Luton v Lessels & Anor C40/1995 [2001] HCATrans 495 (11 October 2001)

IN THE HIGH COURT OF AUSTRALIA

Registry

No C40 of 1995

B e t w e e n -

ANTHONY IAN LUTON

Plaintiff

and

GILLIAN GLADYS LESSELS

First Defendant

THE CHILD SUPPORT REGISTRAR

Second Defendant

GLEESON CJ

GAUDRON J

McHUGH J

KIRBY J

HAYNE J

CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 11 OCTOBER 2001, AT 10.22 AM

Copyright in the High Court of Australia

MR G.C. CORR: May it please the Court, I appear for the plaintiff, together with my learned friend, MS G.K.Y. WONG. (instructed by Tjakamarra-Forrest)

MR D.M.J. BENNETT, QC, Solicitor-General of the Commonwealth: May it please the Court, I appear for the second respondent with my learned friend, MR C.J. HORAN. (instructed by Australian Government Solicitor)

MR B.M. SELWAY, QC, Solicitor-General for the State of South Australia: If it please the Court, I appear with my learned friend, MS A.S. FIELD, for the Attorney-General for South Australia intervening in support of the second respondent. (instructed by Crown Solicitor for South Australia)

MR R.M. MITCHELL: May it please the Court, I appear for the Attorney-General for Western Australia intervening in support of the defendant. (instructed by the Crown Solicitor for Western Australia)

GLEESON CJ: There is a certificate from the Deputy Registrar to the effect that she has been informed by the solicitors for the first defendant that the first defendant does not wish to be represented at the hearing of the case stated and will submit to the order of the Court save as to costs. Yes, Mr Corr.

MR CORR: Thank you, your Honour. This is basically a determination of how, or if, it is possible for the Commonwealth to require one citizen to pay money to another citizen. It is submitted by the plaintiff in this matter that there are two ways in which money can pass from one citizen to another: either by means of the Commonwealth taxing that person and then applying that money to the benefit of the second person or, alternatively, if there have been rights which have been created by the Commonwealth for that second person, that there is a judicial determination of the rights between the two parties by a properly constituted court and that thereafter that the payments are made to them.

KIRBY J: That is not the whole universe because money can pass from one citizen to another by a gift, by will, or various other forms.

MR CORR: Yes, but not by compulsion. The Commonwealth cannot compel a person to make a gift or to make a will in favour of another person. It is the matter of compulsion that raises these two possibilities being available. We would submit that that is, in fact, a closed universe, that it is not possible otherwise for money to pass from one citizen to another by some means of compulsion. We would submit it is not possible for just an arm of the Executive Government to say, "We will take your money and we will give it to citizen B".

That is the case in a nutshell, and we are submitting that this is what the Child Support Agency purports to do. It is not part of the executive arm of government and it purports to take money from citizen A, in this case Mr Luton, and give it to citizen B, Ms Lessels, on the basis that at some stage in the past they had a relationship and a child was born of that relationship. It is not something which is determining anything for the future. It is making a determination on facts which exist at the moment. That is purely and simply what the case is about and it is difficult to go any further than that just to say the Commonwealth has a limited power to compel the payment of money by a citizen.

KIRBY J: It is not quite as simple as that, as your written submissions acknowledge, because before anything is done by the Commonwealth there is the Commonwealth affixation of an obligation on your client.

MR CORR: Yes, that is correct.

KIRBY J: And that is said to be in the scheme of the legislation - and I agree with your submissions, they have to be looked at as a whole. But that is the foundation on which the obligation is based.

MR CORR: Yes, that is right. It creates an obligation on the non-custodial parent or, in some cases, two non-custodial parents, to pay for the benefit of the person who is, in fact, looking after the child. But that is setting down a set of rights and obligations which the Child Support Agency then purports to make a determination as to the rights and obligations between those two citizens, that if it is making a determination on already existing rights and obligations, then it is exercising judicial power. It is not a fee for service. It is not something where it is setting a relationship of, in future citizen A will do something in return, something will be paid to citizen B in the way that, for example, an award of wages is determined where there is an agreement that a person will work and they will be remunerated for it.

There is nothing in future, except the obligation to pay money. There are no rights conferred on the non-custodial parent. They do not have any rights to visit. That is something which is completely at the control of the Family Court or it may be an agreement between the two parties, but there is no benefit conferred on the non-custodial parent.

We would submit that it is possible for a tax to be levied which collects money on the basis of people being non-custodial parents and accumulates that money and can then disseminate money however it wishes. The Commonwealth can say that it will go to the custodial parent in the same amount as has being collected from the non-custodial parent or some other amount. But in that instance, the Act itself has to comply with section 55 of the Constitution and just deal with matters imposing taxation. The particular Acts do not, they go further than that. To the extent that they go further than dealing with the imposition of taxation, they are invalid according to section 55 of the Constitution.

KIRBY J: Do you not have to take us, as your submissions do, to the scheme of the Act? I am not sure that I have it entirely in my mind as to whether the scheme is that the Commonwealth accepts an obligation to pay child support and this is a way of, in a sense, reducing the burden on the Commonwealth, or whether this is an entirely self-funding scheme, or is intended to be. It is not entirely clear to me. I think we are just going to have to have a look at the statute.

MR CORR: Yes, that it is something where the Commonwealth collects that amount of money by means of creating it as a debt due to the Commonwealth by the conversion of - there is the assessment of the amount which is payable by the non-custodial parent. That is done by the Registrar. It is entered on the register; that is then converted to a debt which is due and payable to the Commonwealth by the operation, I believe, of section 30 of the Registration and Collection Act, which extinguishes any right for the payee, ie the non-custodial parent, to enforce payment. Instead, the Commonwealth can enforce the payment. There are various ways in which that can be done. One of the most common is that which is covered in Part IV of the Registration and Collection Act, namely, the deduction from salary and wages, where the employer of the non-custodial parent is informed that there is an order, and is required to deduct moneys from their salary or wages and pay it to the agency. There are penalties which can be imposed on the employer if they do not comply with that.

KIRBY J: I am sorry to ask you this question. It may be in your written submissions, but I have not really absorbed fully the legislation. Is the scheme that the Commonwealth pays every child, regardless of whether they have parents who are in employment or otherwise able to fund it, child support?

MR CORR: No, that is not the situation.

KIRBY J: So, the only people who get the child support are those in respect of whom an order is made against a parent and the parent has paid into consolidated revenue the amount and then the Commonwealth becomes a sort of conduit for the money, is that it? Effectively the Commonwealth is the recoverer from employers of the money?

MR CORR: Yes, that is correct.

KIRBY J: Instead of having a parent, say a deserted wife or husband, being left to their own resources to recover it, they have the benefit of the power and resources of the Commonwealth and the scheme of the Act to make sure that the money is coughed up?

MR CORR: Yes, that is correct. That was the obvious intention of this Act. The obvious concern of the Parliament was to ensure that such orders could be enforced, and I think there was a consideration that it was reasonably difficult for non-custodial parents to do so. While that particular concern or policy may be quite reasonable, the question is whether it can be done in a constitutional manner; whether it is possible for an administrative agency such as the Child Support Agency to do that of its own volition.

HAYNE J: Is that the question? Is not the question rather whether the particular legislative scheme that we have for consideration is valid or not valid? To speak in generalities may be convenient, but do we not have to begin and end at the legislation?

MR CORR: Yes, that is correct, your Honour. What I was going to submit was that prior to the passage of this particular legislation, the way in which these obligations were enforced was through the mechanism of a court. What this legislation and the amendments to the Family Law Act 2001 said was that you could not then go to a court if an application could be made to the Child Support Agency. That is what is now required to be done. There were carryover provisions where a person who had already had an order made by an appropriate court could register that with the Child Support Agency and it would be collected by them, but that is not the situation in this particular case. This is a situation where the child was born after the coming into force of the Act.

KIRBY J: You do not raise any question as to the attachment of the Act? You do not raise any question as to the fact that the Act attaches to your client?

MR CORR: No.

KIRBY J: They have not seen that.

MR CORR: No.

KIRBY J: We are not concerned with that point. Nor do you raise a question touched on in the South Australian submissions as to the power of the Federal Parliament under the referral of power to enact this law.

MR CORR: No, that has not been.

KIRBY J: So that the only two points you raise are whether they have gone about it the right way.

MR CORR: Yes, that is correct.

KIRBY J: I would have thought what you have to do is take us through, as Justice Hayne said, the detail of the Act, at least so far as we can understand it, then go to your two points.

MR CORR: Yes, thank you. If you go to the submissions, your Honour, to paragraph 3, that it is either an eligible carer or a liable parent. The person who has custody of the child need not necessarily be the parent - it can be a grandparent or it can be somebody else - can apply for an administrative assessment of child support under sections 25 and 25A of the Assessment Act. There are various ways in which that has to comply with the objects of that particular Act. If the application has been properly made, the Registrar must accept it; the affected persons have to be notified and the Registrar then determines what the liability is.

HAYNE J: As I understand it, you do not challenge the validity of those provisions of the Assessment Act, is that right?

MR CORR: The assessing of the details - it is only when it starts becoming enforceable that an administrative officer can make any number of determinations and can say you would be liable to payment of so much, and so forth. It is only when such a determination starts being enforced, when there is actually the obligation to pay. It may well be that a scheme whereby parents can work out between themselves with the assistance of a registrar as to what should be the appropriate amount to pay would be quite reasonable. But when the element of compulsion is added to that, that is when we would submit that you run into the constitutional difficulties.

HAYNE J: The only order that you seek in respect of the Assessment Act is a declaration that Part 6A is invalid, that is, the provisions between 98A and 98ZJ?

MR CORR: Yes, that is correct. Those are ones of departure from the administrative assessment, that rather than the Registrar looking at what is contained in the Act itself and working out according to a formula what is owed there, the Registrar can make variations to what is paid, taking into account a number of issues. The Registrar must be satisfied as to certain matters which are listed in 98C, and those are basically whether it was:

(A) just and equitable as regards the child, the liable parent, and the carer entitled to child support; and

(B) otherwise proper;

The basis, as I understand for that was that in certain circumstances what purports to be the income of the non-custodial parent may be artificially low because of the person taking advantage of various tax minimisation schemes or it is tied up in various trusts and so forth. So the Registrar is entitled, if this part is open to the Registrar, to make a variation on the amount payable, taking into account, as I said, what is just and equitable as regards the child, et cetera, so that what might be considered artificial schemes do not reduce the liability of the non-custodial parent significantly below that which should be paid and also to maintain the child in a proper manner.

So, we would say that that particular part of the Assessment Act is one where the Registrar is quite clearly exercising a judicial power, particularly where the determination has already been made and the Registrar is revisiting it.

HAYNE J: I am sorry to take you back and perhaps I am three furlongs behind the pace, but can I just understand this? Four questions are referred to a Full Court, the first of which is cast in quite general terms. "Is the scheme. . .established a tax?" Your submissions in the orders that are sought express orders that would be apt for the final orders on reference back of the answers to the stated questions to a single judge, but are declarations that relate to only one part of the Assessment Act? Am I right in understanding that that is the limit of your contention about invalidity of the Assessment Act?

MR CORR: No. I think that perhaps they were not drafted as broadly as they should be, your Honour, and that the answers then should be in the - the orders which we would be seeking would be in relation to the case stated, that the first answer be "yes" and the second "yes" and although we obviously have posed them as being alternative propositions that, if the answer to those two is "yes", then the answer to the third question would be "not necessary to answer". If the answer to the questions one and two is "no", then we would ask that the answer to question three should be "yes".

HAYNE J: But one possible outcome of this litigation presumably is that there are partial answers, that is to say that an answer is given that the Act is invalid as to part. Now, what is your contention? Is your primary contention that the Assessment Act and the Registration and Collection Act are wholly invalid? Do you have some subsidiary contention about partial invalidity? What is the contention you propound?

MR CORR: Yes. If it is found invalid because of section 55, then I think as we have propounded in our submissions at paragraph 36, all the provisions, other than sections 17, 24A and 30 of the Child Support (Registration and Collection) Act have no effect because of section 55 of the Constitution. So the remaining provisions would be invalid. But other than that, the Assessment Act is not part of the argument in relation to taxation. The broad statement in the question was to be able to look at the scheme as a whole and that we would be submitting the appropriate partial response would be that contained within our submissions at that paragraph.

KIRBY J: I think your submissions acknowledge that in some of these cases in the past relating to section 55 the Court has performed a severance operation, struck down amending Acts.

MR CORR: Yes, that is correct.

KIRBY J: Do you have a fall-back position in relation to severance on the section 55 argument or not?

MR CORR: It is fairly difficult for it to be severable, the way that the Registration and Collection Act is cast at the moment, your Honour, because of the fact that there are only a small number of provisions - those which I mentioned previously are, in fact, able to be considered to be still valid, those of 17, 24A and 30.

KIRBY J: Have you dug out the Minister's second reading speech or the explanatory memorandum explaining the purpose of the legislation so that one can view the legislation in that context?

MR CORR: No, I have not, your Honour, but I can obtain same and - - -

GLEESON CJ: You get a very good account of that, do you not, in section 4, I would have thought, particularly section 4(2)(b) and (c)?

MR CORR: Yes, that is correct. It is one of the objects quite clearly spelt out, as your Honour says. One of the them is the level of the financial support should be determined in accordance with the fixed standards which are contained within the Acts.

GLEESON CJ: Yes, so that a carer of a child does not have to go to court every time a payment falls into arrears.

MR CORR: Yes, that is correct. Your Honours would undoubtedly be aware of the social problems associated with that, but whatever the social benefit, obviously it has to be a question of whether it has been done properly. If it is in fact a tax, then it should have been done according to the way in which Tax Acts have been drafted previously and continue to be drafted today, in accordance with the previous decisions of this Court as to what is required.

KIRBY J: Were these cognate Bills? I see the Registration and Collection Act is dated 1988 and the Assessment Act 1989, but were they part of a package that was introduced into the federal Parliament in the one session with the two Bills travelling together or intended to travel together? That is why I wanted to have a look at the second reading speech in order to understand the severance of the two Bills.

MR CORR: Yes, I think it would be difficult to see that they were not part of an entire package, your Honour, that it would be difficult to have the registration and collection without the ability to assess.

KIRBY J: Was the severance of the Registration and Collection Act from the Assessment Act designed for constitutional purposes, or purported constitutional purposes, in order to afford arguments of severance in the event that one was struck down and the other survived?

MR CORR: I am unfortunately not able to assist your Honour as to the - - -

KIRBY J: Can one live without the other, in your submission, or not?

MR CORR: I think the Assessment Act certainly could. It is, as I said, just when there is the element of compulsion coming into being that the difficulty arises. It would be quite reasonable for the Registrar to make some determination as to what the appropriate amount was and enter it on a register. Providing that the non-custodial parent did not object to the paying of that amount - and it may well be easier for that person to pay through the Commonwealth rather than directly to the custodial parent - any number of situations where there is no contact and no desire for contact, or geographical separation. That may be considerably easier. But when there is the element of compulsion which comes in through the Registration and Collection Act, then there is the difficulty. If the element of compulsion were to go away, then the Assessment Act could reasonably stand. Whether that has the benefits which is intended by Parliament is, of course, a different matter.

KIRBY J: It would be a pretty puny instrument of legislation, would it not, given that the States have taken the trouble, exceptionally, to refer powers, the Federal Parliament has taken the trouble, exceptionally, in an area not earlier in its domain, to enact legislation, to then say, in an area where, often, emotions run high and people are not agreeable, "Well, we will substitute for any obligations you have at law this statutory obligation, and we will pass the law for assessments, and just leave it up to you to decide whether you pay or not". It would not be a very effective piece of legislation. That is why I would like, at some stage, for myself, to have a look at the second reading speeches and the explanatory memorandum.

MR CORR: Yes. I will undertake to get those to your Honour and the other members of the Court.

GLEESON CJ: If you look at those two paragraphs in section 4 that I mentioned, and bear in mind that a tax is ordinarily regarded as a compulsory exaction of money for public purposes, it is a little hard to resist the conclusion that this is an exaction of money for private purposes, is it not?

