y Y Pits v Torres

payments amounting to or exceeding one shilling in the aggregate made by one person for his admission to the main enclosure and the other enclc

tiff claimed declarations that certain of the-regulations were invalid, and the plaintiff was not liable to pay tax on any payments for admission to. entertainment save that it was liable to pay tax on any payment for adm to a separate entertainment which amounted to or exceeded one shilling. parties concurred in stating a case for the opinion of the Full Court upon th questions whether the regulations referred to were invalid and whether plaintiff was liable to pay entertainments tax on payments for adm: any entertainment other than that on any single payment for ad an entertainment which amounted to or exceeded one shilling.

Held, by Knox 0.5., Isaacs, Higgins, Rich and Starke JJ., that the qu should not be answered on the ground that, the facts upon which the cl to declarations was based being purely hypothetical, the Court should : make a declaratory order; and, by Higgins J., on the ground also that action was not " properly brought" within the meaning of Order IV., r. 1, ¢ Part I of the Rules of the High Court.

(asp STATED. An action was brought in the High Court by Luna Park Ltd.

mons, dated 20th October 1923, claimed (1) a declaration that reg. and/or reg. 30 of Statutory Rules No. 227 of 1917 as amended by 'Statutory Rules No. 299 of 1918 and Statutory Rules No. 218 of 1920 e or is invalid ; (2) a declaration that the plaintiff is not liable to

to any entertainment at Luna Park save that the plaintiff is lable

to pay entertainments tax on any payment for admi eparate entertainment which amounts to or exceeds one shilling.

Regs. 29 and 30 of the Entertainments Tax Regulations 1917 above ferred to are as follows : - '' 29. When a person is admitted to any of a place of entertainment and is subsequently admitted to

be payable on the total of the amounts paid for all the admissions as if the total amount had been paid for a single admission. 30. A

sfer ticket is issued to him; or (6) a stamped ticket for the full

e of admission to such other part of the place of entertainment

issued to him - if the total of the amounts paid in respect of all

he admissions is liable to entertainments tax. Penalty: 'Twenty »

_ The parties concurred in stating the questions of law arising in the

action in the following case for the opinion of the Full Court : -

1. The plaintiff is a company incorporated under the Companies

2. The plaintiff has for several years occupied and now occupies

and proposes to continue to occupy a piece of land at St. Kilda in

_ 3. The plaintiff has in the past managed and carried on at Luna

k the business of providing public amusements and entertain-

ments, and proposes and intends to reopen Luna Park on or about

2nd November 1923 for the purpose of managing and carrying on

ainst the Commonwealth in which the plaintiff by its writ of sum- Lewa Park

nother part or other parts of the place of entertainment, tax shall ©

Luna Park is enclosed by a fence and within the main ene! are other enclosures and areas within each of which other enclosur and areas other amusements or entertainments are provided.

The plaintiff has in the past conducted and proposes a intends to conduct its said business at Luna Park upon the follow ing system: (a) A payment of sixpence per adult for admission

the main enclosure where entertainment or amusement is provide

without further payment ; (b) a payment of a further sum of sixpene: per adult for admission to each of the other enclosures and are: (within the main enclosure) within each of which other entertainm« or amusements are provided ; (ce) smaller payments in each case fe children.

The plaintiff contends that under the system mentioned par. 5 hereof no entertainments tax will be payable by the plaint and that regs. 29 and 30 of Statutory Rules No. 227 of 1917 as amende by Statutory Rules No. 299 of 1918 and Statutory Rules No, 218 of 1920 are invalid. :

The defendant, the Commonwealth of Australia, contends that under the system mentioned in par. 5 hereof the plaintiff will be liable to pay entertainments tax on all payments amounting in the a gate to or exceeding one shilling made by or on behalf of any on person for his admission to the said main enclosure and the sa other enclosures and areas.

The defendant, the Commonwealth of Australia, claims that the plaintiff should pay or account for entertainments tax upon the basis set ca in as if Bosh oe intends and eat to

Assessment Act 1916 and the Regulations thereunder if the plaintiff does not do so.

The questions for the opinion of the High Conrt are : j (1) Whether reg. 29 and/or reg. 30 of Statutory Rules No. 227 of 1917 as amended by Statutory Rules No. 299 of 1918 an

Statutory Rules No, 218 of 1920 are or is invalid ; 4

(2) Whether the plaintiff is liable to pay entertainments be 2

on payment or payments for admission to any entertai

ment at Luna Park other than entertainments tax on an} :

single payment for admission to an entertainment which amounts to or exceeds one shilling.

