Vanderstock & Anor v The State of Victoria [2023] HCATrans 10 (15 February 2023)

Last Updated: 15 February 2023

[2023] HCATrans 010

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No. M61 of 2021

B e t w e e n -

CHRISTOPHER VANDERSTOCK

First Plaintiff

KATHLEEN DAVIES

Second Plaintiff

and

THE STATE OF VICTORIA

Defendant

KIEFEL CJ
GAGELER J
GORDON J
EDELMAN J
STEWARD J
GLEESON J
JAGOT J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 15 FEBRUARY 2023, AT 9.49 AM

(Continued from 14/2/23)

Copyright in the High Court of Australia
KIEFEL CJ: Before you proceed, Mr Solicitor, the Court will reconvene after lunch at 2.00 pm and tomorrow it will take a half‑hour off the luncheon adjournment. I think that means that, on previous estimates, we should finish on Thursday around 3.00 pm.

MR DONAGHUE: If the Court pleases. Your Honours, when the Court rose yesterday, I was working my way through the facts as identified in paragraph 5 of our outline. I had submitted that, in undertaking the evaluative inquiry into whether there is a sufficient connection between a tax and goods in order for that tax to be an excise, two important matters were, one, that the tax identified as the criterion of liability to pay the tax, some dealing with goods – picking up there the “dealing with goods” language from the bottom of page 499 of Ha – one, the relevant dealing with goods here being using the good, because a tax that fixes upon the use of the good is, in effect, putting a cost on the person’s interaction or engagement with the good, and the other relevant factor I developed in some detail was that the tax was of such a nature to effect goods of the relevant class as are goods of commerce – meaning, where one is concerned with goods for which there is a market of such a nature as to affect demand for or supply of goods within that class.

There are two other factors that are identified in paragraph 5: connection to quantity or value of the dealing of the goods and revenue raising, or part of a regulatory scheme. Those factors have quite some history in the authorities. We have given your Honours some reference in the outline and, given limits of time, I do not propose to develop those factors further here.

GLEESON J: Mr Solicitor, if you are not going to say anything more about the meaning of the word “dealing”, I just wanted to raise for consideration whether or not the use of goods falls within an ordinary understanding of that word. For example, in other contexts, perhaps the law of conversion use of goods may not amount to a dealing with goods.

MR DONAGHUE: Your Honour, in my submission, in the particular context of section 90 and the way that the word is used in Ha, which is where I am picking it up from, the Court was reasoning in a context where it had explained that the universe of possible taxes on goods is comprised of either excises or customs duties and it had split the line based on importation being customs and everything else being excise. In my submission, once one starts from that point, “dealing” was not a limiting word, it was a word that helps identify how the tax might interface with the goods in question.

So, while I accept that the more common examples of excises are situations where the dealing was something earlier in the chain – the production of the good, its manufacture, its distribution or its sale – in my submission, if your Honours accept as the starting point that section 90 is intended to prevent distortions within the market for goods, if a tax on the use of the goods has that distorting tendency – is of such a nature as to affect the market for the goods – logically, there is no basis to treat usage separately from the other kinds of dealings that your Honour puts to me, and that is the point that I am intending to develop right now, that there is not a distinction to be drawn between those different kinds of dealings.

GORDON J: Can I raise just two questions in relation to that which I would like you to address as you are going to go along. If one looks at the tethers to which the section 90 cases have been attached – one of them you just raised, and that is put, I think, probably most clearly by Chief Justice Mason and Deane in Philip Morris at 426, where they talk about the interaction between excise duties, customs duties and bounties as being the triplet giving rise to the free trade idea. I am not talking about tariff policy now; I am talking about those three concepts working together as one tether. Then, the second is related to that: an inter‑relationship between them and delivery of those free trade goods within those free trade – consistent with the way you just put it – to the domestic market, to the consumer, and you see those concepts picked up again in Capital Duplicators and Ha.

