Knight v State of Victoria

JUDGE: MORTIMER J DATE OF ORDER: 11 april 2014 WHERE MADE: MELBOURNE

1. The applicant has leave to rely on the further amended originating application, filed with the Court on 14 October 2013.
2. The application for relief sought in paragraphs 1 to 4 of the applicant's further amended originating application filed on 14 October 2013 is dismissed.
3. On or before 4.00pm on Friday 2 May 2014, the parties file and serve written submissions, limited to 5 pages, addressing what should occur in respect of the remainder of the proceeding, including orders as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 514 of 2013

JUDGE: MORTIMER J DATE: 11 april 2014 PLACE: MELBOURNE

INTRODUCTION 1 The applicant, Mr Knight, is a prisoner, and is currently held in Port Phillip Prison in Victoria. He was sentenced in 1988 to a term of life imprisonment with a minimum non-parole period of 27 years. He is now 46 years old, and has been since his mid-teens a heavy smoker. If he wishes to smoke, he must purchase his cigarettes at the prisoners' canteen operated within the prison. The price of cigarettes in prisons has varied over time, but since 1993 there has been a difference between the wholesale price paid - by the first respondent, the State of Victoria (in respect of public prisons) or (since approximately 2006) by other prison operators - and the price at which cigarettes are sold to prisoners. The difference occurred because of the imposition of what was described as a "levy", so that monies received through the "levy" could be used to fund anti-smoking, health and QUIT programs within prisons. It is the imposition of this "levy" which is challenged by the applicant in these proceedings, in a number of ways. The term "levy" is used in these reasons for judgment not to suggest any characterisation of what occurred, but simply to reflect the description given at the time of its imposition in 1993. 2 In 2012, the Supreme Court of Victoria determined a challenge brought by the applicant to the imposition of the levy. The Court declared invalid a decision made in 1993 by either the General Manager, Prison Operations within the State's Department of Justice or the then Director of Correctional Services, which was the way in which the levy originally was imposed: see Knight v Secretary, Department of Justice [2012] VSC 613. 3 The Victorian government then introduced amendments to the Corrections Act 1986 (Vic) (Corrections Act) to address the consequences of the Supreme Court's decision. The relevant amendment as enacted is contained in s 112C(2) of the Corrections Act. 4 The parties agreed the applicant's application raises the following issues: Is s 112C(2) invalid because it contravenes a limit arising by implication from Ch III of the Constitution? Is s 112C(2) invalid because it imposes a tax in the nature of an excise, contrary to s 90 of the Constitution? Did any or all of the decisions made in 1993, 2004 and 2006 respectively by the identified officer-holders within the Department of Justice to impose a "tobacco levy" or charge for the purchase of tobacco products in prisons impose a duty of excise in contravention of s 90 of the Constitution? 5 There is a further issue raised by the respondents concerning the applicant's ability to challenge the decision in 2004, based on principles of issue estoppel. 6 The application also has claims by way of restitution in respect of monies the applicant alleges he has been compelled to pay unlawfully for the purchase of tobacco products. The parties agreed that the hearing and determination of these claims should await the outcome of the applicant's substantive challenges to the charges for tobacco products. 7 For the reasons which follow, the applicant's challenges to both s 112C(2) and to the three identified decisions should be rejected.

FACTUAL FINDINGS 8 The parties cooperated extensively in the preparation of this matter and a statement of agreed facts was tendered pursuant to s 191 of the Evidence Act 1995 (Cth), together with annexed documents referred to in the agreed statement. There were also some admissions made by the respondents pursuant to a notice to admit facts filed on behalf of the applicant prior to trial. Finally, an affidavit of the applicant was also relied upon without objection. 9 I make the following findings based on that evidence. 10 On 10 November 1988, the applicant was sentenced by Hampel J in the Supreme Court of Victoria to a term of life imprisonment with a minimum non-parole term of 27 years: R v Knight [1989] VR 705. Since that time he has been, like all prisoners in Victoria, in the legal custody of the second respondent pursuant to s 6A of the Corrections Act. On 19 October 2004, Smith J of the Supreme Court of Victoria made an order under s 21(2) of the Supreme Court Act 1986 (Vic) that, within 10 years of the date of the order, the applicant must not commence any legal proceeding without leave of the Court: Attorney-General (Vic) v Knight [2004] VSC 407. This order is applicable only to Victorian courts and tribunals. It has been the case that the applicant has on several occasions secured leave to issue proceedings in the Supreme Court of Victoria, and elsewhere. For example, he obtained leave to issue the proceedings in which he successfully challenged the 1993 decision which lead to the enactment of s 112C(2): Knight v Secretary to the Department of Justice [2011] VSC 571. 11 The second respondent is the Secretary to the Department of Justice under the Public Administration Act 2004 (Vic). One of the Secretary's responsibilities under the Corrections Act is to monitor performance in the provision of all correctional services, with the objective of achieving the safe custody and welfare of prisoners and offenders: s 7. This includes responsibility for the health of prisoners, within established general law and statutory duties. 12 The third respondent is employed as the Commissioner of Corrections Victoria under Part 3 of the Public Administration Act. The Commissioner has functions related to correctional services as the Secretary determines from time to time in accordance with s 8A of the Corrections Act. 13 Other than Port Phillip Prison, the applicant has always been incarcerated in prisons operated by the State of Victoria. Port Phillip Prison is a maximum security prison. On behalf of the State, the Minister for Corrections entered into a Prison Services Agreement with Australian Correctional Facilities Pty Ltd and GSL Custodial Services Pty Ltd for the provision of what the agreement called "correctional services" at Port Phillip prison. The agreement was authorised by s 8B of the Corrections Act. Australian Correctional Facilities has since changed its name to G4S Correctional Services (Australia) Pty Ltd (G4S). Port Phillip Prison received its first prisoners in September 1997. 14 The General Manager of Port Phillip Prison is an employee of G4S. Pursuant to s 21 of the Corrections Act, he occupies the office of Governor of the Prison. Thus, he is responsible for the management, security and good order of Port Phillip Prison and the safe custody and welfare of the prisoners at that Prison. This responsibility includes responsibility for the health of prisoners, within established general law and statutory duties. 15 The parties tended to refer to Port Phillip prison as a "private" prison, and to others (such as HMS Barwon Prison) as "public" prisons. That is not a nomenclature which I propose to adopt. The custody of persons convicted by the courts of this country, or held on remand pending trial, is pre-eminently a governmental and public function. It sits at the core of what a government does. The powers exercised in all prisons over prisoners are public and, for the most part, statutory powers. There is nothing "private" about a prison, nor about the way it performs its functions vis-a-vis prisoners. As the United States Court of Appeals for the Fourth Circuit observed, private individuals have long been empowered by the government to fulfill the tasks involved in the fundamentally governmental function of incarceration of criminals. But this government delegation of some duties to private persons or entities does not change the public character of the underlying function performed by "private correctional providers," as the [United States Supreme Court] recognized in [Correctional Services Corporation v Malesko, 534 US 61 at 72 n 5 (2001)]. (Holly v Scott, 434 F 3d 287 at 300 (4th Cir, 2006).) 