Airservices Australia v Canadian Airlines International Ltd

High Court of Australia|1999-12-02|Before: Gleeson CJ, Callinan JJ

For the reasons given by Gaudron J, I also agree that the Determination did not "amount to taxation" and that none of the other attacks on its validity made by the respondents should succeed. It follows that the Determination was valid.

There can be no doubt that the effect of the Act's provisions dealing with the imposition of a statutory lien over aircraft was to provide for the acquisition by the Authority of an interest in property which it did not previously have. But the guarantee of just terms that is contained in s 51(xxxi) of the Constitution is not automatically engaged by the fact that a law provides for an acquisition of property. To engage that guarantee, the law in question must be characterised as a law with respect to that compound conception "acquisition-on-just-terms"*". It is the power to make that kind of law which is abstracted from the content of some of the other heads of power.

As was said by six members of the Court in Nintendo Co Ltd v Centronics Systems Pty Ltd**°:

"The cases also establish that a law which is not directed towards the acquisition of property as such but which is concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity is unlikely to be susceptible of legitimate characterisation as a law with respect to the acquisition of property for the

379 Grace Brothers Pty Ltd v The Commonwealth (1946) 72 CLR 269 at 290 per Dixon J.

380 (1994) 181 CLR 134 at 161 per Mason CJ, Brennan, Deane, Toohey, Gaudron and McHugh JJ.

381 See, eg, Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 510; Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 171-173, 177-178, 188-189; Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 285-286; Health Insurance

The charges which may be satisfied by sale of an aircraft under these provisions of the Act may not have been (and were not, in these cases) incurred by the owner of the aircraft. Thus the security interest, for the creation of which the Act provides, attaches in this case to the property of one person to satisfy the debt of another. That fact might suggest that the law providing for creation of the security interest is not concerned with the adjustment of the competing rights, claims or obligations of persons in a particular relationship or area of activity. It is necessary to recall, however, that the lien is a lien over the aircraft which was used in ways that gave rise to the imposition of the charge; it is not a lien over any other property of the owner of the aircraft. That being so, for the reasons given by Gummow J, the statutory lien provisions are not properly characterised as a law with respect to the acquisition of property on just terms from any person for any purpose in respect of which the Parliament has power to make laws. Rather, they are to be characterised as a law with respect to trade and commerce with other countries and among the States.

Each of the appeals should be allowed and orders made as proposed by Gleeson CJ and Kirby J.

Commission v Peverill (1994) 179 CLR 226 at 236-238; Georgiadis v Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297 at 305-308.

521 CALLINAN J. The facts and the outcome of the proceedings in the Federal Court are fully stated in the reasons for judgment of other members of the Court. I would resolve this case by reference to s 51(xxxi) of the Constitution which, in my opinion, the relevant provisions of the Civil Aviation Act 1988 (Cth) infringe.

522 The following are the provisions of the Civil Aviation Act which have to be considered. 523 Section 66 relevantly provided as follows:

"(1) In this section: 'charge' means: (a) acharge for a service or facility provided by the Authority; or

(b) a fee or other charge in respect of a matter specified in the regulations, being a matter in relation to which expenses are incurred by the Authority under this Act or the regulations, including, but without being limited to, a fee or other charge in respect of, or for an application for:

(i) _ the grant, issue, renewal or variation of a certificate, licence, approval, permission, permit, registration or exemption under this Act or the regulations; or

(ii) the grant or variation of an authorisation, or the cancellation, suspension, variation or imposition of a condition, relating to anything referred to in subparagraph

(i). (2) Subject to this section, the Board may make determinations:

(a) fixing charges and specifying the persons by whom, and the times when, the charges are payable; and

(b) fixing the penalty for the purposes of subsection (8).

(2A) This section has effect subject to the Prices Surveillance Authority Act 1983.

(3) Before making a determination, the Board shall give the Minister notice in writing of the proposed determination:

(a) specifying the day on and from which the determination is intended to operate;

(b) if it fixes a charge or penalty, specifying the basis of the charge or penalty; and

(8) Subject to subsection (9), where a charge is not paid within the period determined by the Board, being a period beginning on the day on which the charge became due and payable, the person liable for the charge is liable to pay the Authority, in addition to the charge, a penalty, calculated upon the unpaid amount of the charge from the day on which the charge became due and payable, and compounded.

