Queanbeyan City Council v ACTEW Corporation Ltd & Anor [2011] HCATrans 83

[2011] HCATrans 83

[2011] HCATrans 083

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  No C6 of 2010

No C7 of 2010

B e t w e e n -

QUEANBEYAN CITY COUNCIL

Applicant

and

ACTEW CORPORATION LTD

First Respondent

THE AUSTRALIAN CAPITAL TERRITORY (DEPARTMENT OF TREASURY)

Second Respondent

Applications for special leave to appeal

HAYNE J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 8 APRIL 2011, AT 9.31 AM

Copyright in the High Court of Australia

MR J.K. KIRK:   May it please the Court, I appear for the applicant with my learned friend, MR P.D. KEYZER.  (instructed byWilliams Love & Nicol)

MR C.L. LENEHAN:   May it please the Court, I appear for the first respondent.  (instructed by DLA Phillips Fox Lawyers)

MR J.E. GRIFFITHS, SC:   If the Court pleases, I appear for the second respondent with my learned friends, MS K.M. RICHARDSON and MS C.C. SPRUCE.  (instructed by Australian Capital Territory Australian Government Solicitor)

HAYNE J:   Yes, Mr Kirk.

MR KIRK:   As your Honours would well appreciate, the case concerns the validity of two levies imposed by the ACT, which the applicant says a tax is imposed on steps in the production and distribution of water, being a commodity, and thus an excise.  The two levies are, of course, the water abstraction charge, commonly referred to as the WAC, and the utilities network facilities tax.  In its special leave submissions in response the ACT acknowledges that the issues raised in relation to both levies are ones of general importance.  It says, however, that the decision of the Full Court was plainly correct and that there are thus insufficient prospects of success to merit this Court’s attention.

With great respect, we submit that one does not have to delve very far to see that that cannot be supported, taking account of the nature of the issues in the argument, the fact that his Honour Justice Perram dissented in relation to the validity of the WAC, the fact that the honourable trial judge held the UNFT invalid and, most significantly, in relation to the WAC, the inconsistency, as we would put it, of the Full Federal Court majority decision with clear and concise dicta expressed by three members of this Court in Harper v Minister for Fisheries.

I will deal first with the WAC and then with the UNFT.  The importance of the issues raised in relation to the WAC are illustrated by the ACT’s own submissions.  If your Honours would note at page 195 of the application book, paragraph 9, the ACT submissions, the ACT says:

There is no constitutional limit imposed by s 90 on the amount that can be charged by the Territory for the acquisition of water that it owns and controls. The Territory can charge “a monopoly price” for its water resources with the intent of raising revenue and/or managing demand or restricting supply without infringing s 90 -

Now, where that says “the Territory” one could, of course, add the words “or State” and where it says “water” one could replace the words “natural resource”. That is with respect to a very large claim. It has the effect that a significant part of the national economy in Australia is immunised from the protective reach of section 90 of the Constitution and it is claimed of course ‑ ‑ ‑

HAYNE J:   The challenge you are making is a challenge to what is said in paragraph 87 of Chief Justice Keane’s reasons, is it - application book 105?

MR KIRK:   Thank you, your Honour. Yes, in relation to monopoly power, yes. There were two main issues of principle that arose in relation to the WAC and one issue of application. The two issues of principle are interrelated. The first issue of principle was whether section 90 imposed any constraint on charges for natural resources. We said there was such a constraint, namely that there has to be a discernible relationship between the value of what is acquired and the amount of the levy. In so doing, as your Honours would well appreciate, we are drawing upon what the Court said in Air Caledonie and that was referred to, that is quoted, I think, at application book 20.  Your Honours will be familiar with the passage.

HAYNE J:   Yes.

MR KIRK:   It is the last sentence which is put in bold there:

If the person required to pay the exaction is given no choice about whether or not he acquires the services and the amount of the exaction has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be seen as a tax.

That was expressed, we would accept, in relation to a fee for service but we would say there is no issue of principle which would restrict that to a fee for service. After all, if the ACT had separately imposed a tax on all transfers or sales of water on top of the charge that it imposed for abstraction that would clearly be, we would say, a breach of section 90.