16 As noted, the applicant has smoked tobacco since his mid-teens and during the entire time that he has been a prisoner. He has regularly, and exclusively, purchased tobacco products from the canteen in the prison in which he has been incarcerated. He presently purchases around four packets of Peter Jackson 30s every week from Port Phillip Prison at a cost of $83.00. The applicant gave evidence he had calculated that, during 2012, he had contributed over $900 to the levy he impugns in the proceeding. That evidence was not challenged by the respondents. In being a smoker, he is in the majority of prisoners. Approximately 75% of prisoners in Victorian prisons smoke and purchase tobacco products from prisons. 17 One source of funds for prisoners to purchase tobacco products is a weekly allowance paid according to a scale set for prisons by the Secretary. The scale in evidence was from 2005 and showed varying amounts for prisoners employed in prison industries, those who were not so employed for a variety of reasons (including incapacity) and different rates for those undertaking education and training. The statement of agreed facts suggested this scale was still in force in December 2012. The maximum rate was for an "employed" prisoner at "Level 1", and was $8.50 per day. The lowest was $3.15 per week for prisoners on remand or in police custody (either in transit to and from court or under police protection), or with a short-term illness, and this was also the rate for prisoners participating in education and training, outside term time. Prisoners who refuse to work or are "dismissed" from a position receive no allowance. 18 Prisoners do not have access to 20% of their allowance, which is withheld pursuant to reg 31 of the Corrections Regulations 2009 (Vic), so that something is held in trust for the prisoner's release. Aside from this, the remainder can be spent in prison canteens, or on matters such as photocopying, or it can be sent home to prisoners' families. Prison rules allow individual prisoners to receive a maximum amount of $140 per calendar month from private sources. 19 Prisons purchase tobacco products from suppliers and on-sell them. It is important to understand the basis for the prices at which those products have been sold to prisoners over time. 20 Before August 1993, each prison sold tobacco products to prisoners for the same price at which that prison had purchased those products from suppliers. 21 In 1992, at the initiative of the then Correctional Services Division of the State's Department of Justice, a Smoke Free Environment Taskforce was established. The Taskforce was established to oversee the "development and implementation of a smoke free environment across correctional facilities", being a policy which was known as the Smoke Free Work Environment Policy. One recommendation to implement and further the policy was that the Office of Corrections should create a levy attached to all tobacco products sold in prisons, by increasing the price from cost price to closer to recommended retail price. The initial recommendation was a price increase to not more than 90% of the Tobacco Industries Recommended Retail Price. 22 The proposal was that the levy monies as collected would be deposited into a trust fund for the specific purpose of providing prisoner programs and facilities to assist with the implementation of the Smoke Free Work Environment Policy. 23 It is fair to say that the documentary evidence supporting how the decision was made in 1993 is somewhat scant. No doubt this was part of the evidentiary problem before McMillan J in the Supreme Court of Victoria. 24 In January 1993, a memorandum was sent from the Chairperson of the "Smoke Free Environment Taskforce" to the Director of Correctional Services. The topic was expressed as "Cigarette Levy". The material parts of the memorandum are as follows: CIGARETTE LEVY: PURPOSE: To brief the Director, Correctional Services on the development of a cigarette levy to be placed on prisoner cigarettes sold via prison canteens. BACKGROUND: Cigarettes have a multi-tiered prices structure consisting of a manufacturer, distributor and retailer margins with two levels of taxation - State and Commonwealth. Excise is added by weight to cigarettes at the point of manufacture. The price of a packet of Winfield - sold via the Pentridge store at $3.12 is made up of; $1.04 Manufacturing cost $0.98 Excise Duty $1.00 State License Fee Corrections does not add the recommended retail margin to tobacco products that it sells, which at present is 59 cents. Discussion on this topic by the Taskforce could provide no avenue of resistance to increasing the cost of such products to the of community cost, given the current focus on reducing smoking in prisons. VicHealth recieves 10% of the State License Fee - at present that is 10 cents per packet sold in Victoria. This money is distributed to the Quit Campaign - formally known as the Victorian Smoking and Health Programme to support programs and sponsor activities that aim to reduce the prevalence of smoking in Victoria. If we were to increase the costs of cigarettes to the recommended retail price than on current sales we would collect approximately $247,800.00 per year; although with the Smoke Restriction Policy limiting smoking to open air only this revenue could be expected to decrease to approximately $125,000.00 per year. Average mean of cigarettes sold to persons in custody per week: Cigarette sold 8079 Persons in custody 2230 = 3.622 per person per week RECOMMENDATIONS: 1. That the Office of Corrections establish a similar procedure to that of the State Government and create a levy attached to all tobacco products (cigarettes and tobacco) sold in prisons, increasing them to Recommended Retail Price, an increase of approximately 59 cents at today's prices. This would represent in real terms a 19% increase in cost. 2. That an account established as a Trust Account, for the specific purpose of providing prisoner programs and facilities to assist with the implementation of the Smoke Restricted Environment Policy. 3. That the Director of Prisons be responsible for the monitoring and control of this account. 4. That this Trust Account be established and facilitated under the guidelines of the Director-Generals Rules relating to Finance and Accounts Procedures. 25 How these recommendations were implemented is opaque. The agreed statement states: On 24 March 1993, either the then General Manager, Prison Operations within the State's Department of Justice or the then Director of Correctional Services purported to make a decision directing the governors of each public prison to implement the recommendations of the Taskforce described at paragraph 22 above (the 1993 Decision). 26 The uncertainty of the decision-maker was the central issue in the proceeding before McMillan J. The State could not prove who made the decision and it was for this reason the Court found the decision invalid. It remains the case the State cannot identify the decision-maker and, in this proceeding, the State was able only to submit that it was either the then General Manager, Prison Operations within the State's Department of Justice or the then Director of Correctional Services. The identity of the decision-maker is not material in this proceeding, other than to explain the basis for the Supreme Court's decision and the remedial legislation which became s 112C(2). 27 When the decision was implemented, a centralised financial recording system relating to products purchased by prisons from suppliers and then on-sold to prisoners was used to record each prisoner's canteen purchases. It was called "SPEND". The tobacco levy was to be calculated and recorded using the SPEND system. 28 After the decision was implemented and until mid-June 2004, all prisons sold tobacco products at one of two prices. Either tobacco products were sold at 90% of the recommended retail price for those products, published from time to time in the Australian Retail Tobacconists Journal or, if the tobacco product was supplied to the prisons at more than 90% of the recommended retail price, then the products were sold at whatever the cost price actually was. 29 Any margin between the price at which State-run prisons purchased a tobacco product and the price at which it was sold to prisoners was then allocated by the relevant prison governor to a Tobacco Levy Trust Fund (TLT Fund), as the Smoke Free Work Environment Policy contemplated. 30 This is the first decision challenged by the applicant. I shall call it "the 1993 decision". The 1993 decision was also the subject of challenge before McMillan J. 31 On 8 April 2004, the then Acting Commissioner made a decision effective immediately to increase the price at which tobacco products were sold to prisoners to the recommended retail price of the products published in the Australian Retail Tobacconists Journal from time to time. Any margin between the price at which prisons purchased tobacco products and sold them to prisoners would continue to be paid into the TLT Fund to be spent only on prisoner health programs and facilities, particularly those relating to assisting prisoners to stop smoking. The decision is not recorded in any documentary evidence before the Court. 