(9) The penalty shall not exceed a penalty equivalent to 1.5%, or such other percentage as is prescribed, of the unpaid amount of the charge for each month or part of a month during which it is unpaid, calculated from the day on which the charge became due and payable, and compounded.

(10) Subsection (9) does not require the penalty to be calculated on a monthly basis.

(11) Charges and penalties may be recovered as debts due to the Authority."

524 Section 67 was in these terms: "The amount or rate of a charge shall be reasonably related to the expenses incurred or to be incurred by the Authority in relation to the matters to which the charge relates and shall not be such as to amount to

525 Section 68 made provision for "a Register of Statutory Liens, which shall be maintained, and shall be open to public inspection, as prescribed".

526 Key provisions are s 69 and s 70: "69 (1) Subject to section 76, where:

(a) at the end of the payment period after a charge became payable in respect of an aircraft, the charge is not paid; and

(b) at the end of that period, a statutory lien is not in effect in respect of the aircraft; and

Callinan J 178. (c) the charge or penalty in respect of the charge remains unpaid;

then, if an appropriate officer so directs at any time, the Registrar shall make an entry in the Register in the manner prescribed and, upon the making of the entry, there is vested in the Authority in respect of the aircraft a statutory lien covering the following:

(e) any penalty that becomes payable in respect of the charge after the entry is made;

(f) any further outstanding amounts in respect of the aircraft. (2) In subsection (1): 'appropriate officer' means:

(a) if, at the end of the payment period, the only relevant charge is a charge under section 66 - an authorised officer;

(b) if, at the end of that period, the only relevant charge is a charge under the Air Navigation (Charges) Act 1952 - an officer of the Department designated in writing by the Secretary to the Department; or

70 (1) Where a statutory lien has been registered in respect of an aircraft and until the lien ceases to have effect, the following provisions of this Division apply, in spite of any encumbrance in respect of the aircraft and any sale or disposition of, or dealing in, the aircraft or an interest in the aircraft, and whether or not the Authority has possession of the aircraft at any time.

(2) For the purposes of priorities amongst creditors and the purposes of the distribution of the proceeds of a sale made under section 73, the statutory lien has effect as a security interest in respect of the aircraft ranking in priority:

(a) after any security interest (other than a floating charge) in respect of the aircraft created before the time of registration of the statutory lien, to the extent that that security interest covers a debt incurred before that time; and

(b) before any security interest not falling within, or to the extent that it does not fall within, paragraph (a)."

527 The appellant had the right to seize and sell an aircraft in respect of which charges remained unpaid. Section 72 was the provision relating to seizure:

"If an outstanding amount covered by the statutory lien is unpaid at the end of 9 months after the day on which it became an outstanding amount or the day on which the lien was registered, whichever is the later, an authorised officer, or a person authorised in writing by such an officer to do so, may at any time, subject to section 79, seize the aircraft, and:

(a) shall take reasonable steps to give notice of the seizure to:

(i) _ such persons as, in the opinion of an authorised officer, have a security interest in the aircraft;

(ii) each person who is any of the following, namely, an owner, operator, lessee, hirer, charterer or pilot in command, of the aircraft; and

(b) may keep possession of the aircraft until all outstanding amounts covered by the statutory lien are paid."

And s 73 provided for the sale of an aircraft subject to a lien:

"(1) If an outstanding amount covered by the statutory lien is unpaid at the end of 9 months after the day on which it became an outstanding amount or the day on which the lien was registered, whichever is the later, the Authority may at any time, whether or not the aircraft has been seized under section 72:

(a) _ sell the aircraft as prescribed, whether by public auction or private contract;

(b) make and execute all instruments and documents necessary for effecting the sale; and

(2) Before selling the aircraft, the Authority shall take reasonable steps to give reasonable notice of the sale to the persons referred to in paragraph 72(a)."

