types of journey. If it is intended to operate the vehicle on both types of journey particulars are to be furnished indicating the extent to which it is proposed to operate the vehicle inter-State and within the State, on what premises the vehicle will usually be garaged, and what steps will be taken to avoid danger to other traffic when the vehicle is left unattended or stationary. The matters set out in S. 17 (3) are matters which the commissioner has to consider both when deciding whether or not he will grant a licence and in deciding whether or not he will impose conditions, and in the latter event in making a decision as to what conditions he should impose. In imposing conditions, he is restricted by what appears in sub-s. (3). Section 17 (2) does not infringe S. 92, because the terms and con- ditions which can be imposed are limited to those of a regulatory

1(1937) 57 C.L.R. 327, at p. 352. 93 CLR 138

character. In a statute such as this, with the history this statute

has had, there is no doubt as to what the phrase terms and con- ditions of a regulatory character" means. It means terms and conditions of a character which are regulatory within the meaning of S. 92. The power conferred by S. 17 (4A) to impose conditions is a valid power. The matters enumerated are the sort of matters which have often been said to be matters which are essentially involved in the concept of regulation. Section 15 1 on its true [No. 2].

construction in the form it took before the recent amendment, is not concerned with conferring a power to impose conditions, but with the form and contents of a licence. It states the authority that may be conferred by a licence. If an operator desires to undertake only one or two journeys, he will apply for a licence. While his application is pending he will be entitled to a permit unless there are road or traffic considerations which require its refusal under S. 22 2 of the Acts. There is no obligation on an inter-State operator to pay any fee with an application for a licence. The regulations do not prescribe any fee under S. 14 3 of the Act. The Court should construe S. 14 (3) as giving a power to prescribe a fee that is in some way related to the administrative work involved in dealing with applications for licences. The plaintiffs have no locus standi to complain about S. 14 (3) because no fee has been prescribed. A reasonable charge may be made for the use of roads. [He referred to Willard v. Rawson (1); O. Gilpin Ltd. v. Commis- sioner for Road Transport &Tramways (N.S.W.) (2); McCarter V. Brodie (3) Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 4.] Section 18 of the Act is valid. The provisos to sub-s. (5A) are designed to bring about the result that where a vehicle used by an intra-State operator is entitled to an exemption from charges or charges at a low rate, the inter-State operator operating in similar circumstances is similarly entitled. It is implicit in S. 18 that the charge to be imposed is a reasonable charge for using the roads. If it is a reasonable charge there is no chance of it being used as an instrument of Government policy or for the purpose of diverting traffic to the railways. What is a reasonable charge is a matter for the Court in the last instance. In America it has been settled for many years that a charge of this nature, though limited to commercial users, is valid. In determining a reasonable charge, the advisory committee would, and the commissioner would, in

1(1933) 48 C.L.R. 316, at pp. 323, 2(1935) 52 C.L.R. 189, at p. 206. C.L.R. 1, at p. 3. 3(1950) 80 C.L.R., at pp. 476, 478, 497, 500. 4(1953) 87 C.L.R., at p. 80 ; (1955) A.C. 241, at p. 281 : (1954) 93 93 CLR 139

acting on its recommendations, have to pay regard to the fact that H. there were private users who made substantial use of the highways, from whom no revenue by way of mileage charges was received directly. In effect, a notional contribution to the expenditure would have to be made by those private users. Inter-State users must pay their way by making a reasonable payment for the facilities and benefits they obtain from New South Wales roads, and laws generally. They have the right to challenge that. If they pay a charge, under protest, their redress is to sue for recovery on the ground that their legal obligation as created by S. 18 (4) was to pay a reasonable charge and the commissioner has used his powers to exact more than a reasonable charge. The same sort of considera- tions apply to the tax under the Motor Vehicles (Taxation) Act as to the charge made under the 1954 amendment to the State Transport Co-ordination Act. The State is entitled to impose a charge, a lump sum, if necessary, on any vehicle which uses the roads of New South Wales. Parliament is entitled to impose a charge on vehicles based upon mileage and weight as long as it appears from the legislation that the charge is made for the purpose of road construc- tion or maintenance, and the amounts fixed bear some relationship to the benefit that the operator obtains from the facilities in New South Wales, or from the damage that is done to the roads. If the same taxation was imposed under the Act on the diesel user as on the petrol user the latter could complain that he had already paid a substantial amount to the State through the Commonwealth for the use of the road, and therefore, that he should not be charged the same amount as the former. The provision is essential in order to preserve some basis of equality of burden and sacrifice, operating as between commercial operators who use petrol-driven vehicles and operators who use diesel-driven vehicles. It does not in any way destroy the validity of the legislation. State legislation may impose or authorize the imposition of a charge on persons engaged in inter-State trade by reason of their use in the course of such trade, of State-provided facilities, such as roads, bridges, ferries, aerodromes, harbour and port facilities, or by reason of such facilities being available for their use. [He referred to Willard V. Rawson 1; O. Gilpin Ltd. v. Commissioner for Road Transport &Tramways (N.S.W.) 2; McCarter v. Brodie 3 Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] (4); Bank of New South Wales v. The Commonwealth (5).] In the American

1(1933) 48 C.L.R. 316, at pp. 323, 2(1935) 52 C.L.R. 189, at pp. 206, ( ) (1953) 87 C.L.R., at p. 80. ( ) (1948) 76 C.L.R. 1, at p. 386. 3(1950) 80 C.L.R. 432, at pp. 476, 324, 327, 328, 333, 334. 93 CLR 140

appears that the challenge to this sort of legislation has almost invariably proceeded on the question of whether the charge was a reasonable one. Under the Commonwealth Constitution, if it is a reasonable charge, it is saved; but if it is not a reasonable charge, it is not necessarily destroyed. A charge does not infringe S. 92 unless it constitutes a real burden directly imposed upon inter- State trade as such. [He referred to Wragg v. State of New South Wales 1.] If the charge imposed or authorized is reasonable in [No. 2].

