Deputy Federal Commissioner of Taxation v W R Moran Pty Ltd [1939] HCA 27

Deputy Federal Commissioner of Taxation v W R Moran Pty Ltd [1939] HCA 27 - HCA 1939 case summary — Zoe

[62]

Parliaments of the various States, e.g., the Flour Tax Relief Act 1938 (Tas.). It is significant that all these statutes came into force nthe same day. The scheme involves: (a) an excise duty which criminates between States by reason of sec. 14 of the Wheat Industry Assistance Act; (b) bounties under sec. 6 of that Act, which are not uniform by reason of sec. 10 of the Act; and (c) grants under sec. 7 of the Act, which are not valid under sec. 96 of the Constitution because a Minister and not the Parliament determines the amount and conditions of the grants. Although it may have been the intention to assist wheat growers, the validity of the tax upon flour is disputed because the way in which it is levied d appropriated is not in accordance with the Constitution. The eme offends against secs. 51 (ii.), 96 and 99 of the Constitution. Having regard to the fact that it is a wheat tax, and also to the that the whole object of the legislation is to produce a home consumption price for wheat, what is proposed is a bounty to wheat growers raised by an excise tax which discriminates, and the bounty is not, by reason of sec. 10 of the Wheat Industry Assistance Act, uniform throughout the Commonwealth. Discrimination brought about by means of a scheme involving a number of Acts is just as bad as if the discrimination were brought about by one Act only. For the purpose of determining the effect and validity of the Wheat Industry Assistance Act, and particularly sec. 14, the court is entitled "to have regard to the proceedings of the conference referred to in the preamble to that Act (Attorney-General for Alberta v. Attorney- eral for Canada (1) ). Although the Wheat Industry Assistance Act refers in secs. 6 and 14 to " grants of financial assistance," the various Acts must be examined in order to ascertain their " pith nd substance " or " true nature and character " (Shannon v. Lower Mainland Dairy Products Board (2); Attorney-General for Alberta v. Attorney-General for Canada (3); Hammer v. Dagenhart (4) ) and. "the real object of arming the Minister with the power" (James v. Cowan (5)) of making grants to Tasmania under sec. 14 of the Wheat Industry Assistance Act. In making that examination regard

[140]

where Isaacs J. (2) described the same objection as "a cardinal error," saying that the Privy Council "had for ever settled th question in Powell v. Apollo Candle Co." (3). Accordingly, my opinion, this objection fails. I have not referred to some arguments which were addressed to the court with respect to the admissibility of certain evidence, have said that the reference in the preamble of the Wheat Ind Assistance Act to the conference of Premiers made the report of proceedings at that conference admissible. But I do not think this fact is important in the present case. Federal and State legis lation passed after the conference very plainly carries out the genet scheme which the conference desired. But this circumsta appears to me to be irrelevant. If the statutes carry out the schem their validity is determined by what they in fact do and the p arranged scheme is irrelevant. If the statutes do not carry out the scheme, their validity is still determined by what the statutes - in fact do and again the scheme is irrelevant. Evidence was tendered - of statements by the Treasurer of the Commonwealth contained in - minutes approved by him as to the basis of the grants to Tasmania. - These minutes show that the Treasurer was carrying out the scheme according to its intention, but the validity of the statute under which he acted could not be affected by what the Treasurer purported to do under the statute, if what he did was not authorized by the statute. If what he did was authorized by the statute, then the question is whether a statute conferring such authority is valid. Thus this evidence also does not appear to me to be important. I do, however, agree that, where the question of the validity of a statute is raised, a declaration by parliament as to the character of © the statute cannot be accepted by a court as conclusive in relation to the question of validity. There is ample authority for this state- ment in decisions of the Privy Council. See Shannon v. Lower Main- land Dairy Products Board (4), citing Gallagher v. Lynn (5): In the case of a parliament of limited powers " the legislation must not under the guise of dealing with one matter in fact encroach upon -

[155]