MR CORR: No. I would say that there is a public purpose is seeing that the various children in this country receive a suitable level of support, and that, as was referred to in the submissions from South Australia, Parliament has become the parens patriae. There is certainly a private benefit, but it is almost certainly a public purpose as well. If your Honour carried that argument fully - - -

GAUDRON J: Except the purpose is not for the public at large, is it?

MR CORR: No.

GAUDRON J: The purpose is only for benefiting those children whose custodial parent registers the order?

MR CORR: Yes, that is correct. If there has been some form of agreement, then there is not the need for this to occur. There are a large number of cases where there is agreement between the parties and that the children are properly supported, but this was to ensure that where there was not agreement between the parents, or the carers - in some cases grandparents, aunts, uncles, whatever - that there was the money flowing to support those children.

GAUDRON J: Is not something very similar to this done under the Medicare legislation where doctors bulk-bill?

MR CORR: Yes.

GAUDRON J: Medicare people take the money that would normally go to the patient and give it to the doctor.

MR CORR: Yes, but there is - - -

GAUDRON J: The difference is that the patient signs, whereas here the difference is that the custodial parent takes a step.

MR CORR: Yes. There there is the compulsion to pay the Medicare levy. You do not have any choice in that matter unless there are opt-out provisions.

GAUDRON J: No, I am talking about the transfer of money via the Commonwealth from one citizen to another.

MR CORR: Yes, that does occur in that instance, but it is not as direct as in this particular case because some people can go for years without any illness whatsoever. The Medicare levy does not say if you go to a doctor on so many occasions you will pay so much into consolidated revenue, so it is different to that extent but, yes, there is certainly transfer through the consolidated revenue.

GAUDRON J: Not necessarily through the consolidated revenue.

MR CORR: Or through some other public fund. We would submit that determining whether something is a tax should not be on the basis of where the money goes to eventually, because it should be on the basis of how it is collected. For example, there could be the imposition of a tax which is purely revenue-gathering, no doubts at all about it being a tax, goes into consolidated revenue. At some later stage if there was a hypothecation of that amount saying the amount which is paid in there by those particular people will be paid out to various other people in a certain ascertained manner, that would not convert what was originally a tax into not being a tax.

Similarly, if in this particular instance the Commonwealth decided to have a more equitable situation where it said, "We will collect money from all non-custodial parents on the basis of this ascertainment but, because we can't get some non-custodial parents to pay, we'll average it out and everyone who's registered will get a proportion, dependent upon how much money we actually collect", so that it is not the expenditure of the money which is important but it is the collection of it.

When it is that enforced exaction by a public authority, and the Child Support Agency certainly fits that, and for most of its bureaucratic life it has been part of the Taxation Office, and that it is for a public purpose, that I would say, your Honour, that undoubtedly there is the private benefit which accrues to the custodial parent and to the child or children. But it is also a public purpose but there is most certainly a public interest in seeing that children are well cared for, just purely on the pragmatic basis so that they do not otherwise become a burden on the social security system of the Commonwealth or of the States.

HAYNE J: But is that to slide from the public purpose of application of moneys to public benefit from exacting it, or public interest in exacting it? May we not need to be rather more precise in what is meant by the expression "for a public purpose"? Does it refer only to the purpose of application of the funds thus raised? How do you say we are to understand "for a public purpose"?

MR CORR: Well, I think that would have to be generally broadly read. It is fairly difficult to read down "for a public purpose". There are any number of purposes which public funds can be expended. It is one of those terms that can mean virtually anything that the Parliament may intend to use it for. I do not think it is something which is really capable of any strict definition.

HAYNE J: But not every compulsory payment to government or a public authority is a tax, is it?

MR CORR: No, definitely not.

HAYNE J: One common method of attempting, at least, partial discrimination between compulsory payments to government or public authority is the addition of this expression "for a public purpose". Now, what does that expression add by way of refinement to the general observation that there is a compulsory payment to government or a public authority?

MR CORR: In many cases probably very little. It is difficult to see how most public authorities could be using moneys which they have obtained from however they have obtained them for anything other than a public purpose if they have been set up by the Parliament. The Parliament obviously did have some idea behind setting up whatever authority it happens to be, that it is difficult to see how it really does add that much to the term otherwise.

GLEESON CJ: What do you take to be the difference between a tax and an acquisition of property?

MR CORR: In the Commonwealth, at least, that there has to be the compensation for the acquisition of the property, whereas the tax is just something which is extracted and used for the general benefit of the community. It is a very specific - - -

GLEESON CJ: Let us assume you are right about that. What is extracted here is not being used for the general benefit of the community, is it?

MR CORR: It is in that it provides for the children who would otherwise not have it. I think your Honour's point is that it is just going to a particular section of society, but then a lot of government expenditure does exactly the same. The giving of the diesel fuel rebate to farmers, for example, that is a benefit to a particular section of the community. In relation to government impost which is then not imposed on them but on other members of the community, that could be seen to be some form of purely private matter, but it also serves some public purpose. I do not think that there is a strict differentiation between it going for the benefit of some people in a private manner and it also serving a public purpose.

KIRBY J: Speaking for myself, I found most helpful what South Australia said in its submissions, that when you look at a problem like this you have to keep in mind the constitutional provision, the purpose of that provision, and then the indicia that pull in different ways, because no two legislative schemes are exactly the same. I realise you say this is - the closest that you get is the Tape Manufacturers Case and no doubt you will take us to that. But if you look at the indicia, I think South Australia acknowledges that the fact that the Registrar happens also to be the Commissioner of Taxation is something that is on your side of the ledger. Do you collect anywhere in your written submissions that indicia that you say are indicative of the fact that this is a tax? Your first point is the public purpose.

MR CORR: Yes.

KIRBY J: As I take it, what you are saying there is that the fact that these may be resistant parents who are not willing just to make private arrangements but go into the scheme of the Act is an indication that these are the very types of people for whom the public has an interest in making sure that they cough up and pay for their children. In that sense it is for a public purpose. The public has an interest in the welfare of children.

MR CORR: Yes, that is correct.

KIRBY J: What are the other main indicia that you rely on?

MR CORR: One, obviously, is the payment into consolidated revenue, though that is obviously not of itself indicative of it being - - -

KIRBY J: That is because of the Constitution, is it not?

MR CORR: Yes, that is correct.

KIRBY J: It says, it is not only revenue but any moneys must be paid into the consolidated revenue. So it could not be received by the Commonwealth without being paid into the consolidated revenue.

MR CORR: It depends on - in Tape Manufacturers, I believe, that it was done otherwise, that it did not actually pass through consolidated revenue in that instance. I may be wrong, but I think that is the situation. Or through some other fund - that if the Child Support Agency were set up as a separate statutory body, it may well be that they have their own funds and so on, and can deal with it. That is something that is indicative, but obviously cannot be conclusive.

It is almost a negative indication that something is a taxation when it is not a fee for service. There is nothing which can be considered to be payment for something which is going to be given to the non-custodial parent in the future. Nor is it a fine, though, undoubtedly, some non-custodial parents tend to see it as such. So that is an indication that it must be some other species, and the number of species which it can be narrows it down to it being a tax.

KIRBY J: I referred to the point about the Commissioner, because in paragraph 7 of the South Australian submissions, it says:

the fee is collected by the Commissioner of Taxation (albeit in his capacity as Registrar".

Now, have I understood - I just am not familiar enough with the legislation. Is that, in fact, the case, that the Registrar referred to in the Act is the Commissioner of Taxation wearing another hat? Is that correct, or not?

MR CORR: So I believe.

KIRBY J: Because in the definitions that is not made clear.

MR CORR: Yes, in the Registration and Collection Act, we get to section 10(2):

The Commissioner of Taxation shall be the Registrar.

KIRBY J: Well, that is a pretty strong indication that he is collecting taxes, wearing another hat.

MR CORR: My learned friend, the Solicitor for the Commonwealth points out to me that there has been an amendment by the Child Support Legislation Amendment Act , No 75 of 2001.

KIRBY J: Minds must have been concentrated on this point.

MR CORR: Undoubtedly. At page 20 of that particular Act under 38 it has been amended to:

(2) The Child Support Registrar is:

(a) the person who holds, or is acting in, the position known as the General Manager of the Child Support Agency; or

(b) if there is no such position - an SES employee, or acting SES employee, who holds, or is acting in, a position specified by the Secretary by written instrument for the purposes of this paragraph.

KIRBY J: Who is the Secretary, secretary of what? Secretary to the Treasury?

MR CORR: Yes, this is what I was then going to see.

KIRBY J: In the Act, "Secretary" means "Secretary to the Department of Social Security". At least that is in section 4 of the Registration and Collection Act.

MR CORR: Yes.

HAYNE J: Can the parties between them make sure that we have the current form of legislation?

MR CORR: Yes, I understand.

HAYNE J: It would be of great assistance if that were done, I thought that is what the practice note required?

MR CORR: Yes. Yes, your Honour, as I understand it, the Solicitor for the Commonwealth has several cartons of legislation behind him which will be provided to your Honours giving the entire history of the legislation.

HAYNE J: There has been reference to the money having at some point to go through consolidated revenue. Is there some statutory base for that provision or that consequence?

MR CORR: One moment, your Honour.

HAYNE J: You might come back to it and at the same time, if it does go through consolidated revenue, where do we find the appropriation of that money that would seem to be necessary under section 81. Thirdly, what, if any, consequence attaches to the section 81 expression "to be appropriated for the purposes of the Commonwealth"? Those are perhaps questions which you may wish to consider and give us an answer to at some convenient point.

MR CORR: Yes, thank you, your Honour. I think we were basically going through the operation of the Act and I think a lot of the material which I would have otherwise covered has been covered in the questions.

KIRBY J: Had you finished your list of indicia that you say brings it on to your side of the line?

MR CORR: The compulsory nature of it is obviously a significant part of that. As you have pointed out, the position of the person collecting the money, the payment to the Commonwealth that it would have been quite possible for the Commonwealth to establish some other means of payment so that it did not, in fact, pass through the Commonwealth, the - - -

KIRBY J: I query that. My understanding is that the Constitution requires moneys to be paid in, at least in certain circumstances. Section 52, is it?

HAYNE J: Section 81 requires:

All revenues or moneys raised or received by the Executive Government of the Commonwealth -

If section 81 is engaged, that may perhaps give some real complexion to what is happening here. Thus it becomes of some importance, at least to me, to know whether section 81 is engaged. What happens with this money? Generalities are fine, Mr Corr, but can we grapple with the Act?

MR CORR: Yes, I will return to that, your Honour, perhaps in response. I can see that your Honour's point is if this becomes some revenue which is raised rather than just being a transfer from one person to another and then, if it does go through the consolidated revenue, this is an indicator that it is - - -

HAYNE J: I have no view. All I want to know is how this Act works and how it works against a constitutional background.

MR CORR: Returning to Justice Kirby's point, at the moment the other indicia escape me, though I may return - actually, one further point is the method in which it can be collected from the employer of the person under Part IV of the Registration and Collection Act which is indicative of the way that income tax is otherwise collected.

KIRBY J: That is not necessarily so though, because a garnishee order can be collected from an employer but that is not a tax and no one would suggest it is.

MR CORR: No, that is correct. That would flow to the other leg of the argument, namely that it was an exercise of judicial power that the Commonwealth can - - -

KIRBY J: That is a different point.

MR CORR: Yes, that is correct. Also, the fact that it is something which is made payable to the Commonwealth, the conversion of that which is payable to the other party by section 30 of the Registration and Collection Act is made a debt payable to the Commonwealth is another indicator also that the amounts payable by employees are also made debts due to the Commonwealth under section 64 of the Registration and Collection Act. So that is also indicative that it is something which is payable to the Commonwealth. It is not said to be something which is payable to the other party and the Commonwealth is merely acting as a conduit. It is something which actually comes to the Commonwealth, that there is a trust fund which is established under Part VI.

HAYNE J: You say "a trust fund".

MR CORR: Yes, that is correct.

HAYNE J: What is the reserved money fund of which the child support reserve is a component? What is the statutory basis for this? The reserved money fund no doubt is something that I should know about but it is something about which I do not know. There is provision in here for payments out of consolidated revenue into the child support reserve. We have to write a judgment, Mr Corr. I would be glad of some help.

MR CORR: Yes, your Honour.

GAUDRON J: I have problem too. What is it in the Act that makes money due to the Commonwealth under or in relation to the liability by deduction? Where do we find this "amounts due to the Commonwealth"?

MR CORR: Section 64 of the Registration and Collection Act.

GAUDRON J: "An amount payable to the Registrar", all right. What makes it payable to the Registrar? We do really have to go through this Act in detail.

MR CORR: Yes, that is part of Part IV.

GAUDRON J: What section?

MR CORR: Section 64 is part of Part IV which is the collection by salary or wages. We go back to the beginning of that part in sections 43 et cetera.

GAUDRON J: I want to know about this. If you go back to section 43, "amounts due to the Commonwealth". Now, if we go to 64, that is amounts "payable to the Registrar".

MR CORR: Yes.

GAUDRON J: Now, what makes them payable to the Registrar?

MR CORR: In section 30.

HAYNE J: Section 30 is where we begin, is it?

MR CORR: Yes.

HAYNE J: Which in turn pitches us back, I suspect, into earlier legislation, but if we start at section 30.

KIRBY J: I think you may have thought that because you set out a number of the sections in the Act that we would understand all these things when we came in. Speaking for myself, this is a complex piece of legislation.

MR CORR: Yes, I agree, your Honour.

KIRBY J: Either you or the Solicitor for the Commonwealth or somebody has to take us so that we understand how it operates, I am afraid. There is no escape. It is a tedious, but necessary job.

MR CORR: Yes, thank you, your Honour. So there is the liability under section 30. That has been converted into a payment which is "due to the Commonwealth". Then, if the person is an employee, the employer is notified under Part IV and the employer then pays the money to the Registrar.

GAUDRON J: Then what does the Registrar do with it?

MR CORR: The Registrar then pays it into the trust account.

GAUDRON J: Where does that come from?

MR CORR: That is in Part VI.

GAUDRON J: What section?

MR CORR: Section 73 onwards, your Honour. The payments into the trust account are listed at section 74.

GAUDRON J: Okay, and that is an appropriation out of consolidated revenue?

MR CORR: No, there is the payment into the trust account in section 74.

GAUDRON J: Now, first of all, we have these debts due to the Commonwealth. We have them garnisheed, if you like.

MR CORR: Yes.

GAUDRON J: Okay. The employer sends the money to whom?

MR CORR: To the Registrar.

GAUDRON J: Where do we find that?

MR CORR: Yes, in section 46.

HAYNE J: Section 47, he has to pay it on "to the Registrar". Section 46 deduct, 47 pay it on.

MR CORR: Section 47 pay it on.

GAUDRON J: Yes. Then what does the Registrar do with it?

MR CORR: The Registrar pays in subject to section 74 into the "Trust Account".

GAUDRON J: He forwards it to the Registrar.

MR CORR: He forwards it to the Registrar.

GAUDRON J: But section 74 - - -

MR CORR: Says pay into the "Trust Account" the "amounts received by the Registrar" including the amounts which are paid under 47.

HAYNE J: No, no, "amounts equal to amounts received".

GAUDRON J: They are "transferred to the Reserve" which is a component of the reserved money fund from consolidated revenue. What gets them into consolidated revenue?

MR CORR: The payments "out of the Trust Account".

GAUDRON J: Where is the trust account?

MR CORR: The payments out of the trust account - I think 75(d).

GAUDRON J: I do not think it is those moneys. There is a missing step, I think, Mr Corr. That says how moneys standing to the credit of the reserve may be applied when it talks about money that has:

been transferred from the Consolidated Revenue Fund under section 77 or subsection 78(3) -

which I have not come to yet. That is unremitted deductions.

MR CORR: Yes.

GAUDRON J: And it seems, underpayments or unexplained - now, is there some provision of the Act that requires the Registrar to pay this into consolidated revenue?

KIRBY J: Or is that a constitutional requirement?

MR CORR: Yes.

KIRBY J: Speaking for myself, I need a chart, and it ought to have been produced before the case. I mean, with all respect to you, it is a waste of the time of the Justices of the High Court to be sitting here like schoolchildren looking through the text of a statute trying to work out how on earth it operates. It is not an efficient way for us to be performing our functions.

