Seeley DCT Hut ised Sue v Hill

Seeley DCT Hut ised Sue v Hill - [1926] HCA 58 - HCA 1926 case summary — Zoe

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reference to a Board of Appeal is so intimately connected with the liability imposed by sec. 28 (1) that if the right goes the liability also goes, The same reasoning applies to make secs. 17 and 21 invalid. 'The reason of the invalidity of the provisions as to Boards of Appeal is that the Parliament purported to vest in those Boards part of the judicial power of the Commonwealth contrary to the provisions of Chapter IIT. of the Constitution (see New South Wales v. Common- wealth (2); Waterside Workers' Federation v.. J. W. Alexander Ltd. (3) ; Huddart, Parker & Co. Pty. Ltd, v. Moorehead (4) ; Porter v. The King ; Ex parte Yee (5)). The provisions of the Income Tax Assessment Act 1925 as to a Board of Review are invalid for the reason that the Board is given judicial powers. The powers are judicial because the Board has to ascertain rights as they exist according to law and to ascertain those rights at the instance of the party who puts the Board in motion for the purpose of determining his liability, and when the determination is made the party's rights are established conclusively. The test of judicial power is not the name, description or character of the body exercising the power, but whether a lis may be taken as of right to that body to obtain a conclusive determination. In the scheme for Boards of Review in the Assess- ment Act 1925 are all the constituent elements for the exercise of judicial power, namely, actor (the taxpayer), revs (the Commissioner) and judex (the Board of Review), and a conclusive determination» See, 51 of the Assessment Act 1922-1925 gives the Board of Review powers substantially identical with those given by sec. 51a to the Supreme Court of a State, and the Commonwealth Parliament cannot confer upon the Supreme Court of a State appellate jurisdic- tion in matters not judicial. When the conclusion is reached that the character of an act is judicial, it does not matter by whom the act is done. On the view that the Board of Review is an adminis- trative body, an appeal does not lie to the High Court in its appellate jurisdiction. But sec. 51 (6) clearly indicates that the intention is 'to give an appeal to the High Court in its appellate jurisdiction,

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constituted by the Income Tax Assessment Act 1922-1923, and the first question for decision by the Full Bench is whether the appeals are competent. In the case of British Imperial Oil Co. v. Federal Commissioner of Taxation (1) this Court held that Parliament had by the Act of 1922-1923 purported to confer on the Board of Appeal powers which were part of the judicial power of the Commonwealth ; that by sec. 71 of the Constitution such power could only be vested in a Court; that if such Court be created by the Parliament its members must have the tenure of office prescribed by sec. 72 of the Constitution ; and that, as the tenure of office of members of the Board did not comply with the requirement of that section, it was beyond the power of the Parliament to confer judicial power on the Board. It followed that the Board of Appeal was not and could not be validly constituted under the Act, and that the High Court could not entertain a case purporting to be stated by the Board pursuant to the provisions of the Act. To meet the position created hy this decision Parliament in 1925 passed the Income Tax Assessment Act 1925 (No. 28 of 1925). By that Act the name of the Board was changed from " Board of Appeal" to " Board of Review " and secs. 44 and 51 of the earlier Act were repealed, These sections were replaced by provisions which are in the words following : - '' 44. (1) A Board of Review shall have power to review such decisions of the Commissioner, Assistant Commissioner or Deputy Commissioner as are referred to it by the Commissioner under this Act and, for the purpose of reviewing such decisions, shall have all the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act, and such assessments, determinations and decisions of the Board, and the decisions of the Board upon review, shall, for all purposes (except for the purposes of sub-section 4 of section fifty and sub-section 6 of section fifty-one of this Act) be deemed to be assessments, determinations or decisions of the Commissioner. (2) Notwithstanding anything contained in this Act, a determination made by the Board under section twenty-one of this Act shall not be invalidated by reason of the fact that it is not made within the time prescribed by that section." "51. (1) Where a taxpayer has, in accordance with the

