Bolton v Madsen

If the fee which Turner refused to pay were a duty of excise, then, either because the exaction was beyond the authority of the Commissioner under the Act, or the Act, in so far as it authorized the exaction, was itself ultra vires by reason of s. 90 of the Constitution, an appropriate declaration of right could, in properly constituted proceedings, be obtained; it would, however, be another question whether Turner's inability to obtain a permit without paying a fee which was a duty of excise would warrant his using a vehicle to carry his wool without a permit under s. 39 of the Act. It is, however, unnecessary to express any opinion upon that problem because we are satisfied that the permit fee in question was not a duty of excise. Before stating our reasons for this conclusion it is desirable to isolate the essential constitutional problem from the complications arising from the course of events.

What happened was that Turner, having chartered the vehicle from the other appellants, applied, as owner (as defined) of the vehicle and as owner of the wool which he intended to carry, to the officer in charge of police at Goondiwindi for a Class III permit (see s. 39 (1) (c) of the Act). It is common ground that the officer in charge of police at Goondiwindi had a delegation from the Commissioner for Transport under s. 12 of the Act to issue permits and that, in calculating the fee that was demanded as the price of the permit sought, the officer concerned followed a direction contained in a compilation which has conveniently enough been described as a directive issued by the Commissioner. The particular direction followed, so far as it is relevant, was as follows: -

Wool Permits may be issued irrespective of distance from the place the wool is picked up to the place of delivery as under: -

For journeys of 250 miles and under - 3d. per ton per mile on the registered carrying capacity of the vehicle over total distance carried.

Section 41 of the Act confers authority upon the Commissioner to issue permits "upon and subject to such terms and conditions as he deems fit with respect to the amount or rate of the fee to be paid in respect of the permit " Section 44 of the Act deals with permit fees and provides inter alia: - "(2) In respect of a permit, the fee payable (b) with respect to the carriage of goods, may in the discretion of the Commissioner, be - (i) a fixed amount; (ii) the sum of the amounts fixed by the Commissioner for each and every vehicle in respect of which the permit is issued; or (iii) an amount calculated at a rate not exceeding the sum of the products obtained by multiplying, in respect of each and every vehicle in respect of which the permit is issued - (a) three pence; by (b) the load capacity of the vehicle expressed in tons (including fractions of tons to the nearest hundredweight); and by (c) the number of road miles on which goods are carried on the vehicle pursuant to the permit, but shall not in any event exceed an amount calculated as prescribed by sub-paragraph (iii) of this paragraph (b)." Sub-section (3) makes it clear that the amount "calculated as prescribed" by (b) (iii) is the maximum fee payable and that, if a fee in excess of the maximum should be determined, the determination is invalid as to the excess. The fee demanded from Turner was, it seems, calculated strictly in accordance with the formula in (b) (iii). Although the fee was not imposed by the Act itself but was fixed by administrative authority two steps removed from the Act, yet since it involved no departure from the legislative authority conferred by the Act, it is possible, for the purpose of considering whether it can be a duty of excise, to regard it as a tax imposed by statute. To do this enables the appellants' principal contention to be considered free from the complications that would arise if we were to regard the fee in question as it strictly is, viz. one determined by the delegate in the exercise of a general administrative authority conferred upon the Commissioner by the Act. On the basis stated, the constitutional problem before us is whether, if the fee were imposed by the Act, it would be a duty of excise. If not, it is not necessary to go any further.

It is now established that for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers. Let it be assumed that the carriage of wool from the station upon which it has been produced to a wool store for sale is a step at which the imposition of a tax directly affecting the wool would be a duty of excise and, on the footing already stated, let it be further assumed that the exaction of the fee demanded from Turner was directly authorized by the Act: nevertheless, the fee would not be a duty of excise for the simple reason that it would not directly affect the wool. It would be a fee to use a particular truck to carry any quantity of any wool belonging to Turner from Goondibilla Station to Brisbane calculated by multiplying three pence by the load capacity of the vehicle in tons and the distance in miles. The contention that such a fee is a duty of excise is, we think, completely answered by adopting mutatis mutandis what was said by Dixon C.J. in Hughes and Vale Pty. Ltd. v. State of New South Wales [1] about a tonnage rate levied upon licensees of vehicles used in the course of any trade or business calculated not merely upon the carrying capacity of the vehicle, as here, but upon the combined weight of the vehicle and the load it could carry. His Honour said: - "Finally the point was taken that the levy of the tonnage rates amounted to an excise duty placed beyond the power of the State by s. 90 of the Constitution. In answer to this contention it is, I think, enough to say that the tonnage rate is not a tax directly affecting commodities. It is calculated on the combined weight of the vehicle and weight of the load it is capable of carrying and is payable in respect of the employment of the vehicle upon a journey independently of the weight or quantity of the commodities carried. It is a tax on the carrier because he carries goods by motor vehicle" [2] .

1. (1953) 87 C.L.R. 49. 2. (1953) 87 C.L.R., at p. 75.

It is not enough that Turner, the owner-carrier, could by a simple calculation determine the cost to him per bale of carrying his wool from his station to the wool store for sale. It is not enough because it is the criterion of liability that determines whether or not a tax is a duty of excise. The tax is a duty of excise only when it is imposed directly upon goods or, to put the same thing in another way, when it directly affects goods, and to establish no more than that its imposition has increased the cost of putting goods upon the market by a calculable amount falls short of establishing the directness of relation between the tax and the goods that is the essential characteristic of a duty of excise. A fixed fee to use a vehicle for a particular journey could by a simple arithmetical calculation be distributed over the goods carried, but counsel for the appellants showed natural reluctance to go as far as to contend that such a fee imposed by virtue of s. 44 (2) (b) (i) of the Act would be a duty of excise.