amount, it can never constitute a real burden on inter-State trade, and therefore, in that event, no question of infringement of S. 92 can arise. Whether the charge constitutes a burden directly imposed upon inter-State trade as such, depends primarily upon the legal as distinct from the economic effect and operation of the statute. [He referred to Wragg v. State of New South Wales 2. If the charge imposed conforms with the above propositions it is immaterial to its validity that the legislation denies to the inter- State trader the use of the State-provided facilities except on terms that he pays the charges. [He referred to Harvard Law Review (1940), vol. 53, at pp. 1253, 1271 et seq. "State Tax Barriers to Inter-State Trade " by W. B, Lockhart.] No section of the Constitution, other than S. 92, could have any effect upon the power of the States to impose taxation for the purpose of building and maintaining roads. The fact that people are inter- State traders does not exempt them from the operation of ordinary revenue laws of the States. It is very difficult to draw the line between the two extreme views. Either the States have complete power to tax users of roads with no limitations or they have no power at all. The Motor Vehicles (Taxation) Act is legislation imposing charges on persons engaged in inter-State trade by reason of facilities provided by the State being available for their use. It imposes a flat charge based upon the weight of the vehicle. All money raised by the Act is to be used for the purpose of roads. The tax is not related to the movement of the vehicle or calculated in reference to the movement of the vehicle. It is true that a person would not normally want to register in New South Wales and pay taxation under this Act unless he intended to use the roads of New South Wales. But the use of the roads in New South Wales is not made a criterion of the operation of the law in the present case.

A State has a constitutional right to impose upon users (including inter-State users) of State highways a reasonable charge as compen- sation for the use thereof an /or defray the expense of regulating such use. A reasonable fee imposed for the purposes permitted

1(1953) 88 C.L.R. 353, at pp. 3. ; 2(1953) 88 C.L.R., at pp. 387, 397. 93 CLR 141

is not a direct burden on inter-State commerce. [He referred to Hendrick v. Maryland 1; Michigan Public Utilities Commission V. Duke 2; McCarroll v. Dixie Greyhound Lines Inc. 3.] State regu- lation of the use of highways may include as part of such regulation the imposition of reasonable fees for such use. [He referred to Hicklin v. Coney 4; Interstate Transit Inc. v. Lindsey 5; Clark V. Poor 6.] The power to impose the charge may be delegated to an authority. [He referred to Sprout v. South Bend 7.] The charge must appear to have been levied for the purposes permitted and to bear some reasonable relation to such purposes. [He referred to Sprout v. South Bend (7); Dixie Ohio Express Co. V. State Revenue Commission of Georgia 8; Carley &Hamilton Inc. V. Snook 9; Interstate Transit Inc. v. Lindsey (5).] If the charge appears to have been levied for the purposes permitted and/or is calculated according to a formula which appears to bear some reasonable relation to those purposes, the onus is on the party impugning the validity of the charge to show that an unreasonable amount is charged for those purposes. [He referred to Hendrick V. Maryland (1) Dixie Ohio Express Co. v. State Revenue Commis- sion of Georgia (8); Ingels v. Morf 10.] It is not sufficient to show invalidity to attack the formula for calculating the charge; it must be shown that the amount arrived at under the formula is unreasonable having regard to the permitted purposes. [He referred to Capitol Greyhound Lines v. Brice 11.] The charge must not operate to discriminate against inter-State operators. [He referred to Interstate Transit Inc. v. Lindsey (5).] But there is no discrimination merely because an inter-State operator is differently treated from an intra-State operator if the difference relates to the degree of destructive effects of his operations. [He referred to Aero Mayflower Transit Co. v. Board of Railroad Com- missioners 12.] The fact that a vehicle is engaged exclusively in inter-State commerce does not excuse it from liability. [He referred to Sprout v. South Bend (7); Aero Mayflower Transit Co. v. Board of Railroad Commissioners (12).] In relating the charge to the purposes permitted, the State is not required to show that the

1(1915) 235 U.S. 610 [59 Law. Ed. 2(1925) 266 U.S. 570 [69 Law. Ed. 3(1940) 309 U.S. 176 [84 Law. Ed. 4(1933) 290 U.S. 169 [78 Law. Ed. 5(1931) 283 U.S. 183 [75 Law. Ed. 6(1927) 274 U.S. 554 [71 Law. Ed. 7(1928) 277 U.S. 163 [72 Law. Ed. 8(1939) 306 U.S. 72 [83 Law. Ed. 9(1930) 281 U.S. 66 [74 Law. Ed. 10(1937) 300 U.S. 290 [81 Law. Ed. 11(1950) 339 U.S. 542 [94 Law. Ed. 12(1947) 332 U.S. 495 [92 Law. Ed. 93 CLR 142

A. relation of the charge to the costs occasioned to it by the particular

operator or class of operator has been computed with mathematical precision. [He referred to Clark v. Paul Gray Inc. 1.] Different charges may be levied for different classes of vehicle. [He referred to Clark v. Paul Gray Inc. (1).] Commercial users of vehicles may be singled out as a special class for special charges not payable by private users. [He referred to Continental Baking Co. v. Wood- ring 2; Clark v. Poor 3; Aero Mayflower Transit Co. v. Board [No. 2].