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to the decision referred to, and for the reasons there given. But, that decision standing, what after all is its effect upon the present case? The mere fact that it interprets a differently worded statute excludes its relevancy apart from enunciation or affirmation of some principle. It has no more relevancy than the interpretation of one will has to that of a different will. But as a matter of contrast it affords a powerful illustration. The difference in point of status and nature of function between the new Board of Review and the original Board of Appeal is the difference between daylight and dark. When Parliament has shown so unmistakably its resolve to steer clear of the judicial rocks plainly charted in the earlier case, it would be a serious matter to impute an intention which would wreck the legislation and confuse the finances. In the former legislation the Board of Appeal was linked up in character with the High Court and the Supreme Court of the State, and an appeal on law points was given to this Court in its appellate jurisdiction. That was an unmistakable and an inseparable indication that the Board of Appeal was intended by Parliament to exercise "judicial power." Where that legislative intention appears in addition to a tribunal so constituted, it must fail by reason of the constitutional provisions contained in sec. 71 of Chapter III. of the Constitution. And it matters not how that intention appears, so long as on proper methods of construction it does appear. It may appear, for instance, where the new tribunal is created expressly as a " Court " and the functions assigned are appropriate to judicial action. That is exemplified by Alewander's Case (1). And as to the importance of the nature of the tribunal see National Telephone Co. v. Postmaster-General (2). Or itmay appear simply from the nature of the functions assigned, where they are appropriate exclusively to judicial action, as punishment for crime or trial of actions for breach of contract or for wrongs. But there are many functions which are either inconsistent with strict judicial action, as the arbitral functions in Alexander's Case, or are consistent with either strict judicial or executive action. If inconsistent with judicial action, the question is at once answered. Tf consistent with either strictly judicial or executive action, the matter must be examined further. In a sense the function may

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royal justice by means of the King's judicial power is in itself a primary function ; the ascertainment or determination in a judicial manner of facts, whether controverted or not, for the purpose of carrying out executive functions in a just way is a secondary or incidental function attached to and taking its dominant character from the main purpose. The very same process may thus, in some instances, be either judicial or executive. A right of appeal from the decision of a Permanent Secretary to the Minister, whose direction is, after hearing the parties concerned, to govern their rights, is primarily executive. The same right of appeal to a Court is primarily judicial. The whole relevant legislation must, in such a case, be looked to in order to pronounce upon the question as to which category the particular function belongs to. If, for instance, the Legislature could validly go on to give the tribunal jurisdiction to enforce the decision by execution, the function would be judicial, since the concept of judicial power includes enforcement. If, however, the Legislature could not validly add that jurisdiction, then, in the absence of other controlling expressions - as in the British Imperial Oil Co.'s Case (1) - one would say the function assigned was not judicial. The application of these considerations to the present case leaves me in no doubt whatever as to the character of the function assigned to the Board of Review. The only judicial attribute here is that controverted matters of fact and discretion are to be decided by the Board if the taxpayer is dissatisfied with the Commissioner's decision regarding the assessment and, unless some misconstruction of the law takes place, the Board's decision stands as the assessment. All questions of law are for the Court. The power and function of finally determining matters of fact and even of discretion are not solely indicative of judicial action. That is an attribute common to administrative bodies, to subordinate bodies that are adjuncts to legislation, and to judicial bodies. (See Sir William Harrison Moore's Commonwealth of Australia, 2nd ed.,