32 A "Commissioner's Requirement" was issued at the same time. The requirement contained many directions and policies about working towards a totally smoke-free environment within prisons. It contained plans relating to health promotion and smoking cessation programs for prisoners. The Commissioner's Requirement provided that the Smoke Free Work Environment Policy would apply to State-run prisons on the date of issue and to Port Phillip Prison and Fulham Prison (both operated pursuant to contractual arrangements) on "dates to be fixed". This document does not refer to the levy. The legal status of a "Commissioner's Requirement" remains unclear from the evidence, the Corrections Act or the Corrections Regulations. However, it appears to have been treated as having some kind of legal force and effect. 33 The announcement to prisoners about the 2004 decision was in the following terms: As of Monday, 14 June 2004 all tobacco products sold at Corrections Victoria prison canteens will be priced as per the recommended retail price (RRP). The Tobacco Levy will collect the full margin between the purchase price and the RRP. This money will continue to support the funding of the QUIT programs and nicotine replacement therapy for prisoners. 34 This is the second decision challenged by the applicant. I shall call it "the 2004 decision". It was also the subject of challenge before McMillan J. 35 Up until March 2006, it was still the case that the Smoke Free Work Environment Policy was not in operation at all Victorian prisons. The inference appears to be that cigarette prices in all Victorian prisons also did not necessarily reflect the 2004 decision and the policy aim of making the margin available to fund health programs related to smoking. Accordingly, the then Commissioner issued an updated Commissioner's Requirement, entitled "Smoking in Prisons" and dated 1 March 2006, which imposed a broad number of restrictions relating to smoking in prisons, both in respect of prisoners and staff. Like the 2004 Commissioner's Requirement, the 2006 Commissioner's Requirement does not refer to the levy in terms. Nevertheless, the inference from the subsequent conduct of the non-State run prisons and those responsible for regulating them is that from March 2006 the levy operated in non-State run prisons as well. Aside from the extension to non-State run prisons, the substance of the levy imposition as it is relevant to this proceeding did not change. After 2006, there were further policy directives and modifications about the government's Smoke Free Environment Policy in prisons, but not affecting the pricing of tobacco products. 36 This is the third decision challenged by the applicant. I shall call it "the 2006 decision". It was not the subject of challenge before McMillan J. 37 Amounts in the TLT Fund are kept separate from other funds held by Corrections Victoria. Corrections Victoria determines the recommended prison price or recommended retail price, as is the case, for each tobacco product to be sold in public prisons, and notifies the prisons of the prices. The prices at which each prison purchases tobacco product from a supplier are entered into the SPEND system. 38 The calculation and allocation of the levy occurs in the following way. When a prisoner purchases a particular tobacco product from a State-run prison, and that price is greater than the price at which the individual prison purchased that product, the SPEND system calculates the levy as the margin between those two prices. 39 Each individual State-run prison records the amount of the levy collected to the TLT Fund on a weekly basis, with that amount being accounted for in the financial adjustments between Corrections Victoria and each individual State-run prison, so as to ensure that the amount is kept separate from other funds. 40 A levy has been collected by State-run prisons with respect to all, or at least the majority of, tobacco product transactions over the relevant period. However, the levy collected in respect of each transaction is not uniform (whether denominated in currency or expressed as a percentage of the price at which particular tobacco products were purchased or sold by prisons), because individual prisons purchase various tobacco products from various suppliers at various prices. 41 Prisons are able essentially to make claims for expenses which fall under the Smoke Free Environment Policy - for example nicotine patches, expenses relating to running smoking cessation programs such as "QUIT", expenses relating to running, yoga and other prisoner health programs. However, the matters for which the fund's monies have been used has varied over time. Since 2010, there has been a standardised process, at least in State-run prisons, for seeking authorisation for invoices of significant amounts to be paid from the TLT Fund. 42 There were considerable gaps in the evidence about how the levy was imposed and how funds were collected at Port Phillip Prison after 2006. However, the respondents admitted that on 28 July 2011, Mr John Myers, the General Manager of Port Phillip Prison, informed Mr Roderick Wise, the Deputy Commissioner, Operations of Corrections Victoria, that Port Phillip Prison purchased tobacco products at wholesale prices and sold those products to prisoners at the recommended retail prices, as published from time to time in the Australian Retail Tobacconists Journal. Further, the respondents admitted that Mr Myers also informed Mr Wise that the margin between the (wholesale) purchase price and the price at which the products were sold to prisoners was transferred and held in a separate "Prisoner Amenities" account, and the money held in that account was used only for the purpose of funding smoking cessation programs and material, and for nicotine patches for program participants. 43 Despite the oral submissions on behalf of the respondents to the contrary, I find this evidence sufficient to infer that what Mr Myers told Mr Wise occurs at Port Phillip Prison about cigarette pricing and the disposition of any margin from that pricing is, in fact, what occurs. I find it is probable Mr Myers gave an accurate and complete account of the circumstances of how Port Phillip Prison complies with the 2006 decision to Mr Wise. Indeed, no other inference is reasonably available. 44 Further, the respondents submitted there was no evidence about how, if at all, monies collected from the margin imposed at Port Phillip Prison find their way into the public purse, or whether in fact the funds stay with the operators of Port Phillip Prison. The respondents seemed to accept that the effect of the 2006 decision was to require the operators of Port Phillip Prison to use the funds collected from the margin for purposes consistent with the Smoke Free Environment Policy. However, the respondents submitted, there is no evidence suggesting a legal obligation to pay that margin into a "public fund". I accept the respondents' submission that there is no evidence the funds collected by Port Phillip Prison from the sale of tobacco products are placed in any fund such as the TLT Fund. 45 The respondents do not have records that show how much money was deposited into the TLT Fund for financial years pre-dating 2007-2008. However, from that financial year onwards the amounts have varied between $207,673.48 and $337,581.25. There is no evidence about the amounts collected by Port Phillip Prison. 46 In November 2011, the applicant was granted leave by Daly ASJ to commence a proceeding in the Supreme Court against the Secretary, seeking relief including declarations that both the 1993 decision and the 2004 decision were ultra vires: Knight v Secretary to the Department of Justice [2011] VSC 571. On 14 December 2012, the Supreme Court made a declaration that the 1993 decision was ultra vires and allowed the applicant's application to that extent, but otherwise found the 2004 decision valid and dismissed his application in that respect. 47 On 15 May 2013, and in response to the Supreme Court decision, the Parliament of Victoria enacted the Corrections Further Amendment Act 2013 (Vic) (Amendment Act). In his second reading speech introducing these amendments, the Minister for Corrections described the effect of the amendments as "validating the sale of cigarettes and tobacco products in accordance with the 1993 pricing policy decision". The explanatory memorandum to the amendments was to similar effect, and stated that s 112C(2) "validates the imposition of a charge or additional charge between 24 March 1993 and 8 April 2004 for the sale of tobacco products [in] Victorian prisons".