Wheat Products Prices Act 1938 (2 Geo. VI. No. 39) which provided for the regulation of the prices of flour and other products of wheat and the Flour Tax Relief Act 1938 (2 Geo. VI. No. 40) which provided for the relief of persons paying flour tax on flour for consumption n or imported into Tasmania. 4 The Flour Tax (Stocks) Act 1938 imposed a tax upon all flour in 'excess of one thousand pounds in weight held in stock on 5th December 1938 by any person not the manufacturer of that flour. The rate of tax, not in any case exceeding £7 10s. per ton of flour, such rate per ton of flour as the Minister in accordance with a mmendation by the committee (the Wheat Stabilization Advisory Committee constituted under the Wheat Industry Assistance Act 1938, No. 53), declares to be the amount by which the price per ton of flour based upon the price of wheat per bushel free on rails at 'Williamstown in the State of Victoria at the time of the reeommenda- tion of the committee was less than what in the opinion of the ommittee the price of flour would be if the price of wheat per bushel free on rails at Williamstown were five shillings and two pence. This form of imposing taxation was bad, so it was contended, ause the Parliament could not confer upon or delegate to any executive authority the function of determining the rate of tax. But this contention has many times been considered in this court and always rejected for reasons that are stated in the cases of Victorian Stevedoring and General Contracting Co. Ltd. and Meakes v. Dignan (1): See also Roche v. Kronheimer (2) and Crowe v. The Commonwealth (3). _ The preamble, already mentioned, was referred to in support of an argument to the effect that the flour taxes were imposed to provide financial assistance to the States and to ensure wheat growers a ayable price for wheat, but that the Parliament had not granted h financial assistance. The argument was based upon the Constitution, sec. 96, which enacts that Parliament may grant financial assistance to any State on such terms and conditions as he Parliament thinks fit. The Wheat Industry Assistance Act 1938,

[201]

H.C. or A. entitled to take out this last weapon from our armoury " a Carter v. Carter Coal Co. (1). Dervty I shall, however, do no harm in this particular case in expre FEDERAL ti Commis. my opinion that the Commonwealth Acts do not contravene a Tescuee Provision of the Constitution. The court cannot concern (Ws al ) with the motives of the Parliaments. All it can rightly do is W.R. Monax inquire whether the means devised by the Parliaments in the execu Pry, Lrv. g fie ajven ; tion of their powers are prohibited by the Constitution. It is on the face of the various Acts already mentioned and is expli recited in the preamble to the Wheat Industry Assistance Act 193 No. 53, that the Commonwealth and the States were co-operatin g in a scheme to ensure wheat growers a payable price for wheat The legislative bodies of the Commonwealth and the States each entitled to use to the full the powers vested in them for t purpose of carrying out the scheme. Co-operation on the part of the Commonwealth and the States may well achieve objects 1) : neither alone could achieve ; that is often the end and the advanta; of co-operation. The court can and ought to do no more inquire whether anything has been done that is beyond power is forbidden by the Constitution. The main feature of the scheme to ensure wheat growers a payable price for their wheat has not been attacked. It is contended, how- ever, that the provisions of secs. 6 and 10 of the Wheat Industry Assistance Act 1938, No. 53, involve a bounty on the production or export of goods that is not uniform throughout the Commonwealth. The argument, if sound, would not, in my opinion, destroy the taxi Acts for reasons already given. But sec. 6 grants no bounties : grants financial assistance to the States upon condition that the - amount granted is distributed to wheat growers in manner provided by the section. Even if the same result might have been achie ; by the grant of bounties, still the Parliament did not resort to method but to another authorized and not forbidden by the Con- stitution. The lack of substance in the contention is accentuate when it was suggested that uniformity is lacking in the grant of so-called bounties because the Parliament might under sec. 10° suspend financial assistance to any State in certain events. But -

[377]

Tixatee A Similar rule applies although no executive action is involved or (N.S.W.) questioned. The issue may be whether legislation which at first vas date sight appears to conform to constitutional requirements is colourable

or disguised. In such cases the court may have to look behind names, forms and appearances to determine whether or not the legislation is colourable or disguised. This is a fundamental principle applicable to the Constitutions of the United States and Canada as well as to that of the Commonwealth. As Lord Maugham said recently : " It is not competent either for the Dominion or a Province under the guise, or the pretence, or in the form of an exercise of its own powers, to carry out an object which is beyond its powers and a trespass on the exclusive powers of the other " (Attorney-General for Alberta v. Attorney-General for Canada (2) ). The same principle is also applicable to constitutional guarantees or prohibitions such as those contained in sec. 51 (ii) and sec. 92 (to take two examples only) of the Commonwealth Constitution. Sec. 51 (ii.) proclaims that the great power of taxation, if exercised, must be exercised "'so as not to" create a described condition of affairs. If that condition may be produced in various ways and by devious methods, it may become the duty of the court to examine closely whether the legislature has deliberately set out to produce the forbidden result although by a somewhat indirect method. In principle there is no reason whatever why public announcements of governmental policy, official governmental records and communica- tions, and even the records of the proceedings in parliament, including records of debates, must necessarily be excluded from the field of relevant evidence. In special circumstances, some of this material may afford strong, even conclusive, evidence as to the scheme, object or purpose of the statute, although, as has been said: " Generally speaking," however, "the speeches of individuals" (in the legislature) " would have little evidential weight " (3). A valuable

At a glance

Court

Decision date

Before

Source

Judgment (492 paragraphs)