Vale Press Pty Limited v The Deputy Commissioner of Taxation

[1992] HCATrans 287

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S25 of 1992

B e t w e e n -

VALE PRESS PTY LIMITED

Applicant

and

THE DEPUTY COMMISSIONER

OF TAXATION

Respondent

Application for special leave

to appeal

DEANE J
DAWSON J

McHUGH J

Vale(2) 1 2/10/92

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 2 OCTOBER 1992, AT 11.39 AM

Copyright in the High Court of Australia

MR B.R. PAPE:  May it please the Court, I appear with my

learned friend, MR C.J. BEVAN, for the applicant.

(instructed by Rowlandson & Co)

MR s.w. GIBB:  May it please Your Honours, I appear for the

respondent. (instructed by the Australian

Government Solicitor)

DEANE J:	Mr Pape.
MR PAPE:	Your Honour, I would seek to hand up a summary of

argument and some books which include the

authorities we seek to refer to refer to.

Your Honours, I would like you to read the summary

of argument.

DEANE J:  We will do that. You just sit down for a moment.

Yes, Mr Pape.

MR PAPE:  Your Honour, the essential error which the

applicant submits the Full Court made is that it

failed to apprehend that section 18(l)(b) was

defective in concept. It was uncertain in concept

and, if I might take Your Honours to what

section 18(l)(b) of the Sales Tax Assessment Act

says, that is in the blue book, page 2, the list of

authorities, it says, in paragraph (b):

if the goods were sold by retail - the amount

for which the goods could reasonably be

expected to have been sold by the manufacturer

by wholesale.

The crux of the case is that there are two types of manufacturers. There are those manufacturers who

produce goods for stock and those manufacturers who

produce to the order of individual customers.

Section 18(2), which is on the blue book at page 3,

talks about manufacturers who produce goods for

stock, and a value can be ascertained in those

circumstances, so it is suggested, by some

hypothetical means.

But in the case, as in the present case, which

is a job order manufacturing printer, the goods

are, in essence, sold or agreed to be sold before

they are produced and what the sales tax

legislation works upon is that it starts with a

manufacturer, a wholesaler, a retailer and a

customer and if, in fact, that distribution regime
does not operate, it purports to inject into it a hypothetical middleman where a manufacturer sells

direct by retail, and it is the applicant's

submission that, in the circumstances, to determine

this hypothetical sale value is to arrive at what is a guess. It is a guess because it is not that

Vale(2) 2/10/92

it cannot be determined or ascertained, it is

simply incapable of being ascertained in the case

of a job order manufacturer.

It may well be capable in the case, for

example, of a number of soap manufacturers who sell

by wholesale and retail, a value might be able to

be determined in that case, because the goods are

produced for stock and the manufacturer takes them

at his own risk, but in the case of a printer or a

tailor, or a dental mechanic who produces dentures,
or a shipbuilder who produces a ship to the order

of an individual customer, there is no wholesale

market. By definition the - - -

DAWSON J:  Why not?

MR PAPE: Well, for the simple reason that the purchaser,

the retail consumer, has entered into a contract

with the manufacturer to buy the goods.

DAWSON J: Yes, but you could have a notional retail market.

I mean the customer may go to the retailer who may

convey the order to the manufacturer who sells

through the retailer.

MR PAPE:	The submission I am putting to Your Honour - - -
DAWSON J:	You say that does not happen, but it does not

have to. You can have a notional situation.

MR PAPE:  Your Honour, take the case of the dental mechanic,

who to the order of a - no doubt on the

prescription of a dentist, manufacturers a set of

dentures for his patient and to suggest that there

is a wholesale market for a set of dentures which

fits only one individual - - -

DAWSON J: Well, if the dentist adds his percentage and

sells the dentures to the patient he is acting as a

retailer and there is a wholesale market.

MR PAPE: I am not suggesting in that situation - - -

DAWSON J: There may be more difficulty with the word

"stock" in that it is a one-off.

MR PAPE: Well, precisely, the case that we are talking

about is, in fact, the one-off situation. There is

no stock. Now, Mr Justice Gummow, in my

submission, confused the notion because he started

to talk about stock, and at application book 10,

Mr Justice Gummow, that is the learned primary

judge, made reference to and his reasons are, in

fact, characterized really by section 18(2), where

a manufacturer produces goods for sale by retail.