IS SECTION 112C(2) INVALID BECAUSE IT CONTRAVENES A LIMIT ARISING BY IMPLICATION FROM CHAPTER III OF THE CONSTITUTION? 48 Section 112C was introduced into the Corrections Act by s 3 of the Amendment Act. The avowed purpose, set out in s 1 of the Amendment Act, was to deal with what the government saw were the effects of McMillan J's decision. 49 It provides: 112C Validation of actions and decisions (1) An action taken or purporting to be taken or a decision made or purporting to be made by the Director-General or the Secretary to the Department of Justice or a delegate or purported delegate of the Director-General or the Secretary in the purported exercise of a power or function under section 17 of this Act as in force before the commencement of section 19 of the Corrections (Amendment) Act 1994 has, and is taken always to have had, the same force and effect as it would have had if that section 19 had been in operation when the action was taken or purported to be taken or the decision was made or purported to be made. (2) A charge or additional charge imposed or purporting to be imposed by or on behalf of the Director-General or the Secretary to the Department of Justice or a Governor on or after 24 March 1993 and before 8 April 2004 for the purchase, in a prison, of tobacco products was, and is taken always to have been, validly imposed. (3) Any act or thing done or omitted to be done, whether under a power conferred by or under an enactment or otherwise, before or after the commencement of section 19 of the Corrections (Amendment) Act 1994 in reliance on or in relation to an action or decision referred to in subsection (1) has the same effect, and gives rise to the same consequences, and is to be regarded as always having had the same effect and having given rise to the same consequences, as if that section 19 had been in operation when the action was taken or purported to be taken or the decision was made or purported to be made. (4) A right or liability conferred or imposed in relation to, or affected by an action or decision referred to in subsection (1) is exercisable or enforceable, and is to be regarded as always having been exercisable or enforceable, as if section 19 of the Corrections (Amendment) Act 1994 had been in operation when the action was taken or purported to be taken or the decision was made or purported to be made. 50 In his second reading speech introducing the Bill, the Minister stated: The finding that the sale of cigarettes and tobacco at a price higher than the wholesale purchase price between 1993 and 2004 was invalid has opened the way for prisoners or former prisoners to claim compensation for the additional moneys they paid for cigarettes during this period. Although the amounts of money involved in any actual compensation claims would not be large and legal defences to any claim are available, the administrative and legal costs involved in resolving claims would be significant. This bill therefore has the effect of validating the sale of cigarettes and tobacco products in accordance with the 1993 pricing decision. (Emphasis in original.) 51 In order to determine the Ch III arguments put forward by the applicant, the first task for the Court is to construe the impugned provision. Its legal effect must be ascertained with some precision: see Re Macks; Ex parte Saint (2000) 204 CLR 158; [2000] HCA 62 at [15], [31] per Gleeson CJ, [74]-[77] per Gaudron J, [208]-[210] per Gummow J, [366]-[367] per Hayne and Callinan JJ. 52 The applicant contended subs (2) differed from the other subsections of s 112C in several ways. First, it was a provision purporting to confer general validity retrospectively on conduct and decisions: it was not limited to the delegation flaw which had led to the 1993 decision being found invalid. This, the applicant contends, distinguishes the provision from the one considered in Australian Education Union v Fair Work Australia (2012) 246 CLR 117; [2012] HCA 19, where the validity provision was directed at the particular error the Full Court of the Federal Court had identified. He contends that s 112C(2) purports to confer validity on, amongst other things, the 1993 decision itself, rather than declaring rights and liabilities arising from the 1993 decision. It falls, the applicant contended, on the wrong side of the line articulated by the High Court in R v Humby; Ex parte Rooney (1973) 129 CLR 231, because it seeks to change the character of what was held to be unlawful. Relying on observations by McHugh J in Re Macks 204 CLR 158; [2000] HCA 62 at [111], the applicant contended the effect of s 112C(2) was that, rather than operating on the historical fact of invalidity, it sought to change that fact and therefore rendered the Supreme Court judgment ineffective. 53 The applicant bases these contentions on the language used in subs (2). He submits that invalidity arises from the provision's declaration that the charge on cigarettes "was" validly imposed. It is the use of the past tense in this way which the applicant submits transforms the impugned charge from a charge which was invalid into a charge which "was" valid: that is, subs (2) removes its character of having been made without jurisdiction. 54 The applicant points to the different language employed in subs (2) from subss (1), (3) and (4) and contends this is what marks out the differing effect of this provision. The applicant contends the other subsections do not suffer from the same constitutional infirmity. 55 The applicant also submits s 112C(2) infringes the principles in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1, and in Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51. It infringes the former principle because it immunises the 1993 decision from challenge on the grounds of jurisdictional error. It infringes the latter by impairing both the reality and the appearance of decisional independence of the Supreme Court.