MR CORR: No, your Honour. Having a discussion with my friend, the Solicitor for the Commonwealth, the points which I have not been able to clarify I have no doubt he will be able to.

GAUDRON J: He may be able to but, until you clarify it, I cannot follow your argument.

MR CORR: Yes, your Honour. Simply, it is as I suggested previously, that where there is this compulsion to pay it, it does in fact constitute the tax.

GAUDRON J: What there is, although we cannot trace the mechanism, is a conversion of a liability to pay maintenance into a debt due to the Commonwealth.

MR CORR: Yes.

GAUDRON J: Presumably there being the debt to the custodial parent thereby being discharged?

MR CORR: Yes, that is correct - section 30.

GAUDRON J: One is not exactly talking about the compulsory exaction of money, is one, if one is talking about in the first instance the statutory assignment of a debt? That is what we are talking about, are we not, under the Act?

MR CORR: But the Acts themselves create the debt.

GAUDRON J: Perhaps the Child Support (Assessment) Act 1997 creates the debt. We have not been told about that. I should have thought, uninstructed and unaided as to the working of the Act, that something in the Child Assessment Act creates a debt from the non-custodial parent to the custodial parent.

MR CORR: Yes, that is correct.

GLEESON CJ: Is that section 77 of the Assessment Act?

HAYNE J: And 79.

MR CORR: Yes.

GAUDRON J: Then upon registration, there is an assignment in effect of the debt by the custodial parent to the Commonwealth.

MR CORR: Yes, that is correct.

GAUDRON J: The question is: is that a tax?

MR CORR: Yes.

GAUDRON J: There is nothing quite similar to that, is there? That is not in the same territory as the Tape Manufacturers Case, is it?

MR CORR: The liability to pay, in Tape Manufacturers, as I say, is somewhat analogous, because it is something where there was the requirement to pay by the persons who purchased the tapes. They, obviously, had to pay that amount of money; in this case, the non-custodial parent is obliged by - - -

GAUDRON J: In this case, the non-custodial parent is obliged to pay the money by virtue of the assessment.

MR CORR: Yes.

GAUDRON J: He is not obliged to pay it to the Commonwealth at that point, but he is obliged to pay the money by virtue of the assessment. Is that correct?

MR CORR: Yes, there is that, that once there is that assessment of the obligations of the non-custodial parent, yes, there is the debt.

GLEESON CJ: That follows from sections 77 and 79 of the Assessment Act.

MR CORR: Yes, that is correct. So the Assessment Act has created this obligation to pay. That is - - -

GAUDRON J: And the debt is effectively assigned.

MR CORR: Yes.

GAUDRON J: And then the other provisions of the Act are for the collection of that debt - or the relevant provisions are for the collection of that debt.

MR CORR: Yes.

GAUDRON J: What makes that a tax?

MR CORR: If it is not a tax, then is the Commonwealth creating a mechanism for the enforcement of a debt without having recourse to a court?

GAUDRON J: Then that takes you to judicial power, I suppose.

MR CORR: Yes. This is why I was suggesting earlier, there was the closed universe - - -

GAUDRON J: But let us assume I, as an employer, owe a lot of money to my employees, or I have potential liabilities to my employees. I do not pay them. The Commonwealth could, could it not, by statute, pay out to my employees their entitlements and say, "In place, you owe the Commonwealth, and we are going to take it out of your gross income in this manner, from this day forward", could it not?

MR CORR: Yes, it could.

GAUDRON J: And you say, that would also be a tax.

MR CORR: Yes, that is correct.

GAUDRON J: Because?

MR CORR: It fits within the classical definition of the compulsory exaction by a public authority for a public purpose.

GAUDRON J: Well, what is different if I simply owe money to the Commonwealth because I negligently drove my motor vehicle into one of its buildings? What would there be to stop the Commonwealth saying, "Anybody who negligently drives their vehicle into a Commonwealth building is liable to pay the Commonwealth for the repairs, assessed by the Auditor-General, and we will have it deducted out of his or her salary every fortnight"?

MR CORR: I do not think there would be anything which would prevent them from legislating as such.

GAUDRON J: Would that still be a tax?

MR CORR: Clearly, initially there would be a debt between that person and the Commonwealth, whether converting that into something which is payable without recourse to a court. Quite possibly it is, your Honour.

GAUDRON J: Quite possibly is a tax, because it does not go through a court?

MR CORR: Yes, if you are wanting to enforce a debt in the normal manner, you would just go to the local court and get judgment and then have that executed. If you set up a mechanism whereby the Commonwealth, or any State, is collecting money which is a debt which has been assigned in one way or another, other than by that mechanism you are, in fact, creating a tax.

KIRBY J: Is the amount of the child support fixed by a schedule in the statute, or does it vary with the income of the parent, or is it discretionary completely?

MR CORR: There are tables which are contained within the Assessment Act, under Part 5 of the Assessment Act, going from sections 35 onwards.

KIRBY J: So can you sit down, and taking the income of the parent, work it out mathematically?

MR CORR: Yes.

KIRBY J: Is it as simple as that, or is there a discretion built in waiving amounts, or for reducing the sum?

MR CORR: There is the calculation of the various formulas depending on the number of children, income and so forth. Then there is departure provisions in Part 6A.

KIRBY J: What is departure provisions? I saw that in your submissions, but it does not mean anything to me. Does that mean departing from Australia?

MR CORR: No. The title is "Departure from administrative assessment".

KIRBY J: It is one of these terms of art that do not mean anything to a person who is outside the expertise - - -

MR CORR: No. It is contained in Part 6A, which is sections 98A onwards, and it is departing from the provisions that would otherwise apply from earlier in the Act, as I referred to with section 98C earlier, where it would be - - -

KIRBY J: It is really exceptions?

MR CORR: Yes, that is correct, and allowing for, as I said, such things as where the non-custodial parent's income has been artificially lowered or that there may be particular situations where more payment needs to be paid. For example, if the child was particularly disabled and so on, that it may well be reasonable for a greater level of payment to be made.

KIRBY J: I am aware that the section 55 provision comes from British constitutional history and it is explained in part by its context and the powers of the Senate in Australia to interfere with or amend tax Bills. But is there a good description of the history and its purposes constitutionally in an earlier decision of this Court that you can point to?

MR CORR: Yes, I think in Re Dymond [1959] HCA 22; 101 CLR 11. Justice Menzies certainly at page 27 goes into section 55. I will try and find the other Justices. Justice Fullagar at page 20 continuing.

KIRBY J: Justice Menzies calls the construction or approach to construction by this Court "strict". Now, what does that mean in that context, in your submission? This is at page 28.

MR CORR: Yes. That I think this is something which was covered in the various submissions by particularly the Solicitor for the Commonwealth who was suggesting that, in fact, the strict interpretation should not be followed and that if you were to come to the conclusion that this was, in fact, a tax, that that particular view should be overturned, but that it is - - -

KIRBY J: In a sense, this runs into the problem Justice Hayne raised earlier, namely, that it is a very general word and does not give much of a clue, but it is used by Justice Menzies and I am just trying to understand what, in your submission, he meant by:

the strict construction of s 55 that has always been adopted -

ie by this Court. Now, what is "the strict construction" and why is it strict?

MR CORR: That "the strict construction" is that the Act can only deal with the matters imposing taxation and nothing else. I think that as well as the English constitutional history, there was also, I believe, some carryover from the American system as well, where there was a wish to avoid the tacking into various Bills. So that in order to prevent anything which may conceivably be outside the imposition of taxation, that it has to be purely restricted to the imposition of taxation within a particular Bill. If there needs to be the assessment in others, that is contained within another Act. That is what, I think, Justice Menzies refers to at page 28 as being the practice in Australia.

So "strict" is that if there are two interpretations which can be adopted as to whether or not it complies, then you should adopt that one which says that it does not, that if it looks like it may infringe, then it does. It is very much a precautionary matter.

If I might just respond, Justice Hayne raised some questions which I will endeavour to respond to later on, but otherwise unless I can be of any further assistance, those would be my submissions.

GLEESON CJ: You have not dealt with the judicial power part.

MR CORR: Yes, I apologise, your Honour. I think that has been covered considerably in all my submissions.

GLEESON CJ: You rely on your written submissions?

MR CORR: The written submissions. As I submitted earlier, there is the closed universe of being able to obtain money from citizen A to give to citizen B. The first limb is that it can be done by taxation. The second is that it can be done by the exercise of a judicial power. Those would be my submissions.

GAUDRON J: Can it not be done by assignment, under the general law?

MR CORR: That is voluntary.

GAUDRON J: Not necessarily. Assume Justice Kirby owes me money, can I not, if I follow the procedures of the Conveyancing Act, assign that debt to Justice Callinan and will not the law then force him to pay me?

MR CORR: Yes.

GAUDRON J: Or force Justice Kirby to pay him, rather?

MR CORR: Yes.

GAUDRON J: And that is regardless of the interposition of a court. That is the general law.

MR CORR: Yes, but the person who determines - if Justice Callinan wishes to enforce that against you and take your goods, then he will have to go to a court and get that court to make the determination as to what your rights and obligations are. He cannot go off to the Department of Finance across the road and say, "Could you go and enforce this debt, please?" But it is the enforcement of that debt. Yes, certainly there can be assignments all round the place that people can sell their debts, transfer them, factor them, whatever, but when you get them being enforced by someone other than by a court ordering that you do, in fact, have that debt - - -

GAUDRON J: We need to know what is happening when you talk about enforcement. You are saying, are you, "One must have an opportunity to dispute one's indebtedness".

MR CORR: There can be that; certainly there is that. There is also - - -

GAUDRON J: But is that what you are saying? You are saying Chapter III operates so as to preclude legislation which imposes legislative obligations with respect to debts unless there is an opportunity dispute it in the courts.

MR CORR: Yes, that it cannot be just something where the - - -

GAUDRON J: Do we not have an opportunity to dispute it in the courts here under the Assessment Act?

MR CORR: Yes, there are appeal mechanisms.

GAUDRON J: Then why does that not provide the answer to your own argument?

MR CORR: The appeal provision does not change the nature of the original determination if there is a determination made by an administrative officer.

GLEESON CJ: But administrative officers determine rights and liabilities routinely. If a foreign traveller arrives at Sydney airport this morning with some dutiable goods and declares them to a customs officer, the customs officer will assess and impose customs duty on the goods.

MR CORR: Yes, that is correct.

GLEESON CJ: That is not an exercise of judicial power, is it?

MR CORR: No, it is not.

GLEESON CJ: Although it might involve both a decision of fact and a decision of law.

MR CORR: That is correct. That person can challenge that amount payable by going into a court and the amount which is payable by them cannot be taken from their bank account until there has been an order from a court that they are in fact obliged to pay that amount.

KIRBY J: But the goods may be impounded. There are all sorts of disadvantages that can attach - general warrants and all sorts of provisions in the Customs Act.

MR CORR: Yes, that is correct.

HAYNE J: Part VII of the Registration and Collection Act seems, at least on a quick perusal, to be devoted entirely to providing an opportunity for those adversely affected by, as you would have it, an administrative determination to go to court and challenge it.

MR CORR: Yes.

HAYNE J: Where does your argument go from there? Is that a proper characterisation of Part VII? If it is, what is the consequence?

MR CORR: Certainly they can go to the court and challenge them but, in the event that a person does not challenge them and there is an enforcement against them by means of their wages being garnisheed and so on, the fact that they have not taken up that opportunity for the review does not change the nature of the original determination. If it is determining conclusively what their rights and obligations are and there is an enforcement mechanism, then that is an exercise of judicial power and that is what is done.

It does not matter whether there is an appeal mechanism or not, that still remains an exercise of judicial power at that first instance, because there is exactly that right. The difference between most of the determinations by bodies such as the Taxation Boards of Review and the Copyright Tribunal and so on, is that, in those cases, you are largely looking at the giving of a right by the Commonwealth or the reviewing of an executive decision. In the Taxation Boards of Review, or any of the other various administrative tribunals around the place which are looking at the review of those particular executive decisions, and saying, "Yes, you will pay a lesser amount of tax in this particular case" or, "Yes, you are entitled to the exercise of this particular statutory right, which is conferred under the Copyright Act or the Trade Marks Act or something similar", this is a significantly different situation, where you are not looking at the rights of an individual as against the executive, where the executive is just reviewing its own decision and there can be any number of levels of review within the executive. You are looking at a member of the executive determining the rights between two individuals and requiring one individual to pay to another citizen that which belongs to them. It is a unique situation.

GAUDRON J: That is not so very different, is it, from what happens in terms of wage fixation. Union and employer go along to the Arbitration Commission, not a court - clearly, not a court - - -

MR CORR: No.

GAUDRON J: - - - and the Arbitration Commission says, "As of this week, you will pay this man $20 a week extra".

MR CORR: Yes, that is for the return of services in the future; that, in the future, you will work, you will get paid - - -

GAUDRON J: But that is what your assessment is: "In the future, you will pay so much for the support of your child". Is that not right?

MR CORR: Yes, there is, that in future, you will do that. But there is nothing in return. It is not - - -

GAUDRON J: What do you mean, "nothing in return"? What there is in return is the devotion and care of the custodial parent. There is the discharge by the custodial parent of the obligations that would normally fall on both.

MR CORR: Yes, but that is based on the obligations which exist at the moment, not on something which is going to exist in the future. That is the obligation there at that time. It is, I would submit, significantly different to a wage-fixing situation. It is looking at your rights and obligations as they exist at the moment, rather than a set of situations which exist in the future. The wage-fixing one also falls down because either party can move away from it.

The employee can say "I no longer wish to work for you", and goes elsewhere. The employer can say "I am closing up shop, good bye", you do not have that. With this situation you are required to continue paying.

GAUDRON J: That is the nature of parenthood.

GLEESON CJ: The consequence of a joint Act that has had an irrevocable consequence?

KIRBY J: I think you had better step back a little bit from this territory, you are on very dangerous ground there, not just with Justice Gaudron.

MR CORR: Yes, indeed. I will not make comments about the obligations of parents.

KIRBY J: I took it that your case in section 55 that you said was closest to you was the Tape Manufacturers Case. What do you say is the case closest to you in the judicial power case?

MR CORR: I would say Brandy v Human Rights Commission. As, I think, in the submissions in reply, if you looked at what was originally required in that particular case where Mr Bell, the complainant, went to the Human Rights Commission and complained about both ATSIC and Mr Brandy's behaviour, Commissioner Castan found that both ATSIC and Mr Brandy were required to give compensation to Mr Bell. There was nothing unremarkable about the employer being required to pay compensation for not providing an appropriate workplace and allegedly not allowing the employee to be subject to racial vilification, and there was never any question of that being challenged, and it was not.

However, when the Commissioner, who was a non-judicial officer, said that Mr Brandy should pay $1,500 compensation and apologise to Mr Bell, that this Court held that that was in fact an exercise of judicial power.

McHUGH J: Yes, but that was because the Commission was empowered to adjudicate upon claims of unlawful discrimination and could declare that a respondent engaged in conduct contrary the Racial Discrimination Act and should pay compensatory damages to the complainant. The Act expressly provided that those determinations were not binding or conclusive, but you could register the judgment or the order in the Federal Court and unless there was some proceedings in the Federal Court it was enforceable, as such. It was the combination of those two things. You had adjudication applying the law to past conduct. This case is about as far removed from that as you could possibly get.

MR CORR: No, there is still the adjudication as to the rights and responsibilities between the two parties and it is something which is enforceable.

McHUGH J: Yes, but as was pointed out to you and as was said in Hegarty's Case, I think, by Justice Mason, it is almost an everyday occurrence for administrative officers to apply criteria to facts to come to a conclusion and then order the payment of money. But this looks to the future. It is more an arbitral function than a judicial function. It does not look to the past.

MR CORR: Well, there are any number of workers' compensation schemes where, after looking at the relationship between the two parties, there is, nevertheless, an award made for continuing payments into the future.

McHUGH J: That is so, but that is because the worker has sustained injury in the course of or arising out of the course of employment.

MR CORR: Yes, and in this particular case the custodial parent has the care and responsibility for the child or children arising out of a relationship which existed in the past.

