High Court of Australia|1907-06-28|Before: Higgins JJ

For the reasons above given I think this appeal must be dismissed.

The decision of the Supreme Court in this case rests upon the ground that the provisions of the Queensland Income Tax Acts under consideration are not repugnant to any Imperial Statute. In the view that I take of the matter in controversy it is not essential to deal with that ground. The rights of the parties really depend upon the construction to be placed on sec. 17 of the Queensland Constitution Act 1867.

It is admitted that, but for that section, the appellant would be liable in this action. But it is contended that that section confers on the Chief Justice a right to have the full amount of statutory salary paid to him without diminution by any act of the Government, whether the diminution is by way of deduction before the salary is paid over, or by way of taxation on income received after it has been paid over, and that the imposition of the tax claimed is in violation of that right, and therefore invalid.

The contention on behalf of the Commissioner is that the imposition of income tax on the appellant, in common with other citizens, in respect of his judicial salary does not infringe any rights conferred by sec. 17 of the Constitution, and that even if the exercise of the rights of the Government under the Income Tax Acts is inconsistent with the exercise of those of the appellant under sec. 17 of the Constitution Act, the latter, being the earlier Act, must be taken to have been repealed by the former to the extent of the inconsistency. These different contentions resolve themselves into two main questions: First, what is the true construction of sec. 17 of the Constitution Act? Secondly, can legislation inconsistent with any portion of that Act be passed by the Queensland Parliament until after the enactment of a measure expressly intended to repeal that portion? I propose to deal with these questions in the order in which I have stated them.

There is no difference in the rules to be applied in the interpretation of a Constitution Act and in the interpretation of any other Statute. The object of the Court must always be to ascertain the intention of the legislature from the language it has used. Where the language is ambiguous the Court may be aided by a consideration of the other sections of the Statute, its scope and purpose as a whole, the subject matter, and the condition of the law before it was passed. But where the language used is unambiguous the rule to be applied is that stated by Lord Chief Justice Tindal in the Sussex Peerage Case[2] as follows: - "My Lords, the only rule for the construction of Acts of Parliament is, that they should be construed according to the intent of the Parliament which passed the Act. If the words of the Statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themselves alone do, in such case, best declare the intention of the law giver."

I proceed at once to apply these principles to the interpretation of the section under consideration, sec. 17 of the Queensland Constitution Act 1867 (31 Vict. No. 38), which is as follows: - "Such salaries as are settled upon the Judges for the time being by Act of Parliament or otherwise and all such salaries as shall or may be in future granted by Her Majesty her heirs and successors or otherwise to any future Judge or Judges of the said Supreme Court shall in all time coming be paid and payable to every such Judge and Judges for the time being so long as the patents or commissions of them or any of them respectively shall continue and remain in force."

The Supreme Court Act 1867, assented to on the same date as the Constitution Act, consolidated the previous Statutes and reconstituted the Court. Sec. 14, amended as to the amount of the Chief Justice's salary by the Chief Justice's Salary Act 1900, fixes the salaries of the Chief Justice and Judges, but does not authorize the appropriation of the amount from the public moneys. A later Act, the Supreme Court Act 1874, by sec. 6 expressly directs that the salaries and pensions payable to the Judges of the Supreme Court "shall be charged on and paid out of the Consolidated Revenue Fund of Queensland." But in 1867 the only appropriation of Judges' salaries was by sec. 10 of the Supreme Court Act and sec. 17 of the Constitution Act, which are in terms identical. But for the words of appropriation in these Statutes it would be necessary for Parliament in each year to authorize the payment out of public funds of public moneys for these purposes. Thus, in the light of the Act re-establishing the Supreme Court under the Constitution Act 1867, we may now examine the provisions of sec. 17 of the Constitution itself. Applying the test suggested by Tindal C.J. in the passage above quoted, the words used by the legislature appear to me to be in themselves precise and unambiguous, and we have therefore only to inquire what is the meaning of these words taken in their natural and ordinary sense. The first inquiry is, what rights does the section secure, taking its words in their natural and ordinary meaning? It secures to each Judge, firstly, that the salary attached to his office when his commission was issued shall be paid to him undiminished in amount so long as his commission continues in force; secondly, that the money necessary to meet the payments as they arise is permanently appropriated from the public funds, and will be paid without the necessity for further parliamentary discussion or action. The obligation is imposed by the section on the Government that they shall pay and continue to pay to the Judge the salary fixed by Statute at the time when his commission issues so long as the commission is in force.