What I am interested to know is how your test that you propounded yesterday and that you have now just put to us again, one addresses those factors – if at all – in terms of the rationale and tethers or whether one has a different set of tethers for post‑distribution and sale into the hands of a consumer in terms of the domestic market.

MR DONAGHUE: Your Honour, my answer to that is that, in our submission, once one moves away from a criterion of liability and focuses on the substance of the matter, if the Court is persuaded that the effect of a tax on goods of the relevant class will be to affect the market, then the fact that the tax is on the use of the good rather than on one of the other steps makes no difference, because the policy factors that your Honour has just summarised are the demarcation line between sales taxes on the one hand and taxes at later stages does not logically bear upon the achievement of those purposes. That is how I am intending to develop the argument.

EDELMAN J: Can I ask two questions on that? The first is, is your concern, or should the concern be one which is with the effect on the market, or is it concerned with the purpose of the legislation in terms of the goods and the market, or both?

And then the second question is, precisely what is meant by a connection with the goods? So, yesterday I understood you to say the connection with the goods is concerned with demand and sometimes also supply. Your answer to Justice Gleeson suggests that actually it is at a slightly higher level than that, that the connection with the goods is the extent to which there is a distortion in the market, or the extent to which there would be a distortion in the market for the goods, consistently with the majority’s underlying purpose of section 90 in Ha.

MR DONAGHUE: Your Honour, as to the first question, the effect, not purpose, is our submission. It does not matter whether or not the State is intending to distort the market. If the State imposes a tax on goods for whatever purpose, it might be a completely altruistic or innocent purpose, it is still a tax on goods.

As to the second, in my submission, where we are concerned with goods for which there is a market, then Justice Dixon’s Matthews formulation that the tax is of a nature to affect the class of goods as articles of commerce, we have understood as at least principally calling for an analysis of whether or not the Court is persuaded the tax has a natural tendency to distort that market by affecting demand or supply.

If your Honour has distortions in the market of another kind in mind, I have not engaged with what these different kinds of distortions are.

EDELMAN J: I think what my concern is that your first answer is overinclusive and your second is underinclusive. So, the first answer would capture, for example, a payroll tax, which, on the supply side, could have dramatic effects on the price, the market, for the goods. And your second answer, concerning the extent to which the demand and supply needs to be affected, might not include, for example, highly inelastic goods, or goods that have highly inelastic demand or supply, so a monopoly or a monopsony. But it would not really seem congruent with, or arguably not seem congruent with purpose of section 90 if a highly inelastic demand or supply were to be ruled out because there might not be such a direct effect, at least immediately, in the market.

MR DONAGHUE: Your Honour, I would seek to emphasise that this articles of commerce limb of the argument that I am now discussing with your Honours is part of the evaluative inquiry as to whether a tax is a tax on goods. So, that high‑level question is the question that the Court is answering, as put in Matthews, and Ha, and Capital Duplicators, and the way you answer it is by looking at the character of connections between the tax and goods. A payroll tax might affect the market for the goods, but is unlikely to have any of the other indicia of a tax on goods so as to lead to an evaluation of that tax as properly bearing that character.

So, I am not putting – it is no part of argument to say that any tax that affects the market for goods is for that reason an excise. That is not my case. But my case is that, as a matter of substance, that is a very important factor, which runs through all of the cases, that trading or a market effects, and it coheres with the purpose that we have identified.

EDELMAN J: I suppose the difficulty for me is that I can understand a test which says, well, here are a lot of factors to look at, and the factors might point in slightly different directions, but unless there is some underlying reason why you are considering those factors, it is just like pulling things out of a hat. We are looking at factors without any commonality to them.

MR DONAGHUE: Your Honour, I do understand that concern, and so one cannot have an unlimited class of factors that may bear upon the inquiry because you do not know anything about what the inquiry is. But the ultimate inquiry is as to whether or not there has been a tax on goods. So, if you have a tax that is so far removed from goods that, yes, it has general economic effects on the market but has no other tether there, then, that is, in our submission, to stretch too far.