Section 74 governed the application of the proceeds of a sale of an aircraft. Section 75 had the effect of maintaining the lien until payment on sale. Notice relating to a lien was to be published in the Gazette pursuant to s 77. The knowing removal of an aircraft subject to a lien may have rendered the culprit liable to imprisonment for three years (s 78A). Section 80 conferred an immunity against action in favour of persons involved in the enforcement of a lien. The only remedy that a person affected by a lien had was a right to seek a review of a decision to exercise any rights attaching to it by the Administrative Appeals Tribunal (s 82).

The first time that the position of an innocent third party whose property had been forfeited following an activity prohibited by a Commonwealth statute was considered by this Court was in Burton v Honan*™. There the defendant was the vendor, and the plaintiff was the innocent purchaser of a motor car. The car had been illegally imported into Australia in breach of various provisions of the Customs Act 1901 (Cth) which created offences and authorised its seizure and sale. The defendant argued that the legislation providing for the seizure was illegal for contravention of s 51(xxxi) of the Constitution which provides:

"51 The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:

(xxxi) the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".

Dixon CJ, with whom the other three members of the Court (McTiernan,

Webb and Kitto JJ) agreed, discussed the argument and stated his conclusions**:

"It is argued that, as a consequence, s 262 of the Customs Act dispossesses him, or at least seizures may have dispossessed him and then s 262 makes conclusive the right so to dispossess him; he is thus left without his goods and without any title to his goods, because s 262 purports to make the conviction of the offender conclusive on the subject. It leaves the innocent purchaser without any right to contest the forfeiture. It is said that that does not give him just terms, because just terms require that he should have a right to contest a forfeiture.

The short answer to this contention is that the whole matter lies outside the power given by s 51(xxxi). It is not an acquisition of property for any purpose in respect of which Parliament has power to make laws. It is nothing but forfeiture imposed on all persons in derogation of any rights such persons might otherwise have in relation to the goods, a forfeiture imposed as part of the incidental power for the purpose of vindicating the Customs laws. It has no more to do with the acquisition of property for a purpose in respect of which the Parliament has power to make laws within s 51(xxxi) than has the imposition of taxation itself, or the forfeiture of goods in the hands of the actual offender."

There are some comments that | would make about this passage in which his Honour reaches his conclusion in favour of validity.

First, the use of the word "forfeiture" to describe the extinction of all proprietary rights of innocent as opposed to complicit third parties does not strike me as apt. The Oxford Dictionary™ gives the following as the first definition of forfeit: "[a] misdeed, crime, transgression; hence, wilful injury". The second definition is: "[s]omething to which the right is lost by the commission of a crime or fault; hence, a penal fine, a penalty". These definitions well capture the historical and legal origins of a forfeiture and emphasise two aspects: its relationship with a crime and the consequences to the actual transgressor. In modern legal parlance the word is used in respect of, for example, a clause in a will which provides for the forfeiture of a gift for some act or omission; the forfeiture of shares for failure to pay a valid call, and forfeiture of bail and forfeiture of a lease. In the first example the forfeiture operates upon the person doing or omitting to do some act. In the case of shares, the shareholder, by taking up an issue or acquiring partly paid shares, is bound by the terms of the issue and well knows that the consequence of a default will result in a forfeiture. A lessee by entering into, or accepting assignment of a lease effectively acknowledges that the lease may be forfeited on default. And a surety liable on a default by a person admitted to bail, by entering into a recognisance or otherwise will have voluntarily acknowledged liability for forfeiture of the bail by agreeing to be a surety. Every example has in common that the forfeiture only occurs in respect of a failure by the person, whose property or interest is forfeited, to satisfy either an obligation voluntarily assumed, or to answer for a transgression he or she has personally committed.

Secondly, the passage does not explain how the implementation of "part of the incidental power for the purpose of vindicating the Customs laws" is any different from or adds anything to the implementation, to use the language of s 51(xxxi) of the Constitution, of "[an express] purpose [the collection of customs

384 The Shorter Oxford English Dictionary, 3rd (rev) ed (1973) at 790.

duties] in respect of which the Parliament has power to make laws". An incidental power requires no less a constitutional foundation than an express one.