The section imposes no other obligations on the Government.

One contention on the part of the appellant is that the tax amounts to a diminution of salary, and that, although the diminution takes place after the salary has been paid, the effect is that he receives less than the statutory amount. Assuming it is so, that is no infringement of the right which the Constitution has given, because the full amount of statutory salary has been paid him by the Government in each year. It is clear that there has been no failure on the part of the Government to perform their obligations under the Constitution if the words of sec. 17 are to be taken in their ordinary sense.

The appellant's case cannot be based upon any failure of that obligation. The real meaning of the contention is that the appellant is not only entitled to be paid the full amount of his statutory salary, but that when it is paid he cannot be taxed in respect of it, even although the tax is imposed under a general law affecting every person in receipt of a certain income. In other words, that a Judge of the Supreme Court is entitled to have his salary exempted from any general scheme of taxation of incomes.

Now, as I have pointed out, if the language of the section is to be taken in its natural and ordinary sense, no such right is conferred. But it is said that, having regard to the necessity of preserving the independence of the Judges and the course of legislation which has secured that independence, the section must be read as conferring the right claimed. My examination of the authorities and the history of the legislation in question has led me to the contrary conclusion, and has satisfied me that the words of the Constitution are incapable of being construed in any other way than as enacting that the independence of the Supreme Court Judge in regard to his remuneration was intended to be secured only by conferring on him the right to be paid the statutory salary attached to the office at the time when the commission was issued to him so long as the commission should remain in force.

The legislative history of the provision in question is well known. The independent position which the Judges now enjoy under the British Constitution first acquired statutory security by the provisions of the Act of Settlement. The Statute 1 Geo. III. c. 23 was the first enactment which made those provisions effective. The preamble recites as follows the safeguards to be established and maintained: - "Where as by an Act passed in the twelfth and thirteenth years of the reign of His Late Majesty King William the Third, intituled, An Act for the further limitation of the Crown, and better securing the rights and liberties of the subject; it was enacted, that after the limitation of the Crown thereby made should take effect, Judges commissions be made quam diu se bene gesserint, and their salaries ascertained and established; but upon the address of both Houses of Parliament, it might be lawful to remove them."

Of these three safeguards we are concerned with one only in this case, that by which the Judges' salaries "are ascertained and established," and in reference to that the Preamble, after referring to other provisions, recites: - "And Your Majesty has also desired your faithful Commons that you may be enabled to secure the salaries of the Judges during the continuance of their commissions."

The securing of the salaries of the Judges during the continuance of their commissions is effected by sec. 3, the terms of which have been followed in identical language by every enactment passed since then in England for securing the salaries of Judges placed in the position of independence guaranteed by the Act of Settlement. Sec. 17 of the Queensland Act 1867 is an exact reproduction of that section.

Such being the terms in which the salaries of the Judges in England were secured, it is important to note that the English Income Tax Act 1842 by Schedule E, Rule 3, not only expressly renders the holders of all judicial offices liable to income tax on their salaries, but enables the Government to deduct from the salary before paying it over any sums which may be due for unpaid income tax. In 1855 the British Parliament passed the Act of 18 & 19 Vict. c. 54 which authorized Her Majesty to erect Queensland into a separate Colony and to establish its Constitution by Her Letters Patent and Order in Council. In 1859 Letters Patent and an Order in Council were issued by Her Majesty erecting the Colony and establishing its Constitution.

It must, I think, be assumed that at that date the British Parliament deemed that the provisions of sec. 3 of 1 Geo. III. c. 23 were a sufficient safeguard of the independence of English Judges in regard to remuneration, although the English Income Tax Acts had for some years expressly enacted that their salaries were to be liable to taxation just as the salaries of other citizens were liable. In providing for the independence of the Supreme Court Judges the Order in Council by clause xvi. secures their salaries in terms identical with those used in sec. 3 of 1 Geo. III. c. 23, and also with the section of the New South Wales Constitution then in force on the same subject. When in substitution for the Order in Council of 1859 the Queensland Parliament passed the Constitution Act 1867 establishing its own Constitution, it adopted in sec. 17 verbatim the provisions of clause xvi. of the Order in Council.