Consideration 56 The applicant's Ch III arguments should be rejected. 57 The applicant's construction argument turns on an asserted difference in the use of the phrase "was validly imposed" in s 112C(2) from the language in the other subsections. There is no doubt different language is employed in subs (2), but the difference is not as material as the applicant suggests. 58 I accept the respondents' submission that the phrase "was validly imposed" is not the same as a statute saying (impermissibly) that a charge "was valid" where a court had decided it was not. That is because the formulation in the statute looks to the manner in which the charge was imposed, thus addressing the defect identified by McMillan J. The defect her Honour identified was that neither the person who imposed the charge, nor the statutory authority to impose it, could be identified, and the charge therefore was invalid. Her Honour's decision was a decision about the process by which the charge was imposed and the absence of identifiable statutory authority. That is what s 112C(2) seeks to correct. 59 Putting to one side questions of estoppel and res judicata, s 112C(2) does not preclude other challenges to the ongoing imposition of the charge. For example, if a prisoner other than the applicant had sought to bring a proceeding raising the question that the charge is an excise imposed contrary to s 90 of the Constitution, s 112C(2) would not prevent such a proceeding. Indeed, in this proceeding the respondents have not sought to rely on s 112C(2) in answer to the applicant's case on s 90, although they obviously have relied on issue estoppel by reason of McMillan J's decision. 60 I also accept the respondents' submissions that there is no incompatibility or impairment, in the Kable sense, arising by reason of the operation of s 112C(2) and the supervisory jurisdiction of the Supreme Court, or of this Court (to the extent it has one at least in its accrued jurisdiction). Section 112C(2) is not a provision which confers functions on a court at all: in that sense there is no occasion to consider issues of incompatibility or impairment: South Australia v Totani (2010) 242 CLR 1; [2010] HCA 39 at [69] per French CJ. 61 The applicant's reliance on the principles set out in Kirk 239 CLR 531; [2010] HCA 1 sought to characterise s 112C(2) as having a privative operation. He submitted its terms would protect or immunise the 1993 decision, and the subsequent decisions relying on or extending it, from judicial review. What is clear from both Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476; [2003] HCA 2, and from Kirk 239 CLR 531; [2010] HCA 1, is that statutory language which may appear to have a privative effect will not be construed in a way which permits the legislature to insulate decisions from judicial scrutiny in terms of whether those decisions are within jurisdiction. As a matter of construction, statutory provisions will (to the extent possible) be interpreted in a way which does not produce this effect. If, hypothetically, a privative provision were unambiguously and unmistakably to confer such immunity, it is likely to be found invalid as it would be contrary to the jurisdiction conferred by Ch III of the Constitution on courts exercising federal jurisdiction, and on courts with a constitutionally recognised role in the judicial hierarchy in Australia. The construction of s 112C(2) should be approached from this perspective. 62 In my opinion, the proper construction of s 112C(2), read in its context and taking into account the purposes for which it was enacted, is to declare lawful the process by which the 1993 decision was made, in terms of the uncertainty about the identity and power of the decision-maker. So much is apparent from the inclusion in the text of s 112C(2) of the two nominated decision-makers in the alternative. The link between "purporting to be imposed by" and the final part of the provision, "was validly imposed", cannot be ignored. The extent, and the only extent, of the declaratory effect of s 112C(2) is to remove any legal uncertainty attaching to the failure to be able to identify the decision-maker who imposed the charge, and the authority under which that decision-maker acted. 63 That being the correct construction of s 112C(2), it has no impermissible effect in terms of the principles in Plaintiff S157 211 CLR 476; [2003] HCA 2, and Kirk 239 CLR 531; [2010] HCA 1. 64 Further, construed in this way, s 112C(2) does not change the inherent quality of the decision made in 1993 by either the General Manager, Prison Operations or the Director of Correctional Services. It does not, in my opinion, seek to change the fact of the invalidity of the decision, but rather to attach new legal consequences, taking that invalidity as its starting point. That is why the provision uses the term "purported imposition". This purported imposition became, by analogy with the High Court's remarks in AEU 246 CLR 117; [2012] HCA 1 at [38], the historical fact. Or to put it another way, as Gummow, Hayne and Bell JJ did in AEU, the new provision assumes that the previous judicial decision was correctly decided and does not purport to declare what the law was at the time of McMillan J's decision, instead it deals with the consequences of that decision. From that, a new rule is introduced which gives ongoing legal authority to the manner in which the charge was imposed: see AEU 246 CLR 117; [2012] HCA 1 at [89]; see also at [53] per French CJ, Crennan and Kiefel JJ. There is no substantive difference in my opinion between the kind of drafting found in the AEU case and s 112C(2).

IS SECTION 112C(2) INVALID BECAUSE IT IMPOSES A TAX IN THE NATURE OF AN EXCISE, CONTRARY TO SECTION 90 OF THE CONSTITUTION? 65 In the alternative, the applicant contends that s 112C(2) imposes a duty of excise in contravention of s 90 of the Constitution. He also makes that contention in respect of the three decisions impugned in this proceeding: the basis for the attack is the same in each case. 66 Section 90 provides: 90 Exclusive power over customs, excise and bounties On the imposition of uniform duties of customs the power of the Parliament to impose duties of customs and of excise, and to grant bounties on the production or export of goods, shall become exclusive. On the imposition of uniform duties of customs all laws of the several States imposing duties of customs or of excise, or offering bounties on the production or export of goods, shall cease to have effect, but any grant of or agreement for any such bounty lawfully made by or under the authority of the Government of any State shall be taken to be good if made before the thirtieth day of June, one thousand eight hundred and ninety-eight, and not otherwise. 67 As both parties accepted, the first question is whether the levy is a tax. There are both negative and positive features which must be considered in answering that question. In terms of the positive features, in Air Caledonie International v Commonwealth (1988) 165 CLR 462, the High Court (Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ) endorsed the description of a tax given by Latham CJ in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 at 276: a "compulsory exaction of money by a public authority for public purposes, enforceable by law". However, as the Court noted, despite the presence of these features, some exactions will not be characterised as a tax because they are a charge or payment for services rendered, or the acquisition of property. One of the governing considerations in those circumstances, to which I return below, is the relationship between the charge and the value of goods or services obtained - can the charge be seen as having the necessary relationship? Other exactions such as fines and penalties as part of the enforcement of the criminal or civil law are also not to be characterised as taxes, notwithstanding they possess the positive features outlined by Latham CJ. 68 The Court in Air Caledonie 165 CLR 462 also noted that it was not necessary for all of the features referred to by Latham CJ to be present - in that sense, what his Honour said in Matthews 60 CLR 263 should not be seen as an exhaustive definition of a tax. In Air Caledonie 165 CLR 462 at 467, the Court used as an example a circumstance where there was a compulsory exaction of money under statutory powers by a non-public authority, or for purposes which could not properly be described as public. 