Ha & Anor v NSW & Ors S45/1996 [1997] HCATrans 105 (19 March 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S45 of 1996

B e t w e e n -

NGO NGO HA

First Plaintiff

SOKHIENG LIM

Second Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

R. G. SMITH

Third Defendant

Office of the Registry

Sydney No S165 of 1996

B e t w e e n -

WALTER HAMMOND & ASSOCIATES PTY LIMITED

Plaintiff

and

STATE OF NEW SOUTH WALES

First Defendant

BRUCE BUCHANAN

Second Defendant

I.P. SMITH

Third Defendant

Case Stated

BRENNAN CJ

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

GUMMOW J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 19 MARCH 1997, AT 10.02 AM

(Continued from 18/3/97)

Copyright in the High Court of Australia

BRENNAN CJ: Mr Jackson.

MR JACKSON: If the Court pleases, yesterday I was referring the Court to the Homebush Case 56 CLR and, in particular, there is a passage, your Honours, I omitted, I was not able to find the relevant part in Justice Starke's reasons. It is page 408. The relevant passage, your Honours, commences about point 4, the sentence saying, "But this court" and going through to about point 6 where his Honour refers in parentheses to The Commonwealth v COR Case. Your Honours, the point I was going to make about it was that his Honour says in the first of those sentences, perhaps, with respect, a little inaccurately, that:

Peterswald v Bartley, denied that the words were used in this extended sense in the Constitution : The Constitution limited the words to duties charged upon goods produced or manufactured in Australia itself or upon a sale of such commodities.

That probably takes Peterswald v Bartley too far, but his Honour seems to be putting together the idea of a tax on production or manufacture together with what was done in the COR Case, which is referred to a little later. Your Honours, that was all I wanted to say about that case, but may I go - and it is the last case to which I will go in this regard - to Matthews v Chicory Marketing Board 60 CLR 263. The point that I wanted to make about it was this, that it was not only Justice Dixon who, in that case, referred to the view that the term "excise" could extend beyond taxes imposed at production or manufacture.

Could I go first, your Honours, to Chief Justice Latham at page 276. Now, your Honours will see that at page 276, the second paragraph, he expresses the view that the levy was a tax and then goes on to deal with the question of whether it was an excise. Your Honours will see that dealt with in the next paragraph and then immediately following that the reference to the position in England where your Honours will see him set out a number of references and he describes at the bottom of that page the:

most heterogeneous collection of what may be called taxation oddments.

And your Honours will see then at the top of page 277 that he referred to the approach taken by the Court in Peterswald v Bartley and then, in the paragraph commencing at about point 5 on the page, said that:

the reasoning which led to the conclusion in Peterswald v Bartley does not necessarily limit the application of the term "excise" to taxes imposed upon goods at the very moment when they are "produced or manufactured." A tax possessing the other attributes mentioned in the passage which I have quoted may be an excise duty if it is imposed upon the sale or consumption of goods.

He describes, your Honours, in the next paragraph, the customs and excise duties as being essentially indirect taxes, and goes on to deal with that topic. Could I invite your Honours to note, at page 278, that, at about point 2 on the page, he observed something that your Honour Justice McHugh has mentioned, I think, once or twice in the course of this case, the fact that it is true that - his Honour said that:

commercial competition or other factors may prevent the actual addition of the whole amount of the duty to the price of goods in particular cases, but, even in such cases, a specific amount which has been paid as tax can be assigned to each and every article taxed.

No doubt his Honour was speaking of a notional kind of assignment. Your Honours, he discusses that, and related topics, through the remainder of that page and, if one goes then to page 279, about halfway down the page, says that the particular tax in question in that case was not an excise because his view was that it related to quantity or value of goods. Your Honours, the reason why I go to his Honour's reasons is not really that, but really to demonstrate that his Honour recognised, in that case, the possibility that an excise might be at a point other than production or manufacture.

Your Honours, if one goes to Justice Rich, at page 280, your Honours will see that he commences dealing with section 90 at about six or seven lines from the bottom of page 280 and, your Honours, at the bottom of the page, last line:

The question what is a duty of excise has engaged the attention of this court in Peterswald v. Bartley -

and he then discussed that through the remainder of page 281. Your Honours will see, in about the last third of page 281, where he deals with a matter which, if I might say in passing, is germane to the question whether regulation of some kind is sufficient to put what would otherwise be an excise in a different set of clothes and he says, in the last four lines on the page, that:

If the State authorizes a levy upon a commodity which in other respects is an excise, I think it is difficulty to see how the purpose for which the money is obtained can affect the question whether it comes within an excise.

Your Honours, Justice Starke, at page 284, at about point 4 on the page said that the term "excise" was not a technical term and popular meaning was not rigid. Your Honours will see then, about point 7 on the page, he refers to Peterswald v Bartley, and then, your Honours, refers on that same page to Attorney-General for British Columbia v Kingcome Navigation Co. Your Honours will see the quotation that he later adopts, and that is that:

"In their Lordships' opinion the customs or excise.....are duties which are imposed in respect of commercial dealings" such as, he explains, "their import or sale or production for sale".

Your Honours will see that at the top of the next page, having said that those observations were dealing with direct and indirect taxation, goes on to say, the third line on 285:

The leading characteristic of an indirect tax is that it is susceptible of being passed on, and customs and excise duties ordinarily exhibit this characteristic.

Your Honours will see, at about point 2 or 3 on the page:

The cases under the Canadian Constitution are descriptive rather than definitive.....and they are no authority for the proposition that a tax cannot be an excise duty unless it has the characteristics of an indirect tax.

Halfway down the page:

But, "in every case the first requisite is to ascertain he real nature of the tax". It does not depend upon the name.....but upon its operation and effect, as gathered from the language of the Act itself.

Your Honours will see also - I will not take your Honours to it because your Honours have been there already - Justice Dixon, at pages 291 to 303. Could I just say in relation to that, your Honours, that is where his Honour does discuss the history at length and it is not surprising that he does not do it again in Parton. Then from there, of course, one gets to Parton. The point we would seek to make from that is that it is not only Sir Owen Dixon who was conscious of this view and the possibility of it being ultimately adopted, as it was in Parton, was not new.

Could I go then, your Honours, to the argument put by New South Wales and the States and the Territories in relation to the current test. In our submission, the current test may be seen and it may be seen in two places. First, in Philip Morris 167 CLR at page 434 where Chief Justice Mason and Justice Deane adopted what your Honour Justice Brennan, the Chief Justice, had said in Hematite and in particular the passage commencing "Since then", at about point 7 or 8 on the page, going through that paragraph and also the next paragraph "The fact that the tax" and so on.