Thirdly, I cannot accept, as his Honour appears to do, that because forfeiture of the goods in the hands of the actual offender may be regarded as an incident of the customs power and not the acquisitions power, forfeiture of an innocent third party's goods should also be so regarded. Furthermore, for reasons I will explain later, I cannot regard references to the imposition of taxation as assisting in the resolution of any question of the constitutionality of the taking of the property of innocent third parties on other than just terms in situations involving neither taxation, excise nor customs. The power to tax is quite different from other powers. Its whole purpose is the collection of property (money) from recipients, of means or property, generally indiscriminately, except as to quantum, and not in exchange for any identified service provided to any particular taxpayer, in order to finance the activities of government generally*™. The special character of taxation laws is given recognition by s 55 of the Constitution which provides:

"Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect.

Laws imposing taxation, except laws imposing duties of customs or of excise, shall deal with one subject of taxation only; but laws imposing duties of customs shall deal with duties of customs only, and laws imposing duties of excise shall deal with duties of excise only."

It can also be seen that the same special character of both the customs and excise laws, as revenue raising statutes, is given recognition by their inclusion in s 55.

"Although I have previously been attracted to the view that taxation does not involve any acquisition of property by the Commonwealth the elaborate argument on s 51(xxxi) which the Court heard in this case and the associated cases of Health Insurance Commission v Peverill and Georgiadis v Australian and Overseas Telecommunications Corporation has convinced

385 See Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397 at 408 per Gibbs J and cases there cited.

386 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155 at 220-221.

me that Deane J was correct when he expressed the view in The Commonwealth v Tasmania ("The Tasmanian Dam Case") that compulsory taxation does involve an acquisition of property but is nevertheless outside the scope of s 51(xxxi). This is because the exercise of the taxation power necessarily involves an acquisition of property from the taxpayer." (footnotes omitted)

What his Honour said may readily be adapted and applied to the imposition of customs duties.

Despite the serious doubts that I entertain as to its reasoning and conclusions, in my opinion Burton v Honan is distinguishable from this case for two reasons: first, it is a case in which the Court had to consider the imposition of customs duties; and, secondly, the statute created criminal offences out of which the forfeiture arose.

The Court has not, before this case, had to consider the constitutional validity of a statute making provision for the forfeiture of property of innocent third parties in circumstances in which, as here, the same statute creates no criminal offence for lack of compliance.

In Mutual Pools**' the facts were that a builder had agreed to construct a swimming pool for a customer at a time when the Commonwealth was contending that builders of swimming pools were liable for sales tax under a Sales Tax Assessment Act. In its contract with the customer, the builder paid the sales tax and added it to the price charged to the customer. Subsequently the builder successfully challenged the validity of the provision under which the tax had been charged and paid. After the decision of this Court denying the validity of the original legislation the Commonwealth enacted a Refund Act providing for the making of a refund to a builder, if the builder could satisfy one or more of a number of conditions, including that it had not passed on to the customer the amount of the tax subsequently declared to be unlawful. On the basis that the builder had passed on the tax to the customer, the Commonwealth rejected the builder's claim for a refund under the Act. A challenge to the Refund Act was mounted by the builder on the ground that the Act infringed s 51(xxxi) of the Constitution.

This Court unanimously rejected the challenge, but different judges expressed various reasons for doing so. The circumstances of that case are very

special. In my opinion nothing was said in that case by a majority of judges which would be determinative of this case. It was also a case which was

387 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155.

concerned with taxation laws, the almost unique constitutional quality of which I have already discussed.

The next case in which the possible effect of s 51(xxxi) of the Constitution upon a forfeiture by the Commonwealth was considered is Lawler***. There the Fisheries Management Act 1991 (Cth) made it an offence for a person to use a foreign boat for commercial fishing in the Australian fishing zone unless there was a licence in force to authorise such a use. Section 106(1)(a) of the Act gave a court convicting a person of such an offence power to order the forfeiture of the boat. An order for forfeiture of the boat which was owned by a third party was made. The owner challenged the making of the order. The Court held that s 106(1)(a) was not a law with respect to the acquisition of property within s 51(xxxi) because it imposed a penalty by way of forfeiture for an unlawful activity. The Court further held that s 106(1)(a) was a law under s 51(x) of the Constitution even though the owner of the forfeited boat was not involved in the

"In essence, the position is that the prescription of forfeiture of property used in the commission of a fisheries offence is within the power conferred by s 51(x) and that power extends to the prescription of forfeiture of that property, notwithstanding that the owner is innocent of complicity in the commission of the offence. Likewise, the legislative prescription of forfeiture of that property pursuant to s 51(x) is not a law for the acquisition of property within s 51(xxxi) and it does not become such a law by reason of the legislative prescription authorizing forfeiture of property in circumstances in which the owner is innocent of complicity in the commission of the offence."