In those circumstances when he treats those goods

Vale(2) 2/10/92

for sale by retail there is a notional value which

is to attributed to the goods. But this is not the

case in the present one. This is a case of a

printer, or indeed, the example I suggested a

moment ago, the dental mechanic who produces the

dentures; it is a one-off situation. There is no

wholesale market in those circumstances.

McHUGH J: But the fact that you have to make an estimate,

or express an opinion, does not mean that the tax

is an uncertain concept, does it? I mean, in

business if you write off a debt, whether you bring
profit to account this year or next year; in the
case of, say, an insurance company whether you

bring profit to account this year, are matters

which depend on commercial judgments and opinions.

MR PAPE: Precisely, Your Honour, and to do that one has to

find some factual basis to infer the reasonable

grounds.	One has to find some fact to hang on to
to make that projections or that estimate.	In this

particular situation, and in fact

Mr Justice Windeyer referred to that in the Placer

case, where he looked at the reasonableness of a

price or a subsidy, and that was - I might take

Your Honours to what Mr Justice Windeyer said at

the list of authorities, at page 31 - and this is a case dealing with whether a certain subsidy paid by the Commonwealth was reasonable. At 31 he said:

But when there is no trade or business,

market or experience to which to refer, a

difficulty arises: a jury cannot say what is a

reasonable sum if there be no weight or

measure they can apply, and which a court

could use to test whether their verdict is or

is not within the bounds or reason. A court

could not say whether any sum which the

Commonwealth determined to pay the timber

company was or was not a reasonable subsidy.

There are no objective criteria of the

reasonableness of a subsidy.

And what the concept in this case is is that there are not objective criteria in a job order

manufacturing situation to determine a reasonable

amount.

DAWSON J:  I do not understand that. If you take a printer

that prints personal stationery; presumably you can

go and order them from the printer and it can come

direct to the customer, but at the same time, not

only notionally, but it may well happen in fact,

you can go to the stationery shop which orders

it from a printer and you buy it from the

stationer. In each instance it is a one-off thing,

but in the second example there is a retail sale.

Vale(2) 4 2/10/92

MR PAPE:  But we are not talking about a retail sale. This

is the difficulty.

DAWSON J: If there is a retail sale, there is a wholesale

sale.

MR PAPE:  No, there is no wholesale sale.

DAWSON J:  There would be in that situation. The supplier

who supplies it to the retailer for a price is

making a wholesale sale.

MR PAPE:  In that case, but it is a general - he has

produced those goods when he sold it to the

retailer for stock, and the retailer has taken it

into his shop and he has put it into stock. He has

taken the risk with it, whether he sells it or not.

But in the case of - - -

DAWSON J: There is no risk in that situation. I order it

through the shopkeeper who puts his order to -

MR PAPE: Well, with respect, in that situation you are

looking at what is, in truth, a commission agent.

What I am putting to Your Honour is that the

customer goes direct to the manufacturer, there is

no situation where - production for stock, it is

peculiar to the individual needs of the customer.

DAWSON J: Yes, I appreciate that. All I am really putting to you, Mr Pape, is that there is no difficulty in positing a notional situation. Well, not any great

difficulty anyway.

MR PAPE: Well, with great respect, Your Honour, it is a

difficulty which we submit is completely

insurmountable and it is a difficulty where the

fallacy in this whole regime exists, is that one

could never verify what the amount is, and the

example - the difficulties which existed in such a

situation came with the United Kingdom in 1953;

where it was suggested, I think, in their report,	there was an inquiry into a similar legislation
which is, I think, appeal book 45, paragraph 109, which has been reproduced there:

It was agreed that price-maintained goods are excepted, but outside this category the process of estimating wholesale values

necessarily relies on conjecture and presents

traders with assessments which they cannot

verify in order to satisfy themselves that tax

is not being overcharged.

Now, if this matter went down before the

Administrative Appeals Tribunal, what evidence

could be called to determine what value, or what

Vale(2) 2/10/92

sale value? As the Commissioner suggests in his

ruling, which is reproduced - Mr Justice Gummow's

reasons - in this case an arbitrary figure is

taking the retail price less seven and a half per

cent. Well, one may ask, why not 25 per cent; why

not 33.1/3 per cent, or any percentage?

McHUGH J: Well, because it is confined by the concept of

reasonableness.

MR PAPE:  We come back to the very point of reasonableness,

as Mr Justice Windeyer said in Giris's case.

Reasonableness is an amorphous term.

McHUGH J: True it is. One can make a judgment as to what

is a reasonable margin on the wholesale or retail

sale.