Latham KC. and Owen Dixon K.C. (with them Spicer), for the plaintiff. An action for a declaration lies in this case under Order ., 1.1, of the Rules of the High Court. The Court found no difficulty in making a declaratory order in W. & A. McArthur Ltd. v. Queens- land (1) and Commonwealth v. Queensland (2). In the latter case ceedings were entertained as to the validity of a Queensland tatute and there was no statement of facts beyond a mere appre- hension that the statute would be enforced.

{Srarke J. In that case there was a trespass by the State upon e legislative power of the Commonwealth.

[Isases J. In W. & A. McArthur v. Queensland (1) there was an allegation that the plaintifi's trade would be destroyed if the statute 'in question were valid. |

The action is " properly brought " within the meaning of Order IV.,r. 1. It is not necessary that there should be a cause of action Dyson v. Attorney-General (3); Guaranty Trust Co. of New York y. Hannay & Co. (i)). In Dyson v. Attorney-General no more facts were stated to have occurred than in this case.

: [Kyox C.J. In that case every fact had occurred upon which the liability of the plaintiff to pay was based ; here no such fact has occurred.

{Ricu J. referred to In re Clay ; Clay v. Booth (5).|

The fact that a decision against the plaintiff might cause him to alter his mode of conducting Luna Park is not a ground for the Court refusing to make an order (Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd. (6) ). The Court has jurisdie- tion to make a declaratory order, and in the exercise of its discretion 'it should do so in this case. In exercising its discretion it will have regard to the importance of the matter, to the number of persons affected by it - for, if the tax is payable, every person who is admitted without the tax having been paid is liable to a penalty (sec. 15 (1) of (4) (1915) 2 K.B., 536, at p. 557. (5) (1919) 1 Ch., 66

the Entertainments Tax Assessment Act 1916), - and to the fact th that Act provides no method of appeal (see Smeeton v. Atto General (1)). Reg. 29 of the Entertainments Tax Regulations 191 is clearly in derogation of the common law rights which the plain claims to exercise. This case is on all fours with Automatic To sators Ltd. v. Federal Commissioner of Taxation (2). [Counsel als

Sir Edward Mitchell K.C. and C. Gavan Duffy, for the defenda did not offer any argument upon this question.

Kyox C.J. In this ease I do not think it is necessary to conside whether the Court has jurisdiction to make a declaration, for, ev¢ if it had, I do not think the case is one in which the application f¢ a declaration should be entertained. The state of facts on w1 the claim is based is purely hypothetical - If the company elect: to carry on its business in a certain way, will it be liable to pay a certain tax /"? It has always been the rule that the Court does not answer questions based on a hypothetical state of facts. If authority were needed for that, it will be found in the case of Glasgow Naviga- tion Co. v. Iron Ore Co. (4), where Lord Loreburn L.C. stated that it was not the function of a Court of law to advise parties as to what would be their rights under a hypothetical state of facts. If declaration were made, it would have no binding effect in the true sense at all. It would be no more than an abstract opinion in nature of advice that, if the company did certain things, it wou or would not become liable to pay a certain tax. None of the cases

opinion the questions should not be answered. Isaacs J. I agree.

Hicers J. In concurring with the judgment of the Court I wis

(1) (1920) 1 Ch., 85. (3) (1921) 1 K.B., 187. k (2) (1920) 27 C-L.R., 513. (4) (1910) A.C., 293, at p. 294.

am and Mr. Dizon rely I had the misfortune to differ from the majority of the Court. In the McArthur Case (1) and in the case of Jommonwealth v. Queensland (2) my personal opinion was, as stated the reports, that the action did not lie. But I am bound by the mn of the majority, and I loyally accept it. However, I am to find that in this case a limit is being put upon this class of ions. There certainly is a difference here from the former cases, and it is regarded by my colleagues as indicating a sufficient limit. Some effect, too, must be given to the additional words inserted in our Order IV., r. 1 - words which are not in the corresponding English rule - * the Court may make binding declarations of right an action properly brought." In my opinion this action is not properly brought. It is all the more important for the Court to atch jealously the limits of its powers when it finds that the Commissioner does not take the point. We might soon be led into ridiculous position.

Srarke J. Lagree. I would only add that the case of Automatic otalisators Ltd. v. Federal Commissioner of Taxation (3), to which ir. Dixon referred, is the nearest to this case, and I am by no means e that that case does not require further consideration.

• Solicitors for the plaintiff, Arthur Robinson & Co.

Solicitor for the defendant, Gordon H. Castle, Crown Solicitor for e Commonwealth.

(1) (1920) 28 C.L.R., 530. (2) (1920) 29 C.L.R., 1. (3) (1920) 27 C.L.R., 513. .