Such being the history of clause 17 of the Constitution, it is difficult to conceive that Her Majesty in Council, while adopting the identical language of the Statute by which the independence of English Judges as to remuneration was then secured, intended to confer on the Judges of the Queensland Supreme Court an immunity from taxation which the British Parliament at that time did not consider necessary in the case of English Judges.

Nor is there anything in the history of the Queensland Constitution Act 1867, or in the terms of its other provisions, to indicate that the legislature, although adopting verbatim the language of clause xvi. of the Order in Council, intended to confer upon the Judges of the Supreme Court a security for their salaries beyond that contained in the words of the clause interpreting these words in their natural and ordinary sense.

I am therefore of opinion that sec. 17 does not confer upon a Judge of the Supreme Court of Queensland the exemption from income tax that has been claimed. Being of opinion, therefore, that the only right given to a Judge of the Supreme Court under sec. 17 is to have his salary as fixed by Statute at the time of the issue of his commission paid to him during the continuance of his commission, and that the collection by the Government of income tax on the salary after it has been paid to the Judge is not a violation of that right, I have arrived at the conclusion that the appeal must be dismissed.

Holding that view, it is not essential for the determination of the rights of the parties in this case to express any opinion upon the contention that the appellant cannot, even if his case comes within sec. 17 of the Constitution, rely upon its provisions because it has been impliedly repealed by the Income Tax Acts. But, as the question is one of far-reaching importance, I think it right to state my view of the law.

For this purpose I shall assume that sec. 17 does give a Judge of the Supreme Court the right of exemption from the provisions of a general income tax on the ground that the payment of the tax would amount to a reduction of his statutory salary. It is not contended that there has been any amendment of the Constitution Act 1867 in this respect, unless it is to be taken that sec. 17 has been impliedly repealed by the Income Tax Acts of 1902-4 and the Income Tax Declaratory Act 1905. The opposing views may be thus summarized: -

Mr. Lilley properly admits that it would be open to the Queensland legislature to repeal sec. 17 by an Act amending the Constitution, and that, if that were done, there would be nothing to prevent the Income Tax Acts from applying to the Judges of the Supreme Court as to other citizens. But he contends that, while sec. 17 stands as part of the Constitution, no law can be initiated which contravenes its provisions. Mr. Lukin's argument, on the other hand, is that the Constitution Act 1867 stands in precisely the same position as any other Act of the Queensland legislature; that the Parliament which passed it could not bind succeeding Parliaments as to the mode of repealing or altering it; and that any subsequent Parliament is at liberty, if it thinks fit, to repeal or alter it by implication, that is, by passing another law inconsistent with its provisions.

The whole controversy really turns on the question whether the Constitution Act 1867 does stand in the same position as any other Act of the Queensland legislature, or whether it is in reality a fundamental law which, although capable of being amended by that legislature, binds it until amended, just as a Constitution embodied in an Imperial Act would bind it. The primary object of the 18 & 19 Vict. c. 54, which first authorized the granting of a Constitution to Queensland, was to enact the Constitution for New South Wales embodied in the First Schedule. The territory afterwards established as the Colony of Queensland was then a part of New South Wales. Sec. 7 enabled Her Majesty to separate that territory, erect it into a separate Colony, and establish its Constitution by Letters Patent and Orders in Council, it being directed that the legislature was to be established "in manner as nearly resembling the form of Government and legislature which shall at such time be established in New South Wales as the circumstances of such Colony (Queensland) will allow," &c. The Order in Council of 1859, established the Constitution of Queensland accordingly, partly by its own express provisions, and partly incorporating by reference various Imperial and New South Wales Statutes. The Constitution so established was undoubtedly a fundamental law, and binding on the Queensland Parliament created under it in the same way as a Constitution embodied in an Imperial Act would have been binding, subject only to the powers of repeal and alteration contained in clause xxii. to which I shall refer later on. So fully was this recognized by the British Parliament that when, later, doubts were raised as to the validity of laws passed by the Queensland Parliament by reason of the Order in Council not having established a legislature in the form by the 18 & 19 Vict. c. 54 directed, it was found necessary to validate and declare effectual the Orders in Council and the laws passed by the Queensland legislature thereunder by an Act of the Imperial Parliament, the 24 & 25 Vict. c. 44. The Order in Council, by clause xxii., declares that the legislature of Queensland to be established under the Order "shall have full power and authority from time to time to make laws altering and repealing all or any of the provisions of this Order in Council in the same manner as any other laws for the good government of the Colony," &c. The rest of the sentence does not affect the matter now under consideration.

