Paliflex Pty Ltd v Chief Commissioner of State Revenue

[2003] HCATrans 661

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S456 of 2002

B e t w e e n -

PALIFLEX PTY LIMITED

Applicant

and

CHIEF COMMISSIONER OF STATE REVENUE

Respondent

Application for special leave to appeal

GUMMOW J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 APRIL 2003, AT 9.44 AM

Copyright in the High Court of Australia

MR N.C. HUTLEY, SC:   If the Court pleases, I appear with MR G.A. MOORE and MS K.M. RICHARDSON for the applicant.  (instructed by Brock Partners)

MR M.G SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MR I. MESCHER, for the respondent.  (instructed by Crown Solicitor’s Office for the State of New South Wales)

GUMMOW J:   Yes, Mr Hutley.

MR HUTLEY:   Your Honour, the proceedings concern the exposure of the applicant to land tax for the 1999 and 2000 years in respect of a property which until 4 February 1998 was owned by the Commonwealth.  Should leave be granted, the appeal will raise a number of issues of general importance.  Firstly, the scope of the power of the Parliament to legislate in relation to places which were once Commonwealth places.  Secondly, and on the respondent’s anticipated notice of contention, the constitutional validity of the co‑operative scheme known as the Commonwealth Places (Application of Laws Act) 1970 and the import of the decision of this Court in Attorney‑General of New South Wales on the relation of Maroubra Junction Hotel Pty Ltd v Stocks and Holdings (Constructors) Pty Limited.  Thirdly, the operation of the co‑operative scheme involving the Commonwealth Places (Mirror Taxes) Act and its State counterparts, being the Commonwealth Places (Mirror Taxes Administration) Acts.

GUMMOW J:   Now, is there not also an anterior question of construction of the State Act, which, if adopted, would avoid all these problems?

MR HUTLEY:   Yes, your Honour, would avoid those problems but that itself will involve a question as to the nature of land tax legislation and there are decisions in this Court that have held that the imposition of land tax is a tax with respect to property and that itself will raise questions of some significance.

GUMMOW J:   Yes.

MR HUTLEY:   So the anterior question itself here, if one adopts the construction that found favour with the President, will itself raise questions of significance in respect of decisions of this Court.

GUMMOW J:   Now, that construction, as you understand it, is one for which the Solicitor‑General will be contending, is it not?

MR HUTLEY:   Yes, your Honour.

GUMMOW J:   Now, there seems to be a measure of agreement between you that this should be a special leave case.

MR HUTLEY:   Yes, your Honour.

GUMMOW J:   But that is the division between you?

MR HUTLEY:   Yes – well, the division is this.  The Court of Appeal found that the Land Tax Administration Act was a law with respect to a Commonwealth place, and that is contested, the respondent advancing the argument which found favour before the President.  The Court of Appeal found that the application of laws regime was invalid to the extent in these circumstances because the State law was a law with respect to a Commonwealth place, and that is contested by the respondent.  We support that conclusion.

The mirror taxes legislation was construed by the Court of Appeal to have a retrospective effect which impacted upon the content of the Land Tax Act as at 1956, and no one supports that position.  If one gets to the point of the Mirror Taxes Act, which is the ultimate fallback of the respondent, there is a constitutional issue raised about retrospectivity and there is then also ‑ ‑ ‑

GUMMOW J:   What is that issue?

MR HUTLEY:   The issue is this.  The cases in this Court have said that once a place ceases to be a Commonwealth place the Commonwealth Parliament is no longer legislatively competent to legislate with respect to it.  We say that legislation, even in a retrospective character, dealing with an ex‑Commonwealth place is not legislation with respect to that Commonwealth place, particularly in circumstances here where the sole operative effect of it would be to bring into operation a State regime and expose us to State tax obligations.

GUMMOW J:   Yes.

MR HUTLEY:   That is an issue which is raised there.  If that issue is found adverse to my client, one then moves to a question of construction of the Commonwealth Places (Mirror Taxes) Act and the State cognate which, under section 13(1), only applies the State taxing law to my client if there has been a cessation of the application of the Commonwealth legislation.  Since, we say, there was no application, therefore there cannot be a cessation because it all happens in a legal instant when in February 2002 ‑ ‑ ‑

GUMMOW J:   We all get nervous when we hear the expression “legal instant”.