To similar effect, your Honours, are the observations in Capital Duplicators [No 2] at page 590. Could I just say something about the test. We would submit one can identify its nature from those observations. We would submit, if I may say so, your Honours, that it is not woolly or at least if it is woolly, it is no more woolly than a tax imposed upon production or manufacture. Because if the test is one of substance rather than form, then the woolliness of such a test would always have been there in relation to production and manufacture.

If I could just pause for a moment to deal with the question of substance rather than form. In relation to that, if one goes as far back as Peterswald v Bartley, one sees that it was clear at that point that the relevant test was one of substance rather than form. That that is so, your Honours, it may be seen from [1904] HCA 21; 1 CLR 497, at pages 510 and 511. The relevant passage commences at about point 7 on page 510 where it is said:

Therefore, such a tax is not, prima facie, a tax upon particular goods, but a condition -

et cetera. Your Honours will then see the discussion going on at the bottom of that page and the top of the next page, then particularly the reference to the dire warning by Lord Herschell which goes on to the top of page 511. Then what your Honours will see at about the sixth line on page 511, his Honour said:

In considering the validity of laws of this kind we must look at the substance and not the form. If the Statute is good in substance, the Court will regard the substance, and hold the law to be valid, whatever he form may be.

That goes through to about the middle of the page, where his Honour says:

The Act provides in substance that a person who -

and so on. The notion that one looked at the substance was one which persisted. One can see it in The Commonwealth v South Australia [1926] HCA 47; 38 CLR 408, and may I take your Honours to page 423, Justice Isaacs. The passage at page 423 commences at about point 6 and it is a passage commencing:

The prohibitions of secs 90 and 92 of the Constitution may be transgressed -

Your Honours, I will not read it out. It goes to the bottom of the page. It is put with the vigour that not infrequently attends Sir Isaac Isaacs' judgments, and perhaps the vigour that one tends to see in relation to discourses about section 90; but the proposition is there put strongly, perhaps a little over strongly.

One also sees in Justice Starke at page 438, and at about point 5 on the page his Honour says:

What is the Act in substance? Its title -

which he cites:

is immaterial if its true nature, character and substance is to impose duties of customs or of excise. Again, the motive of the Act, or the application -

and so on, goes through to the remainder of that paragraph. On the next page, 439, what your Honours will see about point 3 is that his Honour says:

The duty is, in this case, also a burden upon the commodity, and equally in substance a burden upon the importation of the commodity.

And that goes through, in a sense, for the remainder of that paragraph. So, your Honours, what we would submit is that there is really nothing new or heterodox in looking at substance rather than form in this context and, your Honours, it is of course something that all the Court held was the appropriate approach in relation to section 92. Could I just give your Honours the reference to that passage, in Cole v Whitfield [1988] HCA 18; 165 CLR 360 at 407 to 408.

Your Honours, there is, in our submission, no greater difficulty for the purposes of, say, section 55 of the Constitution with the present test than there would be with the test which is suggested by the States. In fact, your Honours, there is, in our submission, less difficulty because it is clear that every tax upon a step in the chain of production and distribution is an excise. There is no need to go into the finer distinctions involved in trying to determine whether a proposed law is, in substance, a tax on manufacture or production.

Your Honours, the need to make those distinctions and the air of economic unreality which, in our submission, is inherently associated with doing so is, no doubt, one of the features which led ultimately to the adoption of the view that an excise was a tax charged on any step in the chain of production and distribution. Your Honours, a similar observation applies in relation to the position of the States. The position, in our submission, is clear. The States cannot impose any taxes on the production or manufacture of goods or on steps in their distribution or sale.

They cannot do it as a matter of form or disguise - and I do not say that in a derogatory fashion - disguise the form if that is, in substance, what the tax is, they must look elsewhere. Your Honours, what we would submit is that it is a test which - and I appreciate, your Honours, there may be other views about it - in our submission, is one which is simple and is clear and - - -

KIRBY J: Consistent with your view, would the States be able to put a tax on consumption? Does distribution come to an end at the point of consumption?

MR JACKSON: Your Honour, may I say two things about it. The first is we have a little difficulty in seeing why consumption taxes are excepted. It does not matter for our purposes that they are, but we have a little difficulty, but it seems to be something that is a matter of authority and perhaps derives from the historical nature of a duty of excise.

KIRBY J: I realise it does not affect your case, but I ask you to test your propositions and the authority seems a little ambiguous.

MR JACKSON: Your Honour, one can trace it easily enough. The history of the authority, as it were, seems to come from Atlantic Smoke Shops v Conlon and the adoption of that by Justice Dixon.

KIRBY J: If you adopt your substance view, then is not a consumption tax also a tax that can be traced down the line and is on goods and would, therefore, run into the problem of the definition you are proffering?

MR JACKSON: No, your Honour. It depends what one is endeavouring to identify by reference to form or substance. If one says that a duty of excise is a duty which is one on a step prior to consumption, then the substance for which one is looking is to see whether the tax is of that kind. Now, if the way in which the tax is framed is to make it purely a duty on consumption then, whilst it may well have a similar ultimate economic effect, it would fall outside the boundaries of the test that one is seeking to apply. Your Honour, there are some logical difficulties. I accept that, your Honour, but they come about because of the excision from the concept of consumption rather than anything else. Your Honours, the other thing I was going to say about it was that the test, in our submission, is one which is clear. It is as simple as a test might be in the - - -

DAWSON J: That is all very well. It is clear at one end, but not at the other, because you cannot say what it is that prevents all sorts of taxes not being taxes on goods and yet you know perfectly well that they are not, within the meaning of excise anyway. Why is it, if a licence fee for the carrying of hydrocarbons, unrelated to the quantity, is an excise duty, why is not, for example - let us take the earlier example, payroll tax? That does not affect the cost of production.

MR JACKSON: Your Honour, what I was going to say was that it does in - - -

DAWSON J: So it is not a clear test. Not a clear test at that end and that is the trouble.

MR JACKSON: Your Honour, the approach that one takes, in our submission, is to look at the matters that are referred - I think it is footnote 99 in Capital Duplicators. If one does not exclude from consideration - and indeed a most material consideration in many cases -would be the form and operation of the statute. If one just takes the case of payroll tax to which there has been a number of references in the course of the case, if one looked at a general payroll tax that was made applicable by a State, then in the ordinary course of events, looking at that you would see that what it did was to make exigible from employers sums of money based on probably a sliding scale, dependent on the wages that they paid as the salaries they paid their employees; would not differentiate one from the other. But one might have a payroll tax that did not have an operation whose ambit was as wide as that. One starts to get to the area - - -

DAWSON J: But the width of the tax cannot - you may say it does but the Commonwealth Solicitor-General says it does not. He says a goods and services tax is an excise and obviously it applies to services which are not an excise. The fact that it applies generally across the board, on his agreement, does not matter.