To say that a forfeiture of an innocent third party's property is not within s 51(xxxi) because it is within s 51(x) is, with respect, to state a conclusion and not the reasoning for it. But the fact that a forfeiture so called, if it involves an acquisition, is within a power conferred by s 51 does not mean that it is outside s 51(xxxi). Section 51(xxxi) only operates to authorise acquisitions in respect of purposes in pursuance of which the Parliament has power to make laws. If there is no power to make a law on the topic, there can be no power to acquire, whether by forfeiture so called or otherwise. And to call an acquisition a forfeiture cannot alter the nature and substance of what is in truth an acquisition.

388 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.

389 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 276.

In his judgment Brennan J regarded the Court's decision in Mutual Pools*" as doing no more than vindicating the customs laws, and in the same passage treated the fishery laws providing for forfeiture as if they had the same constitutional basis, without adverting to the special constitutional position of, the customs laws)", His Honour also took into account important policy considerations earlier stated by Mason J in Cheatley*" when he referred to the difficulty of tracking the movement of vessels off the extensive coastline of Australia. His Honour said*"?:

"The need for drastic penalties to vindicate the laws governing customs and fisheries exists in part by reason of the difficulty in policing these laws and ensuring that foreign owners of vessels (or other conveyances) do not permit their use in breaching those laws. As Mason J pointed out in

'The difficulty of enforcing compliance along the length of the Australian coastline called for a stern deterrent if observance of the provisions was to take place. There were obvious difficulties in laying obligations upon foreign owners and taking proceedings against them."

These considerations demonstrate that the provision for forfeiture contained in s 106(1)(a) of the Act authorizing, as it does, the forfeiture of vessels owned by persons who are or might be innocent of any complicity in the offence which creates the liability to forfeiture is appropriate and adapted to the enforcement of the offence-creating provision. The forfeiture provision is therefore properly characterized as a law with respect to fisheries supported by s 51(x) of the Constitution. That power is not to be read down in order to protect the rights of private owners. I would recall the passage from Charles River Bridge v Warren Bridge*"* which I cited in my judgment in Mutual Pools & Staff Pty Ltd v The Commonwealth.

390 Mutual Pools & Staff Pty Ltd v The Commonwealth (1994) 179 CLR 155.

391 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 277-278.

392 Cheatley v The Queen (1972) 127 CLR 291 at 311.

393 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 280-281.

394 Cheatley v The Queen (1972) 127 CLR 291 at 311.

Section 106(1)(a) of the Act is not to be classified as a law with respect to the acquisition of property falling within s 51(xxxi). The guarantee contained in s 51(xxxi) does not affect the validity of s 106(1)(a)."

I would read this reasoning as involving an acceptance that, for its validity, the liability to the forfeiture had to be appropriately adapted to an "offence-creating" provision.

Deane and Gaudron JJ in Lawler acknowledged the uncertainties surrounding the application of s 51(xxxi) and expressed the opinion that some laws stand wholly outside s 51(xxxi)"®. Their Honours quoted the following Passage" the judgment of Gibbs J in Trade Practices Commission v Tooth &

"[I]t has been held that laws providing for the forfeiture of prohibited imports*', the compulsory payment of provisional tax*" and the application of the property of former enemy subjects reparations" are not within s 51(xxxi). Other laws to which s 51(xxxi) obviously does not apply are those for the imposition of tax, the sequestration of the property of a bankrupt or the condemnation of prize'. I am not sure that a completely satisfactory explanation has yet been given of the principles by which it is to be determined which laws do, and which laws do not, fall within s 51(xxxi). With great respect I doubt whether the suggestion of Dixon CJ in Attorney-General (Cth) v Schmidt - that the section does not affect 'anything which lies outside the very general conception expressed by the phrase "use and service of the Crown" - fully expresses the ground of distinction."