of Railroad Commissioners 4; Kane v. New Jersey 5.] A special fee may be levied for increased administration and policing costs occasioned to the State by a special type of vehicle in addition to a separate fee charged against the same vehicle for use of the highway. [He referred to Clark v. Paul Gray Inc. (1).] It is not material to the validity of a tax imposed for the purposes permitted that the State also imposes and collects vehicle registration and licence fees and a gallonage tax on gasoline purchased in the State for like purposes. [He referred to Aero Mayflower Transit Co. V. Board of Railroad Commissioners (4).] It is not material to the validity of charges imposed by a State for the permitted purposes that the State receives Federal aid for State road construction. [He referred to Aero Mayflower Transit Co. v. Board of Railroad Commissioners (4).] A charge is not invalid because the pro- ceeds are or may be spent on roads not used by the payer. [He referred to Dixie Ohio Express Co. v. State Revenue Commission of Georgia 6.] If the manner in which the charge is levied identifies it as charged for the privilege of using State highways it is immaterial that part of the fees collected are not dedicated directly to highway maintenance. [He referred to Morf v. Bingaman 7.] If it appears from the legislation that the tax or charge is levied for permitted purposes, the fact that the revenue thereby arising is not allocated directly and exclusively for highway maintenance policing and administration, or that the revenue wholly passes into a general fund, does not render the tax or charge invalid. [He referred to Aero Mayflower Transit Co. v. Board of Railroad Commission- ers (4).] In exacting fees for the use of highways the State may (a) classify vehicles according to character of the traffic and the burden it imposes on the State; [He referred to Clark v. Paul Gray Inc. (1) ]; (b) graduate the fees according to horse-power

1(1939) 306 U.S. 583 [83 Law. Ed. 2(1932) 286 U.S. 352 [76 Law. Ed. 3(1927) 274 U.S. 554 [71 Law. Ed. 4(1947) 332 U.S. 495 [92 Law. Ed. 5(1916) 242 U.S. 160 [61 Law. Ed. 6(1939) 306 U.S. 72 [83 Law. Ed. 7(1936) 298 U.S. 407 [80 Law. Ed. 93 CLR 143

[He referred to Hendrick v. Maryland 1; Kane v. New Jersey 2; ; (c) impose a flat fee without regard to mileage [He referred to Clark v. Paul Gray Inc. 3 Morf v. Bingaman 4; Aero May- flower Transit Co. v. Georgia Public Service Commission 5 ]; (d) impose a mileage fee on inter-State operators (even though the charge on intra-State operators is based on gross receipts). [He referred to Interstate Busses Corp. v. Blodgett 6; Kane v. New Jersey (2) ]; (e) graduate the fees according to number and capacity of vehicles of an operator used in inter-State journeys passing through the State [He referred to Clark v. Poor 7 ]; (f) base the fee on carrying capacity [He referred to Hicklin v. Coney 8 ]; (g) base the fee on capacity and weight [He referred to Dixie Ohio Express Co. v. State Revenue Commission of Georgia 9 ]; (h) base the fee on gross ton mileage [He referred to Continental Baking Co. V. Woodring 10 ]; (i) impose more than one form of tax [He referred to Aero Mayflower Transit Co. v. Board of Railroad Com- missioners 11; Interstate Busses Corp. v. Blodgett (6); Dixie Ohio Express Co. v. State Revenue Commission of Georgia (9)] (j) base the fee on fair market value of vehicle. [He referred to Capitol Greyhound Lines v. Brice 12.]

R. Else-Mitchell. The Privy Council has decided in Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 13 that a licens- ing system under which some persons may be excluded, either by the licensing authority or because they cannot conform to the objective facts which have to be determined by the licensing authority, may still be a regulatory system. [He referred to Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 14.] A trader may be excluded from the conduct of trade by personal disabilities such as bankruptcy, lunacy and infancy. The categories will vary with the trade and with the character of the activity that the individual wishes to pursue. Exclusion may also ensue by the determination of a licensing authority in respect of some matter which is germane

1(1915) 235 U.S. 610 [59 Law. Ed. 2(1916) 242 U.S. 160 [61 Law. Ed. 3(1939) 306 U.S. 583 [83 Law. Ed. 4(1936) 298 U.S. 407 [80 Law. Ed. 5(1935) 295 U.S. 285 [79 Law. Ed. 6(1928) 276 U.S. 245 [72 Law. Ed. 7(1927) 274 U.S. 554 [71 Law. Ed. 8(1933) 290 U.S. 169 [78 Law. Ed. 9(1939) 306 U.S. 72 [83 Law. Ed. 10(1932) 286 U.S. 352 [76 Law. Ed. 11(1947) 332 U.S. 495 [92 Law. Ed. 12(1950) 339 U.S. 542 [94 Law. Ed. 13(1955) A.C. 241 ; (1954) 93 C.L.R. 14(1955) A.C., at p. 307 (1954) 93 C.L.R., at p. 33]. 93 CLR 144

to the conduct of the trade. That basis of exclusion leads to a

consideration of whether the process of exclusion may be worked by an administrative determination or whether it must be by a determination by a judicial tribunal, It is submitted that it may be by an administrative determination. The way in which the courts have faced the problem of correcting exercises of adminis- trative discretion is illustrated by Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation 1. In Wilcox Mofflin [No. 2].

Ltd. v. State of New South Wales 2 Dixon, McTiernan and Fullagar JJ. expressed the view that mandamus to hear and determine was sufficient where discretion was exercised against the subject without reasons being advanced. The matters which the State Transport (Co-ordination) Act 1931-1954 embraces and which are specified in S. 17 (4) are matters which in accordance with common concepts can be fairly regarded as regulatory of the trade or commerce involved in the pursuit of those operations.

