Registrar of the Accident Compensation Tribunal v The Commissioner of Taxation of the Commonwealth of Australia

[1992] HCATrans 278

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4

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No MS0 of 1992

B e t w e e n -

THE REGISTRAR OF THE ACCIDENT

COMPENSATION TRIBUNAL

Applicant

and

THE COMMISSIONER OF TAXATION OF

THE COMMONWEALTH OF AUSTRALIA

Respondent

Office of the Registry

Melbourne No MSl of 1992

B e t w e e n -

THE REGISTRAR OF THE ACCIDENT

COMPENSATION TRIBUNAL

Applicant

Compensation 1 30/9/92

and

THE COMMISSIONER OF TAXATION OF

THE COMMONWEALTH OF AUSTRALIA

Respondent

Office of the Registry

Melbourne No M52 of 1992

B e t w e e n -

THE REGISTRAR OF THE ACCIDENT

COMPENSATION TRIBUNAL

Applicant

and

THE COMMISSIONER OF TAXATION OF

THE COMMONWEALTH OF AUSTRALIA

Respondent

Application for removal of

cause pursuant to section 40(1)

of the Judiciary Act 1903

MASON CJ

BRENNAN J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 30 SEPTEMBER 1992, AT 11.35 AM

Copyright in the High Court of Australia

Compensation 2 30/9/92

MR R.A. FINKELSTEIN, QC, Acting Solicitor-General for

Victoria:  May it please the Court, I appear with

my learned friend, MR P.J. KENNON, for the

Attorney-General for the State of Victoria.

(instructed by the Victorian Government Solicitor)

MR I.C.F. SPRY, QC:  I appear with my learned friend,

MR P.J. KENNON, on behalf of the Registrar of the

Accident Compensation Tribunal. (instructed by the

Victorian Government Solicitor)

MS H.M. SYMON:  May it please the Court, I appear for the

respondent, the Commissioner of Taxation.

(instructed by the Australian Government Solicitor)

MASON CJ: Yes, Mr Finkelstein?

MR FINKELSTEIN: If the Court pleases. If the Court has the

application book, the originating motion appears at

page 104 and seeks an order under section 40 of the

Judiciary Act. The notice of motion identifies -

and perhaps does a little bit more than that - but

at least identifies the constitutional matters

arising in the cause, the cause now being an appeal

in the Federal Court of Australia from a decision

of a single judge of that court.

MASON CJ:  How much of question (a) is a constitutional

question?

MR FINKELSTEIN:  It is probably true to say that

question (a) involves at the end of the day little

more than the construction of the Tax Act.

Questions (b) and (c) are the true constitutional

questions.

MASON CJ:  To what extent is question (c) affected by the decision in the SASFIT case?

MR FINKELSTEIN:  To a very significant extent. The point

was argued at trial before the SASFIT case was

decided by this Court. Whilst there might be a

little left of that issue, it is probably true to

say that there is not very much left of it now.

MASON CJ: Yes, I would be surprised if there is much of it

left. That brings you to (b).

MR FINKELSTEIN:  (b) is the main question that is raised by

the case.

MASON CJ: If 114 does not apply, if one assumes that, is

there anything left for the implied prohibition to

do?

Compensation 3 30/9/92

MR FINKELSTEIN: Well, we would contend that because the

tribunal is part of the judiciary of the State, it

being described by the relevant legislation as having functions as a court, the taxing of the

income that is set aside for payment out to various

claimants, workers and their dependents, impairs

the functioning of the judicial arm of the State

and as we read the recent High Court decision, or

the two decisions really, that is not an issue that

is addressed and we would contend that there is

nothing in those cases - - -

MASON CJ: That is the two section 114 cases?

MR FINKELSTEIN: That is the two section 114 cases, that

they do not address the issue directly of whether

the Commonwealth can, by the imposition of

taxation, inhibit or impair a State's capacity to

function through, in particular, its judicial arm.