MR JACKSON: Your Honour, could I just say I was simply seeking to set the stage for the next thing I was going to say and it was just this. If one had a tax of the kind I have described across the board, then it would be very difficult to describe it as an excise.

DAWSON J: Why? So far as a producer of goods is concerned, it is as much entering into the price of goods as a licence fee enters into the price of hydrocarbons which are carried in the pipeline.

MR JACKSON: Your Honour, if one says that the test is to look to see if it is a tax imposed on a step in production and so on of the goods, then, in our submission - - -

DAWSON J: That is not what you look to. That has been abandoned as a conclusive test.

MR JACKSON: I am simply seeking to describe the test.

DAWSON J: All right, that is one factor.

MR JACKSON: Your Honour, may I endeavour to put what I am trying to put. What I was going to say was this, that if you reduce the ambit of the tax that was imposed, one can do it in a number of stages and they approach closer and closer to what might be, on our submission, a duty of excise. If, for example, the payroll tax was one that was not imposed generally to persons who are providers of goods, services or whatever, but was imposed upon persons who were wholesalers and/or retailer of goods, you are getting a bit closer; if one goes to the next stage and says, for example, that it is a payroll tax that is applied to persons who are wholesalers and retailers of particular types of goods such as liquor, tobacco or something of that kind, again it becomes closer. If one said that it applies to employees engaged in the - it is a tax on the wages paid to employees engaged in breweries or in bottle shops, that sort of thing, your Honour, in the last cases to which I was referring the view that, as a matter of substance, the tax was a duty of excise, though it was expressed as being a payroll tax, is a view that, in our submission, would be very open.

DAWSON J: That come very close to what Justice McHugh was earlier suggesting; that a tax on particular goods is an excise, but not a general tax.

MR JACKSON: Your Honour, the fact that a tax is imposed in relation to particular goods is a factor, in our submission, that makes it more likely that the tax is something that is capable of description as a duty of excise. We would not, I think, adopt - well, it does not ultimately matter, in terms of result - the proposition that duties of excise are only duties imposed by reference to particular goods, because one does have the difficulty, in that case, what if some goods are identified in one statute and, then, in the same statute other classes of goods, and then another class, and another class. How many classes can you identify? Or, if you identify goods by reference to classes, as distinct from - or by generic things, does it cease to be a duty of excise?

But, your Honour, all I am seeking to say is that one can say, as a broad proposition, that an overall payroll tax would not be, on our tests, a duty of excise.

DAWSON J: What do you say about a value added tax?

MR JACKSON: A value added tax payable by a consumer, your Honour?

DAWSON J: Payable by consumers at various stages along the line, yes. Not necessarily the ultimate consumer.

MR JACKSON: Well, your Honour, it is a distinct possibility that a value added tax in relation to goods would be, because it would be a tax on a step in the chain, a tax imposed by reference to the step, and a tax which, if one is concerned about economic effect, was likely to increase the cost to the consumer.

DAWSON J: You can say the same thing about a payroll tax in relation to producers of goods, because it is a tax on the step of producing the goods, paying wages for those who produce it.

MR JACKSON: Your Honour, that is literally true in some cases. It is not true in every case because - it is true enough, no doubt, if one is looking at the case of the single substance producer, or the person whose only production is in relation to goods all of which are the subject of similar duties. But, if one is looking at the case of someone who produces, for example, a number of things - if you took, for example, Dunhill, which, as well as producing tobacco products, produces other items that have got nothing to do with tobacco, and has for many years, well now, your Honour, a payroll tax on their goods is not necessarily something that is going to go into one set of goods or another set of goods. Ultimately, it will increase the cost of production of goods as a whole, but there are other things they do as well. I mean, companies engage in both goods and services. So, your Honour, sometimes it will be true, sometimes it will not.

McHUGH J: Mr Jackson, what do you say about the Commonwealth Excise Act, which was Act No 9 of 1901, in so far as it might be thought to convey some evidence as to the contemporary meaning of excise? That legislation, I remember, imposed the duty on the manufacturer. It made the goods subject to the control of the customs until they were entered for home consumption or exported and acquired the duty be payable before the goods were entered for home consumption. That certainly does seem to indicate that the contemporary view of excise was quite narrow.

MR JACKSON: Your Honour, what it really demonstrates is a number of things. The Act that was imposed was one that reflects very much, perhaps as one might expect, one of the State Acts that was in being at the time - I cannot remember whether it was Victoria or New South Wales, I am afraid, your Honour - but it reflects that very much. What it was doing was really to, in our submission, pick up at that point what had been the position in relation to the States, without attempting to go beyond that at that point. Your Honour, it is an indication of what contemporary usage was; but usage, not necessarily in the sense of the term but what had been the usage in terms of what had actually been done to that time, what use had been made of it.

Your Honour, we will accept that one of the sources to which one is perfectly entitled to go to see what excise meant was the contemporary usage of it; but what we would say is that it does not follow from that that the extent to which duties of excise had been imposed to that point exhausted the concept of duties of excise that was contemplated by section 90.

GUMMOW J: Mr Jackson, in your definition of "excise" are you confining yourself to inland goods?

MR JACKSON: No, your Honour. In the sense of inland produced goods?

GUMMOW J: Australian produced goods.

MR JACKSON: No, your Honour.

GUMMOW J: In so far as the goods are imported goods, could one not get into a debate as to whether or not the impost in substance was a customs duty?

MR JACKSON: Your Honour, the issue certainly can arise. It could arise particularly - in fact, it has arisen but has not, I think, yet been decided - in relation to the extended operation given by section 3(4) of the Act to goods that was a sale outside New South Wales and tobacco brought in. Your Honour, yes, it does, speaking more generally, because one does have a situation that section 90 contemplates both duties of customs and duties of excise. If duties of excise are treated as applying only to goods produced in Australia, then the situation, ex hypothesi, is that the other goods will be goods not produced in Australia, ones that are imported, and in our submission, the other half of section 90 applies.

Your Honours, could I conclude by just referring to one other matter and it is the argument that the term "excise" in section 90 is a mirror image of the term "bounty". Your Honour, that too is not novel; it was one that commended itself to Justice Menzies in Dickenson's Arcade 130 CLR 213.

Your Honours, there is just one other matter, it is a matter that I mentioned, in a sense, on behalf of the Solicitor-General for the Commonwealth. At pages 328 through to about 331 of the transcript of these proceedings, there is some discussion between him and your Honours Justice Gummow and Justice Dawson concerning what was to happen to the States in relation to their finances immediately after Federation. Could I just give your Honours a reference. It is discussed in Mills Taxation in Australia at pages 204 through to about 208. Your Honours, what there is is, in effect, the speech by the first Commonwealth Treasurer when presenting the - - -

McHUGH J: Is this the 1925 edition?