MR PAPE: With respect, Your Honour, that is a figure

plucked out of the air. That is one standing in

the shoes of that manufacturer saying, "What is it
that I should add as a wholesale margin?" Here we

have got a situation where there has been an actual

retail sale; not a prospective retail sale as in

producing goods for stock, but an actual retail

sale. So retrospectively the manufacturer and

retailer and customer have cut out the middleman,

will go back and insert this hypothetical notional

person and try and construct a wholesale value for

one purpose only; to try and make this Act work.

McHUGH J: Yes, but you are trying to argue that the section

is invalid. Now even if there were cases where you

could not, on any show of rationality, work out the

sale value, that would not mean that the section

was invalid.	You do not take it by taking extreme
cases.

MR PAPE: With respect, this is not an extreme case. In my

submission, if you cannot verify it, in any

circumstance -

McHUGH J: Supposing you are in a one-off situation and

there are a lot of people that sell in the same

situation, but through wholesale sales, and there

is a market figure of 15 per cent; why could it not

be worked out in that case?

MR PAPE:  Because it is a particular situation. You see,

section 18(2) deals with the situation where you

produce for stock; the manufacturer takes the risk;

here is the case of, there is no mark-up. Where

does one obtain a 15 per cent mark-up?

DAWSON J: Well, you could look at what stationers, for

instance, if we are talking about stationery - you

Vale(2) 6 2/10/92

could look what the mark-up for retail stationers

generally is.

MR PAPE:  This is a tax which has got to be imposed and

returned each month. It is a self-assessing tax.

Now, to suggest that a manufacturer would know

what other manufacturers in the industry, what some

notional wholesale value might be, with respect, is

absurd, because it just does not exist, because he

sells to these individual customers. The concept

of having a wholesale and middleman does not exist.

DAWSON J: Is unthinkable, you say?

MR PAPE: Completely, in a made to measure situation.

DAWSON J: All this has got a sense of deja vu somehow.

What is the situation with tailor-made suits? That

has been dealt with somewhere.

MR PAPE: That has been dealt with.

DAWSON J: Where is that?

MR PAPE:  By regulation 26; section 18(5)(a) dealt with the

situation where there are prescribed goods. That

is in the authorities at -

McHUGH J: Fish and chips have been dealt with, have they

not?

MR PAPE:  - - - page 5, there are:

(Goods made to order) Notwithstanding anything

contained in this section, in the case of any prescribed goods manufactured to the order of individual customer, the sale value shall be

an amount ascertained in such manner as is

prescribed, but not exceeding the amount for

which the goods are sold.

And, at page 8 there is the regulation 26 which

talks about clothes made to the individual order of

customers and the regulation prescribes that the

sale value in that case will be the amount payable

less 60 per cent. So, in essence the sale value is

40 per cent of the amount payable.

DAWSON J: But you are not covered.

MR PAPE:  Yes, that is certain. Now it may well be, it

could be arguable, that that regulation could be

invalid also. But I am not here to argue that

today.	The point is that there is a number
arbitrarily put into the regulation.	Now we do not

quarrel with that, but at least that is certain.

The manufacturer, or the tailor knows that when he

Vale(2) 7 2/10/92

puts in his monthly return that the sale value for

his suit will be 40 per cent, but the printer has

not got the faintest idea, with respect, nor has

the dental mechanic, nor has the shipbuilder, not

does anybody who produces goods to the order of

individual customers. It may be the case, as what

was adverted to, where a manufacturer produces

goods to the order for stock. He takes the risk

and there may be other people in that industry who

manufacture, or process manufacture, who do sell

and there is a market and there may be some factual

basis on which to find a reasonable price.

Now I emphasize that, factual basis. Now in

this situation there is no factual basis. Now,

regulation 26 and section 18(5}(a} are a patch-up

job to try and make the legislation work, in the

case of a job order manufacturer. But with

respect, in the present situation, it is to prefer

expediency. Now, it may well be, you can argue,

"Well why has not one of these ever come up

before?". Well, the answer to that is that the
price has been passed on to the customer; everybody
has been reasonably content with that arrangement,

because the manufacturer has been able to pay an

amount, the Commissioner has got his tax and the

customers pay it. Well, in the current climate

there is a little bit more price resistance, so

that is why this issue has arisen, in the case of

this situation.