Yet in substance we say that is what has occurred here and so that restriction should equally apply, but even apart from principle, that it does apply beyond fees for services to acquisition of goods and such like, was what three members of this Court said very clearly in the Harper v Minister for Sea Fisheries Case and it is relevantly extracted at page 25 of the application book, the joint judgment of Justices Dawson, Toohey and McHugh.  Your Honours will see paragraph 80 of trial judge’s reasonings.  Their Honours agreed with Justice Brennan and said:

Whilst the proper conclusion is that the amount paid for a commercial abalone licence is not a tax and, therefore, is not a duty of excise, that conclusion flows from all the circumstances of the case.  Most important is the fact that it is possible to discern a relationship between the amount paid and the value of the privilege conferred by the licence –

Then if one looks at the second paragraph, your Honours will see the quotation from Air Caledonie.  In other words, their Honours clearly applied that principle beyond fees for services to acquisition of goods.

HAYNE J:   Does the discernable relationship point capture all of the points you would seek to make about the WAC, or is there another way in which you seek to put it?

MR KIRK:   It captures the essence of it.

HAYNE J:   Yes.

MR KIRK:   It ties to the point your Honour raised with me which was the second issue of principle about monopoly pricing because the way the ACT put the case in ACTEW was to say no such requirement applies, but if it applies in essence it can be met by reference to the market where the market here, they said, is simply the sale by the ACT to ACTEW.  There was no relevant dispute that that is a monopoly market.  We say if that proposition is accepted, it undermines the whole discernable relationship requirement. 

The discernable relationship requirement, in this context, only arises in the context of a monopoly.  Your Honours will recall it was said in Air Caledonie that the issue only arises if there is no option as to whether or not to meet the charge.  Now, if it was not a monopoly market then the ACT would not be able to sell into the market in a way beyond a discernable relationship to value because it would be constrained by the market.  There would be competition forces at work. 

If there is no constraint, if it has created a monopoly, as it has, for itself, by asserting control over the water in the ACT, to say that a discernable relationship is established simply by the fact it can charge this and ACT consumers and ACTEW keep paying it, is to say that there is, in fact, no limit imposed by section 90 because where you have a monopoly situation, particularly where there is inelastic demand and there is inelastic demand for water, they can charge a very high amount with no relationship to value but for the fact that they can get away with charging it because people need to buy it. There is a practical compulsion to buy it and this is the only available supplier, the ACT to ACTEW and then ACTEW to consumers, including Queanbeyan.

This point was very well put, with great respect, by Justice Perram in his dissenting judgment relevantly at page 140 of the application book at paragraph 195 where his Honour referred to the view of the learned trial judge and said:

Here the value of the monopoly asset is taken to be the actual price paid (including any monopoly rents).  But the Air Caledonie test begins with the assumption of a monopoly in goods or services and then poses the question of whether the impost in question exceeds their value.  If the learned trial judge be right then the Air Caledonie test can never be failed for there will always be a discernible relationship between the exaction and the value of the service – they will be the same.  On this view, the rule has consumed any possibility of being failed.

We would respectfully adopt that and that is in stark contradistinction to what your Honour Justice Hayne pointed out to me at paragraph 87 of the Chief Justice’s reasons.  The learned trial judge had taken a similar view, in that respect, to Chief Justice Keane.

HAYNE J:   Well, we observe that there is a division of opinion within the Full Court on that aspect of the WAC.  Is there anything more that you wish to say in support of the application for leave in respect of that aspect of the matter?

MR KIRK:   Only this, your Honour, and I am very conscious of the time, that in relation to the discernible relationship to value requirement one accepts, of course, that it is going to involve a zone of uncertainty as to whether it has failed or not, but this case is peculiarly apposite for revealing a lack of a discernible relationship for two reasons.  First, when the ACT first increased the WAC to 20 cents a kilolitre, it asked its Independent Competition and Regulatory Commission to do a report and an analysis of the appropriate level of the WAC and the methodology to be employed.  The ICRC came up with a figure of 17.7 cents per kilolitre plus another two for bushfire remediation. 