GAUDRON J: The child is in the present. The child is in the present. This has nothing to do with relationships. This has to do with children.

MR CORR: Yes, but it may well be that the only connection - - -

GAUDRON J: Children who, in our society, are not encouraged to go begging on the streets to maintain themselves, are not encouraged to be engaged as chimney sweeps in order to provide for their own needs. In our society parents provide for the needs of children, both of them. We are not talking about any past relationship at all. We are talking about present obligations.

MR CORR: Yes, but those present obligations are ones which exist at the moment. I accept that there is continuing obligation but it is determined that at the moment those are what your rights and responsibilities are.

KIRBY J: Do I understand that your argument is that there would have been ways, consistent with section 55 of the Constitution and Chapter III, that something like the scheme that has been enacted could have been enacted? The tax aspects would have been in a separate statute and would have been dealt with in a particular way and the judicial power would have been engaged in an appropriate fashion.

MR CORR: Yes, certainly.

KIRBY J: But the fault that you can come to this Court to complain of is not the overall scheme but the way in which it has been effected in this case, and that is all you ask the Court to rule upon.

MR CORR: Yes. I am not suggesting that the Court should make some determination that the children should be sent begging on the streets or engaged as chimney sweeps.

GAUDRON J: No, but you are making an argument that sounds like it. You are making an argument that this is different from, for example, the function of the Industrial Relations Commission and you are making the argument by reference to an assertion that the relationship has ended. The relationship is never ended. It is parent and child. It is not a past relationship.

MR CORR: Yes, that point I think has probably been canvassed in our discussions already, your Honour.

GAUDRON J: Yes.

MR CORR: I think that unless I can be of any further assistance at this stage - - -

GLEESON CJ: Thank you, Mr Corr. Yes, Mr Solicitor.

MR BENNETT: May it please the Court, I propose to deal with the matter in three sections: first, to take your Honours through very briefly the relevant parts of the legislation to show the critical path which your Honours were asking about; secondly, to deal with the taxation issues; and, thirdly, to deal with the judicial power issues. Within each of those three sections I will have a short introduction and then the basic argument.

Dealing with the provisions, may I make two preliminary remarks which indicate the difficulty of the task I am about to undertake in an abbreviated form. The first is that the facts of this case cover a range of periods from the early 1990s to now and the legislation has changed and associated legislation has changed a number of times during that period. It is thus an almost impossible task to take your Honours through all the relevant sections at each time which is relevant to the facts of this case.

KIRBY J: But do the questions not address the validity of the scheme as at the date of our pronouncement?

MR BENNETT: Ultimately, your Honour, that is the way we have treated it and that makes it easier, but as a matter of strictness, what is before your Honours is very largely in relation to orders made many years ago when the legislation was different. The second problem - - -

KIRBY J: Could you just clarify, all we are doing is answering the questions, are we not?

MR BENNETT: Yes, your Honour.

KIRBY J: And if they are in the present tense, we answer them in relation to the present?

MR BENNETT: Yes. Your Honour, ultimately, all of this complex structure can be summarised in a very short form for the purpose of the questions your Honours are asked to answer. It may be necessary to list the provisions and show the critical path at the current stage, but which time one takes does not affect the result one comes to, although obviously there are differences which can be used to support arguments one way or the other. Neither side has sought to do that. We have prepared, and I will arrange for there to be handed up to your Honours, huge folders which hopefully your Honours will not need to go to very much, except for reference purposes, which set out the original legislation and all the amendments up to date.

The second problem is that there has recently in 1999 been a change to the system of accounting used by the Commonwealth in relation to its compliance with section 81 of the Constitution and the consolidated revenue fund. The view has largely been accepted now that the consolidated revenue fund referred to by the Constitution is something which is notional and created as a matter of notional requirement.

KIRBY J: You say it has been accepted, accepted by whom?

MR BENNETT: By the Commonwealth. Your Honours have not yet - - -

HAYNE J: Really, Mr Solicitor.

MR BENNETT: Well, your Honours have not yet had to consider it and this case is not a convenient vehicle, if I can take that phrase from somewhere else, for analysing the entire system dealing with the consolidated revenue of the Commonwealth.

But one of the links in the chain involves going through the entire previous system if one is dealing with the period before 1999 and the entire current system if one is dealing with it after it.

GLEESON CJ: In section 73(2) of the Registration and Collection Act there is a reference to "the Reserved Money Fund". What is that?

MR BENNETT: That, your Honour, is a creature of the Finance and Administration Acts which was subsequent. That scheme is part of what was changed in 1999. It is a subset of the consolidated revenue fund in effect.

HAYNE J: Well, is that right?

MR BENNETT: I may have been a bit fast.

HAYNE J: This talking in generalities will not do. We are entitled to be assisted. The Financial Management and Accountability Act is the origin of this expression, is it not?

MR BENNETT: Yes.

HAYNE J: That deals with what are called public moneys. Public moneys are anything and everything that the Commonwealth receives, are they not?

MR BENNETT: Yes, your Honour.

HAYNE J: They include trust moneys.

MR BENNETT: They do.

HAYNE J: The reserved money fund is established by section 20. Where in the Act do I find it as a subset of the consolidated revenue fund?

MR BENNETT: I was giving your Honour by way of introduction an oversimplification, for which I apologise. I am about to go through in slightly more detail in relation to these matters. The necessity for it arose out of the surplus money system created by the Constitution and the allocation of accounting periods and the need to prevent a surplus arising in relation to particular accounting periods where it had been determined that money would be spent in particular areas. As your Honour points out, there were various categories of funds which were dealt with differently.

Since 1999 there has been a change in name to what are called "special accounts" rather than "reserved funds". I will come to that if I may, your Honours. All of that only involves one step in the critical path. May I just take your Honours through that critical path. For this purpose I am using the Child Support (Registration and Collection) Act 1999 as in force in 2000. It is in the pink volume.

GLEESON CJ: Reprint 2 of the Registration and Collection Act and Reprint 3 of the Assessment Act?

MR BENNETT: Yes.

KIRBY J: Which is the one that has been amended, as you indicated to the appellant at the beginning of the submissions, or have both of them - - -

MR BENNETT: They have both been amended but the significant amendments such as the financial structure and to the various Acts dealing with the way Commonwealth money is handled. May I just show your Honours how the steps develop. In doing this the first time through, I am going to skip over one step in the process and then come back to that step, for reasons which shall become apparent. One starts with section 30.

GLEESON CJ: Which Act?

MR BENNETT: The pink Act, your Honour, the Child Support (Registration and Collection) Act, Reprint 2. They are both pink. I am sorry.

KIRBY J: Could you help me as to why they are in different Acts? Was that for a constitutional purpose? They appear to be integrated measures. Were they cognate Bills?

MR BENNETT: No, your Honour. What happened was first the Registration and Collection Act was passed which set up a scheme which applied, among other things, to existing orders for maintenance. Then the other Act was passed - and it came into force about 18 months later - which provided a scheme under which registrars would assess administratively, rather replacing the previous - - -

GLEESON CJ: They were enacted in different years.

MR BENNETT: Yes, they were.

GLEESON CJ: One was enacted in 1988 and one was enacted in 1989.

MR BENNETT: Yes, and they came into force 18 months apart.

KIRBY J: I noticed that, but I was asking whether they were cognate Bills, but the answer is not.

MR BENNETT: They certainly relate to each other and the second picks up the first for some purposes, or the first picks up the second for some purposes, in one of its applications, but they are not cognate in the sense your Honour is referring to.

If I can start with section 30, your Honours will see that:

(1) If a registrable maintenance liability is registered under this Act, amounts payable under the child support assessment, court order or maintenance agreement -

we are not concerned with those in this case -

under which the liability arises are debts due to the Commonwealth by the payer -

So the starting point is, it is made into a debt. There is also in subsection (3) a provision which one might call a novation provision, although that is again a very loose word to describe it. What that does is to remove the enforceability of any right in the payee against the person liable. There is a provision in the Assessment Act in section 79 which works with that which operates perhaps prior to it by making the amount of child support a debt from one to the other. So, in the absence of - - -

KIRBY J: Is that 79?

MR BENNETT: Section 79 of the Assessment Act, your Honour. That is the other pink volume.

HAYNE J: What is it that joins what is fixed under the Assessment Act to what is dealt with in section 30? What element of the provisions about registrable maintenance liability is engaged?

MR BENNETT: Your Honour, section 30(3) in effect overrides section 79 in cases where there is a registered liability. So instead of it being due from one to the other, which section 79 provides for, section 30(3) picks it up and makes it, where it is registered, a debt to the Commonwealth.

HAYNE J: Why is something fixed under the Assessment Act a registrable maintenance liability?

MR BENNETT: It is not, your Honour. It is not until it is registered. I am sorry, "registrable maintenance liability" is defined in section 4 as a liability that is picked - - -

GAUDRON J: Sections 17 and 18.

MR BENNETT: - - - yes, by 17 and 18. Then section 17 picks up - - -

KIRBY J: This is of the Registration and Collection Act?

MR BENNETT: Of the Registration Act.

KIRBY J: You had better distinguish these as you took us back to the Assessment Act. We will be confused otherwise.

MR BENNETT: I will always be talking about the Registration Act, unless I refer to it otherwise, because there is almost nothing I need to refer to in the Assessment Act at this stage. Section 17 picks up existing maintenance orders and liabilities created under the Act.

HAYNE J: I do not follow that. I know I am being very slow, but section 17 has two elements - (b)(i) seems not engaged; (b)(ii) when I go to "collection agency maintenance liability" gives me a definition at page 4 of the print which seems apt to State or Territory bodies. What is it that is in - - -

MR BENNETT: It is paragraph (b) of the definition.

GAUDRON J: Is it not subsection (2)?

MR BENNETT: Yes, section 17(2) - - -

HAYNE J: Thank you. Right, I understand.

MR BENNETT: I am sorry, your Honour.

HAYNE J: As I say, I am being slow.

KIRBY J: Well, this is not the most beautiful piece of legislation I have looked at.

MR BENNETT: There is very little legislation that is beautiful, your Honour.

KIRBY J: I do not know about that. This is not it.

MR BENNETT: So then one moves to section 64 of the Registration Act, which deals with the part of the Act concerned with garnisheeing employers - I am using words like "garnisheeing" obviously in a colloquial way - and:

An amount payable to the Registrar under this Part -

ie by an employer -

is a debt due to the Commonwealth.

KIRBY J: Now, this Registrar was originally the Commissioner of Taxation, wearing another hat?

MR BENNETT: He was, your Honour, and now it is not the Commissioner of Taxation.

KIRBY J: What, in the last few weeks?

MR BENNETT: In the last few months, I think, yes, your Honour. It may even be weeks.

KIRBY J: I wonder why that was done.

MR BENNETT: Your Honour, there was a revamping of aspects of the administration of it. I make no concession about that, your Honour.

KIRBY J: Is there a second reading speech for that amending Bill? I would like to see that, too.

MR BENNETT: I will have that obtained. Section 114 of the Registration and Collection Act corresponds to section 64 in relation, in effect, to self-employed people. I am sorry - I take that back. I jumped to that. Section 30 and section 64 between them have created debts due to the Commonwealth. Now, I pass for the moment over the second step which gets it from the Registrar to the relevant fund or to the consolidated revenue fund. I will come back to that in a moment.

KIRBY J: Do you happen to have a chart? I think it would be helpful, seeing as you are going to be jumping around different statutes, at some stage to have a chart that traces how the money passes through the system, otherwise it is very easy to get lost.

MR BENNETT: I will have that done, your Honour. Now, in relation to the reverse process, the steps are these. One starts with 74(1) which say that you transfer:

out of the Consolidated Revenue Fund:

(a) amounts equal to -

the amounts paid in and they go to the reserve, or what was then the reserve, and section 75 provides for payment from the reserve to the carer.

CALLINAN J: Mr Bennett, could I just ask you this question? At the beginning of the plaintiff's submissions, there are several paragraphs which outline the Act. There are two Acts and the form of them, I must say, I derive quite a lot of help from that. It appeared to me, when I looked at the sections, that the outline was an accurate one.

MR BENNETT: Yes, your Honour.

CALLINAN J: You do not take issue with - - -

MR BENNETT: We take no issue with it.

CALLINAN J: In fact, I found it very useful, I must say.

MR BENNETT: I think it was taken from one of our documents at one stage, your Honour, but - - -

CALLINAN J: Well, it is very useful, anyway.

MR BENNETT: - - - I acknowledge at least partial copyright to my learned friends.

KIRBY J: It was taken from what?

MR BENNETT: I think it was originally taken from one of our documents, but nothing turns on that. We accept that analysis.

CALLINAN J: You accept it, and when one looks at the sections that are referred to there, they do seem to provide a basis for everything that is stated there, so far as I can see.

MR BENNETT: Yes. It is, your Honour. I am going through this exercise because of the questions asked by the Court.

KIRBY J: Unlike the plaintiff, we do not necessarily accept your letter. I mean, I am not casting doubt on it, but it is nice to have it demonstrated.

MR BENNETT: Yes, if your Honour pleases. Now, the structure of the legislation is that, with one exception, there is coextension between what goes in and what comes out, between what goes in from the liable parent and what goes out to the custodial parent.

KIRBY J: If you do not recover money from the liable parent, then - - -

MR BENNETT: The carer does not get it.

KIRBY J: - - - the child gets nothing.

MR BENNETT: That is so, your Honour. Well, it would get some social services under other legislation but it would get nothing. That is so.

KIRBY J: Yes, and the Commonwealth does not take a fee for this collection service?

MR BENNETT: No, your Honour, it does not. There is only one exception to what I have just said, and that is that if an employer deducts and then does not account for what the employer deducts, there is, in effect - and I have to use words like "in effect" because obviously it is not precisely this - a guarantee by the Commonwealth, and the carer does get paid out of general consolidated revenue.

KIRBY J: Which section is that?

MR BENNETT: It is three sections, your Honour. It is 77, 78(3) and 75(d). Those three sections effect the appropriation and the transfer and so on. But that is the only exception. If the custodial parent does not pay, the carer does not receive. But if the employer of the non-custodial parent deducts but does not account, there is, in effect, a Commonwealth guarantee which guarantees the employer and obviously provides for subsequent collection from the employer. So that is the structure. I left out the step of how one gets from "a debt due to the Commonwealth" into the consolidated revenue fund. I was hoping that your Honour would simply accept the statement that the effect of the various financial management and finance administration Acts at various times has been that where you have a debt due to the Commonwealth, it ends up in the consolidated revenue fund.

The current provisions are contained in the Financial Management Legislation Amendment Act , specifically, sections 5 and 20, which deal with special accounts. The obligations are created by legislation called the Financial Management and Accountability Act 1997 which, in effect, says if a public officer receives money, it has to be paid into the appropriate funds. The relevant section is there and it is a long haul, and even then, the Act does not deal with it comprehensively, because one has to go to directions and regulations.

KIRBY J: What section was that, I am sorry?

MR BENNETT: The sections your Honours would go to if your Honours were looking for it would be 10, 17 and 18. We would be ultimately submitting one does not really need to go through this detailed inquiry and those matters, to some extent, pick up orders of the Finance Minister and, in any event, most of them have been repealed and replaced by the first Act I referred to. But the effect of it is - and I would ask your Honours to let me leave it at this - the effect of it is that when the Registrar receives the money, it is a debt due to the Commonwealth and it has to be paid into a real or notional consolidated revenue fund.

KIRBY J: Do the orders of the Finance Minister have a statutory consequence under the Act?

MR BENNETT: Yes, only in relation to the obligation of the public servant and what can be done to the Registrar if he does not - well, the obligation of the Registrar to deal with the money in a particular way. They would require the Registrar to pay it into a "bank account No 82 at the Pitt Street Branch of some bank", it would be that sort of thing.

KIRBY J: That is under the Financial Management and Accountability Act 1990 ?

MR BENNETT: Yes, your Honour.

KIRBY J: Have you got the section? Perhaps you can give that to us later.

MR BENNETT: No, there were sections I referred to, your Honour. They are sections 10, 17 and 18.

KIRBY J: I see, it is in one of those?

MR BENNETT: Yes.