Now, it goes to the conceptual basis. We do

not say that this is a difficult matter to find

out. That is not the basis we argue. Conceptually

you cannot find a value. One value is as good as

another. They are unverifiable and where you get a

situation where a tax is imposed on a value which

cannot be verified, and Mr Justice Dixon said this

in Brown's case, it becomes a situation where the

tax is incontestable. It is imposed on a figure

which has got no rational basis at all.

Now if, in fact, you may well be able to get a

rational basis in a manufacturer who produces goods

for stock, but in a case of a one-off situation you

do not get a rational basis.	It can only be an
arbitrary amount.	As the Commissioner has said, he

has said in his ruling, it can either be the cost

of the goods plus a percentage. Well, one has got

to ask, "What percentage? Is it 15 per cent? Is

it 25 percent? Is it 30 per cent?" There is no

rational basis which an individual manufacturer can

produce those goods.	The same situation as I
referred to a moment ago.	The retail price less

seven and a half per cent, 10 per cent, 15 per

cent - pick a number - - -

Vale(2} 2/10/92

McHUGH J: It is like a quantum meruit.

MR PAPE: With respect, it is not, Your Honour, because on a

quantum meruit situation you have got some factual

basis on which to draw from.

McHUGH J: Well, what is the different between the two?

MR PAPE: Well, in this case here, all you have got is a

retail sale.

McHUGH J: Well, not necessarily. You have also got the

cost of the components.	I mean, it depends what
end you want to work from.

MR PAPE: All right. Well let us take the cost of the

components: raw materials, labour, overhead; well,

that is fine, what about the profit content?

McHUGH J: Well, that is right

MR PAPE:  Where does one get - and that is the stumbling

block.

McHUGH J: That is not the stumbling block. It is the same

with a quantum meruit. The reasonableness just

does not - the price does not involve merely the

cost, but there is a component there for what is a

reasonable price.

MR PAPE: This is - we are imposing a tax, we are not

attempting to come to a question for damages.	We
are attempting to exact an amount to the
Commonwealth.	Now, as Your Honour Mr Justice Deane

referred to in Hepples case, when we were dealing

with 160M(6) and (7), there was a passage there
which Your Honour referred to that - if I might

read it, I did not produce it:

In circumstances where the heavy burden of

legal costs is likely to constitute an

insurmountable obstacle to the challenge by
the average taxpayer of an assessment in the

courts and where successive administrations

have allowed the Act to become a legislative

jungle in which even the non-specialist lawyer and accountant are likely to lose their way in the search to identify the provisions relevant

to a particular case, the least that such a
taxpayer is entitled to demand of government

is that, once the relevant provisions are

finally identified, a legislative intent to
impose a tax upon him or her in respect of

commonplace transaction will be expressed in

clear words. So to say is not, of course, to

deny that complicated and even obscure

Vale(2) 9 2/10/92

taxation provisions may be necessary either to

deal with technical situations -

and I would suggest those words "technical

situations" in this case ought to be put in

inverted commas -

or to prevent the avoidance of tax by

artificiality or the form or other device.

Now, what the Commissioner is doing in this

situation is trying to make this legislation work.

It is to prefer expedience over the rule of law.

There is no basis that an ordinary manufacturer can

ascertain with any basis at all what the sale value

is. For example, Assessment Act (No SJ deals with

goods which are imported from overseas. A sale

value has to be arrived at. Section 4 of that Act

says the sale value in those circumstances will be

120 per cent of the customs value and the customs
duty - no quarrel - an uplift factor of 20 per

cent, ascertainable, identifiable, but in this situation, and it is not a peculiar situation,

there is no factual basis on which to work.

McHUGH J: Well, you make these assertions, but if you

ever -

MR PAPE: Well, there is no evidence to the contrary.

McHUGH J: Well, if you ever wanted to challenge the

validity of this, you have gone the wrong process,

I would have thought. You should have started an

action where you would have led evidence to show

that the whole process was unworkable, so that the

whole paragraph came down, but you are asserting

things from the bar table. As far as I know, it

may well be objectively understood in the trade, or

in trades generally, as to what is a reasonable sum

to add.

MR PAPE:  The most important feature is that we have a

situation of an agreement for sale by a

manufacturer to a customer - a retail sale. Now,

in that situation there is no wholesale market,

because they are peculiar goods. The goods have

been ordered, they have been agreed to be

manufactured - they have not even come into

existence yet. All that there is is contract

between the customer and the printer, "Will you

print so many mortgage forms for me", for example.