Importantly, in so doing, they indicated that they had received advice from counsel as to the appropriate test to be applied and they indicate in their report they took account of a need to have a discernible relationship to costs.  In other words, they applied that sort of standard.  We are not saying that is binding, of course, on the ACT and whether that is right or not is a matter of law, but they did that exercise and got to about 20 cents.  Less than three years later, the ACT had taken it to 55 cents – 175 per cent beyond what the ICRC had calculated as satisfying that discernible relationship requirement.  That is the first point.

The second point is, as it happens, although it is a monopoly here in the ACT, downstream in the Murrumbidgee there is trade in untreated water in the Murrumbidgee Irrigation Area from the river.  The relevant figures are set out in our submissions at page 181 of the application book in a little table based on calculations done by the ACT’s expert and your Honours will see - so this is the price per kilolitre for untreated water in the downstream market ‑ ‑ ‑

HAYNE J:   Well, to what proposition in aid of a grant of special leave is this detail put?

MR KIRK:   That it shows the vehicle is peculiarly apt to resolve the issues of principle because the facts are clear.  That is why, your Honour.  The last point I make about this is, at the time that the new 30 cent increase to take it to 55 cents was announced, the downstream price was 1.9 cents a kilolitre.  So the price the ACT was charging was more than 25 times the price in the downstream market.  If I could turn then to the second levy, the UNFT ‑ ‑ ‑

HAYNE J:   Do you have any judicial opinion in the Full Court or in the court below that supports you?

MR KIRK:   In relation to the UNFT?

HAYNE J:   UNFT.

MR KIRK:   Yes.  The honourable trial judge held it invalid.

HAYNE J:   Yes.

MR KIRK:   That was overturned by all members of the Full Court, relevantly speaking, through the Chief Justice.

HAYNE J:   Where do we find, conveniently, what you say is the error in the reasoning of the Full Court?  Perhaps, if you could point to Chief Justice Keane’s reasons and identify where you say the error is most conveniently to be identified.

MR KIRK:   We say there are a number of errors.  If I could briefly articulate why we say it was an excise and then seek to address how his Honour rejected our arguments on those points.  We say it was an excise because it imposed a tax on a network, the water network, use of which was an essential step in the production and distribution of potable water to consumers.  That is the first point.  Secondly, we said the length of the network bears a natural relation to the quantity and value of the commodity being produced and distributed.  Third, we said, and say, that the UNFT was intended to be, was permitted to be and was, passed on to consumers of the commodity. 

As to the first step about imposing a tax on the step in the production, his Honour the Chief Justice at page 122 of the appeal book, paragraph 148, amongst other places gave emphasis to the fact that the tax - the UNFT is imposed upon owners of networks, so his Honour says it is a tax “upon the ownership of a productive asset” and there is no support, relevantly talking about Matthews, that that establishes sufficiently close connection and then also distinguishes Hematite and in other places his Honour emphasised ownership as does the ACT in its submissions here.

We respectfully say that to focus upon the fact that the criterion of liability of the tax is ownership of the network and to stop the analysis there, I am not saying his Honour did, but insofar as one stops there, that is to go back to an old “criterion of liability” approach.  One has to look at the substance of the matter and here the substance of the matter is that the owner, ACTEW, was the same as the operator.  That is no minor coincidence when we are talking about the natural monopoly in water distribution to ACT consumers.  It has always been thus that the ACT water network has been owned by the government or a governmental entity.  It is no minor coincidence.  That is the substance of the matter. 

Further, as I have indicated, the tax was always intended to be passed through to the consumers and it was.  From the beginning, it was separately itemised on invoices sent to consumers, including my client.  That was facilitated by the government because, under the relevant regulatory regime, it had to authorise pass through of charges to the consumers.  That was done from the beginning that this could be passed through.       Then as to the natural relationship point, we say, and his Honour respectfully disagreed, and your Honours will find this at page 119, paragraph 137 of the application book.  His Honour said in the last sentence:

In this case, there is not only no arithmetical relationship between the UNFT and the quantity or value of water which passes through the network, there is no relationship at all between the UNFT and the quantity or value of water which passes through the network.