H. A. Winneke Q.C., Solicitor-General for the State of Victoria (with him J. E. Starke), for the State of Victoria intervening Power to impose a reasonable charge for the use of the road is compatible with the immunity conferred by S. 92 because a charge of that nature does not constitute a real burden on the trade or a real deterrent to the inter-State trader. [He referred to the Trans port Regulation (Amendment) Act 1954 (Vict.).) ] The Motor Vehicles (Taxation) Act 1951 (N.S.W.) and the Motor Vehicles Taxation Management Act 1949-1951 (N.S.W.) are of the same general quality and character as the registration and charge provisions contained in the Motor Car Act 1951 (Vict.). Those provisions, which had been contained in the Motor Car Act 1928 (Vict.), were held to be valid in Willard v. Rawson 3.

D. 1. Menzies Q.C. (with him K. A. Aickin), for the State of Queensland, intervening. A State may establish a discretionary licensing or permit system under which certain persons may or must be refused licences and SO excluded from inter-State transport. As part of that licensing system a State may impose conditions upon a licensed operator. The constitutional limitation upon the power to refuse a licence or permit or to impose conditions is that the discretion to do SO must be limited to or confined within the ambit constituted by those matters which should properly be regarded as regulatory

1(1948) 1 K.B. 223, at pp. 228, 2(1952) 85 C.L.R. 488, at pp. 521, 3(1933) 48 C.L.R. 316. 93 CLR 145

of road transport. The fitness of the operator, the suitability of the vehicle, the condition of the roads, the maintenance and preservation of the roads and the safety and convenience of those who use them are all within that ambit. Generality or ambiguity in expression in regard to these matters is immaterial on the question of constitu- tional validity unless it goes to the extent of taking them outside that ambit. A State may impose a reasonable charge upon licensed inter-State operators for use of the State roads.

R. Else-Mitchell for the State of Western Australia, intervening.

I adopt the arguments of the other interveners. [He referred to the State Transport Co-ordination Amendment Act 1954 (W.A.).]

J. D. Holmes Q.C., in reply. The decisions of the United States courts on questions of the powers of States over inter-State commerce are of no real assistance in determining the point in issue here: see R. v. Vizzard; Ex parte Hill 1 Field Peas Marketing Board (Tas.) v. Clements &Marshall Pty. Ltd. 2. The following com- ments on the United States decisions on inter-State motor vehicle taxation are, therefore, tendered merely to ensure fullness of treatment. Inter-State motor transportation for hire is a busi- ness which is different from other inter-State businesses because it involves the use of State highways which are easements belonging to the public of the State. These highways are subject to the sovereignty of each of the several States and " their use for purposes of gain is special and extraordinary, which, generally at least, the legislature may prohibit or condition as it sees fit": Stephenson V. Binford 3. The sovereignty of the States, however, yields to the Federal Constitution in two respects. Citizens of other States are entitled to the same privileges enjoyed by the citizens of any State and Congress has the power to " regulate' all travel across State lines. Under the expansive interpretation of the commerce clause by the United States Supreme Court, Congress may not only regulate the use of a State's highways, but may actually grant franchises for such use. There are two spheres of State action in which the inter-State carrier may be affected, (1) it may be subjected to reason- able police regulation for local purposes and (2) it may be subjected to certain kinds of taxes, including those designed to meet the cost of police supervision. In the field of taxation it should be noted that there are three phases with respect to impingement upon inter- State carriers, (1) taxes beyond the power of the State to impose

1(1933) 50 C.L.R. 30, at pp. 69, 70. 2(1948) 76 C.L.R. 414, at pp. 427, 3(1932) 287 U.S. 251 [77 Law. Ed. 93 CLR 146

[He referred to Meyer v. Wells, Fargo &Co. 1.] 2 taxes within the power of the State to impose, 3 taxes affecting inter-State commerce indirectly, within the power of the State until Congress

' occupies the field ". [He referred to California v. Thompson (2).] In considering the validity of State taxation on inter-State move- ment, at least as far as inter-State carriers for hire are affected, it should be noted that Congress has acted in two respects. (1) Section 302 (b), Pt. II Interstate Commerce Act (54 Stat. 919) [No. 2].

provides that " 'Nothing in this chapter shall be construed to affect the powers of taxation of the several States or to authorize a motor carrier to do an intrastate business on the highways of any State, or to interfere with the exclusive exercise by each State of the power of regulation of intrastate commerce by motor carriers on the highways thereof." (2) The action of the Interstate Commerce Commission, under its statutory authority, in specifying the details and routes to be followed by inter-State carriers may be considered as a limitation of the privileges which such carriers enjoy in the use of State highways to such a degree that the propriety of the view that a State tax should be judged by the value of a general privilege to use that State's highways, rather than with reference to the specific use enjoyed, may be subject to careful re-examination. Hendrick v. Maryland (3) held that a State may charge persons engaged in inter-State commerce for road use SO long as such charges were reasonable and were fixed according to some uniform, fair and practical standard, since, if they met this standard there would be no burden on inter-State commerce. Kane v. New Jersey 4 held valid a similar charge even though it imposed a full annual fee on a non-resident driving through the State in one day and even though the fees collected might result in a surplus over regulation and inspection expense. In Clark v. Poor 5 a sum in addition to the licence fee was charged for highway use but was not entirely used therefor. The court upheld the tax and said that, if the tax was assessed for a prior purpose, the use to which the proceeds were put was immaterial. Interstate Busses Corp. v. Blodgett 6 dealt with a tax of one cent per mile for highway use, proceeds to go to highway maintenance, but levied only on inter-State carriers. A different tax was assessed on intra-State operators. The law was upheld against the contention that it was an attempt to regulate

