Finemores Transport Pty Ltd v New South Wales

Finemores Transport Pty Ltd v New South Wales - [1978] HCA 16 - HCA 1978 case summary — Zoe

[49]

The plaintiff relies heavily on the decision in Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [10] to support its argument that s. 84G of the Act is invalid, at least in so far as it applies to the certificate of registration of a vehicle used exclusively in interstate trade. In Hughes and Vale Pty. Ltd. [No. 2], it will be recalled, two levies were imposed on the operation of (inter alia) interstate road transport; a ton-mile tax and an annual surcharge. The levy presently under consideration in so far as it applies to interstate trade and commerce is in my opinion indistinguishable from the annual surcharge imposed under the Motor Vehicles (Taxation) Act 1951 and the Motor Vehicles Taxation Management Act 1949 which was held invalid in Hughes and Vale Pty. Ltd. [No. 2]. The defendants take as one point of distinction between Hughes and Vale Pty. Ltd. [No. 2] and the present case the fact that the impost in the earlier case was an annual levy whereas in the present case the liability to stamp duty occurs only when registration is sought in a new name, usually on a change in ownership. This difference does not provide a sound basis for distinguishing Hughes and Vale Pty. Ltd. [No. 2] as there is no relevant legal difference in the burden which is imposed as a precondition to use of the motor vehicle only once in respect of each person in whose name it is registered and a burden which is recurrent annually thereafter. A tax of the kind dealt with in Hughes and Vale Pty. Ltd. [No. 2] could not be justified simply because it was not imposed annually but, say, only every third year. The infrequency of occurrence of the liability is not in point. The basic flaw in the stamp duty imposed in the present case is that liability to pay it is a precondition to use of a vehicle intended for exclusive use in interstate trade and commerce. The duty does not fall within the exceptions recognized by Dixon C.J., McTiernan and Webb JJ. in Hughes and Vale Pty. Ltd. [No. 2] [11] where their Honours pointed out that a charge imposed as a real attempt to fix a reasonable recompense or compensation for the use of the highway and for a contribution to the wear and tear which the vehicle may be expected to make will be sustained in conformity with the freedom s. 92 confers. Their Honours went on to discuss the possibility that the tax might be justified on the ground that it was not a charge upon the commercial use of vehicles at all; that it was no more than a tax on the mere ownership of motor vehicles, a tax based on property as such. As to this, their Honours said [12] :

[60]

I find myself compelled by authority, of which no review has been sought, to conclude that the stamp duty purported to be charged under s. 84G of the Stamp Duties Act on any certificate of registration of a motor vehicle pursuant to a new registration or transfer of registration cannot validly be so charged where the vehicle is used or intended to be used solely in the course of and for the purposes of interstate trade and commerce. Registration of a motor vehicle is a condition precedent to use of that vehicle on the roads of the State. A certificate of registration issues pursuant to the Motor Traffic Act and regulations as an inevitable consequence of registration. Its coming into existence is merely an incident of registration. It is sought to charge a stamp duty upon the certificate as an instrument. In these circumstances the stamp duty can only be regarded as in substance a tax imposed upon registration. It is true that it is not imposed upon every registration but only upon every new registration or transfer of registration; but it does not seem to me that this can make any difference. A fee upon registration can consistently with past decisions be justified as an incident of a registration which itself is no more than regulatory. But when the permissible necessity for registration is taken as the occasion for the imposition of a charge which cannot be regarded as a mere incident of that registration then the charge itself cannot, in the light of the decided cases, be validly imposed in respect of the registration of vehicles used or intended to be used solely in the course of and for the purposes of interstate trade and commerce. The charge is open to the same objection as the taxes and charges under the Motor Vehicles Taxation Management Act, 1949 N.S.W. and the Motor Vehicles (Taxation) Act, 1951 N.S.W. held in Hughes and Vale Pty. Ltd. [No. 2] [21] not to be validly applicable to vehicles engaged in interstate trade and commerce and the fees held not to be validly applicable to such vehicles in Nilson v. South Australia [22] and Pioneer Tourist Coaches Pty. Ltd. v. South Australia [23] .