MR JACKSON: Yes, your Honour.

KIRBY J: Is this extract in the South Australian materials?

MR JACKSON: I do not think this is, your Honour, this passage.

KIRBY J: Perhaps it might be helpful if it can be copied for us.

MR JACKSON: Yes, your Honour. Can I give your Honours the reference to it now and undertake, on behalf of the Commonwealth, for the moment to do it, a matter in perfect obligation, if I may so with respect. Your Honours, at page 204 through to about 208, what appears from that is, what was said at the bottom of page 207 in the speech is that:

We are -

"we" being the Commonwealth -

merely trustees for the States with regard to that money -

money from customs and excise -

and must not use more than one-fourth;

and he said:

as I have said, we should be very cautious, because we are spending not our own, but State money.

Your Honours, one sees that on the next page the author says that that had the result that the Commonwealth adopted a policy of - Your Honours, that is where the passage may be found.

BRENNAN CJ: Mr Jackson, can I ask you one other question? Is the test to be applied under section 55 for determining whether a law is a law with respect to duties of excise the same test as that which is to be applied under section 90 to a State law where the question is whether the State law seeks to escape the limitation on power therein contained?

MR JACKSON: Your Honour, could I answer it by saying this, and can I start first by saying that there seems no particular reason why the terms "duties of customs" and "or of excise" in the two provisions should ultimately mean different things, but one does have to bear in mind that the issue arises in different ways. The issue that arises under section 55 is whether the law as it comes, in effect, to the Houses of Parliament is one which presents a law imposing a duty of customs or a duty of excise. Ultimately, the Court will decide that, as it will decide in both cases. There seems no particular reason, your Honour, why the test would be different, in our submission.

BRENNAN CJ: The usual way of determining the character of the law for the purpose of determining whether it is within federal power is to look to its operation after construing its terms. Does one look to the question of substance under section 55 in the same way as one looks to the question of substance under section 90?

MR JACKSON: Your Honour, we would, I think, answer that by saying yes, but appreciating that there is a possibility of another view. The difficulty in adopting the other view, as it were, is this: in the end the body which, or the institution, as it were, that decides the correctness of the question, or the answer to the question, will be the Court. There may be difficulties if a different test were to be applied, one to the other, because one does have to decide in relation to the Commonwealth law whether it is a law imposing a duty of excise.

It is perfectly possible, and one has to bear in mind that section 55 performs a public function, of course, and one in which the States, through their "representatives", and I use the term in inverted commas, of course, have an interest, and it is one in terms of the Senate - the decision of the Senate. So, your Honours, in the end we would submit the test is ultimately the same.

BRENNAN CJ: Yes, thank you.

MR JACKSON: Your Honours, those are our submissions.

KIRBY J: Mr Jackson, I have just one small matter; I think I raised this with you in an interlocutory matter. Does your client call herself Ms Ngo or Ms Ha? What is her surname?

MR JACKSON: Ha and Lim, I believe, your Honour.

KIRBY J: Ha is the surname?

MR JACKSON: That is Ha and Lim respectively.

KIRBY J: Thank you.

MR SPIGELMAN: Could I take your Honours in the first instance to section 95 which is relied upon by the Solicitor-General for the Commonwealth and I do so in order to highlight a particular aspect of section 90.

Section 95 is a transitional provision; it was soon spent. The fact that during that transitional period the concept of a duty at the border between States was described as a customs duty, as it had hitherto been described, does not say anything about the appropriateness of that term for its meaning in either section 55 or section 90.

Could I just go to section 90? It turns on a critical precondition:

On the imposition of uniform duties of customs the power of the Parliament -

One must first identify a power of the Parliament. If the Commonwealth Parliament has no power to impose a duty at the border then section 90 does no work in terms of making such a power exclusive. The power does not exist. The Commonwealth has no power to apply a duty at the border for three alternative reasons: section 51(ii) prevents it from discriminating between States; section 99 prevents a preference, and if all that fails, section 92 prevents such an imposition. No duty at the border can be imposed by the Commonwealth Parliament, and the border between States, and accordingly, section 90 simply does not operate. What stops the States imposing such a duty is section 92.

This matter arises because of the difference between whether or not our home production test is to be goods produced in a State, as Justice Murphy indicated and your Honour Justice Dawson seemed to accept, and goods produced in Australia, as Justices Toohey and Gaudron have accepted. We say it does not matter which one, it makes no difference to our basic point, but if we are right about this it means there cannot be a customs or any other duty at the border because no level of government has power to impose such and, accordingly, one does not need a word for something that one does not have. The text of the Constitution links quite clearly, we submit, the concept of customs to imports into Australia.

BRENNAN CJ: Can I just ask you to pause for a moment in relation to your last submission. If we are looking at those terms in order to ascertain their connotation, not their denotation, then does your submission stand up?

MR SPIGELMAN: Yes, their connotation in 1900 was that the power of the Parliament to impose duties of customs in section 90 was at that stage customs with respect to imported goods, imported into the Commonwealth.

BRENNAN CJ: Why not imported into a relevant area?

MR SPIGELMAN: No. We submit the word "customs" by reason of the fact that nobody can impose duties, either the Commonwealth or the State, on cross-border transactions, these words do not need any limitation other than Australia. The word "customs" does not need any limitation other than Australia. Your Honours will see in the second paragraph of 92 - - -

BRENNAN CJ: Why does it need that limitation? Why is not a duty of customs a duty imposed with respect to the importation of goods across a border?

MR SPIGELMAN: We submit that in this Constitution duties of customs mean importation into Australia and duties of excise are to be defined separately.

DAWSON J: Well, in that sense because you are not talking about customs duties in the abstract. You have made this point. You are talking about the power of Parliament.

MR SPIGELMAN: That is right. Not only that. If you look at the second paragraph of section 92 it talks about:

goods imported before the imposition of uniform duties of customs into any State.....on thence passing into another State -

Now, duties of customs, we say, there means imported into Australia and the concept of passing into another State is a separate process. Similarly, in 93(i) one has the same distinction "goods imported into a State" - duties of customs - "and afterwards passing into another State". So the concept of customs is, we say, imported into Australia from outside of Australia and then the passing into another State is a separate step. Can I refer briefly, because I am conscious of the time, that Quick & Garran discuss this at about 859 point 5 and that we say there is a distinction between customs, which applies to imports, and meant by that, not across a border of any character, but into the Commonwealth created by the Constitution.