The question at once arises, what was the power and scope of legislation permitted to the Queensland Parliament under that clause? It was no doubt open to that legislature to repeal or amend any or all of the provisions of the Order in Council. But the whole scope and purpose of the Order indicate that it was never intended to authorize the entire abolition of any binding form of Constitution or the entire disregard of its provisions. At the time when the Order was issued the other Colonies of Australia were governed under Constitutions conferred by Acts of the Imperial Parliament, which were fundamental laws binding on the Parliaments created under their provisions. There is nothing in the Statute authorizing the Order in Council, nor in the Order itself, nor in its history, to indicate that it was intended to place the Queensland Parliament in a different position; to give it liberty at its own will to treat its Constitution as non-existent. The power given under clause xxii. of the Order was, in my opinion, not a power to abolish the Constitution altogether, nor to substitute for the Constitution under the Order a body of provisions which, although embodied in a Constitution Act, gave no rights and no security whatever either in respect of forms of Government or legislative bodies or officers. It was a power to substitute for the fundamental law of the Constitution under the Order in Council another fundamental law in the form of a Constitution in whole or in part of Queensland's own making, and which, when made and while it existed, would be as binding on the Queensland Parliament as the original Constitution under the Order. The Constitution Act 1867 was the exercise by Queensland of these powers. On the face of it, it is a consolidation of laws relating to the Constitution. It purports to preserve and protect rights of Judges and other officers of the Government. It deals comprehensively with the whole ground generally covered by a Parliamentary Constitution, and, under the circumstances, it must be taken to be the fundamental law under the Order in Council. Its authority can be found nowhere but in the Act of 18 & 19 Vict. c. 54, under which the establishment of the Queensland Constitution was originally authorized.

Whether the validity of a law passed by a colonial legislature, and assented to by the Governor, can be questioned on any other grounds than those mentioned in the Colonial Laws Validity Act 1865 it is unnecessary at present to inquire, because the Constitution Act 1867 having been, as I have pointed out, enacted by virtue of an order in Council issued under an Imperial Act extending to the Colony of Queensland, clearly comes within the express provisions of sec. 2. It follows that a law of the Queensland Parliament which is repugnant to any provision of the Queensland Constitution Act 1867 is, by virtue of the Colonial Laws Validity Act 1865, void and inoperative. Assuming, therefore, that sec. 17 of the Constitution gives to the Supreme Court Judge immunity from taxation in respect of his salary, the provisions of the Income Tax Acts which purport to tax that salary must be invalid, as being contrary to that section of the Constitution which then stood and still stands unrepealed.

The position generally may be thus stated. The Queensland Parliament may repeal or alter any portion of its Constitution, and when the repeal or alteration has taken effect, that portion is as if it never had been. But so long as it exists no Act conflicting with it can be passed. In other words, before an Act can be passed taking away any right given by the Constitution, the Queensland Parliament must first repeal the portion of the Constitution which gives the right.

I wish to express my entire concurrence on all grounds in the judgment of my learned brother the Chief Justice which I have had the opportunity of reading.

I have had the opportunity of reading the judgment of the learned Chief Justice, and I agree with the reasons there stated, and have nothing further to add.

I also think that the appeal should be dismissed. The appellant, by refusing to pay income tax, has usefully brought before this Court, for further definition, a principle of the greatest importance - a principle which has materially conduced to the independence and purity of British Courts, to the confidence of the public in these Courts, and thereby to the order and peace of the British dominions. Owing to this principle, as embodied in the Act of Settlement and subsequent Acts, the Judges of British Courts have been able to say to those who are in places of power and influence, as executive ministers or otherwise.