396 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 284. 397 (1979) 142 CLR 397 at 408.

399 Commissioner of Taxation v Clyne (1958) 100 CLR 246 at 263, 270.

400 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361.

401 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373. As to imposition of a tax, see further: Federal Commissioner of Taxation v Barnes (1975) 133 CLR 483 at 494-495; MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622 at 638-639; Australian Tape Manufacturers Association Ltd v The Commonwealth (1993) 176 CLR 480 at 508-510; and, as to sequestration of the property of a bankrupt, The Tasmanian Dam Case (1983) 158 CLR 1 at 282.

Some of the examples that Gibbs J gave in the passage quoted can immediately be distinguished from this case. The observations of Dixon CJ in Schmidt's case" as to the scope of s 51(xxxi) repeat views of the kind that his Honour expressed in Burton v Honan*® which I have already discussed. But in any event the forfeiture provisions which this Court held justified the transfer of the funds in Schmidt's case" had to be exercised under "various exigencies and perils [of war or imminent war]" which may provide a justification in such times for a special reading of s 51(vi) and s 51(xxxi). Neither the bankruptcy laws nor the prize laws could have effective operation unless there was power to deal with a bankrupt's property and to seize and deal with a prize.

Deane and Gaudron JJ in Lawler*® did not doubt however that s 51(xxxi) operated as a constitutional guarantee and that the words "acquisition" and "property" should be construed liberally". Their Honours also drew a distinction between laws in connexion with which just terms were an inconsistent or incongruous notion and laws where they were not.

Dawson J, in Lawler, said that confiscation of property connected with the commission of crimes was long part of the common law and had its origin in the doctrines of attainder and deodand and that property could be forfeited even if its owner was not involved in the crime*''. The historical origins and implications of attainder and deodand must yield to the Constitution. But in any event they can afford little or no modern justification for the forfeiture of the property of innocent persons. The history of the deodand is summarised by Brennan J delivering the opinion of the Supreme Court of the United States in Calero-Toledo™®:

"At common law the value of an inanimate object directly or indirectly causing the accidental death of a King's subject was forfeited to the Crown

402 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361 at 372-373.

404 Attorney-General (Cth) v Schmidt (1961) 105 CLR 361.

405 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.

406 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 284- 285. See also The Commonwealth v Western Australia (1999) 73 ALJR 345 at 380-381 per Kirby J; 160 ALR 638 at 686-687.

407 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270 at 289.

408 Calero-Toledo v Pearson Yacht Leasing Co 416 US 663 at 680-682 (1974).

as a deodand™. The origins of the deodand are traceable to Biblical*"' and pre-Judeo-Christian practices, which reflected the view that the instrument of death was accused and that religious expiation was required. See O Holmes, The Common Law, c | (1881). The value of the instrument was forfeited to the King, in the belief that the King would provide the money for Masses to be said for the good of the dead man's soul, or insure that the deodand was put to charitable uses. 1 W Blackstone, Commentaries 3004". When application of the deodand to religious or eleemosynary purposes ceased, and the deodand became a source of Crown revenue, the institution

Forfeiture also resulted at common law from conviction for felonies and treason. The convicted felon forfeited his chattels to the Crown and his lands escheated to his lord; the convicted traitor forfeited all of his property, real and personal, to the Crown. See 3 W Holdsworth, History of English Law 68-71 (3d ed 1927); 1 F Pollock & F Maitland, History of English Law 351 (2d ed 1909). The basis for these forfeitures was that a breach of the criminal law was an offense to the King's peace, which was felt to justify

Deodand derives from the Latin Deo dandum, "to be given to God".

See Exodus 21:28 ("[i]f an ox gore a man or a woman, and they die, he shall be stoned: and his flesh shall not be eaten").

See 1 M Hale, Pleas of the Crown 419, 423-424 (1st Am ed 1847); 2 F Pollock & F Maitland, History of English Law 473 (2d ed 1909); Law of Deodands, 34 Law Mag 188, 189 (1845); Finkelstein, The Goring Ox: Some Historical Perspectives

on Deodands, Forfeitures, Wrongful Death and the Western Notion of Sovereignty, 46 Temp L Q 169, 182 (1973).