The sheet anchor of the appellants' argument was the case of Matthews v. Chicory Marketing Board (Vict.) [1] where the tax held to be a duty of excise was a levy upon the producers of chicory of £1 for every half acre of land planted. The fee here is, however, plainly distinguishable from that levy, for the ratio decidendi of that case was that "the basis adopted for the levy has a natural, although not a necessary, relation to the quantity of the commodity produced", to quote the language of Dixon J. (as he then was) [2] . His Honour went on to say: - "By adopting area planted as the criterion of the amount of the levy upon each producer the board has taxed the production of the commodity as effectually as if it had selected, for instance, the weight of the chicory gathered in its raw state, the quantity treated or the gross returns. For it has placed upon an essential step in production, namely, planting, an impost computed quantitatively" [2] . The permit fee in question in the present case could not be similarly described for, to quote again what has already been cited from Hughes and Vale Pty. Ltd. v. State of New South Wales [3] , the tax is independent "of the weight or quantity of the commodities carried" [4] .

1. (1938) 60 C.L.R. 263. 2. (1938) 60 C.L.R., at p. 303. 3. (1938) 60 C.L.R., at p. 303. 4. (1953) 87 C.L.R. 49. 5. (1953) 87 C.L.R., at p. 75.

Support for the conclusion that if the permit fee under consideration had been imposed by the Act it would not be a duty of excise is to be found in the decision in Browns Transport Pty. Ltd. v. Kropp [5] for, in deciding that a fee fixed under s. 35 (2) (ii) of The State Transport Facilities Acts Q. was not a tax "upon" or "in respect of" or "in relation to" goods, the Court said: - "The person taxed is not taxed by reference to, or by reason of, any relation between himself and any commodity as producer, manufacturer, processor, seller or purchaser. The exaction is in truth, as it purports to be, simply a fee payable as a condition of a right to carry on a business" [6] . It was sought to distinguish that decision by pointing out that here Turner was not merely the carrier of the wool but that he was the producer of the wool which the vehicle was carrying. But, if attention is concentrated on the facts of the particular case, it is still clear that the fee in question was payable as a condition of a right to carry on that part of his business which consisted of carrying his goods upon the road. The distinction which was attempted therefore fails.

1. (1958) 100 C.L.R. 117. 2. (1958) 100 C.L.R., at pp. 129, 130.

The decision in this case, however, does not depend upon whether the facts are similar to those in Browns Transport Pty. Ltd. v. Kropp [1] . It is upon the legislation itself that attention must be focussed rather than upon the origin of the wool which Turner intended to, and did, carry. What the legislation does is to prohibit, subject to exceptions, any carriage of goods without a permit and it provides three classes of permit (see s. 39 (1) (a) (b) and (c)). It is because he fell within (c) that Turner was entitled to a permit upon conditions including the payment of a fee and he fell within (c), not because he wanted to carry wool which he had produced upon a vehicle of which he was the owner but because he wanted to carry wool belonging to him on that vehicle; not because he wanted to carry the wool to market but because he wanted to carry the wool on a Queensland road. If there were a law imposing liability to pay fees for permits to carry a person's own goods upon his own vehicle without more, it could not be said that the criterion of liability is "the taking of a step in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer", to adopt the formulation which Kitto J. made in Dennis Hotels Pty. Ltd. v. Victoria [2] , which was based upon what Dixon J. (as he then was) said in Matthews v. Chicory Marketing Board (Vict.) [3] , viz. "The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce" [4] , and upon what Dixon C.J. said in the passage already quoted from Hughes and Vale Pty. Ltd. v. State of New South Wales [5] .

1. (1958) 100 C.L.R. 117. 2. (1960) 104 C.L.R. 529, at p. 559. 3. (1938) 60 C.L.R. 263. 4. (1938) 60 C.L.R., at p. 304. 5. (1953) 87 C.L.R., at p. 75.

Mr. Matthews, in the course of his forceful arguments for the appellants Bolton and South Queensland Transport Pty. Ltd., made two submissions to which we think we should refer. Firstly, he used the Commissioner's directive to which reference has already been made in an attempt to show that among the permit fees to be collected there were some that should be regarded as "in relation to" goods to reinforce his argument that the fee here in question should be so regarded perhaps by an application of the maxim noscitur a sociis. It is not necessary to examine the details of this argument for we do not think that the directive can be used as an illuminating commentary upon the Act. In treating the part of the directive which relates to fees for permits for vehicles to carry wool as having the character of subordinate legislation in order to examine the contention that a fee calculated in accordance with the directive is a duty of excise, we certainly have not erred on the side of attributing too little weight to the directive. In the second place, he pointed out that the permit fees charged under the Act are in addition to contribution under The Roads (Contribution to Maintenance) Act of 1957 and fees charged under The State Transport Facilities Acts, neither of which, he contended, was a duty of excise but each of which, he pointed out, was different from the permit fees charged under the Act. As to this, all that it is necessary to say is that the existence of other charges throws no light upon the character of the permit fees here under consideration.

The attacks upon the convictions on the ground that the permit fee for which Turner refused to pay was a duty of excise accordingly fail.

For Turner it was also contended that the double fee which he was ordered to pay pursuant to s. 52 of the Act was a duty of excise because the basis of liability was that he had carried wool which was in fact twenty-one bales of his own production. This contention does not, however, raise a constitutional question different from that which we have already decided in relation to permit fees under s. 44.

We can dispose shortly of the argument that The Transport Laws Validation Act of 1962 does not validate the Act by referring to Kropp v. Cobb & Co. [1] in which it was decided that the Act had validating effect and by observing that nothing has emerged to require reconsideration of that decision.