Your Honours, at page 262, the Solicitor-General for the Commonwealth characterised our approach as defining only a little corner. At 269, he referred to it as some sort of "fiscally unimportant criteria". Yesterday he referred to one of the select, and very few exclusive powers as a basis for giving it some sort of broader significance. This seemed to pick up some of the language that your Honour Justice Kirby had used about why one of the few exclusive powers should be given what may be described as a narrow construction. We say this is not a narrow construction.

When one goes through Justice Dixon's three alternative formulations of this proposition, in Matthews, at 304, your Honours will recall, in the context of the quantity or value link, he used the words "evasion by easy subterfuges or unreal distinctions." In Parton it had become "matter of mere formal significance." In Dennis Hotels, which I think your Honour Justice McHugh referred to at 540, the concept was it was:

ridiculous to say that a State inland tax -

on both imports and home production was neither a customs, nor an excise. Now, these are very strong words.

KIRBY J: The second case you mentioned was Parton, was it?

MR SPIGELMAN: Parton, "mere formal significance". It was a phrase that I used and directed when I was dealing with Parton. But it occurs in all three of the key judgments by Justice Dixon, and he had obviously warmed to the task. But these were strong words to use in response to a proposition that Sir Samuel Griffith, Sir Isaac Isaacs and Sir John Latham had all agreed to.

Now, we say there is nothing narrow, there is nothing formal, there is subterfuge, there is nothing ridiculous, nor anything about circumventing by opposing a tax further down the line. Our definition of section 90 retains the basic objective, if we are right about the objective, of tariff policy. Now, the one thing that you cannot say about 1900 is that tariff policy, and the fulfilment of the tariff policy, could be described as merely being a "formal significance", or "a subterfuge", or "ridiculous", or any of the other language that had been applied. This was the lion in the path. Your Honours have heard that. It was the most important single decision that the draftsmen of the Constitution had to resolve, and it was - - -

McHUGH J: But one of the difficulties with it is that the tariff policy was not given as a reason for the terms of section 90, or enacting it, at the convention debates, in all events, was it?

MR SPIGELMAN: We say it was, and that if one reads the convention debates, it was in the context of a discussion about tariff policy. Not all the terminology is one way, and there is a lot of difficulties of using convention debates But it was in the context of an economic policy of the character which reflected the basic, we say, political thought line of that time. The political thought line since that time is, perhaps, Labor and Liberal, or Labor or Capital, however one defines it. At that time, the most important political thought line in Australia was free trade and protection and, to say that something which fulfilled - that was reflected in the convention. It is reflected in the Constitution.

McHUGH J: As Sir Garfield Barwick pointed out in argument in Hughes v Vale Sir Henry Parkes named his son Cobden.

MR SPIGELMAN: And because of that significance, at the time, to the draftsman of the Constitution, reflected in the Constitution of votes, reflected in the history of the referenda and why we had to have two sets of referenda, and reflected in the terminology, this was the most important single job they were doing. That is why something which fulfils and satisfies that single task of tariff policy, external trade policy in the general sense cannot be dismissed as formally significant. It is only if you make the assumption, as Sir Owen Dixon did, that it has some other significance about the monopoly on taxation of commodities. It you make that assumption that it goes beyond that very significant issue in the debates, then one can start using words like evasion by subterfuges and the like.

The most important thing that seems to have emerged, particularly from Mr Jackson's submission, is that one cannot construe this provision in the Constitution in accordance with the way one construes any other provision in the Constitution or any statute because, apparently because no one could agree on what the meaning was, they left it to the Court. The Court cannot approach it that way. The Court has to say that someone, whether it be the delegates to the convention or the people in the adoption or the English Parliament, intended this language to mean something. It had a no definite meaning. That seems to be clear. There was a wide range of possible meanings. The key thing in that is that therefore dictionary definitions do not help very much. What matters is the purpose and that is determinative. We say we identify a purpose. There are other purposes suggested and I will come to them but dictionary definitions and definitions in England or America are not going to be helpful.

There is a passage in Justice Isaacs decision in Commonwealth Oil Refineries Case - I do not ask your Honours to go to it. For purposes of dealing with Mr Jackson's basic submissions, I would like to draw attention to it. It was this. At 426 in Commonwealth Oil Refineries, right at the top of the page and I read elsewhere from that page, Justice Isaacs made a reference:

The concatenation of the three branches of finance, customs, excise and bounties.....in the Australian Constitution, their evident interdependence and mutual action and reaction -

and that is critical to the construction of the purpose. That concatenation of the three elements. Customs and excise travel together. They are one side of the coin, on the other is bounties. This in Commonwealth Oil Refineries led him, Justice Isaacs, to reject the broader English view of excise. That concatenation is still central.

Mr Jackson gave three reasons at transcript pages 370 to 371 why section 90 could not be limited to a tariff policy purpose. First, he said was that there was some revenue purpose. Now, 51(ii) clearly has a revenue purpose. What is the revenue purpose of section 90? Section 90 is a provision for exclusivity and what one must find is a purpose for that exclusivity. It is not just that it is one of a number of provisions that has effects on revenue - and he referred to other sections in Chapter IV - it is not a question of what the revenue effect is but what the revenue purpose is of exclusivity. All he said in that respect was that it would give the Commonwealth access to this area of taxation unhampered, he said, by similar access by the States. We submit that there is no proper basis for suggesting that Commonwealth revenue raising would be hampered by such State access. When one looks at the mischief, after Cole v Whitfield, one can look at the convention debates. We have gone down those and they are not all one way but there is nothing in them which suggests that a hampering of Commonwealth revenue raising was the purpose or the reason for an exclusivity or that it was in any way relevant.

What does "hampered" mean here, particularly with respect to customs, for example? How does one hamper customs collection? In the question of hampering Commonwealth collection, perhaps of excises, perhaps there is some question of priorities that may arise if an individual goes bankrupt owing excises and other taxes. If he does that, why is it only State excise taxes? Your Honour Justice Dawson has made this point perfectly well. If a person cannot pay his excise taxes, State ones, if there are such, he cannot pay his State payroll taxes or stamp duties or anything else, why is it only State excise taxes that are made exclusive if there is a priorities issue?

Finally, there is the concatenation point on how do you hamper bounties? You see, section 90 does not deal only with the expenditure side. It does not deal only with questions of revenue - sorry, does not deal only with the revenue side, it also deals with the expenditure side of the Commonwealth budget, namely, bounties. It is in that concatenation that the true purpose is known and it is not a revenue purpose, however defined in terms of hampering or otherwise, it is an economic purpose. The question is, at what level of generality does that economic purpose be drawn? We submit that it is in the context of trade and trade policy. Justice Dixon's views were real control of taxation on commodities, which we did not understand to be a revenue matter but more a controlling the economy kind of concept.