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at pp. 305-306.) The character of the function often takes its colour largely from the primary character of the functionary, and depends also on how the decision is made binding and how enforced. Govern- ment could not be carried on without some administrative power of finally determining disputed facts. This is becoming every day more manifest and pressing. As was said by Viscount Haldane in Everett v. Griffiths (1), "the tendency of modern legislation has recently been to entrust to many who are prima facie only adminis- trative officers, functions which have some judicial attributes at all events, although they remain primarily administrators." His Lordship then refers to the cases of Board of Education vy. Rice (2) and Local Government Board v. Arlidge (3), and speaks of them as "administrative awards" attended with "' quasi-judicial powers." The word "appeal" is appropriately used even as to executive functions (see Arlidge's Case, per Lord Haldane L.C. (4), per Lord Parmoor (5), and very particularly per Lord Moulton (6) ). Everyone knows that the term " quasi-judicial " means not strictly judicial but analogous to judicial. The case of Lapointe v. L' Association de Bienfaisance et de Retraite de la Police de Montreal (7) shows this very clearly both in its own language and in the language quoted. In Fisher v. Keane (8) Jessel M.R. referred to the committee of a club as "a judicial, or quasi-judicial tribunal." I am quite unable to understand why Parliament, without in the least trenching upon the strictly judicial domain reserved for the -Judicature, cannot entrust successive administrative functionaries to consider and review assessments, making the final decision the governing factum fixing the taxpayer's liability. In doing that, what is there to prevent Parliament from enabling the Commissioner to contest the challenge of his initial accuracy ? For instance, if, instead of the Court, the Treasurer were made the ultimate functionary to settle the accuracy of the Board's assessments in -ease either the Commissioner or the taxpayer desired further revision and appeared to explain why, how could it be said with any show of reason that the Board's functions were of that strictly

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assimilating the Board to the Court, as in the old sec. 44, the Board in the new sec. 44 is assimilated to the Commissioner. Instead of the Board being given the powers and functions of the Court, it is given "the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act.'' Those are the only powers and functions conferred upon the Board for the purposes of decision. Other powers of formulation after decisions are given, but these are incidental only. (e) Sec. 44 then takes up the "decisions" of the Board and says they are for all purposes (with certain exceptions) to be deemed those " of the Commissioner." (f) The first exception is patently immaterial here. It is merely to prevent the taxpayer having a double choice instead of an alternative choice of tribunal from the Commissioner. (g) The second exception, when carefully examined, is really to negative the notion of the Board being judicial. It allows an appeal to the Court from any decision which in the opinion of the Court is a question of law. That is to say, the Crown is bound by all opinions of the Board on pure matters of fact - that is, on true administration of the law - - but as to law the Court, and not the Board, is to determine. The appeal being given to the Court in its original jurisdiction only - which is manifest when sec. 50 (4) (6) and sec. 51 (2) and (10) are compared

it follows necessarily that the Board's decision is not intended to be an exercise of the judicial power. The fact that the Commis- sioner may appeal as well as the taxpayer only indicates that the Crown as well as the subject may invoke the Court to correct a misconstruction of the law, which would, of course, affect not merely that taxpayer but all taxpayers in a similar position. (h) The Board's decision, when given, may, by sec. 51 (4), be formalized by confirming, reducing, increasing or varying the assessment. This is form only. (i) By the next sub-section it may order the forfeiture of the deposit if it thinks the reference frivolous or unreasonable. Administrative " orders" are numerous, and, in this instance, the exercise of the power rests, not on law, but on opinion. In any event the sub-section is quite subsidiary. This series of amendments, not only leaves the case of the British Imperial Oil Co. (1) no precedent (1) (1925) 35 C.L.R. 422.

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limb of sec. 55, the constitutional attack upon the legislation has been made, it would leave to the chance majority in Parliament for the time being to determine, by the mere form in which taxation Bills were framed, whether the constitutional powers and privileges of either House should be exercised or not. If such measures were introduced in one form, the Senate could not amend a line of any provision relating to the assessment, collection or enforcement of the tax; and, if in another form, it could amend every provision relating to the imposition of the tax. So far as taxation Bills are concerned, sec. 53 and the first limb of sec. 55 would be dead letters, The Constitution would become the plaything of political parties. Only one thing could avoid that result, that is, the entire exclusion of the Senate in the opinion of this Court from amendment even of a taxation machinery Bill. If, as seems to me unquestionable, no sensible distinction can be drawn between a Bill " imposing taxation" and a Bill "dealing with the imposition of taxation," then, if machinery for collection is incidental to, that is, incidentally included in, "imposition," it necessarily follows that the Senate cannot, consistently with sec. 53, amend an ordinary Assessment Bill at all. If this were held by the Court, and it is perhaps the only logical conclusion should the opposing contention be upheld, then one of two results would inevitably follow : either the Senate would, conformably to that opinion, be shorn of rights it has always by common consent enjoyed, or else both Houses of Parliament would with impunity constantly disregard the opinion of this Court and in the most practical manner declare its incorrectness. In either event the dominant intention of the Constitution in this respect would be defeated. It was that a political struggle should never take place ; that a surrender could never take place; that the Senate should never be in rea] danger of surrender; and that, if coercion were pressed so far as to be politically successful, it should not be legally successful, because this Court under sec. 55 would be the standing security for the maintenance of the rights of the Senate.

