Browns Transport Pty Ltd v Kropp; Downs Transport Pty Ltd v Kropp

Two actions were commenced in the Supreme Court of Queensland on 13th January 1958. The plaintiff in the one case is Browns Transport Pty. Ltd., a company incorporated in Queensland, and in the other is Downs Transport Pty. Ltd., which is also a company incorporated in Queensland. The defendant in each case is the Commissioner for Transport appointed under The State Transport Facilities Acts 1946 to 1955 Q.. In each case the plaintiff claimed relief in respect of the cancellation by the defendant of a licence, which had been issued to it under the Queensland statute, to carry goods by road for reward. The statement of claim in each case contained an allegation (the relevance of which is not obvious) that one of the conditions of the licence had the effect of imposing a duty or excise and was therefore void by reason of s. 90 of the Constitution. To this allegation the defendant demurred. Subsequently the Attorney-General of the State of Queensland applied to this Court for an order under s. 40 of the Judiciary Act 1903-1955 Cth., and on 21st April 1958 this Court made an order in each case "that so much of the cause be removed into the High Court of Australia as involves the question whether the levy made by or under condition 17 of the license issued under the provisions of The State Transport Facilities Acts 1946 to 1955 to the plaintiff amounts to an attempt to impose a duty of excise contrary to s. 90 of the Constitution ". Later the parties agreed on a special case to be stated in both cases for the opinion of the Full Court of this Court. It is this case stated that is now before this Court. The question asked by the case is "whether a levy made by or under condition 17 amounts to an attempt to impose a duty of excise contrary to the provisions of the Commonwealth Constitution".

The Queensland statute is a statute in pari materia with the State Transport (Co-ordination) Act N.S.W. and the Transport Regulation Act Vict., but it is framed on a slightly different scheme. Section 23, which is in Pt. III of the Act, prohibits generally the use of any vehicle at any time on any road for the carriage of passengers or goods unless those passengers or goods are being carried under and in accordance with a provision of Pt. III of the Act. Section 24 then sets out in numbered paragraphs a long list of vehicles which may be lawfully used in certain ways and for certain purposes. The only material paragraph is par. (25) which reads: - "Any vehicle approved for use in carrying on a licensed service at any time when such vehicle is carrying passengers, or goods, or both passengers and goods under and in accordance with the terms and conditions of the license for such service". -

Part IV of the Act deals with the licensing of vehicles for the carriage of goods or passengers or both. The Commissioner of Transport is given an absolute discretion as to the grant or refusal of licences, and (subject to regulations to be made under the Act) he may impose such conditions as he determines on the grant of a licence. Section 35 (1) provides that "a licensing fee of the amount or at the rate determined by the Commissioner shall be payable by every licensee". Section 35 (2) deals with the amount of the licensing fee. It is not necessary to set it out in full. It provides that the licensing fee "shall, in the discretion of the Commissioner, be (i) an amount fixed by the Commissioner, or (ii) an amount per centum as fixed by the Commissioner of the gross revenue derived from the licensed service, or (iii) the sum of the amounts fixed by the Commissioner for each and every vehicle used for the purpose of carrying on the licensed service," or an amount or amounts calculated on a passenger-mile or ton-mile basis. The commissioner may fix the total licensing fee payable by a licensee partly on one of the specified bases and partly on another.

Each of the plaintiffs is a company incorporated in Queensland, and carries on business in that State as a carrier of goods by road for reward. Each is (or was until the cancellation abovementioned) the holder of a licence under the Act authorising it to carry goods for reward to and from specified places in Queensland. The plaintiff Browns Transport Pty. Ltd. has (or had) held such a licence since 18th December 1956. The plaintiff Downs Transport Pty. Ltd. has (or had) held such a licence since 1st October 1948., Each licence is subject to a number of conditions, one of which provides for the licensing fee which is to be payable under s. 35 of the Act. The fee is fixed on the basis authorised by s. 35 (2) (ii). The relevant condition in the case of Browns Transport reads: - "The licensing fee payable in respect to this license shall be the amount of twenty per centum (20%) of the gross revenue derived by the licensee from carrying on the service authorised by this license, and such licensing fee shall be due and payable at the office of the Commissioner for Transport, Brisbane, in respect of each and every calender month not later than the 21st day of the calender month then next immediately following." The relevant condition in the case of Downs Transport is not in quite identical terms, but the percentage rate is the same and there is no material difference between the two conditions. It should be mentioned that the licences also contain conditions the general object of which is to prevent the licensee, where his service might compete with a railway, from charging lower freight rates than those charged by the railway.