The second matter that Mr Jackson referred to was that exclusive power could be used to achieve non-tariff purposes, like a tax discouraging consumption. Once again the question is, that is true of the power under 51(ii) but why is it that this is an exclusivity? Why is the exclusivity of such a power the thing that has to be explained. The third issue he mentioned was bounties on export, and he said they could be used to encourage interstate traders to use infrastructure. He mentioned the sugar terminal in Brisbane.

We do not understand, if that is the objective, why there is no ban on a direct State subsidy for the matter. There is a ban on the bounty for export - you cannot do a bounty for export, but if, for example, you can charge them what you like on your railways, if you own the railways to get there, and if you own the terminal you can give them whatever subsidy you like. If it is third party transport or terminal the State can give a bounty for the transport, it can give a bounty for the operation of the terminal, what it cannot do is a give a bounty for export. What we say is that the very limitation to bounty on export indicates that one looks for a purpose which is narrower than the purpose for which my friends contend.

Mr Jackson indicated that there was nothing in Matthews and Parton about tariff policy. We are at idem on that and that is where his Honour went wrong. Mr Griffith suggested a test of excise as an impost on goods in Australia. This, we think, is the equivalent of an inland tax. One will notice that there is no reference to steps in production or distribution or anything like that. It is just impost on goods in Australia. It may have some support in the inland tax passage at 590 of the Capital Duplicator [No 2] decision, which relied on Justice Rich. Justice Rich had not hitherto been accepted in this Court. Indeed, we submit he had been rejected.

Justice Rich himself accepted in Homebush Flour Mills 56 CLR 403 that the majority in Commonwealth Oil Refineries were against him. Furthermore, Justice Rich's views have been rejected in subsequent cases, we submit, like Bolton v Madsen and the like. The analysis of that on which we would rely is Justice Menzies' summary of a whole line of cases. That appears in Hamersley Iron 120 CLR, the passages at 64 to 66, in which he ended up with the view that Justice Rich went too far and that his view was inconsistent with what the Court had then accepted to be the test.

Now, Justice Rich highlighted in his passage and particularly the passage in the joint judgment with Justice Williams in Parton was the key thing was the existence of goods. Now, that seems to be the test that the Commonwealth now adopts. Now, there is an interesting distinction. A customs is an impost on entry they say, namely, some sort of activity. That is not at the same conceptual level as an impost on goods because of their mere existence. It is a different conceptual level. One is an activity of some entry and the other is they are there and, therefore, it is on goods. What we say the equivalent to entry into Australia for customs is, is entry into the economy, namely, by production and manufacture and it is that first point of entry. That is where customs and excise, which throughout these provisions travelled together, can have a common meaning at a similar level.

GUMMOW J: Mr Spigelman, can I ask you this. As I understand it, you are saying when one construes section 90 one looks at the term "excise" and does so assisting oneself by saying, "What was the purpose of making the power exclusive in section 90?"

MR SPIGELMAN: Yes.

GUMMOW J: To what extent does one perform the same or a different task with section 55?

MR SPIGELMAN: One performs the same task. It is not clear exactly why customs and excise were separate, but remember what section 55 is doing. It is concerned with the powers of the Senate and in a general sense what it is saying is - it is exempting laws imposing duties of customs and excise from the requirement of dealing with only one subject and the reason that is doing it is because the States cannot impose such laws, the States House should not be able to interfere with them either. That is general as an objective, but it is the same kind of idea as the exclusive power.

GUMMOW J: It does not seem to have much to do with tariff policy.

MR SPIGELMAN: In section 55?

GUMMOW J: Yes.

MR SPIGELMAN: We submit that it has the same meaning in the sense that it has the same objective, namely, when Commonwealth imposes customs and excise, what one is doing is the relationship between the two is the critical thing, and what they are saying is that perhaps the Senate can look at them separately, but together they are not subject to the restriction. This all operates as an exemption from the obligation to have only one subject matter of taxation. The reason for that exemption is to allow the Senate, as it were, to reject one and not have to accept a package.

So, understood in that way, it is not precisely coinciding with the objective of section 90, but it is in the same area, namely the State's House cannot do what themselves cannot do. There is no perfect logic in this, but one can see why one would regard it as overlapping.

Mr Jackson proposed the test at Philip Morris at page 435 which adopted your Honour Justice Brennan in Hematite. That passage referred to production, manufacture or distribution; it did not make a reference to sale. There are other such references to sale, and obviously not to consumption.

In Capital Duplicators at page 590, the other aspect of the test on which he relied, was that it did include sale. So, there is a difference here - it included sale because it was part of the inland taxes concept. We think that Capital Duplicators went further than previous authorities in this regard, without acknowledging that those previous authorities, including the way that Justice Rich had not been accepted in previous cases. Of course, Bolton v Madsen, itself, which was in this respect in terms of the identification of the formula, the Parton formula, was a little ambiguous because it referred to before it reaches the hands of the consumer, and it was ambiguous as to sale.

Once again the critical question is the degree of connection between the tax and the goods, which your Honour the Chief Justice has directed attention to. Mr Griffith has referred to a case on section 114 which, as your Honours are aware, referred to a tax on property - referred to South Australia v The Commonwealth 174 CLR; referred to your Honour Justice Dawson at page 258, referring to how substantial the connection is.

At page 259 point 2 in your Honour's judgment and in 249 point 2 in the joint judgment, there is a clear distinction between a tax upon property and a tax upon transactions affecting property, and it is the same distinction here. The case law on 114 refers to a tax on property, refers to something on the ownership or holding of the property, but there is a substance issue there too as South Australia and the Commonwealth indicated.

We say that the question "ownership or holding of a property" as a test is equivalent to "on production or manufacture". So, if one wants tax on goods, the Court's jurisprudence about tax on property is relevant but other dealings should be mere transactions in the same way as in section 114 territory a transaction is not enough, and that is why the test that Dr Griffith eventually put to your Honours late yesterday in his submissions about dealings was too broad. It is at page 356 of the transcript. Your Honour the Chief Justice summed up what he had said by saying a tax imposed by reference to a dealing with goods, dealings being of a particular kind, namely, a step in production, et cetera.

We say that that is not in accordance with the Court's jurisprudence on 114. A dealing is not enough. It is equivalent to a transaction and we say it has to be closer than that in order to be on goods. Dr Griffith also relied heavily on what he saw as an inconsistency between his concept of a free trade area and said that that was the broader purpose, the broader economic purpose, that if States can tax not in a differential way, tax their own product and product of other States or overseas, then somehow or other the free trade area is cut down.