1(1912) 223 US 298 [56 Law. Ed. 2(1941) 313 U.S. 109 [85 Law. Ed. 3(1915) 235 U.S. 610 [59 Law. Ed. 4(1916) 242 U.S. 160 [61 Law. Ed. 5(1927) 274 U.S. 554 [71 Law. Ed. 6(1928) 276 U.S. 245 [72 Law. Ed. 93 CLR 147

inter-State commerce or at least to discriminate against it. The court held that factual proof of a disproportionate economic burden was not made, nor was it shown that no reasonable relationship existed between the charge and the value of the privilege granted. Sprout v. South Bend 1 held invalid a seat fee ordinance as applied to an inter-State carrier because the charge was unrelated to the cost incurred or value of use of streets and there was no requirement that the funds were to be applied for street maintenance or con- struction. Interstate Transit Inc. v. Lindsey 2 involved a flat fee on inter-State buses which was held invalid because it was not shown to be levied only for use of highways nor the proceeds allocated for highway purposes. The court further pointed out that there was no relationship between the tax formula and the degree of use. Continental Baking Co. v. Woodring 3 sustained a gross ton-mile assessment on a private carrier moving in inter-State commerce on the theory that there was a relationship between the levy and the use. Hicklin v. Coney 4 resulted in a finding of validity for a licence tax on private contract carriers graduated by truck size and weight on the presumption that the charge was for use of the roads. Aero Mayflower Transit Co. v. Georgia Public Service Com- mission 5 held that a moderate licence fee of the same amount from all carriers for upkeep of highways, regardless of the extent of the actual use, was proper. It was said that all received the same privilege and if one carrier did not use it as much as others that was his own business. In Morf v. Bingaman 6 the court held that a caravan licensee could not complain if the fees collected from him were not allocated to highways. In Ingels v. Morf 7 the court held that a caravan fee was SO far in excess of cost of facilities or regulation that inter-State commerce was unduly burdened. Dixie Ohio Express Co. v. State Revenue Commission of Georgia 8 embraced a challenge on the ground that the inter-State carrier did not use the roads toward the upkeep of which the taxes were expended. The court found that it was immaterial how the State chose to use the proceeds. Clark v. Paul Gray Inc. 9 considered another caravan statute and found the classification reasonable and the fee not disproportionate to the cost of administration and policing.

1(1928) 277 U.S. 163 [72 Law. Ed. 2(1931) 283 U.S. 183 [75 Law. Ed. 3(1932) 286 U.S. 352 [76 Law. Ed. 4(1933) 290 U.S. 169 [78 Law. Ed. 5(1935) 295 U.S. 285 [79 Law. Ed. 6(1936) 298 U.S. 407 [80 Law. Ed. 7(1937) 300 U.S. 290 [81 Law. Ed. 8(1939) 306 U.S. 72 [83 Law. Ed. 9(1939) 306 U.S. 583 [83 Law. Ed. 93 CLR 148

McCarroll v. Dixie Greyhound Lines Inc. 1 rejected a gasoline tax on all fuel in the tank of an inter-State bus because it bore no rela- tionship to use of the highways in the taxing State. Aero Mayflower Transit Co. v. Board of Railroad Commissioners 2 upheld a tax on an inter-State carrier for use of highways despite the fact that the proceeds therefrom were not specifically allocated for such purpose. The charge was for the privilege, not the use and it was immaterial what use the State made of the proceeds. Capitol [No. 2].

Greyhound Lines v. Brice 3 involved a tax based on percentage of value of the vehicle which became due, not annually, but at the time of first registration and upon each subsequent transfer of title. The majority refused to evaluate the relationship of the tax incidence to the objective to be attained thereby and cast upon Congress the burden of such examination. It pointed out that the Motor Carrier Act was a declaration by Congress that nothing in that Act was to be construed as affecting State tax powers and noted that carriers under the Act were required to keep accounts of State taxes for road use. The chief point of the dissent was that reason precludes the notion that a tax for a privilege may disregard the absence of a 'nexus' between privilege and tax." The dissenters pointed out that in no prior case had the court upheld a tax formula bearing no reasonable relationship to the privilege of road use and emphasized that not only is the tax base irrelevant but the incidence also lacked relevance to privilege of use. A review of United States motor vehicle tax cases leads to the conclusion that the Supreme Court has recognized that the motor vehicle in inter-State commerce must, like other instrumentalities SO engaged, pay its way". It has also recognized, in principle, that taxes on motor vehicles which are in excess of fair compensation for the privilege of using State roads may be declared invalid if the taxpayer can establish such fact by competent proof, but unless a taxpayer can meet the burden of proof as to unfair and excessive amount of tax, the court will not look very closely at the form of particular State taxes because it thinks that Congress should act to clear up the situation. In the field of property taxation on inter-State carrier property, apportion- ment was early established as a prerequisite for validity of State taxation of rolling stock. [He referred to Pullman's Palace Car Co. v. Commonwealth of Pennsylvania 4.] Both mileage and average number of vehicles have been held to be proper bases for determining proportions. Unapportioned gross receipts taxes have