I do not seek to minimise the concern that your Honour puts to me, but, in the end, no one has ever suggested that an excise can be a class of tax that is so broad that it is any effect at all on the market for goods. There needs to be a closer connection to the goods in question, and I have endeavoured to articulate some of the factors that we submit, and that the authorities support, as assisting in making that evaluation.

GORDON J: Can I just ask one last question about that, and that is the (d) paragraph in 5. In answer to Justice Edelman, you just said it is effect and not purpose of legislation. That seems – is that consistent with your (d)? In other words, if I have got a tax on gaming machines, which is a tax on goods, on your analysis, but I know that I have taxed it because I wish to regulate the number; I wish to regulate it as a revenue raising source as well – how does that fit, then, with your contention that it is not purpose but effect?

MR DONAGHUE: It fits as one of the things that goes into the evaluation, and so one sees it particularly in the cases concerning alcohol and tobacco, that there is a theme in some of the judgments over a period of time as to whether or not one reason why a licence fee on tobacco or alcohol might be different from other kinds of taxes on goods, is because of the need for regulation in those kinds of industries. So, it is not decisive, and the fact that it is not decisive ‑ ‑ ‑

GORDON J: So, your answer to Justice Edelman is, it is not just effect, it is effect and purpose?

MR DONAGHUE: My answer to Justice Edelman was that one cannot escape characterisation as an excise just by saying this is regulatory – but it is one of the factors that goes into the evaluative inquiry. That is why I started this submission yesterday afternoon by saying I accept that it is not a bright line, and by referring to your Honour Justice Gageler’s reasons in Palmer that looked back on the jurisprudence and said, it is understandable that courts wanted a bright line, but the bright line did not work.

EDELMAN J: I just do not understand that. If the inquiry is one that is concerned with effects, why would you ever have a factor that is concerned with purposes?

MR DONAGHUE: The inquiry is into the proper characterisation of the tax. One cannot just pick any one of the evaluative factors and give determinative significance to it. That is what the criterion of liability attempted. And revenue raising is in a similar territory in the sense that, in one sense it should not really matter how big the tax is in characterising it as a tax, but the Court has been comfortable in saying, the more you are trying to raise, the more comfortable we will be in concluding that this is actually a tax on goods rather than a fee for the privilege of carrying on a particular activity – which is often the other side of the dichotomy.

GAGELER J: Mr Solicitor, that is that I just wanted to raise with you about your 5(d). If it is a fee for a privilege, it is not a tax, is it?

MR DONAGHUE: Well, one of the peculiarities of the case law in this area is that one would – Chief Justice Latham’s formulation in Matthews says not a fee for services. It may be that – so, I understand entirely what your Honour puts to me, but Dennis Hotels and all of those cases draw a line between a fee for a privilege and an excise, apparently on the assumption that the fee for a privilege may still be a compulsory exaction for public purposes and not a fee for services rendered such that it can meet the tax definition, and otherwise those cases do not make sense.

GORDON J: The reason why that is an important question is because some of these factors that you are bringing in at stage 2 are referrable to whether or not it is a tax. So, what I am trying to work out is at what stage and whether their interrelationships – they overlap. That first question – in a sense, this case is a bit odd because there is no dispute here it is a tax, and so we have not gone through that normal exercise of working out public purpose, impost, nature of that charge, in those contexts.

MR DONAGHUE: I am putting them all as factors that start from the premise there is a tax. But I accept, as I accepted yesterday, that the first question is the tax question. So, if the Court in analysing a particular impost looks at it and thinks it is not a tax, that is the end of the inquiry. You never get to my evaluative exercise. If it is a tax, then you do need to work out the nexus with the tax on goods and I do not think I can do better than the submissions that I have already made in relation to that, your Honours.