We say that is wrong, that the free trade area has never gone that far, that the concept of the free trade area on which he relies seems to be some sort of equality of outcome, but the free trade area for which the Constitution provides is about equality of treatment, not of outcome, because the outcomes will inevitably differ.

We rely on Cole v Whitfield, particularly the passage at the foot of 392, over to 393:

The expression "free trade" commonly signified in the nineteenth century, as it does today, an absence of protectionist, ie., the protection of domestic industries against foreign competition.

Free trade area does not mean every individual in Australia pays the same amount for the particular commodity. Of course, that could never happen. Transport costs are enough to ensure that. A good could cost $100 - let us just look at 51(ii), the Commonwealth cannot discriminate. A good that costs $100 in Melbourne costs $110 in Brisbane and $120 in Perth by reason of transport costs. If you add a 10 per cent sales tax for that good at the Commonwealth level it is equal, there is no discrimination, but it increases the price in Victoria by $10, in Queensland by $11 and in Western Australia by $12, as an example. Your Honour Justice Dawson's examples of different State policies affecting consumer prices are the same, not only taxes but other kinds of policies about industries' regulation of manufacturing, trading conditions and the like.

Free trade means differential or discriminatory imposts, that is equality of treatment. It does not mean equality of outcome. Where this equality of outcome comes from overlaps with a point that your Honour Justice Gummow raised with Dr Griffith, namely, about the interests of the people. Where one refers to a guarantee to the people; that section 90 is some sort of guarantee to the people. Your Honour referred to Hematite. It emerges in Hematite for the first time in Justice Deane's judgment at 275 - I am sorry, that is a transcript reference. It is 661 to 662 of Hematite where his Honour, for the first time, says that it guaranteed the people "equality" in respect of the burden of duties and the benefit of "bounties which they were entitled to receive." Bounties was not quite right because they were bounties on production or export only.

This matter arose again in Capital Duplicators [No 1], and I will come to that presently. That was a joint judgment of Justice Deane, the Chief Justice and Justice Toohey. In between, the concept of equality of outcome had featured prominently in Justice Deane and Justice Toohey's joint judgment in Leeth. This idea of a guarantee of equality is the same kind of guarantee as that one in Leeth.

McHUGH J: Your argument about transport costs may not be right. It depends whether discrimination in 51(ii) means facial discrimination or disparate impact. That is a case that may be - - -

MR SPIGELMAN: I am coming to that in 60 seconds. Your Honours, in Capital Duplicators [No 1] Case in which there is this discussion about a free trade area, we say it is based on Cole v Whitfield. It is the same free trade area and there is absolutely nothing inconsistent with our position in the free trade area properly understood. There is words concerning uniformity of excise and a guarantee of equality in regards to excise duties in the joint judgment of the three Judges I mentioned a moment ago. Justice Gaudron, who was the other member of the majority in Capital Duplicators [No 1], made no such reference. Uniformity - no equality. Justice Toohey pointed out in this case, transcript 272, to Dr Griffiths, as I recall, that Capital Duplicators [No 1] does not purport to define either free trade or excise. It picks up the expressions and that is so.

We say trade is free in the relevant constitutional sense even if ultimate consumers pay different prices. The new concept of free trade for which the Commonwealth addresses is some sort of equality of outcome, not treatment. That is not what the Constitution provides. Section 51(ii), to come back to it, is a similar provision in the sense that it refers to no discrimination between States and section 99 refers similarly to no preference. The Court has long recognised that there is no discrimination, nor any preference, when a uniform rule, ie, equal treatment, has a varying operation or effect, ie, unequal outcome.

McHUGH J: Yes, I know, but that was before the whole new jurisprudence arose in respect of discrimination and in Street's Case we looked at the disparate impact as opposed to - - -

MR SPIGELMAN: The Court did, but we say that that does not apply to the concept of a tax, that that analysis ought not apply the Courts up to the tax.

McHUGH J: Discrimination.

MR SPIGELMAN: No, not the discrimination but the analysis - a tax - I know everyone has been running away from criterion of liability in this area of discourse but when one is dealing with a taxing statute there is very little else that a tax statute is about but the criterion of liability. The only other thing it is about is rates. We would submit that that line of authority is still the good line of authority and that it is not qualified by Street v The Bar Association in this area. Can I give your Honours the references, James v Commonwealth [1928] HCA 45; (1928) 41 CLR 442 at 462; Conroy v Carter [1968] HCA 39; 118 CLR 90 particularly at 101 and 103; Colonial Sugar Refining v Irving (1906) AC 360 at 367; your Honour Justice Kirby sitting in the Court of Appeal of New South Wales had occasion to refer that latter case in Chau v Commonwealth DPP (1965) 37 NSWLR 639 at 652 to 3.

McHUGH J: I cannot recollect whether I mentioned it in my judgment in Street. I do not think I did, but I remember I worried about - - -

MR SPIGELMAN: These other cases.

McHUGH J: Yes.

MR SPIGELMAN: Your Honour, that did not become clear to the readers. May I say these other cases operated - when one is talking about abstractions like States, the concept of discrimination which found favour with the Court in Street v Queensland Bar Association was that there are circumstances in which it is discriminatory to treat unequals equally. That is a concept that applies perfectly logically and reasonably to individuals and one can understand it. But when one is talking about States and unequal treatment between States or parts of States, we submit that if that were right, in a concept of a Commonwealth taxation one would really be talking about the possibility of a patchwork quilt; namely, people in Darwin would say, "We shouldn't have to pay income tax at the same rate as people in Tasmania". I do not want to suggest anything to anyone in the room, but because we have different cost structures; we have different social structures, all I can say is if it applies to States, that concept of treating unequals equally is discrimination, applies to discrimination between States for purposes of section 51(ii), this Court will not rest for some considerable period of time in terms of this constitutional jurisprudence.

Could I just, I think finally, come to the use that was made of dictionary-type definitions, particularly Blackstone, Story, the US cases, Britannica, OED, and other such examples in response to that are contained particularly in the South Australian written submissions, and also Mr Selway's oral submissions. We say none of these quotes, none of them, establish the proposition that customs and excise exhaust the field of taxes on goods. That was a critical step that was taken for the first time expressly in Capital Duplicators [No 2]. Without it there is an undistributed middle problem for all previous decisions. We say they are authority for no more than the proposition that a tax falling on a step in distribution in sale, although the OED and Britannica did not include that, may be an excise, but they do not establish that any tax on a step of that character is an excise.

When one traces these authorities, and we have not done and cannot do all these definitions back to their source, but we think that they all find their origins in Blackstone. That is really where they all come from. For example, that paragraph in Story that your Honour Justice Gummow first drew our attention to at paragraph 940, the authorities there start off with Blackstone - they are the references for the proposition on which reliance is placed - start off with Blackstone and commentaries on Blackstone in America and, of course, Blackstone was an absolutely fundamentally influential book in 18th century American political and legal life and that has continued down to this day, perhaps much more so than anyone, quoted all the time.