1(1940) 309 U.S. 176 [84 Law. Ed. 2(1947) 332 U.S. 495 [92 Law. Ed. 3(1950) 339 U.S. 542 [94 Law. Ed. 4(1891) 141 U.S. 18 [35 Law. Ed. 93 CLR 149

been held invalid as well as capital stock taxes of the same purport. He referred to Northwest Airlines Inc. v. Minnesota 1, per Stone J. 2.] Proper apportionment will result in sustaining of the tax even though it affects inter-State commerce. [He referred to Central Greyhound Lines Inc. v. Mealey 3.] But apportionment will not save a tax when the entire business to be charged is solely inter-State commerce. [He referred to Spector Motor Service Inc. v. O'Connor 4.] The theory that a domiciliary State might tax air or water carrier property in toto, has recently been shaken by Ott v. Missis- sippi Valley Barge Line Co. 5 and Standard Oil v. Peck 6. The former case permitted a non-domiciliary State to place an appor- tioned tax on barges moving in inter-State commerce while the latter case struck down a non-apportioned tax on boats in inter- State commerce by the domiciliary State. The situation that obtains at present can be summed up by pointing out that prior to 1938 a tax impinging in any way upon inter-State commerce would have been struck down. [He referred to Puget Sound Stevedoring Co. v. Tax Commission 7; Fisher's Blend Station Inc. V. Tax Commission 8.] Starting in 1938, however, the court decided a series of cases which indicated that a gross receipts tax on inter-State commerce fairly apportioned, would be sustained. [He referred to Gwin, White &Prince, Inc. v. Henneford 9; McGoldrick v. Berwind-White Coal Mining Co. 10.] In 1947 the court, at least apparently, reversed the trend which it had been following since 1938. [He referred to Joseph v. Carter &Weekes Stevedoring Co. 11.] The point of law which was rendered indeter- minate by the fluctuation in the United States Supreme Court pronouncements was this May a State validly measure tax liability of an inter-State business by an allocated proportion of the gross proceeds of such business ? Until 1951, the question would probably have been answered in the affirmative. In that year, however, the court held that a tax on the privilege of doing business computed at a non-discriminatory rate on a proportion of net income reasonably attributable to local business activities was invalid in any case

1(1944) 322 U.S. 292 [88 Law. Ed. 2(1944) 322 U.S., at pp. 308 et seq. 3(1948) 334 U.S. 653 [92 Law. Ed. 4(1951) 340 U.S. 602 [95 Law. Ed. 5(1949) 336 U.S. 169 [93 Law. Ed. 6(1952) 342 U.S. 382 [96 Law. Ed. 427]. 7(1937) 302 U.S. 90 [82 Law. Ed. 8(1936) 297 U.S. 650 [80 Law. Ed. [88 Law. Ed., at p. 1293]. 9(1939) 305 U.S. 434 [83 Law. Ed. 1633]. 10(1940) 309 U.S. 33 [84 Law. Ed. 573]. 11(1947) 330 U.S. 422 [91 Law. Ed. 585]. 93 CLR 150

There is, however, one observation which I wish to make and which may perhaps be regarded as, though I do not see it as, a qualification of this view. I should have thought that it is com- petent for a State to exclude from its roads those vehicles which, by reason of their weight or construction, are calculated to work such destruction to the roads that they ought not to be there at all. To prohibit the operation of such vehicles on the roads would not be to prohibit the owner thereof from engaging in inter-State trade, but merely from engaging in that class of trade with a vehicle

93 CLR 240

of that character. Cases in which vehicles may be excluded

altogether from the roads may, perhaps, arise only on rare occasions, though it is possible that the use of a vehicle may, for special reasons, be prohibited on some particular roads though not on others. The concluding observation which I wish to make concerns vehicles which may find their way into one of these categories for, it seems to me, if it be permissible to prohibit the use of such vehicles then the prohibition may lawfully be relaxed upon terms. That is to [No. 2].

say, I see no reason why in such cases payment of a stipulated charge should not be made a condition of the relaxation of the prohibition. But I am unable to perceive that, in any other circumstance, charges may legitimately be levied in respect of vehicles engaged in inter-State trade.

I should, perhaps, add before concluding the discussion on this point that the general notion that the public roads of the State constitute facilities provided exclusively by the State for the vehicles which use them presents a quite incomplete conception of the part that the construction and maintenance of such roads play in the life of the State. As was pressed upon us by the defen- dants there is, of course, considerable truth in the view that persons engaged in commercial transport operations make a special use of them, but they do SO only as instruments by which the needs of the community are served. The work of constructing and main- taining public roads is essential to the development of the country generally and in the wider-and very real-sense those works are undertaken for the benefit and use of the community generally.

With these observations in mind it is convenient to consider the effect of the decision of the Judicial Committee. In the first place it affirmed the proposition that regulation of trade, commerce and intercourse among the States is compatible with its absolute freedom. But this statement of principle immediately raises the problem of what is meant by the expression "regulation" for used in this context it can be understood only as a convenient word to describe that form of direction or control of physical operations which, though operating directly upon inter-State trade, yet leaves it, in the language of S. 92, absolutely free. Practical con- siderations suggest many rules of conduct which may properly be regarded as regulatory in this sense, but the same considerations also disclose the impossibility of formulating any general criterion fixing the boundary line in all cases between what is and what is not " regulation". But, as at present advised, there is, I should think, one common feature in all so-called regulatory rules. They do not purport to control or regulate inter-State trade or commerce

93 CLR 241

as such on the contrary they relate to some activity by means of which the particular form of inter-State trade under consider- ation is carried on. In the present case the particular activity involved is the operation of motor vehicles in the course of that trade and many examples are to be found of rules which may properly be regarded as regulatory of such an activity. A number are to be found in the passage in the reasons of Fullagar J. in McCarter v. Brodie 1 which was quoted by their Lordships of the Judicial Committee 2. In general, these examples relate to the regulation of vehicular traffic on the roads in the strictest sense. But, in addition to rules of this kind, the Judicial Committee observed that: "Their Lordships can imagine circumstances in which it might be necessary, e.g. on grounds of public safety, to limit the number of vehicles or the number of vehicles of certain types in certain localities or over certain routes, with the result that some applicants might be unable to obtain licences" 3. The examples given by Fullagar J. in McCarter v. Brodie (1), are readily recognizable as examples of restrictions which leave the absolute freedom of trade and commerce unimpaired whether they be regarded as rules relating to the use of the highways generally or to their use by any particular person. Alone they do not exclude any person from the use of the highways. Of the same type are rules which prescribe minimum conditions of roadworthi- ness for vehicles the owners of which desire to use them upon the roads. Such rules may directly result in the imposition of a con- ditional prohibition upon particular individuals, yet, nevertheless, may be regarded as "regulatory". Features of another kind arise when a third class of rules comes to be considered. Practical considerations suggest that rules prescribing, for instance, that only persons holding certificates of competency shall pilot aero- planes cannot be regarded as an infringement of the freedom guaranteed by S. 92. Rules forbidding unqualified persons from driving motor vehicles on a public highway give rise to similar considerations, but they may well result in the exclusion of indivi- duals from particular forms of inter-State trade and commerce among the States. Yet, nevertheless, such rules do not invade the individual freedom guaranteed by S. 92. This same class of rules may deal with circumstances such as age or mental capacity and may, in some instances, result in the imposition of a prohibition which is permanent and cannot be overcome by the