BRENNAN J: But is the argument that by placing an

income-earning fund under the control of a judicial

instrumentality that an Alsatia from taxation is

thus achieved?

MR FINKELSTEIN:  I am sorry, Your Honour.

BRENNAN J: That an Alsatia from taxation is thus achieved?

MR FINKELSTEIN: Yes.

MASON CJ: It does not sound that attractive.

MR FINKELSTEIN: Well, it was our submission in the court

below, and will be our submission at whatever level

the case gets argued, that it is a clear inhibition

on the States functioning, in a sense which is

contrary to an implied prohibition in the

Constitution.

MASON CJ: Is there really any point in removing (c), having

regard to SASFIT?

MR FINKELSTEIN:  Yes and no; what I think is going to be

proposed is that not part of the cause which is pending in the Federal Court be removed but the

whole of the cause.

MASON CJ: But why should we remove (a)?

MR FINKELSTEIN:  The determination of (b) depends in the end

on whether or not the accident compensation

legislation does or does not create a trust and, if

it does create a trust, what sort of a trust is

created? That is to say, who is the trustee and

who are the beneficiaries? It was argued for the Commonwealth that the legislation created a trust

Compensation 4 30/9/92

of which the worker's dependants were the

beneficiaries, and the Tribunal and the

Attorney-General argued that that was not the case.

The trial judge found that there was not a trust

created in favour of that class of beneficiary,

that is the worker's dependants, but that there was
a trustee, without really giving proper

articulation to who were the beneficiaries of the

trust.

Now, the answer to (b), at the end of the day,

regardless of how good or bad the point might be,

will still depend on an analysis of what trust

relationship, if any, was established by the

legislation because the arguments will differ

depending upon what sort of trust is identified as

having been created, if one is established at all

and, in any event, if there is no trust at all and

no trustee of a trust, then question (b) does not

arise. So that is really to indicate how other

parts of the case are really inextricably

interwoven one with another, so that it is not

necessarily the best thing to do to take out a

question, such as the questions that we have

identified here, still leaving part of the cause in

the Federal Court.

I, under section 40(1), may not have the right to have the whole of the cause remitted to this

Court but a party to the cause does and, if

necessary, an application will be made by a party

to the cause, that is to say by the Tribunal,

because it seems, at least to us - and I do not

think that the Commonwealth has a different view of

the matter - that all of the questions are linked

necessarily as a step in the chain of argument,

that it is, in this case, best to take the whole

cause to this Court and, if the whole cause goes to

this Court then all of the issues, including (a), will be here as well. That is a very long way of

saying why (a) should come up as well, but really

because, at the end of the day, it seems to all of

us, I think, sensible that the whole lot come.

MASON CJ: Yes.

MR FINKELSTEIN:  I am not sure whether the Court desires me

to take the Court to the affidavit in support of
the application which sets out the background facts

giving - - -

MASON CJ:  No, there is no occasion to do that. We have

read that.

MR FINKELSTEIN: Thank you, Your Honour. At this stage they

are the submissions we desire to make.

Compensation 5 30/9/92

MASON CJ: Yes, thank you Mr Finkelstein. Dr Spry?

MR SPRY:  We would adopt the submissions of Mr Finkelstein,

and in particular would say to the Court that in

deciding the constitutional question under (b), for example, it may well be necessary to decide whether there is a trust in the relevant sense of that

term, and that if the Court does not on this

occasion hear all aspects, then the matter may

simply have to return to the Court in some way, at

some later stage, or there is a possibility perhaps

of inconsistent decisions on the part of the

Full Court or the Federal Court and this Court.

BRENNAN J: Yes, I suppose what we would have to do is

retain (b) within the courts until the matter took

its course in the Federal Court under (a).

MR SPRY:  That would also mean the other matters as well.

Other matters would have to be decided in the

Federal Court on that basis such as the trust points, the question of whether there is a trust.