The gross revenue of each plaintiff consists exclusively of freight charged by it to members of the public for the carriage of goods. Large sums have been paid by each plaintiff under the condition which imposes the licensing fee, the amount paid by each in the year 1957 being in the vicinity of £30,000. All fees paid by licensees are paid into the consolidated revenue of the State of Queensland and are not reserved or earmarked by law for any special purpose.

The case stated refers to a number of other matters, but these have not seemed to us to be relevant to the question at issue. That question is, as has been said, whether the imposition of licensing fees under s. 35 (2) (ii) in relation to a licence for the carriage of goods amounts to the imposition of a duty of excise within the meaning of s. 90 of the Constitution, which denies to the States the power to impose such duties. It seems obvious that, in the case of a licence to carry passengers, the imposition of a licence fee calculated in accordance with s. 35 (2) (ii) could not possibly be said to be the imposition of a duty of excise, but it is contended that a fee so calculated in the case of a licence to carry goods does amount to such a duty. This contention cannot, in our opinion, be supported.

The definition of a duty of excise propounded by Griffith C.J. in Peterswald v. Bartley [1] , has been found in several later cases to be somewhat too narrow. But the decision in that case has never been doubted, and it has never been doubted that the term "duties of excise" in s. 90 of the Constitution does not include many classes of impost which in England have been commonly described by that name: see, e.g., Matthews v. Chicory Marketing Board (Vict.) [1] , (per Latham C.J.), and see also the general discussion of the history and scope of the term by Dixon J. [2] in the same case. If an exaction is to be classed as a duty of excise, it must, of course, be a tax. Its essential distinguishing feature is that it is a tax imposed "upon" or "in respect of" or "in relation to" goods: Matthews v. Chicory Marketing Board (Vict.) [3] . It would perhaps be going too far to say that it is an essential element of a duty of excise that it should be an "indirect" tax. But a duty of excise will generally be an indirect tax, and, if a tax appears on its face to possess that character it will generally be because it is a tax upon goods rather than a tax upon persons. " a direct tax is one that is demanded from the very person who it is desired and intended should pay it. An indirect tax is one which is demanded from one person in the expectation and with the intention that he shall indemnify himself at the expense of another": Attorney-General for Manitoba v. Attorney-General for Canada [4] , per Lord Haldane [5] .

1. (1904) 1 C.L.R. at p. 509. 2. (1938) 60 C.L.R., at pp. 276, 277. 3. (1938) 60 C.L.R., at pp. 292-299. 4. (1938) 60 C.L.R. at p. 304. 5. (1925) A.C. 561. 6. (1925) A.C., at p. 566.

In the present case it is clear enough that the impost is a tax. "It is a compulsory exaction of money by a public authority for public purposes, enforceable at law, and is not a payment for services rendered": Matthews v. Chicory Marketing Board [6] As to whether it is a direct tax or an indirect tax, it is to be observed that no reason appears on the face of the Act or in the case stated for supposing that there was any expectation or intention that the licensee should indemnify himself at the expense of his customers. While the licensing fee would no doubt normally enter, like any other outgoing, into the calculation of fares and freights to be charged, this does not mean that it is expected to be "passed on" as such. But it is unnecessary to consider this matter, because whether it is expected to be "passed on" or not, it is very clear, in our opinion, that the tax is not a tax "upon" goods, or "in respect of" goods, or "in relation to" goods.

Here the exaction is imposed without mention of, and without regard to, any commodity or class of commodities. 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 taxes which s. 35 (2) authorises, calculated on one or more of a variety of bases, are payable whether the person taxed carries goods or passengers, and, if he carries goods, whatever may be the nature of the goods carried. 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. "A tax imposed upon a person filling a particular description or engaged in a given pursuit does not amount to an excise": Matthews v. Chicory Marketing Board [1] : cf. Parton v. Milk Board (Vict.) [2] .

1. (1938) 60 C.L.R., at p. 300. 2. (1949) 80 C.L.R., at p. 259.

The question asked by the case stated should be answered: - No.