McHUGH J: Well, we know one thing, do we not? We know that

the wholesale price is not going to exceed what the

goods have been sold for retail.

Vale(2)	10	2/10/92
MR PAPE:	Yes.	But somewhere between there one is to divine

this notional wholesale value. It can either come

from the retail price, but somewhere there is

supposed to be a figure, but the reason why the

manufacturer, who is also the retailer, entered

into it and was able to reduce his price, was to

cut out the concept of the wholesaler. There is no

wholesaler. Now the Act says there is no

commercial reason for determining a wholesale value

in this situation.

DAWSON J:	Then the wholesale value is the retail value.
MR PAPE:	If that be the case, this is not a tax upon

wholesale sales, it is a tax upon some other

subject, and we do not suggest that, and I think

there is authority that takes the view that that is

not the case. So there is this notional,

arbitrary, hypothetical, imaginary number, plucked

out of the air on no basis whatsoever and the

taxpayer has got to put it in each month.

DAWSON J: But it is not on - we are going over the same

ground -

MR PAPE:	Yes, that is right.
DAWSON J:	- - - but one can have notions of reasonable

profit and so on, and percentages and margins, and

it is a matter of what happens in the trade, and I

very much doubt if you went to a printer and said

what margin would you want on this to make it
worthwhile he would be able to give you an answer.

MR PAPE:  But, Your Honour says, what is the nature of the

trade?	Now, if you are producing for stock there
may be a case, but there is no situation.	The
trade is a one on one situation - - -

DAWSON J: Well, this raises the difficulties that

Mr Justice McHugh was talking about, but I find it

difficult, as I am at present informed, to say that

you could not do this.

MR PAPE:	I am sorry, Your Honour, I missed the thrust - - -
DAWSON J:	It was the point that Justice McHugh was putting to you, that maybe, if evidence were called you
could support what you are putting forward, but
there is no reason, a priori why you should not be
able to arrive at a notional figure, which is reasonable.

MR PAPE: Well, Your Honour, there could be no further

evidence called before the the tribunal from what I

am saying to you now. There is no further

information that could be given to a tribunal. We

Vale(2) 11 2/10/92

would be taking - the taxpayer would be saying,

"This is our guess, as to what the figure is", the

Commissioner would say, "This is what my concept of

the guess is, my ruling, at seven and a half per
cent off the retail price", and the tribunal would

say, "Well we will take a guess too", and we will

all end up with three guesses. And if it went on

appeal, somebody else would probably have a guess.

But may I suggest, just on basic conceptual

reasoning, you could not come up with a wholesale
figure which would be verifiable; not even a basis
of saying, as in determining damages, or quantum

meruit, because there is no factual basis there.

McHUGH J: But you get those problems in value cases all the

time. You get a string of expert valuers on each

side and they come up with a range of figures

varying dramatically, sometimes.

MR PAPE:  That is right, but they are dealing with a

situation which is, in most instances, prospective,

and there is a factual basis put down. They are

not looking at a situation where you have got the

sales actually being completed. The goods in this

case have been produced and they have been sold,

and now what the Act says, "Oh well, this Act will

not work, unless you can come up with a wholesale value". So, therefore, we have got to say, "What

would the wholesale value have been if there had

been a wholesale sale?".

McHUGH J: Well, just let me put one hypothetically.

Supposing it was established in the trade that

there was a 15 per cent mark-up and goods were sold

by a manufacturer by ret~il; why could you not say

in that situation that it is the retail price less

15 per cent?

MR PAPE:	When you say 15 per cent, Your Honour - - -
McHUGH J: Well, I am just saying, assume that there was a

custom, or the norm was a mark-up of, say, 15 per

cent in a particular trade - - -

MR PAPE:	What, to the customer?
McHUGH J:	No, from the manufacturer - the retailer marked up 15 per cent.
MR PAPE:	All right. The retail mark-up is 15 per cent to

the customer.

McHUGH J: Yes. Why could you not, in those circumstances,

say that the price that could be reasonably

expected would be the retail price less 15 per

cent.

Vale(2) 12 2/10/92

MR PAPE: Well, it would not 15 per cent; it would be some

lesser figure.

McHUGH J: Well, it would be, yes.

MR PAPE: Well, why could you not say 5 per cent, or 10 per

cent or 7 per cent? You have given me a number and

there is no basis at all for what Your Honour says.

Where is the factual basis which Your Honour got

the difference off the retail mark-up?

McHUGH J: Well, let us test it? The question is the amount

for which the goods could reasonably be expected to

have been sold by the manufacture by wholesale.