One can see similarly Dixon in Matthews at 295 described Blackstone as the source of many dictionary definitions and so he was. Many of the dictionary definitions that we have seen come from there. His definition, which has proven so influential, in all of the subsequent bits of paper that have been given, I think most of them will find their origins back in those commentaries. His definition is based on English practice in the middle of the 18th century. We say the Australian Constitution used the concept of excise based on Australian practice in the late 19th century and are not the same. The delegates were warned that perhaps there was this other definition out there and the warning, "Look, you do not know what will happen when the lawyers get hold of this one," has proven all too right, but it was not taken.

McHUGH J: But it was more than that they were merely warned. The Treasury report that Sir Isaac Isaacs produced at the convention seemed to regard it as inevitable that the courts would turn to United Kingdom authorities. That is why they were so anxious to put a definition in.

MR SPIGELMAN: He put that proposition and Mr Barton said, "Well, if we agree with you, we will do something about it," and nothing was done. The inference from that is others did not agree with him.

McHUGH J: Yes, I know, but as I pointed out the other day and as Justice Deane has pointed in the past, this Court cannot be bound by what was in the minds or the beliefs of those at the conventions. After all the people approved this Constitution and did so at referendum.

MR SPIGELMAN: We agree completely, we are ad idem on this, but what was used then - the connotation that was adopted then was the connotation of a word used daily in Australian political and social life.

McHUGH J: But it strikes me as almost absurd if in 1899 this very legislation under challenge in this case had been passed in New South Wales, that it would not have been accepted throughout all the colonies as being an excise.

MR SPIGELMAN: Your Honour, that turns on the franchise cases exception more than it turns on the matter to which I am replying, which is the Parton formula test, that issue.

McHUGH J: No, but I think it goes further than that, because it does indicate, as Mr Jackson pointed out, that all one can get from the pre-1900 practice is that that was the usage in that community at the time. It does not exhaust the meaning of excise.

MR SPIGELMAN: It does if one gives the emphasis, as we do, that in an area where there is a range of possible meanings, the purpose of the provisions ought to be determinative. If we are right about the purpose, we are right about the meaning, and the purpose reflected the then usage, as your Honour pointed out earlier this morning, as the Excise Acts passed almost immediately - later did. The then usage we rely - obviously your Honours have been taken to it - Quick and Garran at page 837. Peterswald v Bartley say expressly that there was an Australian usage and the English of that time was rejected. The United States usage was not even seriously considered for the purposes of rejection. Excise appears in the United States Constitution in the equivalent of 51(ii), not their equivalent of section 90. It appears in a combination of taxes, duties, imposts and excises.

McHUGH J: I know, but you cannot interpret a Constitution by terms of usage. What would happen to the commerce power if you interpreted it according to the usages in 1900?

MR SPIGELMAN: One gets a connotation - obviously the denotation changes and changes considerably, but the usage at that time gave you a connotation of taxes on production and - - -

GUMMOW J: But the significance of that is that the States were parting with what seems to have been the most significant element of their revenue base at the time.

MR SPIGELMAN: Yes, there is no doubt about the significance of that step. They were parting with that and saying that in order to achieve the Commonwealth, we say, economic policy objective of a free trade area and a single external policy, they did that.

GUMMOW J: More significant than it seems to be today.

MR SPIGELMAN: That policy?

GUMMOW J: Yes. What they were handing over seems to have been a greater element to their revenue base than these franchise fees are on their present-day revenue base. It was an enormously significant step taken by reference to the term "excise".

MR SPIGELMAN: Yes, they were, in terms of what they were giving up.

GUMMOW J: What is said is, because it could have had some other usage which they did not think of at the time, that can now be used today to achieve a particular result on which you rely.

MR SPIGELMAN: And a result that may have been contemplated. If we are right, and that customs and excise do not exhaust the range of taxes on commodities, and they do not - there had been sales taxes in the past, going back to ancient Rome. I mean, there were not any in Australia at that time, but there had been sales taxes in the past and we submit that, if that - that was an opportunity of other tax regime that they were not giving up because - I mean, they may not have had it in their mind, but they knew what they were giving up was this area.

GUMMOW J: That is why one has to get back to the words. One cannot get much out of their minds, it seems to me. That is what Justice McHugh has been putting, I think.

MR SPIGELMAN: If your Honour pleases. "Mind" is sort of a loose term in this area of discourse. Could I just finish what I was saying about the US authorities? The word "excise" appears in the tax power, 51(ii). It appears in a combination, "taxes, duties, imposts and excises" in a context before 1900 when direct taxes levied by the - this has since been repealed by a constitutional amendment but, at that stage, direct taxes had to be apportioned to the States that they came from. That led to a very narrow view of what was a direct tax, and a corresponding expansion in America of what was an excise, including all sorts of things that we would call "a direct tax", and had no relationship to goods. For example, a flat fee licence on keeping a carriage was an excise. The case is - - -

GUMMOW J: It would have been an excise in England, too.

MR SPIGELMAN: Under the extended meaning, yes. But we would not regard that as a tax on goods.

GUMMOW J: Yes.

MR SPIGELMAN: Hylton v United States [1817] USSC 24; (1796) 3 US 171, which was explained in Pollock v Farmers' Loan & Trust [1895] USSC 159; (1894) 158 US 601 at 627. A few years later, an income tax was found to be an excise Flint v Stone Tracy [1911] USSC 40; (1911) 220 US 107 and, also, see Bromley v McLaugh (1929) 280 US, at 129, the passage is at 136. We say this infection of the US position by other considerations is such as to make the US definitions useless for our purposes. What has happened, in effect, is that Blackstone is now adopted in Capital Duplicators [No 2] at 590, by the reference to "inland taxes", although a tax on consumption in Capital Duplicators [No 2] was specifically set aside for further consideration. Obviously, that further consideration would need to overrule Dickenson.

Now, we say we should prefer Australian usage at the end of the 19th century to British usage at the middle of the 18th century. The connotation of excise in Australian usage was a tax on home production and it had no connotation then of a tax on goods generally and we should not freeze the concept for all time on a mid-18th century connotation, irrespective of how or when the Commonwealth wishes to pursue policy about particularly industries or, if it be relevant, its revenue raising. The Court's adoption of such a broad definition, we submit, does so. If your Honours please, they are our submissions in reply.

BRENNAN CJ: Thank you, Mr Spigelman. The Court will consider its decision in this matter and will adjourn to a date to be fixed.

AT 11.23 AM THE MATTER WAS ADJOURNED