We again respectfully say that ignores the practical reality.  It is self‑evident, we say, that, for example, as the population of Canberra expands more pipeline has to be laid to deliver water to those consumers.  That indicates there is, of course, a natural relationship between the size of the network, the length of the pipelines and the amount that is the quantity and value of water distributed.  There will, of course, be some variation.  Some suburbs will be high density and will have higher consumption than others. 

There will be seasonal variation, a point the ACT made.  With the drought we had, water consumption in the ACT fell in response to restrictions on water use and so forth, but as a whole, there is a natural relationship between the size of the network, we say, and the quantity or value of the water.  That is all that is needed.  Since Matthews v Chicory Marketing Board it has been made very clear one does not need an arithmetical relationship, a natural relationship is enough.  Indeed, Justice Brennan in Hematite indicated it may even be enough that it is a tax on an essential step in the production or distribution of goods and plainly this is.  There is no other practical way of distributing water to consumers than through such a water network.  This is a tax, a significant tax, on the use of that network to transmit water. 

The other core part of his Honour’s reasoning was at paragraph 136, starting at page 118, where his Honour went through a series of six factors which his Honour said distinguished this case and UNFT from Hematite.  The first of those factors was that the UNFT is payable by the owner of the network, not the operator.

HAYNE J:   We have read it, Mr Kirk.  What is the point you want to make about it?

MR KIRK:   First, in relation to that it is the point I have already made.  It misses the substance of the issue which is a reversion to the criterion of liability.  The second:

the UNFT is imposed by reference to the conferral of the right to use and occupy land on which its facility is situated –

with respect, his Honour is incorrect.  The right to have a utility service was conferred under a separate piece of legislation prior to the enactment of the UNFT.  The UNFT is a simple tax.  It confers no rights whatsoever, merely a liability.  The second point, thus, is not correct, with respect –

thirdly, the quantum of the tax is referable to the length of land occupied –

Perhaps, but we have made the natural relationship point –

fourthly, the quantum of the UNFT is not explicable “only on the footing that it is imposed in virtue of the quantity and value” –

Now, that is a quotation from his Honour Justice Mason in Hematite.  We say again it does not have to be arithmetical.  It is sufficient to have a natural relationship –

fifthly, payment of the fee is not a condition upon the transportation of water –

We say it ignores the practical reality that this network must be used to transmit water and this is a significant impost on that –

sixthly, the UNFT does not select the water network for discrimination so as to warrant the conclusion that the tax is upon the water carried in the network.

Discrimination cannot be a necessary criterion.  It was relevant in Hematite, but a number of cases of this Court have indicated that the fact that a tax might not be an excise in all its applications does not mean it is not an excise in some of its applications.  I think Chamberlain Industries was an example of that and also Logan Downs.  For all those reasons we respectfully say the Chief Justice deviated from this Court’s emphasis on substance over form, misapplied Hematite and reached an incorrect decision and for that reason we say the case merits special leave.

As I said at the beginning the ACT accepts the issues raised are of general importance. They are clearly of general importance. In relation to both it has been 14 years since this Court has considered a section 90 case. In Betfair v Western Australia in the joint judgment this Court emphasised the importance of section 90 as one of the foundation stones of the national economy and the issues raised in relation to both these excises are important matters of principle, relating to that foundation stone of the economy.

HAYNE J:   Thank you, Mr Kirk.  Have the respondents agreed on whether there should be a separate argument for the respondents or the order in which argument is to be presented?  What is the position?

MR GRIFFITHS:   The position is, your Honour, as a result of a happy announcement yesterday, I will take the lead.

HAYNE J:   That is an expression commonly reserved for other events, I would have thought, Mr Griffiths, but there we are.

MR GRIFFITHS:   I was proposing to lead, your Honour, in the argument.

HAYNE J:   You are content with that are you, Mr Lenehan?

MR LENEHAN:   I am, your Honour.

HAYNE J:   Yes, Mr Griffiths.

MR GRIFFITHS:   Insofar as the WAC issue is concerned ‑ ‑ ‑

HAYNE J:   Can I put this to you up front, Mr Griffiths?  There being a division of opinion in the courts below, it being accepted that this is a matter of general importance, unless you could persuade us on leave that the decision below is plainly right, why should leave not go?