KIRBY J: Thank you.

MR BENNETT: But the essential point about that structure, for present purposes, is that with the qualification in relation to the guarantee of employers, who in a sense work with the Commonwealth to achieve the result, what comes out is what goes in.

HAYNE J: Now does what comes out come out as the result of parliamentary appropriation?

MR BENNETT: Yes, your Honour, and that follows from section 75. Yes, section 75 is the appropriation.

KIRBY J: Of the Registration Collection Act?

MR BENNETT: Yes, that applies it from the reserve and the appropriation from the consolidated revenue fund is 74. So it is between those two, yes.

HAYNE J: the point for me is one of quite considerable significance, Mr Solicitor. Section 81 of the Constitution speaks of a consolidated revenue fund to be appropriated for the purposes of the Commonwealth. At first blush, the various provisions to which you have taken us seem to me to create something separate from the consolidated revenue fund, what was once called a reserved money fund and is now called a special account. Again, at first sight, it seems to me that payments out of that fund or account are not within the purview of section 81 of the Constitution, that is, they may be paid out, no doubt pursuant to legislative authority, but they may be paid out otherwise than for whatever the expression "for the purposes of the Commonwealth" may mean.

MR BENNETT: Yes, the purpose of the Commonwealth is putting it into the special fund.

HAYNE J: I can understand the need to appropriate the consolidated revenue fund to top up the reserve fund in respect of unremitted employer deductions. That I can see the need of parliamentary appropriation for. At the moment it seems to me there is an invitation to error to conflate the special account, formerly reserved money fund, and the consolidated revenue fund, for a consequence of that conflation would be that moneys could come out of that fund only by parliamentary appropriation and only then for purposes of the Commonwealth which would lend a deal of artistic verisimilitude to the contention that what is here concerned is a tax, being the compulsory exaction of money for the application to public purposes, namely the purposes of the Commonwealth.

MR BENNETT: Your Honour, there are three or four questions in that that we can deal with separately. First, section 83 of the Constitution uses slightly different language to section 81 and has to be borne in mind in construing these provisions in the structure. That is the first matter. The second matter is that the phrase "purposes of the Commonwealth" when used in section 81 is, in my respectful submission, something different to the phrase "public purposes" when used in cases such as the Blank Tapes Case.

GLEESON CJ: It would include paying a debt owed by the Commonwealth.

MR BENNETT: Precisely, your Honour, and it would include - that is a simple example. There may well be an obligation of the Commonwealth, which is not a purpose of the Commonwealth in the broad sense.

GLEESON CJ: Even so, in the Tape Manufacturers Case, at page 522, Justices Dawson and Toohey said:

the fact that an exaction is to be paid in a consolidated revenue fund is sufficient indication that the exaction is for a public purpose, hence a tax.

MR BENNETT: I will be asking your Honours not to accept that. I will be coming to that. There is a similar remark at page 503 in the majority judgment. At point 5 their Honours have this sentence which we submit is not borne out by the footnote and which goes further than was necessary for the case:

In Australia, the fact that a levy is directed to be paid into the Consolidated Revenue Fund has been regarded as a conclusive indication that the levy is exacted for public purposes.

The problem with that sentence is the words "paid into". If your Honours go to the footnote, your Honours will see the footnote contains four references. The first is set out in full from R v Barger where Justice Isaacs said:

"[T]he imposition of a tax on any person or thing for the benefit of the Consolidated Revenue -

which is a different thing for payment into the consolidated revenue fund -

is taxation -

So that quotation does not bear it out. The second is the statement of Chief Justice Latham in Moore v The Commonwealth. Again, it is fully set out sufficiently for my purposes:

"The moneys collected are paid into consolidated revenue . . . The moneys can then be spent for any purpose for which the Commonwealth may lawfully appropriate money".

That is not so in this case. The third is page 572 of Moore's Case by Justice McTiernan. I will not invite your Honours to get that out. I will just tell your Honours it is the very bottom of the page and it is a statement which talks about forming part of "the consolidated revenue of the Commonwealth". It is not a statement in relation to payment into the fund; it is a more general statement.

The fourth one is Dennis Hotels Pty Ltd v Victoria [1960] HCA 10; 104 CLR 529, and there was a statement at page 548 in the judgment of Chief Justice Dixon where his Honour says, at line 3 on the page:

It is a tax which goes into the Licensing Fund kept in the Treasury under Pt. XV. From that certain annual subventions are payable to municipalities and to the Police Superannuation Fund and the costs are paid for administering the Act. But the balance forming the great bulk of the fund goes to the Consolidated Revenue of Victoria.

Those passages, in my respectful submission, do not support the precise words of that sentence which I read to your Honours. What they support is a proposition that where money goes into general Commonwealth funds for general Commonwealth purposes, the levy is exacted for public purpose, but not that the payment into the fund is sufficient.

GAUDRON J: Do I take it from that that you concede there is an exaction in this case? I would have thought the real issue here was whether there was not just a simple assignment of debt.

MR BENNETT: Your Honour, we say there is, when I come to that.

GAUDRON J: Which is not an exaction as I understand it.

MR BENNETT: That is one of the reasons I started by saying to your Honours that one does not really need to go through the exercise I have been going through and the detail I am going through it in, but I am answering questions to which I am asked and dealing with it.

GAUDRON J: Yes.

KIRBY J: It is an assignment of a debt in which is given a new and very different quality arguably, and that is, the Commonwealth gets behind it, the Commonwealth lends the public power of the Commonwealth, the polity of the Constitution to ensure that the money is paid. I am not saying that that is not a justifiable social purpose, but it is not quite just a sheer funnel for the payment, it is a very different type of debt.

MR BENNETT: Well, your Honour, with respect, not. Any debt can be assigned by anyone to anyone else. It is not regarded as something personal like services, which cannot be assigned, the obligation to perform services. The obligation to pay a debt is regarded as an assignable obligation. One can give it to anyone. I have no say in it if my creditor chooses to assign my debt to a Mafioso, who will endeavour to use all sorts of means to enforce it.

KIRBY J: Yes, but that is A going to B, but we are talking about something, a value added. What is added is the power of the Commonwealth.

MR BENNETT: No, your Honour. There is no value added, in my respectful submission. The only difference between owing a debt to the Commonwealth and owing a debt to a private creditor is that we know the Commonwealth has the means and the administration and other matters to enable it easily to enforce it whereas the private individual may not be able to afford to enforce it, may not be able to take the necessary administrative steps and so on.

In normal circumstances, it makes no difference to the debtor whether the debt is owed to an individual or to the government, but if the individual is a person who is unsophisticated or who does not have substantial funds, does not have easy access to lawyers, where there are a lot of small amounts involved, because here we are talking about debts of such a size that the cost of enforcement may absorb a large part of them, then, of course, it is easier and more convenient for the Commonwealth to enforce them than for the individual ultimate beneficiary to enforce them and that is the reason for this legislation.

It is a minor practical difference from the point of view of the payer. It simply means the payer does not have the advantage that the payee may not be prepared to take all the steps involved or may not be able to take them efficiently. It is not, in any real sense, a qualitative difference from the point of view of the payer. The payer still has to pay. The bailiff delivers the same summons with a different name on it and the procedure is carried out by the Australian Government Solicitor identical to those carried out by a private firm of solicitors.

The procedures of the courts where the government is a plaintiff are not different from the procedures where an individual is the plaintiff. It is rather like the difference between a bank cheque and a personal cheque. There is no difference in law, the only difference is that one knows that the debtor is solvent. It is the converse of that. The only difference is that the creditor is a person who has the will and the wherewithal to enforce a small debt, whereas an individual may not, but that is the only difference.

KIRBY J: As you would appreciate what one has to do in a case like this, looking at the Constitution, looking at its purpose, is to look down the tracks of what happens if this model becomes a general principle and entitlements of A to B become, by force of statute within power, debts to the Commonwealth which then have the power of the Commonwealth behind them.

MR BENNETT: Yes.

KIRBY J: That is an exaction on citizens, in certain circumstances, one can imagine of a much more compulsive character. It is certainly much more effective.

MR BENNETT: Effective, but not more compulsive, your Honour. There is no difference when I go to court if I am sued by the Commonwealth or by an individual. The only difference is that if the amount is small and the individual to whom the debt is owed is not a person of means, there may be practical difficulties in the way of that individual. They are practical and capable of being overcome and today, of course, rather more than in the past. Today if a litigant in person goes into a court office and says I do not really understand this but someone owes me money, there is far more likely to be assistance and co-operation available to enable the individual to do what has to be done than in the old days. The differences are purely differences on the other side of the record. There is no difference to the payer except the payer does not escape as easily because of the lassitude of the payee, or of the obligee. That is the only difference.

Your Honour has used the phrase "the might of the Commonwealth" and so on. The might of the Commonwealth is not involved. It is nothing to do with its might. It is simply the fact that it is not going to be deterred from collecting a debt of $150 by the inconvenience and cost of doing it. That is the only difference. That is not its might.

KIRBY J: Well, it is not deterred because of its might. What you say is that the legal obligation is the same.

MR BENNETT: Yes, your Honour.

KIRBY J: The practicalities may be a bit different because of the Commonwealth's resources, but that is not offensive to the Constitution and it is highly desirable in this particular field of operations.

MR BENNETT: Yes, and it goes further than that, your Honour, because, as has been pointed out, any creditor can assign a debt to anyone. A debtor has no right to say, "I don't want you to assign my debt to a particular person". As I said within the extreme example I gave, I cannot prevent a debt I owe being assigned to a well-known Mafioso, or a creditor who is noted for his toughness in enforcement. That is something I have no right to prevent.

This legislation does not take away anything from the carer. The carer need not use it. The carer has no obligation to use the machinery of this Act. The carer can simply sue under section 77 of the Assessment Act but the carer using this Act is analogous as a matter of practical reality to a carer assigning the debt, saying, "Yes, I'll assign this to the Commonwealth. I'd much rather have the Commonwealth collect it and pay me the money. It's much easier for me."

I can do that with a debt collection agency if someone owes me a debt. The debt collection agency will collect it, no doubt more rigorously than I would and pay me the money, although it takes a fee. But that is all this does. There is no hardship, no possible hardship or potential hardship in that part of the scheme so far as the non-custodial parent is concerned, except to the extent that he or she loses the chance that the custodial parent will not or cannot make the effort to enforce the otherwise due liability.

CALLINAN J: One feature that makes it look hardly like a tax perhaps is that a deduction can be made from a social security pension or payment under section 72AA. It is not something that you would expect to be taxed in the ordinary course.

MR BENNETT: No, precisely, your Honour. That is simply an additional means of enforcing the liability, which is not available to a private creditor. That is true.

CALLINAN J: But if one is looking at the character of a tax and something that the Commonwealth gives and then takes away is hardly what you would expect to happen in a taxing situation.

MR BENNETT: Precisely, your Honour. Also of course, in relation to the guarantee of the employer, that is something else which rather takes it away from being a tax.

KIRBY J: In fact, if you look at the whole scheme, the Commonwealth is making nothing out of this. It stands to lose: (a) the cost of administering and providing the resources and so on to follow the payment through; and (b) it stands as guarantor in the case of an employer not remitting the funds. So there is no enhancement of the revenue in this case.

MR BENNETT: Yes, that is so, your Honour.

KIRBY J: That is a pretty significant difference. If one is looking vigilantly against secret and hidden taxation, normally it is to increase the coffers of the Commonwealth. Here there is no enhancement of the coffers at all; on the contrary.

MR BENNETT: Your Honours, the question I was asked by the Chief Justice about payment into consolidated revenue led me into the first part of my argument in relation to taxation. Your Honour's question leads into the second part of the argument in relation to taxation.

KIRBY J: Because in Tape Manufacturers there was no enhancement of the funds of the Commonwealth, and yet it was struck down as a tax.

MR BENNETT: It was, your Honour, and the reason was this. One has a continuum. When at the one extreme one has a general tax on income or capital gains or property which goes into consolidated revenue, mixed with all the Commonwealth's money and is spent on all the Commonwealth's expenses, that is clearly classic taxation. That is at one end of the spectrum.

At the other end of the spectrum, the Commonwealth may impose a liability, in an area within its powers, on one person for the benefit of another. For example, it may create a right of copyright or patent and may require that one citizen pay to another a sum of money as a royalty. That is clearly not a tax. But there is a continuum between those extremes, and one sees that in the cases. One sees, for example, agricultural schemes where levies are placed, at some point in the distribution process, on an agricultural commodity, and the proceeds are used for indigenous farmers.

KIRBY J: Indigent, I think.

MR BENNETT: Indigent. I am sorry, yes, your Honour.

KIRBY J: The Commonwealth in those days was not very generous to indigenous farmers.

MR BENNETT: Your Honour, I apologise.

KIRBY J: Perhaps still so.

MR BENNETT: I was thinking of my next sentence and tripped over the word in the first sentence. Indigent farmers. Now, that is the type of case where one has a levy on one group in the community for the benefit of another, but related, group. In the Tape Manufacturers Case, one had a levy on one group, the manufacturers of blank tapes, for the benefit of copyright proprietors who were likely to suffer as a result of the use by private citizens of blank tapes to record copyrightable material. There again, there was a relationship, but the relationship, the nexus, was insufficient to prevent it being a tax.

But may I imagine a case where the facts of Tape Manufacturers are altered. Let me assume two things. Let us assume, first, that a blank tape can only be used once, to simplify the example, like certain types of CD-ROMs which can only be burnt once; and assume, second, that what the legislation does is impose the tax on the manufacturer or on the first stage of the sale of the blank tape and then require any citizen who records something on a blank tape to file a return, the blank tape having an identifiable government number when the tax was paid, and when the government receives that return, it takes the money out of consolidated revenue, the exact amount paid on that blank disc, and pays that to the copyright proprietor whose work was put on it.

Let me assume that was the scheme. So what the scheme does now is provide a mechanism for the payment of a royalty by the purchaser of the blank tape to the person whose copyrightable material is recorded on it. That would, in my respectful submission, not be a tax. The reason for the distinction between that case and the Blank Tapes Case is simply that that case is much closer to the mere imposition of a liability on one citizen to pay another, as opposed to the taxation of a citizen for the benefit of a group of society. One is on one side of the line, one is on the other side of the line. I see, your Honours, it is 12.45.

GLEESON CJ: We will adjourn until 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

GLEESON CJ: Yes, Mr Solicitor.

MR BENNETT: If your Honours please. Your Honours, first we have provided that large volume of legislation which, hopefully, your Honours will not need to go to. That is there if your Honours wish it. We have prepared over the luncheon adjournment a table which I hand to your Honours which sets out the steps I referred to this morning.

Your Honours will see that, because of the exigency of time in preparing this over the luncheon adjournment, we have in step 5 not itemised the detailed provisions of the Audit Act until 1997 of the Financial Management Act from 1997 to 1999 and the Amendment Act since 1999. If your Honour Justice Hayne would be assisted by that, we can have such a document prepared and filed in the next few days and I will have that done.

HAYNE J: Thank you.

MR BENNETT: This gives the other provisions to which I referred this morning. Your Honour the Chief Justice asked me this morning about the statement in the judgment of Justices Dawson and Toohey in Tape Manufacturers [1993] HCA 10; 176 CLR 480 at 522. Now, your Honours will see that the passage occurs at the top of the page and in the first line their Honours say:

Those characteristics of a tax which require it to be levied by a public authority for public purposes are important in that they reflect the general conception of a tax as a means of raising revenue for government -

and then there is an irrelevant reference in parentheses.

In consequence, the fact that an exaction is to be paid into a consolidated revenue fund is sufficient indication that the exaction is for a public purpose, hence a tax. By inference, the strongest indication that an exaction does not constitute a tax is that the moneys raised do not form part of such a fund. However, as we point out later, the fact that moneys are not paid into such a fund in not necessarily conclusive.