1(1950) 80 C.L.R., at pp. 495, 496. 2(1955) A.C., at p. 297 ; (1954) 93 (1954) 93 C.L.R., at pp. 32-33. C.L.R., at p. 24. 3(1955) A.C., at pp. 306, 307 93 CLR 242

attainment of a prescribed standard of proficiency or capacity. Yet, again, practical considerations make it clear that such rules do not impair the freedom of any individual. In each of these classes of rules there is a common feature. They spring from considerations directly concerned with the safety of traffic on the roads and their object is sought to be achieved by the regulation of the conduct of individuals in relation to an activity which may, in some circumstances, constitute an essential element in the carrying [No. 2].

on of trade and commerce among the States. Such rules may, of course, result in partial prohibition or prohibition sub modo. But although the further class of rules envisaged as a possibility by the Judicial Committee, put as it is on grounds of public safety, appears to spring from the considerations upon which traffic rules generally are based the formulation of rules in this category would, or at least might, give rise to very different results. The same reasons may be thought to lead both to the exclusion from road traffic of a mechanically dangerous vehicle and to the prescription of a limit on the number of vehicles which may be used on any particular road or roads. But the owner of a dangerous vehicle may equip himself with a roadworthy vehicle and, subject to doing this, be free to engage in inter-State trade. On the other hand, the owner of a roadworthy vehicle may, under a rule of the latter class, be excluded indefinitely from inter-State trade simply because existing road users are already operating a specified number of vehicles over portions of an inter-State route or routes. Indeed, a rule of that class might well operate to exclude entirely from the roads of one State motor traffic originating in another State, or, under the legislation under review in this case, in the exclusion from inter- State trade of all vehicles registered in New South Wales in the interests of the operators of motor vehicles engaged in intra-State trade in New South Wales. And, indeed, this might be done not- withstanding the fact that any number of vehicles may use the roads SO long as they do not engage in the carriage of goods or passengers.

It is, I should think, possible now to say that the vital provisions of the Act under review go far beyond any conception of what may properly be regarded as "regulation" of the traffic concerned. In the first place S. 17 (2), in spite of the words contained in paren- thesis, purports to authorize the imposition of conditions which travel far beyond this limit. Such conditions may include conditions limiting the use of the licensed vehicle for the carriage of goods of a specified class or description or concerning the circumstances in which goods and passengers may be conveyed. These provisions

93 CLR 243

purport to authorize the imposition of conditions which, for purposes quite unrelated to the regulation of traffic as such, would, at the discretion of the commissioner, substantially exclude licensees from inter-State trade and commerce. Secondly, the grounds upon which the commissioner may refuse an application for a licence clearly indicate that sub-s. (4) of S. 17 may operate far beyond the bounds of 'regulation". If the commissioner is satisfied that the applicant is not a fit and proper person to hold a licence he may refuse the application. This means no more and no less than that the applica- tion may be refused if the commissioner is satisfied that the applicant is not a fit and proper person to engage in such trade. I confess that even if I were able to comprehend the qualities which con- stitute fitness or propriety in this connection I would still be unable to see how such a provision could ever be relevant to the regulation of motor traffic on public roads or how it could be said to leave unimpaired the freedom guaranteed by S. 92. Moreover, other grounds of refusal, namely, that the operation of the vehicle would create or intensify conditions giving rise to unreasonable damage to the roads or danger to persons or vehicles using the roads or unreasonable interference with other traffic on the roads, are expressed in terms SO wide as to include matters not relevant to the regulation of motor traffic on the roads. Although these pro- visions may in some respects be based upon conceptions of public safety, they fail to define with any degree of precision the limits of the commissioner's discretion and it is, therefore, impossible for this Court, on any view of the matter, to say that his discretion is appropriately confined. Much of the language employed represents an unfortunate choice if it was intended SO to confine the commis- sioner's discretion for it is obvious that, although their Lordships of the Judicial Committee were able to imagine circumstances in which it might be necessary to limit the number of vehicles or the number of vehicles of certain types in certain localities or over certain routes, those circumstances by no means exist simply where "the operation of the vehicle would create or intensify conditions giving rise to unreasonable damage to the roads or damage to persons or vehicles using the roads or unreasonable interference with other traffic on the roads".

Finally, the provisions of the Act which purport to impose charges as a condition of the use of vehicles " in the course of and for the purposes of inter-State trade" are, for reasons which are apparent from what has already been said, clearly invalid. In the result, therefore, I am of the opinion that the licensing system erected by the Act of 1954 is one which, at every point, infringes

93 CLR 244

S. 92, and the provisions of S. 3 2 are incapable of saving any

part of the legislation upon which it depends.