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such persons as might be declared by a later Act. Or, if such a Bill were originated in the House of Representatives, it could be amended in the Senate. Such a construction would, as is apparent, entirely annul the first three provisions quoted from sec. 53 and subvert the constitutional arrangement to the prejudice of the House of Representatives. It ought not, in my opinion, to receive the sanction of this Court. The expression law or proposed law "imposing taxation" has reference, not to the completeness or incompleteness of its provisions, but to the character or category which is properly applicable to it. It belongs to the category of laws by which a tax is "imposed." It may be in an absolutely complete form, or it may be in a form which needs some further provision or some further action to make it complete or operative. But, if it is essentially a measure appertaining to the classification of those " imposing taxation," then, even if it merely takes the first step as declaring that there shall be a poll tax leviable on such persons and at such rates as may be declared by some future Act, it is for the purposes of the Constitution a measure " imposing taxation." If it went on to name the rate, but left the persons on whom the tax should fall to be thereafter determined, the same result would follow. The proposition leads, indeed, to absurdity. If the words "law imposing taxation" mean a law which, as it stands, completely and presently "imposes taxation," though it may be from some future date, then the phrase " proposed law imposing taxation" means a proposed law which, as it stands, completely and presently imposes taxation. That would be nonsense, but inescapable nonsense. It shows that the words "Imposing taxation" are descriptive of the nature or character of the Bill or the law, and indicate the category it occupies in political practice. Any other construction leads, as is plain, not merely to a clear path for evasion of the Constitution, but to a misunderstanding of the history of the subject. We have only to imagine a Money Bill in England or in a State to enact that a tax of £1 a head should be henceforth imposed on horses, payable by such persons and with such exemptions as should thereafter be enacted. Could it be doubted that the Legislative Assembly of a State would regard that

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Assessment Act (No. 22 of 1910). Bearing that fact in mind, we can appreciate the words which follow : " Some confusion was introduced into the argument, I think, by the tacit assumption that a law dealing with taxation is necessarily a law imposing taxation." 1 stop there a moment because it is necessary in order to draw attention to the precision of the language used. "A law dealing with taxation " is the first phrase - that is, taxation in any or all of its branches ; not a law dealing with the " imposition" of taxation - that is, with one particular and exclusive branch of taxation. To fail to observe this is to fall into the confusion the learned Chief Justice was trying to dispel. Then, referring to the false tacit assumption he has stated, he proceeds to show its error. He says, in a passage the meaning of which appears to have been entirely reversed (1) : - Thatis notso, The terms arenotsynonymous. An Act imposing taxation may, like the English annual Finance Acts, both impose taxes and contain a complete scheme for their collection." The meaning that it has been, tacitly at all events, attempted to attach to those words is that that course may be taken under our Constitution. Nothing of the sort was intended. The learned Chief Justice was speaking of the traditional mode of taxation legislation. And his reference to the English Act shows it. And, further, it was for the very purpose of drawing the distinction between an Act " dealing with taxation" without restriction, and an Act dealing only with imposition of taxation. He goes on to show that by the next sentence: " Or the Act may impose taxation eo nomine, leaving its collection to be regulated by other laws." That is his example of an Act dealing only with the imposition. Observe the word " regulated," which is only an interchangeable term with "deal with." The learned Chief Justice used the words "deal with" at the foot of p. 336 in that sense. He has so far spoken of the well-understood branches of taxation legislation in order to apply the provisions of the Constitution to the Assessment Act No, 22 of 1910, Hesays: " Now, Act 22, when examined, does not on its face purport to impose taxation at all." He gives his reasons. He says: "The Act then goes on to make provision for assessing