69 Keane CJ (as his Honour then was) described the imposition of a tax as "an exercise of the power of the government lawfully to take from the governed, as opposed to the internal financial arrangements of the government": see Australian Capital Territory v Queanbeyan City Council (2010) 188 FCR 541; [2010] FCAFC 124 at [51]. In the Queanbeyan City Council case his Honour also found that a charge imposed by one organ of government on another should not be seen as a tax (at [51]). On appeal, the High Court took the same approach: Queanbeyan City Council v ACTEW Corporation Ltd (2011) 244 CLR 530; [2011] HCA 40. The respondents submit that, here, the levy was imposed by an entity within the Victorian government (the General Manager, Prison Operations or the Director of Correctional Services) on another entity within government (prison governors). All that then occurred, the respondents submit, is that the "burden of the levy was passed on to prisoners". How the principles in Queanbeyan can or should be applied to private prison operators is a matter I consider further at [86] below. 70 The respondents' submissions on this aspect are said to apply to s 112C(2), and to the administrative decisions in 1993, 2004 and 2006. 71 The applicant submits the levy is a tax, and that it is properly characterised as an excise. 72 The applicant relies on the findings of McMillan J in Knight v Secretary, Department of Justice [2012] VSC 613 where, in relation to the 1993 decision, her Honour found all but one of the features of a tax to be present. The following paragraphs of the applicant's submissions set out her Honour's reasoning: 49. Justice McMillan accepted the Applicant's argument that the levy satisfied the "positive indicia" of a tax, in that it was a compulsory exaction of public money for public purposes, enforceable by law. Her Honour stated: [92] … [T]he levy amounts to a compulsory exaction of money as the prisoners have no real choice as to whether or not to pay the levy. In order to continue smoking … the prisoners are practically compelled to pay the levy upon the purchase of their cigarettes. [93] … [T]he levy is clearly an exaction by a public authority, that being Corrections Victoria, for public purposes, that being the purpose of health and wellbeing of prisoners and prison staff. … [95] [T]he fact that there is no legal obligation imposed on the prisoners, as there is no law in place requiring the prisoners to purchase cigarettes, does not … mean that the charge is prevented from fulfilling the description of a tax. 50. Justice McMillan also accepted the Applicant's argument that the levy was not a "payment for services rendered". Her Honour stated: [101] … [T]he levy cannot be said to be a fee for services rendered as there is no specific identifiable service linked to the levy and the services provided through the Smoke Free Work Environment Policy are not services which are rendered at the direction or request of the prisoners required to pay the levy. 73 McMillan J distinguished the Queanbeyan City Council case on the basis that the government entity on whom the ACT government imposed the charge (ACTEW) had a legal obligation to pay the charge and, in order to fund it, ACTEW passed the amount of the charge on to its customers, such as Queanbeyan City Council. Her Honour found that there was no "passing on" of the charge to prisoners: rather, the charge was imposed on prisoners directly through a delegation of power from the Secretary to prison governors. 74 The feature which led to her Honour ultimately refusing to characterise the 1993 levy as a tax was that the amount of the levy, and the fact that in effect prisoners paid the recommended retail price for tobacco products, meant there was a "discernible relationship" between the value of the tobacco product and the price paid. This approach is taken from the High Court's decision in Air Caledonie 165 CLR 462 at 647, and applied in Harper v Minister for Sea Fisheries (1989) 168 CLR 314. In Harper, a majority of the Court found that the right to acquire abalone for commercial purposes in specified quantities was a right to acquire a finite but renewable resource, which required careful management of its exploitation to ensure sustainability and therefore, despite the size of the charge, the fee paid for the abalone licence was not a tax. Rather, the Court characterised the payments as akin to a charge for the acquisition of valuable property. 75 In this Court, the applicant submitted the Court should adopt the reasoning of McMillan J save for this last step, at which point the Court could be satisfied McMillan J was clearly wrong and should reach the opposite conclusion: namely that there was no discernible relationship between the amount paid by prisoners and the value of what they acquired. 76 The applicant contended that there was, on the evidence, no relationship at all between the levy and the value of what is acquired by prisoners who purchase tobacco products, because the entire amount of the levy is applied to fund the provision of services that are not necessarily sought or received by prisoners who pay the levy. In other words, although some prisoners who are smokers may decide to access the QUIT programs funded within prisons from the levy, there are other prisoners (the applicant being one) who are compelled to pay the levy without receiving anything of value or benefit in return. 77 The applicant submits, essentially, that the correlation between the prison price for tobacco product and the recommended retail price to the Victorian community is inapposite. There may be, the applicant accepts, a "relationship of value" between the wholesale price at which the prison acquires tobacco product and the value of that product to prisoners. However, any such relationship breaks down once the levy is imposed in prisons and the retailer's margin is imposed in the community. The margin between the wholesale and retail prices, in a commercial context, will represent the retailer's operational costs, the tax liabilities (such as GST) and an expectation of profit. It is wrong, therefore, the applicant contends, to see the retail price as representing a "value" of the tobacco product at all. 78 However, in answer to the applicant's reliance on Harper 168 CLR 314 and his arguments about the absence of a "discernible relationship" between the value of the product and the levy, the respondents submitted the applicant posed the wrong comparison. The appropriate comparison, the respondents submitted, was between the whole of the purchase price paid by prisoners and the whole of the purchase price paid on ordinary retail purchases. The respondents submitted that was consistent with the approach in Harper 168 CLR 314, where what was examined was the whole of the licence fee. The recommended retail price is the approximation of the value of the product in the hands of the consumer, because it represents the price paid for the whole of what was acquired. Previously, the respondents submitted, tobacco products were in fact acquired at a discount by prisoners - that is, less than value.