MR PAPE: All I am saying is, "Where is the factual basis?"

As Mr Justice Windeyer said in Giris's case, there

has got to be some measure of fact there and all you have got is a retail sale and a customer has paid a price of, let us say, $115 which cost $100.

Now, somewhere in there there is supposed to be

this imaginary wholesale value, which, no doubt,

there has probably got to be a figure added on to

the retail price because if there was to be sales

tax charged somebody has got to pick up the sale
tax otherwise the manufacturer would go - his
margins would really put him in a difficult

situation. But there is no basis - on those fact

which Your Honour has just postulated there is no

factual ground on which you can come to a figure.

You can come to a figure, but it will be an

arbitrary figure. It will be a figure plucked out

of the air to make the thing work.

DAWSON J:  I know we are going over the same ground,

Mr Pape, but it would not be arbitrary. I put to

you an example of ordering stationery through a

retailer, which is actually printed by a printer.

You say well that is not - that is a commission

agent situation, well, maybe it is, but maybe it is

sufficiently analogous to arrive at what is a

proper wholesale price.

MR PAPE: Well, in that situation the goods would be sold by

the manufacturer to the retailer and there would be

a wholesale price - - -

DAWSON J:	The retailer would then have a mark-up, yes.
MR PAPE:	In that particular situation, but in that

situation the retailer has said, "I am buying those

goods for stock" and he comes into an 18(2)

situation. But what I am talking about is an

18(l)(b) situation, where there is no intermediary,

and that is the difficulty and that has always been

the difficulty with the wholesales tax legislation.

It is a patch-up quilt and this is the plug that is

Vale(2) 13 2/10/92

put in there to try and make it work. Now, in my

submission, there are cases where things can be

made to work, but in this case you only end up with

an arbitrary figure, and I am inviting the Court to

look at this legislation and say it does not work,

which they did in the Mutual Pools case.

Your Honour said in the Mutual Pools case that one

cannot deem things to be - at page 469 in Mutual

Pools:

That case is a difficult one but it illustrates the point that the Parliament cannot bring legislation within power by

deeming facts to be as they are not or by
deeming things to have a character which they

do not bear.

Now, Your Honours in Mutual Pools saw that this

concept of these fictions, and this is just an

extension of it, and may I take it one step

further. There was a case which Your Honours

referred to in the Mutual Pools case, called

Hornibrook, dealing with the manufacture of reinforced concrete piles for a bridge; the question was whether they were manufactured goods.

It was a deemed sale of goods. The question I

asked then is, where you end up with a deemed sale

of goods, how does one determine a sale value?

That is to pile a fiction upon another fiction.

There is no factual basis in Hornibrook's case.

If Hornibrook's case had to be determined over

again and it was determined because the parties in
that case agreed what the sale value might be, that

was a comfortable outcome, but if the Court or the

tribunal or anyone had to determine what a sale

value would be in a deemed sale situation, I would

suggest you could not find one. You might find

one, but it would be an arbitrary amount, and it is

the same type of situation which you have here.

Take another case. Nimrod Theatre case came

to this Court and there was an application for
special leave, but if one took the view that the

Court had in the Queensland TAB case about manufacturing, Nimrod Theatre it was held that it

was not carrying on the business of manufacturing

stage props applying for their own use. Now on the

basis of, may I suggest, the Queensland TAB case it

would probably be held to be a manufacturer. The

question then that would arise: what is the sale

value for the props for a play call "The Sea"?	Now
there is no market, or a reasonable value, or
wholesale value for those types of goods. It is

the same issue. It is right through the sales tax

legislation. It will not go away. The only reason

this works at the present time is because of

Vale(2) 14 2/10/92

expediency and the threat that somebody is going to

have an assessment against them.

I keep coming back to the proposition, the way

it operates with the rule of law, or the

Commissioner's rulings, is to prefer expediency to

the rule of law. Those are my submissions.

DEANE J:  Thank you, Mr Pape. The Court need not trouble

you, Mr Gibb.

In this matter the Court is of the clear view

that an appeal would not enjoy sufficient prospect

of success to warrant a grant of special leave to

appeal. Special leave is accordingly refused.

MR GIBB:  Your Honours, the respondent seeks his costs for

the application.

DEANE J: Special leave is refused with costs.

AT 12.19 THE MATTER WAS ADJOURNED SINE DIE

Vale(2) 15 2/ 10/92