We

... Neither beg nor fear

Your favours nor your hate.

The question here is, does that principle, under the Constitution of Queensland, extend so far as to exempt a Justice of the Supreme Court of Queensland from liability to pay income tax in respect of his official salary; or rather, so far as to enable him to exclude his official salary from his statement of the income on which he is to pay tax. This question is to be faced on considerations quite different from those discussed in Deakin v. Webb[3] and in Webb v. Outtrim[4] as to the salary of federal officers. In the case of a State taxing the income of a federal officer, there is, or may be, a clashing of what may be called, though not quite accurately, two sovereignties. The view of the High Court, as stated in Deakin v. Webb[5], is that the recompense of a federal officer is not to be lessened, nor the full exercise of the executive or judicial power of the Commonwealth interfered with, except by that power - the federal power - from which the officer derives his appointment. Whatever may be our views as to the decision in Deakin v. Webb[6], or as to the effect of the more recent decision of the King in Council in Webb v. Outtrim[7], in this case there is no such conflict of State power with federal power. Here it is the Queensland legislature which purports to exact from its State Judges income tax, according to the same scale as from every other citizen. The question is, does the Queensland Constitution forbid such taxation on the official salary of the State Judges? In the first place, I entertain no doubt, notwithstanding the ingenious argument of counsel for the appellant, that the Queensland legislature, by the Income Tax Act Amendment Act 1904, intended to tax the Judges (see Income Tax Act 1902, sec. 3, "income derived from personal exertion," secs. 7, 12, 58). In sec. 12, there is an express exemption of the Governor "in respect of the emolument of his office as Governor"; and there is no such exemption provided for the official emolument of Judges. In sec. 58, it is provided that no Judge shall on account of his liability to tax under this Act be debarred from dealing with any matter upon which he may be called upon to adjudicate under this Act. Moreover, if any doubt could linger after such provisions, that doubt is, in my opinion, absolutely settled by the declaratory Act of 1905 (No. 34 of 5 Edw. VII.). For in this Act it is declared that each of the persons for the time being holding the office of Chief Justice is and always has been chargeable with, and liable to pay, income tax in respect of his official salary. But the question remains, does the Queensland Constitution, as distinguished from the Queensland Acts of Parliament, forbid the levying of such a tax on the Judges? As usually happens in constitutional cases, the controversy has raised a great number of curious and delicate points, but in the end the issue is reduced to a very narrow compass, and here it is as to the meaning of sec. 17 of the Constitution Act 1867. I assume, in favour of the appellant, that this Act, and particularly this section, were authorized by the Imperial Act 18 & 19 Vict. c. 54, sec. 7, and by the Order in Council thereunder of the 6th June 1859. I assume also that, notwithstanding the exceptionally wide and very peculiar powers contained in par. xxii. of the Order in Council, of altering the Constitution, the legislature of Queensland has no power to pass a law forbidden by the Constitution as it stands, unless and until the Constitution has been definitely so altered, with His Majesty's consent, as to give the legislature power to pass such a law. I understand that it is the particular desire of the appellant to test the power of legislating in defiance of the Constitution, to test the validity of the declaratory Act of 1905 on the assumption that it is in violation of the Constitution. But it is not necessary for the purpose of the decision in this case to decide such a point, for, in my opinion, the declaratory Act of 1905 is not in violation of the Constitution. The point may never come for decision; but, if it should, it will be well if it can be approached as a fresh subject uninfluenced by any expressions of opinion made in a case that has been solved on other and narrower grounds. I do not think that the mind bestows the same searching scrutiny on a point which is not necessary for a decision as on a point which is necessary. I confine my decision to sec. 17 of the Constitution. When the Constitution says that the salary shall in all time coming be paid and payable to every such Judge and Judges for the time being so long as the patents or commissions for them or for any of them respectively shall continue and remain in force, does it involve the proposition that the Judges shall not be liable to any taxation in respect of their salaries as Judges? Does this provision for payment in full