Much of what I have already said concerning the authority of the State to impose charges for the use of public roads applies with equal force in considering the Motor Vehicles (Taxation) Act 1951 and the Motor Vehicles Taxation Management Act 1949-1951 and were it not for the decision in Willard v. Rawson 1 it would have been sufficient to dispose of this aspect of the matter by saying [No. 2].

that it follows that those Acts cannot validly operate with respect to vehicles engaged exclusively in inter-State trade and commerce. But by the decision referred to the validity of a Victorian statute- the Motor Car Act 1928-1930-in terms not essentially dissimilar to those of the Motor Vehicles (Taxation) Act, was affirmed. In general, however, the reasons of the majority of the Court in that case, which were analyzed by Dixon J. (as he then was) in R. V. Vizzard Ex parte Hill (2), are now, at least, of doubtful validity. Their Lordships of the Judicial Committee were not invited to review Willard v. Rawson (1) in Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 3 but it is clear from their later observations in that case that they were of the opinion that the conception that the railways and roads formed facilities for the carriage of goods for the provision and maintenance of which the State is responsible was not a factor capable of limiting the applica- tion of the principles laid down in McCarter v. Brodie 4 to cases of inter-State transport. I take this to mean that the conception is inadequate to justify the creation of a power, exercisable at the discretion of a licensing authority, to deny the use of the public roads of the State to the operator of a motor vehicle engaged in inter-State trade. If this be so, it is also inadequate to justify a power to deny the use of such roads in the case of such a vehicle except subject to the payment of an impost prescribed by the legislature. The prohibition upon the use of the roads by inter- State operators which is the result of the Acts under consideration in this case must now be taken to be direct and immediate, not- withstanding the view entertained by Rich J. in Willard v. Rawson (1) that the burden imposed by the Act under consideration in that case was "consequential, mediate or indirect, and not direct, immediate or intended burden or restraint imposed upon trade, commerce or intercourse among the States " 5. The con- ditional prohibition on the use of the roads which that Act erected

2(1933) 50 C.L.R., at pp. 67-71. 1(1933) 48 C.L.R. 316. 3(1955) A.C., at p. 283 (1954) 93 C.L.R., at p. 10. 4(1950) 80 C.L.R. 432. 5(1933) 48 C.L.R., at p. 324. 93 CLR 245

may not have been thought to have been devised with the intention of impeding or burdening trade and commerce among the States, but the Act directly operated to prohibit the movement of such vehicles in the course of inter-State trade and permitted it only upon payment of the charges imposed. The view entertained by Starke J. that the charges imposed could properly be regarded as

a reasonable adjunct to the main provisions of the Acts " 1 and that they took the colour or character of registration or licence fees from these provisions was not entirely shared by the rest of the Court and is not open in this case. The Motor Vehicles (Taxation) Act 1951 is expressed to be " An Act to impose certain taxation upon motor vehicles, tractors and trailers" and expressly imposes a motor vehicle tax in accordance with the scheduled rates. But even if the imposts were not expressly declared to be taxes there can be no doubt upon a consideration of the imposts themselves and the circumstances of their imposition that this is their true character. The ground upon which Evatt J. considered that the Act should be upheld is no longer of any validity 2. I do not under- stand the observations of Fullagar J. in McCarter v. Brodie 3 as giving approval, as was suggested in argument, to the reasoning in Willard v. Rawson 4. Rather they indicate that, upon the views taken in that case of the character and effect of the Act in question, the decision was by no means an obstacle to the opinions formed and expressed by him concerning the Victorian Transport Regulation Act. Nor do I think that the adoption by the Judicial Committee of certain observations of the same learned Justice in Hughes &Vale Pty. Ltd. v. State of New South Wales [No. 1] 5-containing as they do statements concerning the authority of a State or of the Commonwealth to make a charge for the use of "trading facilities" such as bridges and aerodromes-carries with it any suggestion that charges of any kind may, consistently with S. 92, be made for the use of public roads by vehicles engaged in inter-State trade.

For the reasons given I agree with the order proposed by the Chief Justice.

Plaintiffs' demurrer to the defence allowed. Judgment in

the suit entered for the plaintiffs with costs. Declare that S. 3 (3) and the Third Schedule of the State Transport (Co-ordination) Amendment Act 1954 (No. 48 of 1954) (N.S.W.) is invalid. Declare that the Motor Vehicles

1(1933) 48 C.L.R., at p. 328. 2(1933) 48 C.L.R., at p. 337. 3(1950) 80 C.L.R. at p. 500. 93 C.L.R., at pp. 25, 26. 4(1933) 48 C.L.R. 316. 5(1955) A.C., at pp. 298, 299 (1954) 93 CLR 246

Taxation Management Act 1949-1951 (N.S.W.) and the Motor Vehicles (Taxation) Act 1951 (N.S.W.) HUGHES

cannot validly apply in respect of vehicles used exclu- sively in or for the purpose of inter-State trade commerce PTY. LTD.

or intercourse.

THE STATE

Solicitors for the plaintiffs, Higgins, de Greenlaw &Co., Sydney, WALES

by Henderson &Ball. [No. 2].

Solicitor for the defendants, F. P. McRae, Crown Solicitor for the State of New South Wales, by Thomas F. Mornane, Crown Solicitor for the State of Victoria.

Solicitor for the State of Victoria intervening, Thomas F. Mornane, Crown Solicitor for the State of Victoria.

Solicitor for the State of Queensland intervening, H. T. O'Driscoll, Crown Solicitor for the State of Queensland, by Thomas F. Mornane, Crown Solicitor for the State of Victoria.

Solicitor for the State of Western Australia intervening, R. V. Nevile, Crown Solicitor for the State of Western Australia, by Thomas F. Mornane, Crown Solicitor for the State of Victoria.