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and levying the tax, which it assumes to have been imposed by another Act." The "collection" is not the " imposition." It has nothing to do with the imposition except that it is the legal machinery by which the obligation declared by the imposition is effectuated. The distinction and the separateness of the two conceptions appear from the Bill of Rights. The imposition is the "grant"; the collection (which includes assessment, levy, é&c.) is the " manner." "Grant" is purely legislative, "collection" is purely executive and must be legislatively authorized. The Constitution enforces that separateness. Anticipating what I have to say as to the third proposition, I should point out that the learned Chief Justice there plainly refutes it. For, notwithstanding the incorporating section, he treats Act No. 22 of 1910 as having an independent existence, and not as being a "law imposing taxation." He emphasizes that by pointing out that the incorporating section may affect the Taxing Act No. 21 of 1910, which is a different matter. The observations of Griffith C.J. fully establish that, if it were permissible here to follow the example of the English Finance Act, the Senate could not amend a word of it, because it would not only be an Act "dealing with taxation," which embraces both imposition and collection, but it would be an "Act imposing taxation," because it dealt with imposition. That, of course, he could have never intended to sanction by any opinion of his. Barton J. says (1): "The provisions for assessment and collection are é proper to an Act not imposing taxation." This is relevant to the second proposition. As to the third, he negatives it (2), where he says that the reference section made the two Acts one, but only for the purpose of interpretation. Clearly that means for the interpretation of the Taxing Act. O'Connor J. is in exact concurrence on these points with Griffith C.J. He says as to the Assessment Act (3) that it "though dealing with taxation, does not impose taxation, and is therefore not within the section." He does not suggest, but, in my opinion, denies, that it "' deals with the imposition of taxation." As to the third proposition, I have already added sufficient to my

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numerous cases under the United States Constitution. Under that Constitution no Federal Court can be created if the members have not a life tenure - a tenure " during good behaviour." By art. m1, sec. 1 - The judicial power of the United States shall be vested in one supreme court, and in such inferior courts, as the Congress may, from time to time, ordain and establish. The Judges, both of the supreme and inferior courts, shall hold their offices during good behaviour." These words are very clear; and yet it has been held that Courts of special jurisdiction may he created by Congress although the members of the Courts have a mere tenure for years, This principle has been applied to Courts created by Congress for the Territories (American Insurance Co. v. 356 Bales of Cotton (1) ). It has been applied to special tribunals for the settlement of claims against the United States to lands derived by the United States from Mexico (United States v. Coe (2); United States v. Ferreira (3) ; United States v. Ritchie (4) }. It has been applied to commissioners and examiners of patents (Butterworth v. Hoe (5); United States v. Duell (6)). It has been applied to the Inter-State Commerce Commission (Kentucky and I. Bridge Co. v. Louisville and N. R. Co. (7); Willoughby's Constitutional Law of the United States, vol. t., p. 369; vol. 1., pp. 970, 1276). In my dissenting judgment in Alexander's Case (8) I referred to these cases in the discussion as to the exercise of judicial power. I infer, also, that in the United States the judicial power would not be regarded as exercised by a tribunal if the tribunal has not been given the power to enforce the results of its decisions. '' That judicial power essentially involves the right to enforce the results of its exertion is elementary" (Virginia v. West Virginia (9) ). Neither Board of Appeal nor Board of Review has been given this power of enforcement under our Assessment Acts. The assistance of some legitimate Federal Court is necessary for the execution of any decision of the Board of Appeal or Board of Review; and although the decision of the Board of Appeal is made final and conclusive as to facts (sec. 51 (2) of the

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