MR HUTLEY:   I am content with that, your Honour, at the moment. Just nerves is all I need at the moment. An issue of construction as to what is meant by cessation in section 13(2) of the State Act, which finds reflection in section 22 of the Commonwealth mirror taxes legislation. Those words derive from section 19 of the Commonwealth Places (Application of Laws) Act passed in 1970 and those words have never been subject to consideration by any court as to their import.

GUMMOW J:   Yes, thank you.  Yes, Mr Solicitor.

MR SEXTON:   As your Honours know, we support the application.  There is one matter I should mention.  There is a removal ‑ ‑ ‑

GUMMOW J:   Yes, we will come to that.  You will be putting on a notice of contention, will you, or a cross‑appeal or ‑ ‑ ‑

MR SEXTON:   Yes.

GUMMOW J:   What would be the point you would be wanting to make?

MR SEXTON:   The particular point for us, your Honour, is that there is a decision on the record of the Court of Appeal of New South Wales which calls into question the application of the State law in relation to former Commonwealth places, but in a sense I think my learned friend and I are agreed that the case throws up a range of issues which would all have to be approached in a sense afresh.

GUMMOW J:   Yes.  How long is this going to take?

MR HUTLEY:   Your Honour, one of the things we were going to raise is its duration may ‑ ‑ ‑

GUMMOW J:   It sounds like a complex case.

MR HUTLEY:   It is, your Honour, and its duration will be affected by how many interveners there are.  We anticipate it is likely to attract the attention of most of the Attorneys‑General and one of the things we were going to raise, whether it be here or before a single Justice, is some alteration of the timetable as to submissions because, when all the Attorneys turn up, one tends to get a wave of paper ‑ ‑ ‑

GUMMOW J:   Well, they tend to turn up at 5 to 12 on the day before.

MR HUTLEY:   Within hours of actually having to stand on one’s feet and we were going to seek, whether by application to a single Justice, some alteration of the timetable.  Therefore it is somewhat hard to predict how long ‑ ‑ ‑

GUMMOW J:   We have about two days I think.

MR HUTLEY:   We think two days and possibly a little more, depending on the number of people who turn up.  That will be extended by what we anticipate is the removal application, if it takes place, of the other proceedings relating to council rates, which my learned friend ‑ ‑ ‑

GUMMOW J:   Yes.  I will ask the Solicitor about that.  What is this other application, Mr Solicitor?

MR SEXTON:   Your Honours, it is a removal application in the name of the Attorney-General.  It involves my learned friend’s client ‑ ‑ ‑

GUMMOW J:   Removal from?

MR SEXTON:   From the Supreme Court of New South Wales involving my learned friend’s client and the South Sydney Council.  It concerns the rates in relation to the same property.  It really raises the same issues, except for two things.  It does not, of course, involve the mirror taxes legislation.  It involves a different primary statute, the Local Government Act and not the land tax legislation.  But we would not see it as significantly ‑ ‑ ‑

GUMMOW J:   Yes.  You say you would have available to you the same or similar construction arguments that appealed to President Mason?

MR SEXTON:   There may be some similar arguments but I have not looked at the Local Government Act in detail, your Honour, but we would think two days.  Your Honours know how succinct the interveners are these days in the High Court and ‑ ‑ ‑

GUMMOW J:   Well, there is room for improvement.

MR SEXTON:   In most cases, and we would think two days would be adequate, your Honours.

GUMMOW J:   Yes.  Have you a date for the section 40 removal?

MR SEXTON:   Not yet.

GUMMOW J:   You have not.  All right.  I will deal with the removal application in Canberra on Monday the 28^th at 2.15 – is that convenient – or 12 or which would be better – 12?

MR SEXTON:   Late.  The other time was ‑ ‑ ‑

GUMMOW J:   2.15.

MR SEXTON:   That would be better, your Honour, yes.

GUMMOW J:   You can get down there that morning.

MR SEXTON:   Yes, your Honour.

GUMMOW J:   There will be a grant of special leave in the second application and it also will be stood over for directions before me at 2.15 on Monday, 28 April.  The estimated time is two days.  Is there anything else?

MR SEXTON:   I do not think so, your Honour.

GUMMOW J:   Thank you, gentlemen.

AT 9.55 AM THE MATTER WAS CONCLUDED