MR GRIFFITHS:   Your Honours, we accept that and we readily accept that it is harder for us to resist a grant of special leave in respect of the WAC than it is with respect to the UNFT, because of what your Honour has just said.

HAYNE J:   Yes.  Is there not a division of opinion about the UNFT in that the primary judge went one way and the Full Court went the other, or am I mistaken?

MR GRIFFITHS:   No, you are not.  You are absolutely correct.  But in respect of the UNFT, we would submit that the unanimous decision of the Full Court – and it was only the Chief Justice, of course, who gave reasons in support of the validity of the UNFT – is clearly correct.  In our respectful submission, the Chief Justice’s judgment properly understands the relevant and established principles established by this Court, and applies those principles to the particular facts and correctly distinguishes the Hematite Case.

HAYNE J:   Now, assume that that argument were ultimately to be held to be right, what do we gain by carving the case up and taking only the WAC and not the UNFT?

MR GRIFFITHS:   You gain this.  The WAC issue turns on whether or not it is a tax because if the WAC is a tax it will follow, as night follows day, that it is an excise.  It is the opposite end in terms of the UNFT.  The issue with the UNFT is, assuming that it is a tax, is it an excise.  So it focuses upon the other side of the equation. 

KIEFEL J:   But both of them will require attention to what is an excise.

MR GRIFFITHS:   Both of them would require that, certainly, your Honour, although with an emphasis more in the UNFT on decisions such as Hematite and the like that deal with where the line is crossed, where you have an impost on infrastructure as opposed to directly on goods or commodities.  As your Honours will have gathered from the reasons of the Chief Justice, the UNFT issue, and whether or not it is an excise, was capable of being resolved without reference to the authorities that guided the Court on the WAC issue.  In other words, cases like Airservices, Air Caledonie, Harper and the like were used in respect of the WAC and not in respect of the UNFT. 

The other point I should add as to how the two can be severed, in response to Justice Hayne’s question is, of course, it goes without saying that they are quite separate in terms of their facts and they are quite separate in terms of the legislative scheme underpinning the two imposts.  They are quite different legislation.

HAYNE J:   But would we be looking at the same suite of authorities for both, albeit, you would say, through different lenses?

MR GRIFFITHS:   In our respectful submission, you would not in any meaningful sense be looking at the same suite of authorities because of the reason that I have just given that one focuses upon the Logan Downs Case and the Hematite Case on which our learned friends rely for the characterisation of whether or not it is an excise.  So, in our respectful submission, they are quite distinct.  Insofar as the WAC issue is concerned, we readily accept what your Honour has said, that it is more difficult to resist the grant of special leave because of the division within the Full Court and also some differences, perhaps more of nuance than anything we would respectfully submit, between the Chief Justice and Justice Stone forming the majority in the Full Court.  It is not an appropriate case, in our respectful submission, to say that we can demonstrate unquestionably that that is correct. 

There is, however, one matter that we would wish to join issue with our learned friends and it relates to the proposition that was put to the court that the facts in this matter in respect of the WAC are clear and your Honours will recall that Mr Kirk took the Court briefly to the evidence on the cost of water downstream in the Murrumbidgee River.  As your Honours will have appreciated from reading both the judgment of the trial judge and also the Full Court’s decision, there was considerable expert evidence filed by both parties at first instance, evidence of Professor Grafton on behalf of the Territory and, in particular, evidence of Dr Beare on behalf of the Queanbeyan Council.

Your Honours get a flavour of that evidence, which was complex and lengthy and which was the subject of almost a day’s cross‑examination, if your Honours go to page 27 of the appeal book, starting at paragraph 86 ‑ this is of course from the judgment of Justice Buchanan at first instance, and your Honours see there in summary form the expert evidence given by the two competing experts in terms of the meaning of the “value of water” and the “economic value of water” in particular. 

An important difference between those two experts was that Professor Grafton expressed the view that, in fact, not only was the WAC an appropriate reflection as to the economic value of water but in fact the ACT, in his expert opinion, should have been charging more.  The reason why he says they should have been charging more is because, if your Honours go to page 28 at about line 25, the trial judge sets out a passage from Professor Grafton’s reply report where he says:

“There are sound economic reasons to support the use of scarcity water pricing instead of water restrictions to help balance supply and demand in periods of low inflows”.