We would make a number of comments on that passage. The first is, as in the case of the majority judgment, it goes further than the references in the footnote. The first two references in the footnote both are references which appeared in the footnote of the majority, which I took your Honours to this morning. The reference to Parton - your Honours do not have this case, but it is Parton v Milk Board [1949] HCA 67; 80 CLR 229 at 258. I will just read your Honours the passage. Your Honours do not need to go to it - it is a very short passage. Justice Dixon, as he then was, says:

In the first place I think that it is clearly a tax. It is a compulsory exaction -

first characteristic -

It is an exaction for the purposes of expenditure out of a Treasury fund -

second one, and that is the one that is referred to -

The expenditure is by a government agency and the objects are governmental. It is not a charge for services -

and so on. So it is in an itemisation of a number of characteristics, and one of those is it is for the purpose of expenditure out of a Treasury fund, which is very different to the sort of situation we have here. In my submission, neither that passage nor the passage in the majority judgment are properly authoritative for the proposition that any payment into the consolidated revenue fund is necessarily a tax.

Here of course, it is a two-step process in any event. There is the creation of the liability and the transfer or novation of the liability to a debt due to the Commonwealth and the consequence that it be paid into consolidated revenue, although it is immediately paid out in exactly the same sum to a person who has a relationship and is in a relevant transaction with creating liabilities from the person who has paid it in. So one simply does not have a collection of money for the benefit of a group in society or anything like that. One has a simple convenient means of taking money from one person and giving it to another for a specified purpose related to a matter affecting those two persons, namely the joint parenting obligation.

GLEESON CJ: The legislation from one point of view begins by taking a moral obligation and making it a legal obligation and then providing a mechanism whereby the legal obligation is discharged.

MR BENNETT: Yes, with one qualification I would accept that, and that is the qualification that the provision creating the general obligation is one which is really introductory to the Act in referring to the moral obligation rather than one itself creating any new legal obligation. The Act says a parent has the obligation to support the child, but that on its own without the other provisions, there would be a real question as to how enforceable that was.

CALLINAN J: Mr Bennett, is not the legal obligation to be found in section 66C of the Family Law Act?

MR BENNETT: No, your Honour. That is repeated, in any event, in the Assessment Act. In my respectful submission, that provision is merely a general provision stating the object of the Act, which is to provide for the creation of such obligations. It is laying down the broad approach of what the Act sets out to do. It is not itself creating the obligation.

CALLINAN J: No, the obligation is created, is it not, by the Family Law Act, section 66C?

MR BENNETT: No, your Honour. In my respectful submission the obligation is created by the specific provisions which give rise to the obligation. What demonstrates that is this, your Honour, that one does get under the Collection Act a retrospective order. If the parent who is the carer is caring on his or her own for a year before seeking any order of any kind from any court, or from the Registrar, then one does not get under the Collection Act a retrospective order going back that 12 months. One only gets an order commencing from the date of one's application. If section 66C created a general obligation, then one could sue for the back amount, which one cannot do.

KIRBY J: I think I saw in your submissions that at common law the father had no duty to support the child, is that the position was it? The mother did? That would be the sort of discrimination the old common law would have had.

MR BENNETT: That is why we have changed it, your Honour, it is clearly inappropriate. This is an Act which creates an obligation. All the Family Law Act does is give a general introduction to the nature of the obligations that are being created. That appears also from section 3(1) of the Assessment Act and that says the same thing, that:

The parents of a child have the primary duty to maintain the child.

But that is the sort of introduction to what the Act then sets out and does. That section on its own does not create the relevant rights and liabilities. It is the modern style of drafting, I suppose, that one - - -

KIRBY J: I think the South Australian submissions point out that in all States except Western Australia, or is it all States, the power has been referred?

MR BENNETT: Yes, your Honour.

KIRBY J: What did the Western Australians do, they enacted that this Act would apply in Western Australia?

MR BENNETT: Yes, they adopted as a State Act the same provisions.

KIRBY J: A parallel word-for-word statute, was it?

MR BENNETT: I think they incorporated it by reference, but I am not certain.

KIRBY J: Anyway, we can ask - Mr Mitchell can clear that up later.

MR BENNETT: Yes. Now, your Honours, before lunch I had come to the second of the two aspects dealing with the tax argument and that was the specificity and I was drawing the distinction along with the continuum between an act saying A will be liable to B or A will pay money to the government which the government will pay to B, on the one hand, and legislation which says taxpayers pay money which is then administered by the government for the benefit of some group, on the other, such as necessitous farmers or copyright proprietors or any other appropriate group.

Now, in my respectful submission, even if one accepts, as for present purposes of course one must, the Tape Manufacturers Case, that is the outer limits of how far it can go and still be a tax and not be merely an adjustment of rights between citizens. An adjustment of rights between citizens is not a tax on its own. Of course, if it is a general adjustment it is. If one said we will tax everyone who has more than a certain amount of money and give it to everyone who has less than a certain amount of money, that is a tax, of course.

But if one takes an individual in situations arising out of individual positions and says, "You will pay money; you will be liable to a person with whom you have a pre-existing relationship", which is the reason for imposing the obligation, then in my respectful submission, it is very different and the example I gave this morning of the variation to the facts of the Tape Manufacturers Case illustrates that clearly.

If that were not so, any Act in any area of Commonwealth activity under any of the powers in section 51 which happened to, as an incident of administering copyright or patents or bankruptcy or lighthouses or any other power in section 51, created a liability in one citizen to another as part of the administration of that area of law, would be a tax or, at least, would be a tax if the government interposed itself between the payer and the payee, however precise the input and the output was.

KIRBY J: But what do you take Justice Menzies to have meant by saying this Court has consistently applied a "strict" test? You say the Tape Manufacturers is at the outer limit, but if we think about the purpose of section 55 it is to prevent Houses of Representatives tacking on to tax Acts provisions which bypass the Senate and thereby reduce the powers under our Constitution of the Senate to amend the Bill. I mean, that is quite an important restraint on the Executive Government which controls, or has a big influence, on the House of Representatives.

MR BENNETT: Yes.

KIRBY J: So it is quite an important constitutional setting for us to look at it and I can understand in that setting why it is a strict rule because you can do it but you have to do it in a separate measure.

MR BENNETT: Yes. There are two aspects to that, your Honour. The first is, of course - the countervailing part is that if one construes tax very widely, one gives an enormous increase to the powers of the Commonwealth under section 51(ii) outside other areas of section 51 and one can simply, in any area of human endeavour having nothing to do with section 51, impose a liability on A to pay the Commonwealth, who will then pay B, and call it taxation.

So, in a sense it goes both ways if one construes the power too widely. But the answer to your Honour's question is that when Justice Menzies was talking about the "strict" test, that was in the context of the Re Dymond issue, which is raised by South Australia in some detail and by us very briefly in our submissions, about the distinction between the imposition of taxation and the machinery for its collection and the debate has been - and this is the debate which his Honour is referring to - whether the machinery for collection is included in the word "imposition".

There is a discussion of that in the Convention Debates where there was an amendment made that might have clarified it, which was not passed. I will just give your Honours the reference. It is the Melbourne session in 1898, volume 5 of the Convention Debates. They are the passages around page 2064. I might even take your Honours to that. The strict matter that is being referred to is the question of whether one construes the words "imposition of taxation" strictly and narrowly by not including "collection" or whether one includes it more broadly as including "collection" and therefore, whether one has to have separate legislation dealing with the imposition and collection, as is done in the Income Tax Assessment Act each year where one has the Assessment Act dealing with collection and one has the Rates Act saying what the rate is for this year.

KIRBY J: Is that not what the plaintiff is saying in this Court, that you should have divided the legislation differently?

MR BENNETT: Yes. He only gets to that, of course, if he gets past the first leg of being taxed. It is for that reason a subsidiary argument. It does not arise if I succeed on what I have been saying to your Honours up to this point.

KIRBY J: There do seem to be analogies between the case and Tape Manufacturers.

MR BENNETT: Your Honour, my answer is that no case has ever suggested that an Act which imposes a liability on A to pay money for the benefit of B simpliciter arising out of a transaction between them or relationship between them is a tax. No one has ever said that. All Tape Manufacturers has done is to go a little further than a line of Canadian and American cases referred to in it by saying that where one has a tax on a group, where it is paid to another group in a general way, in a pooled way, that can be a tax. That is all it says.

KIRBY J: Why is this not a case where you have a liability imposed on a group, namely the non-custodial parent, for the payment to another group, namely the custodial parent, with the intermediary of the Commonwealth to ensure that you do?

MR BENNETT: Because, your Honour, here, unlike those cases, the amount paid is precisely the amount received at the other end, with the exception of the guarantee of the employer, and there is a relationship between the parties. It is a liability imposed. In all those cases there is a generic group which receives undifferentiated moneys. Here a specific person receives an amount which is the same as the specific amount paid in by the person to whom that person has a relationship and the amount is fixed by reference to that relationship.

KIRBY J: What was the point of distinction in the Tape Case? Perhaps the owners of the copyright thought that they were getting only what they deserved in aggregate.

MR BENNETT: No, your Honour. If I buy a blank tape from a manufacturer and pay a tax on that under the Tapes Case, that goes to a body, a quasi-governmental body, which distributes it in a general way among copyright owners whose works are put on tapes. It has no relationship at all to what I choose to put on that particular tape, which may or may not - and in that sense it is totally undifferentiated. It is like a tax on the rich to pay to the poor. It is a generic thing over a body of people paid to a body of people.

Here, one does not get the payment unless the other parent has paid in exactly that amount. Even in the case involving the employer, when the Commonwealth guarantees the employer, the other parent has paid exactly that amount. If the other parent does not pay, nothing is paid out. It is completely different to the copyright situation.

It is interesting to see that in the Canadian cases there has been a departure. The original Canadian case which is referred to in the authorities is a case called Lower Mainland Dairy Products v Crystal Dairy [1932] 2 DLR 277, in the British Colombia Court of Appeal, and it went to the Privy Council. The Privy Council decision is what is cited in the Australian cases which deal with this.

KIRBY J: You do not have a copy of that for us?

MR BENNETT: I will, your Honour, in a moment, but I do not want to read any part of it but I will hand it up in a moment. That was a case where there was an equalisation scheme involving liquid milk and other dairy products, and in order to ensure that people who manufactured one form got the same as people who manufactured the other form, there was a tax on consumers or intermediaries in relation to liquid milk which was paid to manufacturers of other dairy products. It was an equalisation scheme. That was held to be a tax. It is rather like the Tape Manufacturers tax. It is an adjustment between groups of people. There is a later case - yes, in the Privy Council it is [1933] AC 168.

There are a number of recent cases in Canada which have departed from those cases. One must remember that the Canadian cases need to be looked at with some caution, for two reasons. First, they depend on a distinction between direct and indirect taxes. Secondly, they are dealing with a situation where there is a power of taxation and the act has to be a tax to be valid, rather than is invalid if it is a tax.

The case which suggests that the Crystal Dairy Case is no longer good law, although that is the case which was, in a sense, the fons et origo of the Australian doctrine, is a decision of the Supreme Court of Canada which is called the Agricultural Products Marketing Case [1978] 2 SCR 1198. It is the very last page where there is a general reference to the reluctance to follow the Crystal Dairy Case and the earlier cases. The second last and last page.

The third case in Canada - again, this is referred to in Tape Manufacturers, and I will not take your Honours to it, although I will give your Honours a copy - is the decision in Massey-Ferguson Industries Ltd v Government of Saskatchewan 127 DLR (3d) 513. There, there was something that one would have thought was a tax, but it was held not to be. That was an impost on all manufacturers of agricultural equipment to pay money into a fund and then if a farmer had agricultural equipment which broke down and the warranty was not on it, he or she could draw on the funds to have the equipment repaired. Now, one would have thought that was, on the Tape Manufacturers decision, very clearly a tax, but it was held not to be in the current Canadian approach.

I will hand your Honours copies of these cases, although I will not refer to them any further. I am not inviting your Honours to analyse these cases and draw specific conclusions from them, and I am certainly not inviting your Honours to overrule Tape Manufacturers. But what I do submit is this, that Tape Manufacturers is as far as anyone has gone in the direction towards specificity. No one has ever said that the imposition of a liability between two people, even with the government intervening, where it arises out of a transaction between them, that that can be a tax.

If it is a tax, it means that the powers of the Commonwealth are increased beyond the dreams of the greatest federalists this country has seen, because it means that the Commonwealth can always create a liability between two citizens, in areas far from section 51, by interposing consolidated revenue and calling it a tax. That simply cannot be right. That, one might well think, is one of the reasons why two State Attorneys are here supporting me, and they will, no doubt, say more about this. One characteristic of a tax is that it is an impost for public purposes. Now, when one says "public purposes", one does not mean merely that there is some governmental policy behind the creation of the liability. One means something more. One means that the money is distributed in a generic way, at least to a group, if not for all expenses of government, but it cannot include - - -

GLEESON CJ: It certainly does not have to be for all expenses of government.

MR BENNETT: It does not have to be, no, your Honour.

GLEESON CJ: The payroll tax, as I recollect it, was introduced in order to provide funds for a particular social services initiative - free milk or something like that.

MR BENNETT: Yes. Your Honour, there is certainly no reason why one cannot have that. As I have said, the Tape Manufacturers Case is the high-watermark of that, is the furthest it goes. The cases involving necessitous farmers, where one has a tax on a commodity which is paid to farmers who are unable to produce it, are a good example. One can have all sorts of cases where a tax is imposed for the benefit of some group, even some related group, as in Tape Manufacturers, or as in the Canadian cases. But once one gets to the degree of specificity one has here, it ceases to have the character of a tax.

I have addressed your Honours about the absence and significance of consolidated revenue. There is simply no reason to relate the requirements of section 81 or 83, and the phrase used there, with the public requirement in the definition of a tax, or in the statements of the characteristics of a tax. They are different things and they are dealing at different levels of generality.

As your Honour pointed out, the purposes of the Commonwealth might include the simple meeting of a Crown debt or liability in tort or many other things, but when one talks about the raising of money for public purposes, one is talking of something less specific.

Now, I will deal very briefly with the Re Dymond issue, I only want to say a few things about it. It is dealt with in far more detail by the Solicitor for South Australia and I am happy to adopt what is in his submissions. But the point we make is very simply this, that the statements in Re Dymond to the effect that the words of section 55:

Laws imposing taxation shall deal only with the imposition of taxation -

in my respectful submission, the better view is that imposition of taxation includes its collection and the machinery for its collection. If there was a power to deal with imposition of taxation, that would clearly involve the incidental power to collect the tax. In my respectful submission, to construe it as requiring the ritual which is gone through every year of separating legislation of the one kind from the other is, in my respectful submission, highly artificial and this Court should take the opportunity, if it gets to it, and the Court does not get to it if it is with me on taxation thus far to prefer the dicta of the minority in Re Dymond to the dicta of the majority on that topic. It was, of course, a 4:3 decision. The reasoning - - -

KIRBY J: Has that case been commented on? I must admit I was not aware of it until a few months ago and when I read it I thought that there was some sense in what the minority said, with respect, but that might just have been a reaction to the good sense of the scheme, but one has of the same reaction, perhaps, to the good sense of the present scheme, but one has to keep an eye on the constitutional requirement and the reasons for it which are pretty fundamental to the nature of our Commonwealth and its Parliament.

MR BENNETT: Yes, very well, your Honour, and as I say - - -

KIRBY J: Are there law review articles or commentaries on the Tape Manufacturers Case? Anyway, if they could be found and - - -

MR BENNETT: I have it, your Honour. We did a search on it and my recollection is that there was nothing of great significance. There certainly, I think, have been articles. I do not think this aspect of the case has been the subject of discussion in this Court, but I will just check that before I give your Honour an answer. I also should refer - I will not deal with it orally, but I simply remind your Honours that in our submissions we have dealt with it in paragraphs 66 to 71 of our submissions.

That brings me to the second aspect, which is judicial power, and can I say two or three things by way of introduction to this part of the argument, which will be brief. The first is that the rigidity of Boilermakers, if taken to its absolutely logical conclusion, would make government extremely difficult because it would mean that every time a decision has to be made under a federal Act, a decision would have to be made by the Parliament as to whether it was judicial power or not judicial power under pain of the Act being invalid if one strayed on either side.

Because of that the courts have developed what is known colloquially as the chameleon doctrine referred to in Tasmanian Breweries and numerous other cases in this Court and other courts and this was fully argued before your Honours a few weeks ago in Pasini's Case, where your Honours gave a decision but have not yet provided reasons.