Consideration 79 The attack on s 112C(2) stems from its validation of the manner in which the 1993 decision was made. It is said by the applicant that, if the 1993 decision is invalid because it is inconsistent with s 90 of the Constitution, so too s 112C(2) is invalid to the extent it also purports to validate the imposition of a tax prohibited by s 90. The respondents submitted that s 112C(2) cured the deficiency in the making of the 1993 decision, as found by McMillan J, and nothing more. I have accepted that to be the correct construction (see [62] above). However, in case I am wrong about that construction, I consider the s 90 argument on the basis proposed by the applicant: namely, that s 112C(2) authorises the imposition of the margin through the 1993 decision, and is in that sense capable of constituting the imposition of an excise as much as the decisions themselves are. 80 The evidence discloses the purpose of the 1993, 2004 and 2006 decisions, in particular the 1993 decision, was to raise revenue. Office-holders within the Department of Justice sought to raise funds through the levy which could then be used to pay for programs relating to prisoners' health, especially health issues related to smoking. While an intention to raise revenue is not determinative of the exaction in question being a tax, it is an important consideration: see Roy Morgan Research Pty Ltd v Commissioner of Taxation (2011) 244 CLR 97; [2011] HCA 35 at [16]. 81 The exaction here on the evidence was imposed by a public authority: namely, the General Manager, Prison Operations or the Director of Correctional Services. It was done by way of a direction to prison governors, rather than by legislation, but in my opinion that method does not preclude the exaction being characterised as a tax and the respondents did not suggest otherwise. The purposes of the exaction (being to raise money to advance anti-smoking initiatives) can be described as public, in the sense that they are stated to be in furtherance of the obligations of prison governors, and of the Secretary (in whose custody each prisoner is deemed to be) of their duties to provide for the safety and welfare of prisoners. Whether the 1993 decision or the subsequent Commissioner's Requirements were enforceable remains unclear on the evidence and submissions in this proceeding. 82 The respondents submitted that there was nothing more than a voluntary transaction involved, and the levy did not have the character of a "compulsory exaction". The respondents submitted that, just as in Harper 168 CLR 314, those acquiring abalone licences had no other way to acquire those licences, nevertheless the licence fee was held not to be a tax. The 1993 decision, s 112C(2) in validating it, and the 2004 and 2006 extensions of the 1993 decision, should all properly be seen as nothing more than an instruction of the pricing of tobacco products in prison, should prisoners choose to purchase such products. 83 I do not agree that it is appropriate to describe the transaction involving the payment of the levy as "voluntary", and in that sense not within the concept of a "compulsory exaction". The compulsion is that, if a prisoner wishes to purchase cigarettes, she or he must do so by paying the price set by the prison, which on the evidence includes the levy. It is no different to any other exaction which is added to the price of goods: it is the payment of the exaction which is compulsory, in the sense the goods cannot be purchased without payment of it. There is in that sense a practical compulsion, and that is sufficient: see General Practitioners Society in Australia v Commonwealth (1980) 145 CLR 532 at 561 per Gibbs J; Airservices Australia v Canadian Airlines International Ltd (1999) 202 CLR 133; [1999] HCA 62 at [132] per Gaudron J. If the respondents' analysis were correct, the licence fees in Harper 168 CLR 314 would have been seen as a voluntary transaction because the operators elected to fish for abalone. 84 There are nevertheless three features of the levy decisions (and, by implication, the validation of the process by which the 1993 decision was made, by s 112C(2)) which in my opinion mean the applicant's submissions must fail. The first two are matters not accepted by McMillan J and, with respect to her Honour, I have reached a different conclusion on the evidence before me. 85 First, and linked to the second point, in my opinion the respondents are correct to characterise this as a pricing decision rather than an exaction. There is nothing on the evidence to explain how pricing of any product for sale in prison canteens is arrived at, but the question whether a product is sold at retail or less than retail price seems to be a matter of discretion for each prison. The evidence makes it plain there is no uniformity on pricing even between prisons, because price will depend on the cost of the product obtained from the supplier used by any given prison. It is true that in the past the evidence shows tobacco products were available at wholesale price. However, there is no evidence about the explanation for this, other than inferences which might be drawn from the evidence about the high proportion of prisoners who smoke, and perhaps some prisoner management issues which were seen to be improved by having tobacco products available at cheaper prices than they were available in the general community. In my opinion, what occurred through the 1993 decision was nothing more than a resolution, by either the General Manager, Prison Operations or the Director of Correctional Services, to increase the price of tobacco products closer to that paid in the general community, and to give a direction about the use to which any margin would be put. There is no evidence about what, if any, margins exist on other products sold in prison, and what is done with the income produced from any margins between the price of acquisition and of sale. Although the applicant's submission sought to use the absence of such evidence to his advantage, as the respondents pointed out, the applicant bears the onus of proof in this proceeding. The evidence supports an inference, which I am prepared to draw, that pricing is to some extent discretionary in and between prisons. All these decisions were pricing decisions. 86 Second, on the evidence it is clear that this pricing decision was imposed within government: that is, by the General Manager, Prison Operations or the Director of Correctional Services on prison governors. It was subsequently imposed by the Commissioner on those who were governors of non-State run prisons for the purposes of s 21 of the Corrections Act. Its description as a levy in the policy documents seems designed to ensure that prison governors understood the need to quarantine any margins received so that they could be used for the purpose expressed in the policy documents. As in the Queanbeyan City Council case, it was inevitable there would be a cost increase to prisoners, as the consumers. The memo to prisoners in May 2004 made that clear. However, the 1993 decision (and its extensions in 2004 and 2006) were intramural directions on pricing, designed to fund or offset the cost of providing anti-smoking related health initiatives to prisoners. Both as to price and as to allocation of any specified margin, they were directed at those responsible for prison governance. There was a tangible consequence for prisoners, but pricing was passed on to them, not imposed on them. 87 Third, even if the first two findings are wrong, and the levy is properly seen as an extramural exaction, I accept the respondent's submissions that there is a discernible relationship between the value of what is acquired and the exaction. Although it is correct to say, as the respondents do, that in Harper (and Air Caledonie) the exaction was examined as a whole in order to evaluate whether the necessary relationship existed between the value of what was acquired and the exaction, the majority in Air Caledonie 165 CLR 462 at 467 also allowed for a circumstance where the exaction may exceed value and, to that extent, be a tax. That is really the applicant's argument here: there is the necessary relationship, he accepts, between the value of tobacco products and the wholesale price. However, the margin that is then imposed by reason of the levy has nothing to do with value and, to that extent, is a tax. The applicant's submission, in my opinion, does take as its starting point the whole of the amount paid for the tobacco product. The submission simply fastens on the component of the price which is constituted by the levy and contends, to that extent, the exaction is a tax. 88 Viewed in that way, I nevertheless reject the applicant's submission there is no discernible relationship in the sense discussed in Air Caledonie, because the margin exceeds the value, being the wholesale price. In these circumstances, in my opinion the overall value of the product in its sale to a prisoner does correlate to the value of the product in its sale to a consumer in the general community. 89 It may be different if prisoners were being charged a price far in excess of recommended retail price. 90 Given the conclusions I have reached above, it is not necessary to determine the respondents' argument that there is insufficient evidence about what occurs in the collection and allocation of monies raised from the levy by Port Phillip Prison, as opposed to the evidence about what occurs in State-run prisons, in particular whether it is significant that the monies from the margin do not find their way into the TLT Fund or an equivalent public fund.