That concept, your Honours, of scarcity water pricing is a concept which involves the proposition that a price for water should be set to encourage its efficient use so as to reduce demand and defer or postpone the significant capital investment that needs to be made in order to supply water, building dams, building infrastructure and the like.  There was a dispute between the two experts on whether that is an appropriate concept in economics by which the value can be determined.  The short point is this.  As your Honours are aware both the trial judge and the Full Court ruled the expert evidence to be irrelevant.  If special leave is granted on the WAC issue there will be an important question as to what is the meaning of value.  How do you measure the value of urban water?

HAYNE J:   In constitutional terms the question would be what is the relevant constitutional fact, would it not?

MR GRIFFITHS:   What is the relevant constitutional fact, your Honour, but if special leave is granted we would be wishing to contend that the concept of scarcity water pricing, as endorsed by Professor Grafton, is an appropriate concept that informs the content of the meaning of value in this context.  Your Honours would be in a position where your Honours would not have the benefit of any findings made by either trial judge or by the intermediate appeal court in respect of that matter.

HAYNE J:   That would go to questions of relief.  Why would it embarrass our consideration of the issue?

MR GRIFFITHS:   Justice Perram took the view that the issue of the determination of value is something which could be remitted to the trial judge.  The proposition that we are advancing is that there is a threshold issue before that as to what is the meaning of value in the context of this product which is sui generis in so many ways - abalone a luxury, water an essential.

HAYNE J:   The more you advance that aspect of the argument, the more interesting the case becomes and the more appropriate it is to a grant of leave, I would have thought, because water is a matter of some interest in this country.

MR GRIFFITHS:   Unquestionably, your Honour, a matter of some interest and it is also, of course, recognised in the fact that it is one of only a handful of natural resources that are effectively within the stewardship or custodianship of government polities.  There is one other point I should mention and that is were the Court minded to grant special leave in respect of the WAC we would wish for our part to seek leave to argue the point which is raised by the Chief Justice but then put to one side because his Honour said that it was not agitated.  It is the issue as to whether or not it is a tax where it is an aspect of intergovernmental financial arrangements between one organ of government, the Territory, and another organ of government, namely ACTEW.  It is referred to, your Honours, in paragraph 51, page 91 of the appeal book.

HAYNE J:   Would that be a matter of notice of contention or ‑ ‑ ‑

MR GRIFFITHS:   It would be a matter of a notice of contention, your Honour. 

HAYNE J:   That is not a matter for which you would need leave, I think.

MR GRIFFITHS:   Perhaps not if it is matter of contention.  If the Court pleases.

HAYNE J:   Yes.  Yes, Mr Lenehan.

MR LENEHAN:   Your Honours, may I make three short points and they all concern the UNFT.  The first point relates to the difference between the reasons of the trial judge and the reasons of the Full Court.  If I can invite your Honours to actually look at his Honour Justice Buchanan’s reasons in relation to the excise point.  They appear at page 48 of the appeal book at paragraphs 160 to 163.  I think a fair, in my submission, distillation of what his Honour there says is that it is sufficient to characterise an impost as an excise, if the impost enters into the price of the goods.  You see that in particular in paragraph 162 and the last two lines of 163. 

That seems to be based, as we understand it, upon the comments of Justice Mason in Hematite at page 632 and your Honours can conveniently see those comments in Chief Justice Keane’s reasons at page 120 of the application book and at paragraph 141.  At paragraph 140 his Honour sets out the relevant passage from Justice Mason’s reasons in Hematite and then observes that those comments can be read out of context and notes that:

Mason J explained at some length what he meant in saying that the tax “enters into the cost of the goods”:  it is apparent from that explanation that he was not speaking of any impost apt to increase the cost of goods. 

ACTEW adopts what is there said by the Chief Justice and for those reasons, as the Chief Justice concludes in paragraph 142, it is plain, in my submission, that the primary judge was in error in relation to that point.  It is notable that the applicant does not now seek to defend the reasons of the trial judge on that basis, that is, it is sufficient if the impost enters into the price.  There is a further matter in addition to what is there said by the Chief Justice, which indicates that his Honour was wrong and that is this. 