But the point that I would seek to take forward now is that – your Honours will recall I made a submission yesterday to the effect that, as a matter of ordinary human experience, to make it more expensive for a person to use a good is to do something that has a natural tendency to make that good less desirable to the consumer, to affect demand for it, and I had some exchanges with your Honours about the extent to which that can be taken to be so as a matter of natural human experience.

The submission that I seek to start with this morning is to say that what we are inviting your Honours to do there in assessing that is no different from the assessment that the Court undertakes, in the context of the pre‑sale to consumer steps, that is, distribution or sale, which similarly require an assessment as to how the impost at the stage of distribution or sale may impact upon the goods, which is not a straightforward one, and that would potentially be subject to economic evidence but which the Court has not required, has instead been prepared to look at the natural tendency of an impost of that kind.

STEWARD J: That is a big proposition. I mean, there are some consumers who will more likely buy a good because it is more expensive, so they can display their wealth. The luxury goods market operates on that principle.

MR DONAGHUE: I accept that that is so, your Honour, but in some of the passages I am about to take your Honours to, the Court has recognised that one does not look in characterising the effect of the tax on a class of goods as to the outlier or unusual example; it is the general tendency of the tax in question.

STEWARD J: Luxury markets are huge markets, not an outlier.

MR DONAGHUE: Again, your Honour, I think I must fall back on the proposition that as one of the factors one is looking at an effect on the market. Your Honour might have just identified a reverse effect on the market and so there might still be an effect on the market in the opposite way to the normal one, but if the Court does not think that there is a tendency to affect the goods of article of commerce, then that will tend against characterisation.

EDELMAN J: That would work, for example, if the market were and the tax were a tax on luxury goods or luxury cars.

MR DONAGHUE: It might, your Honours.

EDELMAN J: My concern related to that is that I can completely understand your submission which says that these type of economic concerns run all the way through, but does that not then mean that if, suppose, on a fully‑informed trial of these issues, evidence were led, or expert evidence were led as to the economic effect, then two or three years later one conclusion might become completely different? In other words, statutes could fade in and out of validity according as to whether or not the behaviour of the market changed.

MR DONAGHUE: Well, that, in my submission, is why the Court does not conduct these inquiries by reference to evidence of that kind, so that validity does not turn on what material the parties choose to put before the Court or whether the evidence changes over time, the Court has refused to conduct the inquiries at that level of generality.

But I suppose to try to develop my common-sense proposition about the effect of future costs upon the market, one can move away from the ZLEV charge and your Honours could take or consider that the situation with a particular model of car that might be well known for having regular expensive maintenance issues over its life – and there are models of car that do suffer from that reputation – if a consumer is considering at the point of purchase, do I wish to buy a car of a model that has that reputation, it is in no sense difficult to accept that the consumer will rationally think, well, I am going to pay X amount for the car now but this car is going to be expensive to me over its life, I am going to have to continue to outlay maintenance amounts for the car, as a class I can reasonably anticipate that.

That is so whether or not the car turns out – the particular car the person buys turns out to be expensive or not. The effect of the reputation for future costs in maintenance bears upon the class of good as an article of commerce at the time. Now, if your Honours accept that example, the usage charge is no different.

STEWARD J: But one possible problem with that example is that it looks at the matter is isolation, where the reality is car companies with that reputation often ameliorate the problem by offering longstanding warranties.

MR DONAGHUE: Your Honour, but ‑ ‑ ‑

STEWARD J: We are not going to mention any car brands today.

MR DONAGHUE: No, we are not going to mention – indeed not, your Honour. I considered that and decided, even under privilege, perhaps not. But, your Honour, that just shows the effect of the ‑ ‑ ‑

STEWARD J: It may, it may.

MR DONAGHUE: ‑ ‑ ‑ on articles of commerce, that very possibility, in my submission.

STEWARD J: Yes.