of the salary involve, by necessary implication, that the legislature is prohibited also from compelling an increase of the expenditure of the Judges? The question really carries its own answer on its face. The protection of the Constitution extends only up to the time that the money gets into the possession of the Judge. The money must get there; but there is nothing said as to what may happen afterwards. In this case, the salary for 1905, which is the basis of assessment, has in fact been received in full by the appellant; and, in my opinion, this satisfies the requirements of the Constitution. It is urged that if the Commissioner's view is right there will be nothing to hinder the Crown from deducting the income tax from the salary before payment. But this result by no means follows. In England there is an express power to make such a deduction (5 & 6 Vict. c. 35, sec. 146, Schedule E. Rule 3). At all events, the difficulty has not yet arisen, for the salary has been paid in full. For my part, I am at present strongly inclined to think - and I state my present opinion because it confirms me in my view of the main question - that the income tax cannot be so deducted before payment of the salary, and that a Queensland Act providing for such a deduction would, in the present state of the Constitution, be ultra vires and void. The Constitution provides that the salary shall be "paid and payable"; and, in my opinion, nothing that will not support a plea of payment will be a sufficient answer to a Judge's claim for salary. Even if the income tax were made payable before or on the same day as the Judge received his salary, I think that the Crown could not refuse to pay the salary on the ground that it has a set-off. Where has the right to set-off been given? At common law, a defendant, who had a cross claim, had to bring a cross action. The right to set-off is purely statutory (2 Geo. II. c. 22, sec. 13): Liskeard and Looe Railway Co. v. Liskeard and Caradon Railway Co.[8]. A fortiori, a counterclaim cannot be used so as to enable the Crown to escape payment. But the protection of the Constitution does not go farther than actual payment; and we have no right to give a meaning to the words of the Constitution which the words do not bear in themselves, on the grounds urged by counsel - that, without further protection, the independence of the Judges has not been secured by the Constitution against all possible risks. That is a matter for the framers of the Constitution. It has to be remembered that the protection given, according to our construction, extends as far as that given to the English Judges; and it is in most, if not all, of the States, stronger in quality, by virtue of the sections forming part of a written Constitution, a fundamental law. The sections of the Queensland Constitution, secs. 16-18, follow almost verbatim the words of the English Act 1 Geo. III. c. 23. The British Parliament has uncontrolled power to alter that Act at its will, but it has never been altered; and yet the words in that Act have not prevented the English Parliament from making the Judges as well as others liable to income tax. The British Income Tax Act 1842 makes the Judges liable to the same income tax as other citizens; and, as I have said, it specifically enables the tax to be deducted from their salaries. Perhaps it is not an unfair inference that the Queensland legislature, in adopting the Queensland Constitution in 1867, and the Privy Council in framing the Order in Council in 1859, did not, in using the same words as the Act 1 Geo. III. c. 23, intend to give the Queensland Judges an immunity from a tax to which the English Judges were already subject. The same Act (1 Geo. III. c. 23) has been embodied in most, if not all of the Constitutions of the Australian Colonies; and there is no instance on record of a Judge in Australasia having escaped the payment of an income tax by reason of those words in the Constitution. I am, therefore, of opinion that both questions in this special case should be answered in the affirmative; and as to the amount of income tax to be paid there is no contest.

Solicitors, for appellant, Macpherson, Green & Macpherson.

Solicitor, for respondent, Hellicar (Crown Solicitor).

[1] (1907) A.C., 81, at p. 88; 4 C.L.R., 356, at p. 358.

[3] [1904] HCA 57; 1 C.L.R., 585.

[4] (1907) A.C., 81; 4 C.L.R., 356.

[5] [1904] HCA 57; 1 C.L.R., 585, at pp. 613-615.

[6] [1904] HCA 57; 1 C.L.R., 585.

[7] (1907) A.C., 81; 4 C.L.R., 356.

Tax Declaratory Act 1905

Justice's Salary Act 1900

Laws Validity Act 1865

Cooper v Commissioner of Income Tax (Qld) [1907] HCA 27; (1907) 4 CLR 1304 (28 June 1907)

Cooper v Commissioner of Income Tax

At a glance

Court

Decision date

Before

Source

Judgment (39 paragraphs)

Parties

Legislation Cited (9)

Cases Cited (2)

Cooper v Commissioner of Income Tax (Qld) [1907] HCA 27; (1907) 4 CLR 1304 (28 June 1907)