In Hematite it is clear that Justice Mason was adopting the well‑known passage from Chief Justice Barwick in Anderson’s and in that passage his Honour sets out the various matters which may, in a particular case, lead to an impost being characterised as an excise.  Entry of the impost into price is simply one of those various matters and as Chief Justice Barwick says in Anderson’s, in a passage that Justice Mason adopts, those various factors may be given different weight and different emphasis in different cases.  There is no doubt that that factor is relevant, but here the other matters of substance identified by Chief Justice Keane in ACTEW’s submission will lead to the conclusion that the impost is not an excise.  That is the first point.

The second point is that, as I understand my friend Dr Kirk’s argument, the applicant says that it is sufficient that there is a relationship in the sense that as the population of Canberra increases, so too will the length of the pipes.  Thus, the amount of the UNFT will also grow.  The same could also be said of a payroll tax which QCC accepted below in the Full Court was clearly not an excise and it was right to accept that because that is what is in fact said in Mutual Pools at 454 by Chief Justice Mason and Justices Brennan and McHugh.  In the case of a payroll tax it would also follow, on my friend’s hypothetical, that as the population of Canberra grows ACTEW would necessarily put on more staff, in particular, staff to attend to the maintenance and operation of the pipe.  So that sort of relationship is simply, in my submission, not sufficiently close.

The third point that ACTEW seeks to make relates to the last matter that Dr Griffiths mentioned and that is what follows if your Honours grant special leave in relation to the WAC?  Below at first instance and again on appeal ACTEW sought to advance certain arguments in relation to Roxborough and also a Limitations Act point.  Again, those matters would need to be the subject of a notice of contention, should leave be granted.  Thank you, your Honours.

HAYNE J:   Just one matter, Mr Griffiths.  It concerns the last matter that you and I were discussing about notices of contention.

MR GRIFFITHS:   Yes.

HAYNE J:   Justice Kiefel points out to me that at page 91 of the application book, line 35, the point that we were discussing was one, apparently, not argued by the parties in the courts below.  Now what, if any, effect that may have on whether you can put on a notice of contention is a matter about which I should express no view and what I had earlier said about it being ‑ ‑ ‑

MR GRIFFITHS:   Yes.

HAYNE J:   ‑ ‑ ‑ not a matter for leave is to be understood, subject to whatever little time bombs are ticking in that sentence. 

MR GRIFFITHS:   Yes, your Honour, thank you for that.  We accept what your Honour says and there may well be an issue, I think, as to whether, in fact, this point was raised or not.

HAYNE J:   Yes.

MR GRIFFITHS:   That could be for another day.

HAYNE J:   Yes.  Thank you, Mr Griffiths.  Mr Kirk, we need not hear you in reply.  There will be a grant of special leave in both of these matters.  Mr Kirk, I speak only for myself, but I observe that the notice of appeal in each matter is very long and very discursive.  Must it be of that length and that detail, or cannot the points be formulated much more crisply?

MR KIRK:   No and yes, respectively.

HAYNE J:   Yes, well perhaps you might give some attention to that.

MR KIRK:   Yes.

HAYNE J:   How long do you think the case would take, Mr Kirk?

MR KIRK:   I have spoken to my learned friend, Dr Griffiths, about that.  It took two days in the Full Federal Court.  However, there are two complicating factors in this Court.  First, it would be reasonable to expect a Greek chorus of Attorneys-General to intervene – not in support of us, we suspect, which will delay matters.  Secondly, at the beginning of the trial at first instance, the ACT reserved to itself formally, the right to challenge this Court’s decision in Capital Duplicators No 1 about whether or not section 90 restricts territorial legislatures. If that is to be reargued, that will be another complicating matter not put below. So, my friend and I agree three days is probably appropriate.

HAYNE J:   I am surprised by three.  I would have thought one and a half to two, Mr Kirk.  It may be that it would take as long as two, but the parties should not assume that they will necessarily have three days.

MR KIRK:   If it please the Court.

HAYNE J:   Yes.  There will be a grant of leave in these matters.

AT 10.12 AM THE MATTERS WERE CONCLUDED