Now, this, we submit, is a classic case of a power which is in the chameleon category. It is not like conviction for crime or enforcement of a contract or tort, as in the cases which have to be judicial.

McHUGH J: But, would you accept that the way forward out of this morass of what constitutes judicial power is to place less emphasis on definitional analysis which seems an impossibility and instead look at it in terms of the function at issue and whether or not that function should be exercised in accordance with the judicial process alone?

MR BENNETT: Well, your Honour, if, by that, your Honour means that really all that remains as purely judicial are enforcement of liabilities in contract and tort and conviction for crime, and perhaps one or two other categories - - -

McHUGH J: No, you have to look at in a wide range of issues such as historical analogues, the nature of the interest affected, whether it has a policy content, the type of policy issues involved in it, whether the function is close to determining existing rights or is closer to creating new rights, matters of that nature.

MR BENNETT: Yes.

McHUGH J: In other words, you look at it from a functional point of view rather than from an analytical point of view.

MR BENNETT: Yes.

McHUGH J: Boilermakers depends very much on a textual analysis of the Constitution, but as the dissenting judgment of Justice Williams showed in that case, the text could answer both ways and in Boilermakers, the actual decision can be supported, really, upon the function that is to be served by the separation of powers doctrine rather than by a strict - - -

MR BENNETT: Your Honour, in general terms I would accept that. Certainly the last requirement your Honour referred to of the distinction between creating new rights and applying the legal principles to an existing situation in accordance with established laws is one of the distinctions the courts have relied on again and again, and we will be submitting this is in the category of creating new rights.

McHUGH J: Grollo, Wilson and perhaps Kable all provide a rather different test, an incompatibility test, which in some ways can be traced back to the majority judgment in Lowenstein. Maybe that is the way forward.

MR BENNETT: One thing one learns clearly from the cases is that one cannot look at the trappings or the procedures because, apart from anything else, one wants to encourage administrators to mimic courts in the judicial way in which they deal with problems, so one clearly does not look to that. But in this case one has something which this Court has said in a very closely analogous situation can be dealt with administratively and one does not really need to go much further than that. The case which does that is R v Humby; Ex parte Rooney 129 CLR 231. I have copies of that for your Honours. There were two significant statements in this case which are adopted by four of the five Justices between them. The first is at the bottom of page 243 in the judgment of Justice Stephen where his Honour says:

It was conceded by counsel for the applicant that it would be within power for the legislature, under s.51(xxii), to provide for divorce without recourse to a judicial proceeding. It is equally within power to legislate in respect of ancillary relief in terms that do not involve a determination by means of a judicial proceeding. This is, in effect, what sub-s.(3) does, it takes the outcome of a non-judicial proceeding, before a Master or commissioner, and says of it that it shall have particular consequences, those consequences being identified by reference by the consequences of an order of a properly constituted judicial tribunal . . . Just as it would be open to the legislature to provide for a non-judicial form of divorce proceedings and to describe the outcome of such proceedings by reference to what is the result of a decree absolute . . . it is within the power conferred -

Justice Mason, as he then was, said very much the same sort of thing at page 248 where, at line 5 on the page, his Honour says:

The legislative power with respect to divorce is not confined to authorizing a dissolution of the matrimonial relationship by means of a judicial determination in a judicial proceeding. The old procedure of dissolving a marriage by private Act of Parliament is a clear demonstration . . . It is for Parliament in the exercise of the power to select the means by which the marriage is to be dissolved and the means by which consequential provision is to be made respecting the rights and obligations of the parties. Subject only to the limitations to be discovered in Ch.III, Parliament may provide that a designated tribunal or officer may dissolve a marriage and define the consequential rights -

et cetera.

McHUGH J: But this case is somewhat different. From your point of view, is not a better analogy the approach of Justices Isaacs and Rich in Alexander's Case concerning the arbitral power? They tended to see awards as factum which were then given legislative effect. Likewise, arguably here you could say the administrative procedures are the factum which the legislation then gives effect to.

MR BENNETT: We do say that, your Honour, and we said that in a number of places in the submissions. What I am using this case for at the moment before I come to that is to say that the making of consequential adjustments on a dissolution of a marriage is something that can be done administratively under the marriage and divorce power. Correspondingly, under the referred power in relation to exnuptial children, the adjustment of payments in relation to them between parents can be done by an administrative tribunal. It is a new form of liability being created by Parliament which can be done in any way it chooses and it is not bound to have it done through a judicial proceeding.

GLEESON CJ: Mr Solicitor, could you have a "no fault" system of compensation for injuries suffered in motor vehicle accidents dealt with purely by an administrative tribunal? I think they do in New Zealand, do they not?

MR BENNETT: Yes, your Honour, one could, assuming it was within power, which it might not be.

GLEESON CJ: What I wanted to ask you was could you have a "fault" based system of compensation dealt with purely by an administrative tribunal?

MR BENNETT: Leaving aside the possibility of the factum argument which I will come to, which Justice McHugh raises, that is one of the three matters which is always said to lie at the core of judicial power. A conviction for crime and the determination and enforcement of liabilities in contract and tort.

McHUGH J: Perhaps you can do it by analogy with the Board of Review cases, as long as you have an appeal ultimately to a court, you can have an administrative tribunal determining rights subject to an appeal to the High Court or some federal court.

MR BENNETT: That is really the way we attack this case. If your Honours see the way we have done it in our submissions. We have taken each of the four relevant stages where there is a suggestion that it might require judicial determination and we have shown how, at each one - and one can put the four together and get the same result - one does not have a conclusive determination. One has a determination based on newly created rights; one has a factum on the basis of which the liabilities imposed, one has something which is not immediately enforceable; one has even a discretion not to exercise "jurisdiction". That, of course, is foreign to the nature of a court. All those factors which apply at each level make it quite clear that what one has here is not a judicial determination. As I say, one can look at each of those elements. The most important is that it is the creation of a new right.

My learned friend, of course, puts it as giving effect to the rights created by section 66C or section 3(1). The answer is it cannot be that because that, on its own, would require the enforcement to be retrospective to the date when it arose, which it does not do. For all those reasons, we would submit, each of the relevant steps and the combination of them is something which is squarely capable of being imposed on an administrative tribunal.

The one thing one does not look to in these cases, surprisingly perhaps, is the importance of the imposition of the liability for the person suffering it. That, on its own, does not seem to be the criterion and the clearest illustration of that is the extradition cases which say that that is something which is capable of being the subject of administrative determination, something which, in many ways, might be thought to be analogous to a conviction for a crime, although it is a step before, of course, the actual trial.

McHUGH J: The whole area of Chapter III is a bit of a mess and I have to give a lecture next week on Chapter III and I have been examining all aspects of it and it is really worrying me. I have been much influenced by a PhD thesis written by Doctor Fiona Wheeler which argues on a functional purpose of analysis of Chapter III rather than the definitional analysis which has hitherto prevailed and which leads nowhere really.

MR BENNETT: My task might have been easier if it was last week and not next week, your Honour.

KIRBY J: We had better all be there.

MR BENNETT: But, at the end of the day, it is not going to be a "bright line" test and, at the end of the day, what this Court has said in Humby makes it clear that this is not one of the core subject matters of judicial power. Once one says that and one is within the chameleon doctrine, one does not even need the extra matters we have here: the absence of conclusivity, the fact that it is based on a factum, the fact that it is creating new rights and even the discretion to exercise jurisdiction.

It is significant that when one goes to the court to enforce these orders, or even if one uses the quasi garnishee provisions, there is always the ability to go to a court and have what is, in effect, collateral review. So, there is nothing conclusive about what the Registrar has done and, indeed, the various roles of the Registrar, when one analyses them, the first one is purely mechanical. It could be done by a counter clerk as much as by a registrar. One just looks at the documents. One looks at the income. One looks at the number of children. One looks at a number of fixed criteria and comes up with a number.

Then, if one goes to the second stage where one seeks a departure order, there is a series of criteria on which either party can say to the court it should be more or less than that amount because of a list of itemised special circumstances. There again one is creating a new obligation but there is the ability to challenge it collaterally before one enforces it. There is the ability to have a stay and there is, more importantly, the ability in the body ultimately making the determination, to make a retrospective determination. So, one can go to the court and have an order made which totally reverses everything that has gone before. So, it is not conclusive as exercise of judicial power is. It is based on a factum and has all the other elements to which I have referred.

KIRBY J: And who is this mysterious registrar? He is now an officer of the Department of Social Security, is he? He is not the registrar of the Family Court, is he?

MR BENNETT: No, no.

KIRBY J: He is a special registrar by that name designated under the Act.

MR BENNETT: Yes, your Honour.

KIRBY J: And you were telling us earlier it used to be the tax commissioner.

MR BENNETT: No, no. That is a different person.

KIRBY J: Is it?

MR BENNETT: That is the person who administers the collection end. The person I am talking about now is the person who makes the various determinations. That is quite different. That is not the Tax Commissioner.

KIRBY J: What is his title? Is he a commissioner, is he?

MR BENNETT: I am sorry. The person who administers the collection end was the Tax Commissioner and is now the Secretary of the Department of Social Security or the other nominated persons mentioned today, in the senior executive service. The person who makes the decisions under the Collection Act is a - the person who.....is a delegate of that person, who is one of the Child Support Registrars, and they are defined by the Act. For present purposes, all that we are concerned with is that they are not judicial officers. They are making what used to be called quasi-judicial decisions and act judicially, but they are not exercising the judicial power of the Commonwealth.

The way we have set out the submissions, if your Honours have our submissions, makes them a little tedious to read but does deal with it in some detail. What we have done is taken the four functions. If your Honours start on page 6, with the heading, A, "Administrative assessment of child support". We have dealt with that assessment - - -

McHUGH J: Before you go on, while I think of it, in your oral submissions today you said you did not want to attack Tape Manufacturers, but in your written submissions did you not say that you wanted to reopen it?

MR BENNETT: Well, your Honour, we have - - -

KIRBY J: I thought you told us that if we got to the point where we felt that it stood in the way, then you asked us to.

MR BENNETT: Yes. It is a conditional - - -

CALLINAN J: If the outcome was adverse to you because it depended upon the strict application of Tape Manufacturers, you wanted to reopen it. That is your position.

MR BENNETT: Yes, but your Honours do not really need to, because it is simply an example of where along the continuum one draws the line. It is the furthest the courts have gone, and it is nowhere near this case. So that is why your Honours probably will not need to. But if your Honours are - - -

CALLINAN J: You expressly seek to distinguish it in your written submissions.

MR BENNETT: Yes. We would be delighted if your Honours were to overrule it, but I do not want to take time. So what I have done then in the submissions -and I am not going through them again; I am just showing your Honours what we have done - is that in that section, section A, we have dealt with the first stage, shown why that on its own is not judicial, and dealt with the various elements. We have done that again on page 10, with departure determinations; again on page 13 with registration; and on page 14, with the collection and recovery mechanism. Your Honours will find those four sections very repetitive, because most of the elements to which I have referred in general terms arise at each stage, if it is that which is said to be of the essence of judicial power. Of course, the same matters can be read in relation to the combination of the four of them.

Yes, there are two references I will give your Honours before I sit down. The first is there is a very useful article on the Tape Manufacturers by Peter Johnston entitled "A Taxing Time, The High Court and the Tax Provisions of the Constitution" (1993) 23 Western Australian Law Review 362, particularly the last part of that article which analyses the Canadian decisions.

Secondly, Re Dymond has been cited in the High Court without analysis in MacCormick v The Federal Commissioner of Taxation [1984] HCA 20; (1984) 158 CLR 622 at 630, footnote (41), and it is also referred to in the Northern Suburbs General Cemetery Reserve Trust Case [1993] HCA 12; (1993) 176 CLR 555 at 563 and 595.

McHUGH J: But that is rather at the opposite end of you, is it not? I mean, one argument here is whether it goes in.

MR BENNETT: Yes.

McHUGH J: In Cemetery the question was whether there was any appropriation and we held there was an implied appropriation, I think.

MR BENNETT: Your Honour, yes. There was a division in the Court, but in both cases it is merely a passing reference.

McHUGH J: Yes.

MR BENNETT: I am only giving those in answer to your Honour's question. We have not searched for articles on Re Dymond. For those reasons it is my respectful submission that the Acts in their entirety are valid and neither attack on them succeeds. May it please the Court.

GLEESON CJ: Yes, Mr Solicitor.

MR SELWAY: Your Honours, there are four issues we wish to touch on in our oral submissions. The first relates to the assumption made in the submissions of the parties as to the effect of the references of power by the States or, in the case of Western Australia, the adoption by Western Australia of the Commonwealth law. It is assumed by all the parties that the reference gives sufficient power to impose a charge but that the reference and the powers given by them are subject to section 55 and to the implication of separation of powers.

Your Honours, we say that both of those assumptions are correct, but the second of them raises a number of issues which do not need to be explored in this case but are at least worth flagging that they exist. The first of them is whether implications within section 51 itself limit reference of power. As I say, it does not arise in this case but an assumption that, for example, State banking limitation, which may apply to some other provisions in section 51 also apply to 51(xxxvii), we would say would be too narrow a view.

The second is whether the same approach applies to 51(xxxviii) because that may have implications for the Australia Act. So we merely point out that the assumption is there in the submissions. We say the assumption is right but it may require further analysis in an appropriate case.

Your Honours, the second issue is whether the charge is a tax. We say that that question is a question of characterisation rather than the application of a definition. We say that various factors will be important, history, commercial usage and so forth, and that the question, ultimately, is whether in ordinary parlance the relevant charge is a tax.

We make the further submission that there is no suggestion that the meaning of the word "tax" is different today than it was in 1900. In this case, we say that if that question is asked, the answer is no. Essentially that is for the reasons given by the Commonwealth and Western Australia, which we respectfully adopt. In our submission, the Commonwealth charge is essentially the price for the discharge of a private obligation, which is a real obligation. Undoubtedly the reason why the Commonwealth has passed this legislation is its perception that it is in the public interest. What we have referred to in our written submissions as the Crown's obligation in relation to parens patriae. Nevertheless, we say that the real issue is not to be answered by asking a different question, that is, "Is this a tax for public purposes? Is the money paid into a public account?", and so forth. All of those may be relevant, but they do not actually answer the question. The question is, "Is this a tax in general parlance?".

KIRBY J: Just on the questions of parens patriae, to answer that and to uphold that view you would have to know precisely the terms of the reference of power. Is that in any document that is readily available?

MR SELWAY: Your Honours, the Acts are referred to in our written submissions. Your Honours may be aware we have provided a CD disc. That CD disc has on it those Acts and we can provide them in solid form if that is necessary.

KIRBY J: Thank you, that is enough for my purposes.

MR SELWAY: We say that the obligation that is discharged in this case is a private obligation. That matter is explained further in the Western Australian written submissions at paragraphs 7 to 9, which we respectfully adopt. Consequently, if it matters, we say that the case is logically distinguishable from Australian Tape Manufacturers. The effect of our submission is that some care has to be taken in detailed analysis of individual cases to determine whether a particular case is distinguishable or not, because that analysis forces one into a definitional discussion whereas the actual discussion, we say, is a characterisation discussion, looking for the normal meaning of the words.

KIRBY J: Except that, first of all, you have to quest for consistency so that it is not just a matter of whim or chance, but principle. Secondly, in order to perform the task of characterisation, you have to have some concept of the guide posts for which you are looking in the performance of that function.

MR SELWAY: We accept what your Honour says, of course. The difficulty we see is that the attempt to apply rigid definitions leads one into the - - -

KIRBY J: I am not suggesting that and, for my own part, I am with you on the issue of characterisation. But even you in your submission said, for example, if you look to the fact that the Registrar was the Tax Commissioner wearing another hat, that is an indication in favour of the plaintiff's case.

MR SELWAY: Yes.

KIRBY J: Why is it an indication? Then you have to go to find a reason why it is an indication beyond the fact that you get a bit suspicious when the Tax Commissioner is actually hauling the money into consolidated revenue and you think normally the Tax Commissioner does that with tax, and that somebody saw that and that has been slipped out of the Act just before the matter comes to the court.

MR SELWAY: To that extent our written submissions need variation to take account of that change, your Honour. Anyway, the end result of our submission is that this is not a tax when that characterisation approach is applied.