See Hale [supra] at 424. Indeed, the abolition of the deodand institution in England in 1846, 9 & 10 Vict c 62, went hand in hand with the passage of Lord Campbell's Act creating a cause of action for wrongful death, 9 & 10 Vict ¢93 (1846). Passage of the two bills was linked, because Lord Campbell was unwilling to eliminate the deodand institution, with its tendency to deter carelessness, particularly by railroads, unless a right of action was granted to the dead man's survivors. See 77 Hansard's Parliamentary Debates, Third Series 1031 (1845). See generally Finkelstein [supra] at 170-171.

The adaptation of the deodand institution to serve the more contemporary function of deterrence is an example of a phenomenon discussed by Mr Justice Holmes [in The Common Law (1881) at 5].

denial of the right to own property. See 1 W Blackstone, Commentaries 299".

In his Lectures on Legal History, Sir Victor Windeyer discussed the primitive notions underlying the doctrine™"*:

"When a man was killed, even accidentally, by anything in motion, that thing, animate or inanimate, which caused the death had to be surrendered. It might be the sword with which he was slain, the ox that gored him, the cart that ran over him. This remarkable rule was a part of the law of England until 1846" until, indeed, it became difficult to apply when men began to be killed by railway trains! Much amusing learning came into existence concerning deodands, and some surprising articles were thus forfeited. But it is all long obsolete now. On the origin of these rules we can only speculate. The name deodand tells us that the forfeited article was given to God, according to Cowel 'for the pacification of His wrath'"®. We know that during the Middle Ages the value of the deodand was often used for masses for the dead man's soul, and after the Reformation usually given to some charity. But deodands were probably a survival from superstitious times before Christianity. Originally, apparently, the kinsmen of the dead man received the deodand, perhaps as compensation for their loss, but more probably because it was itself an unclean and guilty thing which they must destroy. The matter drifts off into the realm of conjecture. But we may remember the words in the Book of Exodus*'": 'If an ox gore a man or a woman, that they die; then the ox shall be surely stoned, and his flesh shall not be eaten; but the owner of the ox shall be quit'." ""*

To require the forfeiture of animals and inanimate things in modern times without regard to any culpability on the part of the owner smacks of hearkening to primitive notions of animism and anthropomorphism.

413 In 1870, England eliminated most forfeitures of those convicted of felonies or treason. 33 & 34 Vict c 23.

416 Cowel's Interpreter, published by Manley in 1672. 417 Exod xxi, 28.

418 See also Holmes, The Common Law (1882) at 22-25.

Neither the old learning on the topic of the deodand, nor the variety of opinions expressed in the quite different factual situation under consideration in Lawler', can be determinative of this case.

In Health Insurance Commission™® the facts were that whilst a valid claim for fees payable by the Commission to a medical practitioner was pending in the Federal Court, the Act regulating the quantum of refunds payable for medical services was amended with the consequence that the values of the refunds were significantly reduced. The Court (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ) held that the amending Act was not a law with respect to the acquisition of property but did so on a variety of grounds: Mason CJ, Deane and Gaudron JJ on the ground that the reduction was effected both as a genuine adjustment of competing claims between parties who stood in a particular relationship, and also as part of a regulatory scheme for the provision of welfare benefits from public funds; Brennan J on the ground that the right conferred by the Act was not "property" for the purposes of s 51(xxxi); Dawson J on the ground that the Commonwealth had not "acquired" property; Toohey J also on the ground that there was no "acquisition", and on the further ground that the operation of the amending Act lay outside the scope of s 51(xxxi); and McHugh J on the ground that the entitlement to payment was conferred subject to the condition that it could be altered or revoked by Parliament at any time.

The Court also held that the amending Act did not contravene s 55 of the Constitution because the reduction of the value of a chose in action, or the substitution of a chose in action for a lesser amount for another chose in action, was not an imposition of a tax.

With respect, for myself, I would have thought that the second holding which accepted that the medical practitioner's claim was a chose in action contradicted any notion that he did not own property, the property being the debt payable by the Commission, and that, by reducing the value of that debt (by statute) there was effectively an acquisition of property by the Commission to the extent of the amount of the reduction of the debt. As to the relationship between the Commission and Dr Peverill, no matter what other complexion it might bear, it certainly included, as an element, the relationship of debtor and creditor and there is no reason in principle to distinguish between legislation to effect a welfare purpose and legislation to effect some other purpose (except for legislation relating to tax, customs and excise). And any acquisition must involve a disbursement of public funds.