BRENNAN J:	It may be we would have no discretion in the matter, or at least it is a limited discretion, but
one wonders whether this is the most efficient and economic way of dealing with the matter.

MR SPRY: Well, that is a matter for this Court, of course.

So far as subsection (1) is concerned it was a

question of construction as to whether, in a case

like this, the entire cause, or simply the part of

a cause which involves the interpretation is

operated upon, and of course under subsection (1)

where one has an Attorney-General involved, it is a

mandatory thing. But, there is then subsection (2)

and subsection (2) gives a discretion to the Court

at the application of a party to have the entire

cause, if necessary, or if thought fit brought into

this Court, and it would be our submission, this is

an appropriate case for an order to be made under

subsection (2).

We have prepared and have with us a notice of

motion to that effect, that is, if the Court takes

the view that it is necessary to proceed under

subsection (2) and that it is appropriate to

proceed under subsection (2), then we have with us

now the appropriate notice of motion under

subsection (2).

BRENNAN J: There is no contest on any question of fact

here, is there?

MR SPRY:  No, Your Honour, there is no conflict on questions

of fact. As well as the constitutional points, the

interesting question is raised as to whether where

Compensation 6 30/9/92

you have a statutory machinery, that involves trust

concepts or simply administrative concepts without

any trust obligations which, in our view, is a

matter of some importance. If there are no

questions from any of Your Honours, then those are

the submissions that we would wish to make.

MASON CJ:  Dr Spry, there is one question I might perhaps

put to you: is there any constitutional element in

question (a)? It was put by - - -

MR SPRY:  Yes, Your Honour, in our opinion there would be

because it basically deals with the question

whether there is an intention to be bound and, in

any event, is not bound, and the second part of

that would - - -

MASON CJ: Yes, in a sense, capacity to bind.

MR SPRY:  Yes, it would be involved, Your Honour. Likewise,

in our submission, section 114 does involve a

constitutional point.

MASON CJ: Yes.

MR SPRY:  If Your Honours were minded to confine yourselves

to subsection (1), we would say that

paragraphs (a), (b) and (c) should all come in but

we would urge upon Your Honours that it would be

unsatisfactory not to have the trust point brought

in as well, particularly as, in any event, in

deciding, for example, question (b), a part of a

logical process of deciding (b) would be to decide

the trust point because if it were found that there

was a trust that was not a trust, that might be an

important element for the Court in deciding whether

or not constitutionally what was done was

permissible.

MASON CJ: But my question to you with respect to (a) was

rather designed to ascertain whether the Court had
any discretion not to take up (a).	In other words,

if there is a constitutional element in (a), the

Court may be bound to take up (a) on the

application of the Attorney-General,

notwithstanding that the bulk of (a) may be a

matter of statutory construction.

MR SPRY:  Yes, Your Honour. In our submission, the Court is

obliged by subsection (1) to take each of (a), (b)

and (c). It may well be in the course of that that

Your Honours will decide the trust point but it may

be not and, in our submission, because it is so

closely related, it is desirable that it be brought

in as well which would be under subsection (2).

MASON CJ: Thank you. Ms Symon.

Compensation 7 30/9/92

MS SYMON:  If Your Honours please. The Commissioner does

not seek to be heard, particularly, on the

application except that I do endorse my learned

friend's submission that it is appropriate that the

whole cause be brought up to this Court, rather

than attempt to divorce the constitutional

questions.

MASON CJ: There will be an order for removal and the order

motion at page 104 of the application book.

for removal, I think, should be made on the of

That is sufficient to your purposes, is it not

Dr Spry? If an order for removal of the whole

cause is made on that application?

MR SPRY: Yes, that is so, Your Honour.

MASON CJ:  And the order will be that the costs of each

party be costs in the cause so removed.

The Court will now adjourn.

AT 11.51 AM THE MATTER WAS ADJOURNED SINE DIE

Compensation 8 30/9/92