The third issue about which we wish to make a submission assumes that the Court is against us on our second submission that it is not a tax. We then look at the question of what follows from that. That involves the meaning and effect of section 55. If the law deals with a matter other than the imposition of taxation, then section 55 of the Constitution provides that those matters other than the imposition of taxation are of no effect. In paragraph 36 of the plaintiff's written submissions, the plaintiff submits that if this law is in breach of section 55, then the effect of it is that all of it must be struck down because it is inseverable. Of course, the plaintiff has to say that because the plaintiff is here challenging the tax.

The difficulty is that common law severance is not the test. Section 55 tells us what happens if that section is breached. What happens is that the liability to tax remains and everything else goes. It may not be able to be collected but the liability still exists. What that means of course is that section 55 is not directed to private rights; it is directed to the political arrangements within government and the powers of the Senate. The effect then is that the subject usually will not escape the tax even if section 55 is transgressed. The other effect of that is that if the approach of the majority in Re Dymond is correct, the result - - -

McHUGH J: I am just trying to recall the facts of Mutual Pools. Mutual Pools was directed to the wrong person, was it not?

MR SELWAY: I think that is right, your Honour. I think there were two taxes in it. It was a sales tax and a - - -

McHUGH J: Yes.

MR SELWAY: So it involved two matters. One of the taxes had to be invalid because it dealt with two matters. I think that is different. Similarly, in some of the later cases where there have been amendments which have put the tax in a pre-existing Act, the Court has held that the whole tax is invalid because it is an amendment rather than an original law. Certainly it is our understanding that the Court has accepted that if you have, if you like, a stand-alone statute which imposes a tax and poses other matters, then section 55 directs what the result is, which is that the other matters are of no effect.

What we submit is that that highlights, if you like, one of the problems that result in Re Dymond. You end up with an absurdity, the absurdity being that you have a liability to tax but no capacity to collect it. So to that extent, my learned friend's submission that the thing is inseverable and should all fall makes some sense. The difficulty is it is contrary to section 55.

For that reason, we say, if necessary, that the Court should reconsider Re Dymond. Perhaps we should say Re Dymond, in fact - and the comments of the majority in Re Dymond are obiter, but we say, notwithstanding that, they may well be compelling. My learned friend, the Solicitor for the Commonwealth, has referred to the reference to that case in Northern Suburbs General Cemetery. Could I also refer your Honours to State Chamber of Commerce and Industry v The Commonwealth [1987] HCA 38; (1987) 163 CLR 329 at 341 to 342, where again Re Dymond was referred to with apparent approval.

KIRBY J: Why is it necessary to revisit it?

MR SELWAY: Your Honours, if one gets to the point - - -

KIRBY J: Yes, I realise you are in your third argument.

MR SELWAY: Yes, and if one gets to that point, the effect of it is that all of the collection parts of this Act are of no effect, which would leave, on our submission, the plaintiff liable to a tax but no capacity, at least under the existing law, for it to be collected, and on the plaintiff's argument, the tax entirely falls. We say that if section 55 has that result, it is only because the relevant Act, in this case, the Registration and Collection Act, deals with a matter other than the imposition of taxation.

HAYNE J: But why should we regard that result as an odd result, if 55 is directed to what is happening within the Parliament? The solution being, if you are left in this odd nether-world of a citizen liable to pay tax but no machinery for collecting it, is that not then a matter for political resolution, rather than application of a legal solution to the conundrum thus presented, because the base problem was itself political?

MR SELWAY: Yes. Your Honour, Justice Menzies in Re Dymond at page 28 actually draws attention to what he says is a "convention" which, in his view of the law, has gone beyond section 55, where the Act is split up for political purposes. We certainly do not argue that - perfectly proper for there to be a political response, and we would assume that the reason we are in this position is because the Commonwealth and its advisers assumed that this was not a tax.

HAYNE J: No doubt so, but if the problem thus created is not solvable at the political level, that is, if the majorities in the two Houses fall in ways that make its solution not politically possible, does the imposition of a judicial or legal solution, in effect, cut away the underpinning of 55, it being, as I would understand what you have put, directed to those political problems?

MR SELWAY: I would accept what your Honour says, with this qualification. If we are right and the current approach to section 55 by this Court as reflected in Re Dymond goes further than what section 55 of the Constitution does, then the Court is no longer, if you like, assisting in a political exercise, but is replacing a political exercise with a legal exercise, proven by this case. Your Honours, there are four reasons we say that the approach of the majority in Re Dymond is doubtful.

Firstly, that the words themselves do not lead to the result, that is to say the words "imposition of tax" are broad enough to include the collection of the tax. Secondly, that the interpretation is not within the mischief as outlined in Re Dymond itself, the mischief being the tacking of non-taxing measures to a taxing statute so that the Senate does not have power to interfere with it. We say that where it is collection in relation to a specific tax, that is not an issue. I should make the point though that on that issue the debates in the Convention are probably against us, and my learned friend, the Solicitor for the Commonwealth, has given your Honours the reference to that.

The third is the absurdity of the result when the collection aspects are of no effect, but the tax remains. The fourth, which we say is the compelling issue, is the failure of the Court in Re Dymond to look at the word "matter" within section 55, because the issue was not whether this was an imposition of tax but whether it was a "matter" other than the imposition of tax. If one puts the word "matter" in, we say it becomes clearer that we are talking of categories.

Before leaving Re Dymond could I make one short mention to a matter your Honour Justice Kirby has raised with both my learned friends, and that is what Justice Menzies meant when he talked about "strict construction". Our understanding is, in fact, quite different from what has been put. If I could take your Honours to that case, 101 CLR, particularly at page 26 and following. At page 26 your Honours can see that Justice Menzies discusses the previous cases and refers to a number of judgments. On page 27, after referring to those judgments, his Honour says:

This review shows that Isaacs J is alone in his opinion that a law providing machinery for the assessment, levying, collection and recovery of tax is not a law dealing with the imposition of taxation and that in Moore's Case a contrary view was part of the decision of that case.

So his Honour Justice Menzies was working on the assumption the law at the time he was delivering this judgment was, if you like, as I put it, that is to say that collection fell within the imposition of the tax. Then his Honour at the bottom of page 27 and page 28 deals with the reasons why that analysis is correct. At the top of page 28 he refers to the political convention that has grown up which he accepts is more rigid than the strict application of section 55. At the bottom then of the first paragraph his Honour says:

The maintenance of this convention is not, however, any part of the function of the Court and the convention itself affords no ground for departing from the strict construction of section 55 that has always been adopted.

The strict construction his Honour is referring to is what his Honour was saying that the majority was leaving in Re Dymond. The "strict construction" was, if you like, a broad reading of "imposition of taxation" and consequently a narrow reading of section 55, and to that extent a strict reading. So his Honour was not talking about the strict construction being the majority view, his Honour, of course, being in disagreement with the majority on that point.

Your Honours, the final matter is the question of judicial power, and as to that we simply adopt the submissions of the Commonwealth and of Western Australia. If it please the Court

GLEESON CJ: Thank you, Mr Solicitor. Yes, Mr Mitchell.

MR MITCHELL: May it please the Court. We adopt our written submissions. I only want to address oral submissions on two aspects of the taxation argument, firstly, to the question as to whether there is any exaction effected either by the Registration Act alone or the Registration Act read with the Assessment Act; and, secondly, on the impact of section 81 of the Constitution on the characterisation of a purpose as public or otherwise.

Your Honours, the plaintiff seems to accept that sections 77 and 79 of the Assessment Act seem to make clear that all the Assessment Act standing on its own does is to create a private debt between particular individuals in the community in specified circumstances.

KIRBY J: Could you please start by telling us how your statute fits into the scheme. You are in a peculiar situation apparently.

MR MITCHELL: Yes, your Honour.

KIRBY J: Do not go to the detail because apparently it is on the Solicitor for South Australia's CD-ROM.

MR MITCHELL: Your Honour, the Child Support (Adoption of Laws) Act, a Western Australian Act, adopts both the Commonwealth Assessment Act and the Registration Act, adopts it in the sense that section 51(xxxvii) of the Constitution refers to the adoption of laws when it says that the Commonwealth may make laws with respect to matters which have been referred by the States:

so that the law shall extend only to States by whose Parliaments the matter is referred, or which afterwards adopt the law -

The Western Australian Parliament has chosen to adopt the law - - -

KIRBY J: You did not get in in time, is that what happened?

MR MITCHELL: That is correct, and a number of the amendments to the legislation have subsequently been adopted. The adoption of those amendments is then incorporated into the Western Australian Act I referred to.

KIRBY J: Is that done by way of a schedule to a State Act which annexes in the schedule the federal statute, or is it some other - - -

MR MITCHELL: No, it simply refers to the Commonwealth legislation as amended by various Acts and indicates that Western Australia adopts that legislation.

KIRBY J: I am sorry, I interrupted you. You were in the middle of telling us about 77 and 79.

MR MITCHELL: Those sections make it clear that all the Assessment Act, looked at alone, does is to create a private debt, which it seems clear cannot be a public purpose for the purposes of characterising exaction as a tax. The question is then: what effect does the Registration Act, read with the Assessment Act, have on that position? We say in answering that question, it is relevant to consider the extent to which the system which the Registration Act establishes might have been implemented without the enactment of that legislation.

My submission is that the Registration Act does no more than provide a statutory framework for the collection of debts by the Commonwealth and that a substantially similar system of collection by the Commonwealth could have been established without that legislation and, if that is all that the Registration Act does, then there is no reason to regard it as converting the private debt provided for in the Assessment Act into a tax. If the Commonwealth had enacted the Assessment Act alone, there would have been nothing to have prevented the Commonwealth from accepting assignments of debts created under the Assessment Act in consideration for the Commonwealth's agreement to pay the assigning creditors the equivalent of any recovered amounts. It is clear that the common law would permit the assignment of choses in action to the Crown and the Commonwealth retains that right.

There is a useful discussion of the history of that doctrine in the judgment of the Full Court of the Federal Court, comprising Justices Gummow, Lee and Hill, in Ling v Commonwealth [1994] FCA 1156; (1994) 51 FCR 88, particularly at pages 92 to 93. I need not take your Honours to it. That case concerned the assignment of a debt to the Commonwealth owed by a person who provided educational courses in Australia to overseas students. The overseas students assigned the debt to the Commonwealth and the Commonwealth then sought to enforce the debt in its own name. The Full Court of the Federal Court held that that was open to it as a matter of prerogative and the common law.

Having received the debt provided for by the Assessment Act, the Commonwealth then could simply enforce that debt by way of action before the courts. Subject to any legislative provision for social security payments and tax refunds, the Commonwealth might have set off amounts which were owed to it against its liability to make social security payments and tax refunds.

The money, being money received by the Commonwealth, would necessarily form part of the consolidated revenue fund, but subject to an appropriation those amounts agreed with the carer entitled to child support could then be repaid to them. There is no reason why the Commonwealth could not make that service generally available to members of the community who are owed debts for child support and as most elect to proceed under the Registration Act it may well be that most debtors would elect to avail themselves of the collection service offered by the Commonwealth.

KIRBY J: But if you think there is strength in what the Solicitor for South Australia said, that their fundamental task is to characterise the law, is it a tax or not, and if you take the point of the plaintiff that the task is not helped by simply taking little bits and pieces and what they might have had or what they might have done separately, but that your duty is to look at the whole scheme, then really what you are saying now is rather irrelevant, is it not?

MR MITCHELL: I would submit not, your Honour. The substance of the whole scheme looked at together is for the creation of a private debt by the Assessment Act, which can, but not must, be assigned to the Commonwealth for the purpose of its collection on behalf of or for the benefit of the creditor, which is not substantially different from a system which the Commonwealth could have established at common law had it chosen not to enact the Assessment Act.

So the Registration Act, in my submission, does not fundamentally alter the private nature of the liability created by the Assessment Act and when the Registration Act then provides for debt to the carer entitled to support to be substituted with a debt to the Commonwealth, it is not effecting an exaction and perhaps I would adopt the language which his Honour Justice Gummow used in the Air Services decision.

Again, without taking your Honours to it, Air Services Australia v Canadian Airlines International Ltd (1999) 202 CLR 133 at 285, his Honour posed the question in terms of whether there was a financial burden imposed by the Act which was said to impose the tax and here we say that the Registration Act looked at a loan firstly does not impose any additional financial burden. It simply involves a person who may have owed $1,000 to the carer of their child now owing the same $1,000 to the Commonwealth.

That substantive approach to the question of exaction seems to be consistent with the comment which this Court made in the Air Caledonie decision (1988) 165 CLR 462 at 467 that there is no reason, in principle, why a tax should not take the form other than the exaction of money.

In relation to the question of public purpose, can I deal with one question posed by your Honour Justice Hayne, that is the impact of the words appropriation "for the purposes of the Commonwealth" in section 81 of the Constitution. Many of those words were, of course, the subject of a number of different views in the AAP Case, which is reported in Victoria v The Commonwealth (1975) 134 CLR 288. I do not propose to take your Honours to it.

Can I begin by disavowing any attempt to suggest that one of those views might be preferred to the other in this case? My submission is that whichever view one takes of those words as adopted by the Justices in the AAP Case, it is clear that those words are not controlling for the purposes of characterising an impost as a tax.

The broad view which was adopted by Justices McTiernan, Mason and Murphy was that which Chief Justice Latham had adopted in the Pharmaceutical Benefits Case which was really that the words simply meant any purposes the Parliament may determine. They really were not words of limitation. In that context it seems unlikely that Chief Justice Latham in Matthews v Chicory Marketing Board 60 CLR 263 at 276, using the phrase "public purposes" which seems clearly to be limitation words, was using those words in the broad sense he gave to the words "purposes of the Commonwealth" appearing in section 81. If the contrary is asserted, then one really is forced to the position of my learned friend for the plaintiffs when he says that the words "public purpose" really do not add anything very much to the definition.

Justice Jacobs viewed the question as one which was simply not justiciable, reference to that being at page 410 of the Commonwealth Law Reports. If the question which section 81 poses is not justiciable, then it is difficult to see how that requirement can control the characterisation of a tax which clearly is a justiciable question.

Chief Justice Barwick's and Justice Gibbs' narrower view of "purposes of the Commonwealth" comprehended any purpose in respect of which the Parliament had power to make laws. We would simply make the point that there is no reason why those purposes must be affected by expenditure of a public as opposed to a private nature. So my submission is that we do not need to resolve this difference of opinion to see that the language of section 81 of the Constitution, either in relation to revenue or in relation to appropriation does not hold the key to characterising an exaction as a tax, if indeed there is any relevant exaction effected here.

If it please the Court, those are my submission.

GLEESON CJ: Thank you, Mr Mitchell. Yes, Mr Corr.

MR CORR: Yes, your Honour, I think most of the matters have been traversed but in relation to public purpose, I would just point out that the result of the custodial parent receiving child support payment is that they can, if they are in receipt of a social security benefit, have a diminution of that benefit because such child support is considered to be income for the purposes of the Social Security Act 1991 under sections 8, 10, 503 and 1068A. So that, in fact, one of the effects of this determination would be that, in fact, the revenue of the Commonwealth would be increased or, rather, the expenditure would be decreased in some cases.

Other than that, your Honour, I think, as I have said, the issues that have been before the Court have been traversed both in my original submissions in the matters before the Judges. Unless I can be of any further assistance, those would be my submissions.

GLEESON CJ: Thank you, Mr Corr. Yes, Mr Solicitor.

MR BENNETT: Your Honours, may I have leave in accordance with what I indicated earlier, to supplement the schedule which I handed to the Court....and to include in that a couple of the second reading speeches I was asked about in my submissions.

GLEESON CJ: Yes.

MR CORR: Similarly, your Honour, I believe I am to give second reading speeches as well.

KIRBY J: It may be that you could coordinate that with the Solicitor for the Commonwealth.

MR CORR: Yes, we shall talk, your Honour.

KIRBY J: We do not want them twice.

MR CORR: Once is usually more than enough, your Honour.

GLEESON CJ: We will reserve our decision in this matter.

AT 3.40 PM THE MATTER WAS ADJOURNED