Whether an excise 91 The determination that the levy is not a tax means strictly it is unnecessary to decide if it is an excise. However, the question was addressed at some length in submissions and it is appropriate to deal with the question briefly. 92 If the levy is a tax, the applicant went on to submit that it is clearly an excise, because it is imposed at a point of distribution before it reaches the consumer (ie the prisoner): see Parton v Milk Board (Vic) (1949) 80 CLR 229 at 260 per Dixon J; Ha v New South Wales (1997) 189 CLR 465 at 490 per Brennan CJ, McHugh, Gummow and Kirby JJ. This is a question of the practical and substantial operation of the levy: Hematite Petroleum Pty Ltd v Victoria (1983) 151 CLR 599 at 633 per Mason J, at 659 per Brennan J, at 663 per Deane J. 93 In Ha 189 CLR 465, Brennan CJ, McHugh, Gummow and Kirby JJ said (at 498): When a constitutional limitation or restriction on power is relied on to invalidate a law, the effect of the law in and upon the facts and circumstances to which it relates - its practical operation - must be examined as well as its terms in order to ensure that the limitation or restriction is not circumvented by mere drafting devices. 94 If the tax is imposed at the time of the "entry into consumption" of goods, then this is the act of the vendor making delivery of the goods and the purchaser receiving them, which are not acts of consumption: see Dickenson's Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 185-187 per Barwick CJ. If levied before delivery into the hands of the consumer, then the tax is not upon consumption but should properly be seen as an excise: see Mason J in Dickenson's Arcade Pty Ltd v Tasmania (1974) 130 CLR 177 at 243; Commissioner for Revenue (ACT) v Kithock (2000) 102 FCR 42; [2000] FCA 1098 at [25]. 95 In Anderson's Pty Ltd v Victoria (1964) 111 CLR 353, Barwick CJ said (at 364-365): it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage of production to the point of receipt by the consumer. This in substance, is the formulation of my brother Kitto which received the endorsement of a court of six Justices presided over by the former Chief Justice in Bolton v Madsen [at 273]. … I would merely add expressly what I think is implicit in his Honour's expression, namely that the step which puts goods into consumption is still in the line, albeit at the end of the line, to which his Honour refers. 96 The respondents conceded that, if the Court held the levy was a tax, then it was correct on the authorities to characterise it as an excise. In my opinion this concession was properly made: if the levy is a tax, then it is clearly as a matter of substantial and practical operation imposed prior to delivery into the hands of the consumer. That is because the levy is, on the evidence, added to the price at a time the price is struck by each prison, depending on what it has cost the prison to purchase the cigarettes. It is added as part of the prison's internal pricing process, prior to the tobacco products being available for sale in prison canteens. It is in this sense a different situation from the one facing the Full Court in Kithock 102 FCR 42; [2000] FCA 1098, where the tax imposed was on resale of used cars. Rather it is, as Barwick CJ described it in Anderson's, a step "at the end of the line" before the tobacco product is placed in the hands of the consumer - here, the prisoner.

VALIDITY OF THE 1993, 2004 AND 2006 DECISIONS 97 It was not suggested by the respondents that these three decisions, being executive decisions made in carrying out responsibilities conferred by the Corrections Act, were incapable of constituting a tax because they were not themselves contained within a statute. 98 Although his Honour spoke of the effects of a statutory exaction, in my opinion the observations of Isaacs J in the Commonwealth Oil Refineries case are apposite in terms of why a decision implemented by policy pursuant to statutory powers is nevertheless capable of being characterised as an exaction: The prohibitions of secs. 90 and 92 of the Constitution may be transgressed not merely by a direct and avowed contravention. They are transgressed also by a statute - whatever its ultimate purpose may be, and however its provisions are disguised by verbiage or characterization, or by numerous and varied operations lengthening the connective chain, or by otherwise paying titular homage to the supreme law of the Constitution - if it operates in the end by its own force so as to do substantially the same thing as a direct contravention would do, either in attaining a forbidden result or in using forbidden means. The relevant constitutional prohibitions include both means and results. It is no justification for using forbidden means that permissible results are sought, nor for securing forbidden results that lawful means are employed. (Commonwealth v South Australia (1926) 38 CLR 408 at 423.) 99 However, the attacks on these three decisions fail on their merits for the reasons I have expressed in relation to s 112C(2) above.

IS THE APPLICANT ESTOPPED FROM CHALLENGING ANY OF THE DECISIONS? 100 Given the conclusions I have reached above, I consider it is unnecessary to determine the question of issue estoppel. It was not raised as a preliminary objection to the matter proceeding: rather, the hearing was dealt with on the merits of the arguments, which have failed. 101 However, if I had been required to determine the matter, I would have found that the applicant was estopped from impugning the 2004 decision, that matter having been conclusively determined against him by McMillan J. He had the opportunity to appeal that decision, which he elected not to do. The applicant appeared to accept that the principles of issue estoppel as set out in Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34 at [21] were applicable. He also did not contest that the State of Victoria and the Commissioner of Corrections Victoria could claim the protection of that doctrine as privies in interest of the Secretary to the Department of Justice, in relation to the issues decided by McMillan J: Ramsay v Pigram (1968) 118 CLR 271 at 279 per Barwick CJ. Rather, the applicant advanced a contention that the principles of issue estoppel could not apply to proceedings where the issue in question was a constitutional one. I agree with the respondents' submission that: Here, there is no question that the three prerequisites [in Kuligowski] are satisfied in respect of the 2004 Decision. The applicant appears to concede as much, contending only that issue estoppel has no application to proceedings in the nature of a constitutional challenge. However, the reason for the alleged distinction is not apparent. There is no reason why the rationale of issue estoppel - "it is unjust and unreasonable to permit the same issue to be litigated afresh" - should not apply equally to a litigant who seeks to re-litigate a constitutional issue decided against him by a competent court. If the applicant were aggrieved by the Supreme Court judgment, he should have appealed. It would be unprincipled to allow him, in the context of "an integrated Australian court system for the exercise of the judicial power of the Commonwealth with [the High] Court at its apex", to re-litigate in the Federal Court of Australia the issue that was resolved against him in the Supreme Court of Victoria. 102 The injustice and unreasonableness which gives rise to issue estoppel is no less applicable to constitutional arguments. Where the exercise of public power is concerned, the character of an argument based on the Constitution is not so substantively different from the character of an argument based on absence of jurisdiction or statutory authorisation, as to exclude principles of estoppel. However, I do not accept the proceeding is an abuse of process. Its principal attack was on s 112C(2), which was not (and could not have been) in issue before McMillan J. The challenges to the 1993, 2004 and 2006 decisions were necessary aspects of that challenge, because of the relationship between s 112C(2) and those decisions.

CONCLUSIONS 103 For the reasons I have set out, the applicant's challenges to the levy fail in their entirety. 104 As to what should occur in respect of the remainder of the proceeding, I will direct the parties file short written submissions on this matter by 4.00pm on Friday 2 May 2014, including submissions on costs.

THE APPLICANT'S REPRESENTATION 105 The Court was significantly assisted by the solicitors and counsel who agreed to take a referral to advise and appear for the applicant, pursuant to r 4.12 of the Federal Court Rules 2011 (Cth). The applicant's challenges were formulated and developed in a full and sophisticated manner, so that the Court had the benefit of well-prepared, considered and thorough submissions on both sides of the argument for each aspect of the claim. The Court records its gratitude to solicitors and counsel who took the referral under r 4.12 in this proceeding. I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.