419 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.

420 Health Insurance Commission v Peverill (1994) 179 CLR 226.

The different facts and legislation, and the diversity of the reasons given by the Justices of this Court in that case are such that I would not regard it as dictating any particular conclusion in this case.

Before disposing of this case | would make some brief observations about some policy considerations as some members of this Court did in Lawler®!. There are some obvious measures which might be taken to ensure that large debts for charges are not allowed to be run up by aeroplane operators, such as perhaps the requirement of a substantial bond or deposit in advance of permission to land or fly over Australia, or the withholding of permission to operate without payment in advance. There are no doubt other measures which would be effective to ensure payment. The point is that the special difficulties referred to in upholding the fishery laws are not present in the case of laws governing the

In The Commonwealth v Western Australia*", I discussed the particular advantages enjoyed by government in dealing with, by reducing or sterilising, by executive action, people's property rights. No narrow view is in my opinion warranted of the constitutional guarantee contained in the acquisitions power. Ample breadth should be accorded to it, as a constitutional guarantee, indeed one of the very few explicit guarantees in the Constitution. In The Commonwealth v

Western Australia, Kirby J made observations to a similar effect":

"The word 'acquisition' is not to be treated pedantically. It is not limited to the physical taking of title or possession in, relevantly, a State's 'property'. Nor is it to be confined by reference to traditional conveyancing principles and procedures."

There is no doubt that there has been an acquisition of property here to the extent that the lien purports to operate to reduce the value of the aeroplanes owned by the respondents. The statutory provisions upon which its existence depends purport to confer an absolute right upon the appellant to dispose of the aircraft and to pay itself part, or the whole of the proceeds, if required, to discharge the debt owed by the operator of it. The respondents are third parties not shown in any way to be complicit in the failure of the operator to pay the relevant charges. The failure to pay the charges does not involve in any way the commission of a criminal offence. There is no criminal or quasi-criminal sanction provided for in the legislation. Policy considerations of the kind

421 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270. 422 (1999) 73 ALJR 345 at 398-400; 160 ALR 638 at 710-713.

referred to in the fisheries case of Lawler" are not present here. The seizure and sale of the aircraft are not necessary to vindicate the laws authorising the fees and charges under the Act. These are not laws concerned with taxes, excise or customs duties. The defence power is not, and could not be invoked in the circumstances of this case. One or more of these reasons might be sufficient to distinguish this case from those that I have discussed. I would however rest my decision on all of the matters to which I have just referred. The appellant accordingly had no right to exercise any of the powers purportedly conferred by the Act to take the benefit of a lien against the respondents and to exercise rights under it to defeat or diminish any of the respondents' property rights in and to the aircraft without providing for compensation on just terms to the respondents.

On the view that I take of the case I do not need to decide any of the other questions that were debated.

424 Re Director of Public Prosecutions; Ex parte Lawler (1994) 179 CLR 270.

Air Navigation Act 1974(Cth)

See Marine Insurance Act 1909(Cth)

Audit (Transitional and Miscellaneous) Amendment Act 1997(Cth)

("the Transitional Act"). Contemporaneously, the Auditor-General Act 1997(Cth)

(Cth), the Financial Management and Accountability Act 1997(Cth)

Authorities and Companies Act 1997(Cth)

Trade Practices Act 1974(Cth)

Railways Act 1858(NSW)

Navigation Act 1871(NSW)

Melbourne Harbor Trust Act 1890(Vic)

Railways Act 1890(Vic)

Tax Assessment Act 1936(Cth)

There the Fisheries Management Act 1991(Cth)

24 Semco Salvage and Marine Pte Ltd v Lancer Navigation Co Ltd [1997] AC 455 at 467 per Lord Mustill.

256 Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 458-460, 470-472; Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561; British Steel Corporation v Granada Television Ltd [1981] AC 1096 at 1168.

260 See Egan v Willis (1998) 195 CLR 424; Egan v Chadwick [1999] NSWCA 176.

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