[88]

The second case is Hughes and Vale Pty. Ltd. v. New South Wales [No. 2] [36] ("Hughes and Vale [No. 2]") which dealt with the amended New South Wales legislation, namely the State Transport (Co-ordination) Act, 1931-1954 and two of its provisions. Section 12 of that Act imposed a licensing system which enabled the Commissioner to refuse a licence on a number of very generally expressed grounds and empowered him to impose conditions relating to a wide variety of matters. That provision was held to be contrary to s. 92 in so far as it applied to vehicles engaged in interstate trade. Section 18 required that every such licence was to be subject to a condition that the holder paid to the Commissioner what was described as a "reasonable charge" for the use of roads at rates to be fixed by the Commissioner at a figure not exceeding that recommended by a committee, and that he and the committee were to have regard to a number of stated matters. The charge payable was not to exceed the charge payable in respect of similar vehicles engaged in intrastate trade over the same routes and in the same circumstances. That charge was also held to be invalid. The Motor Vehicles Taxation Management Act, 1949-1951 N.S.W. read with the Motor Vehicles (Taxation) Act, 1951 N.S.W. provided for the imposition of a tax on motor vehicles at the time of application for registration and at the time of each renewal thereof. That tax was based on the unladen weight of the vehicle and it was provided that vehicles powered by diesel fuel were to be taxed at double the ordinary rate. It was held by the Court that s. 18 of the State Transport (Co-ordination) Act, 1931-1954 was invalid and that the Motor Vehicles Taxation Management Act, 1949-1951 could not validly apply in respect of vehicles used exclusively for the purposes of interstate trade commerce or intercourse. The majority of the Court however held that it was possible for the States to impose a fair and reasonable charge for the use of roads by vehicles engaged in interstate trade commerce and intercourse, but that the impost referred to did not answer that description.

[90]

It may well be that there is no constitutional objection to a provision requiring the registration of motor vehicles, including motor vehicles which are originally registered in other States and enter New South Wales from other States. Again, it may well be that the requirement of registration will not be invalidated by the mere fact that a uniform fee is made payable on registration: all States require payment of a fee on registration, and, unless some affirmative reason appeared for regarding it as a real burden or impediment on inter-State trade, the exaction of a fee as a mere incident of registration may be said not to offend against s. 92: cf. Willard v. Rawson [38] . But the exaction imposed by the Management Act and the Taxation Act cannot be regarded as a mere incident of registration regarded as an object in itself. What is imposed by those Acts is a real and very substantial tax on motor vehicles. The levying of a pecuniary impost is the end in view, and the impost is made payable on registration only because that is a convenient means of ensuring its collection. When we look at the actual operation of the legislation in relation to commerce, we cannot, I think, avoid saying that it does impose a real and direct burden on the carrying on of commerce in a particular way. And, if that is so, it cannot, consistently with s. 92, operate in respect of the carrying on of inter-State commerce. The fact that that tax was imposed on registration and renewal and that the tax now in question is imposed on registration and transfer of registration is a trifling and immaterial difference. Moreover the present tax is not distinguishable from the tax dealt with in Armstrong v. Victoria [No. 2] [39] ("Armstrong [No. 2]") which dealt with s. 6, especially sub-s. 4, of the Motor Car Act 1951 Vict.. The words used by Dixon C.J., are directly applicable to the present tax [40] : It appears to me that on a proper scrutiny of Pt II of the Motor Car Acts 1951-1956 Vict. and the second schedule it must be seen that no room exists for the grounds upon which it has been sought to reconcile with s. 92 the imposition upon vehicles exclusively engaged in inter-State commerce of the rates contained in sub-par. (b) of par. B of the schedule. (1) The exaction cannot be regarded simply as a fee contributing to the cost of registration a service in the interest of motor car owners and drivers and others so that it is nothing but an incident or adjunct of the traffic. (2) It cannot be treated as another contribution to the maintenance of the highways compensatory for the use made of them. (3) It cannot be justified as a tax upon the ownership or possession of a chattel considered independently of the use of the chattel in the carriage of persons or goods, including the inter-State carriage of persons or goods. (4) It cannot be treated as involving no appreciable burden upon the possession of a motor vehicle as a means of inter-State carriage and movement.

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Judgment (96 paragraphs)

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