MR DONAGHUE: So one does not rationally, in our submission, draw a line based on whether or not the charge can affect the market for the goods, the goods as articles of commerce, based on whether it happens to be before sale or after sale, it can go either way, and that was a point that was recognised by five members of the Court in Dickenson’s, to which I will come fairly soon, three members of the majority and the two dissents, but it was also explained by the minorities in both Capital Duplicators and Ha, who regarded the exclusion of consumption taxes as being illogical, or irrational, on the majority’s reasoning.

So, in Capital Duplicators, for example, Justice Dawson – his Honour addressed the topic both at page 602 and 610, but if your Honours just went to 610 in Capital Duplicators then, having quoted from Chief Justice Mason and Justice Deane in Philip Morris about the passage your Honours have already seen a few times about the general tendency to be passed on down the line to consumers and to prejudice demand for goods, Justice Dawson said at about point 4 on 610:

One may, of course, comment upon this view that it should logically result in a consumption tax being an excise duty as well, the distinction between direct and indirect taxes now being recognized as of little or no assistance in the interpretation of s. 90.

His Honour cites quite a number of cases. Justice Toohey and Justice Gaudron at page 628 said much the same thing. Their Honours referred back to their own observation in their joint judgment in Philip Morris and said:

On this view it is difficult to see any basis for distinction between taxes imposed during the course of production or manufacture and those imposed at any subsequent point, including the point of consumption.

Their Honours noted that Justice Gibbs had said the same thing in Dickenson’s – as I said, a number of other judges said the same thing there. Their Honours all together – Justices Dawson, Toohey and Gaudron – in Ha said, at page 510, at about point 7 on the page:

the notion persisted that duties of excise must somehow affect production or manufacture and the exception of a tax upon consumption was, somewhat illogically, continued.

So, their Honours, of course, rejecting the majority analysis, nevertheless accepted that, consistently with that analysis, it made no sense to draw a strict demarcation line. The proposition – the economic proposition, if one calls it that – that their Honours articulate there is consistent with ordinary experience, as I have endeavoured to develop. The way that the Court has approached these questions rather than requiring evidence is illustrated in various passages in the authorities. I will just ask your Honours to look at a couple. In Dennis Hotels [1960] HCA 10; (1960) 104 CLR 529, which is in volume 4 tab 20, Justice Windeyer at page 594 addressed the kinds of economic issues your Honour Justice Edelman in particular has been raising with me. On page 594, his Honour – having discussed Matthews – at about point 4 on the page – at about half‑way down, at the sentence beginning “but”:

But we ought not to take too much from Lord Hobhouse’s reference to a duty which “enters at once into the price of the taxed commodity”; for whether a duty does enter at once into the price of the taxed commodity and in what sense, to what extent and for how long it does so, must depend upon how far various factors and circumstances remain unchanged and on the relative elasticity of demand and supply.

Then:

“The distinction (i.e. between direct and indirect taxation) has little actual economic basis, because the effect of the tax in retarding production or consumption may be such as to throw the burden elsewhere, and the customer may, in consequence of the higher price, drink less beer, and the brewer, through selling less, make lower profits” . . . But that a tax on commodities levied on anyone before the ultimate consumer does ordinarily affect the price the ultimate consumer pays seems indisputable. If one assumes a state of perfect competition, inelastic demand and supply and other factors constant – an economist’s dream world – then, as I understand the matter, the tax might be said in a simple sense to enter . . . into the price.

So, his Honour was acknowledging that this was not a perfect process, that there were assumptions involved in the effects – and that passage is not about consumption taxes. That is about taxes at earlier stages in the lifecycle of the product – supply, sales and distribution in particular.

In a subsequent decision – Western Australia v Chamberlain Industries [1970] HCA 5; (1970) 121 CLR 1, which your Honours have in volume 7, tab 40 – Chief Justice Barwick turned to this topic at page 13 of his Honour’s reasons. His Honour said, about five lines down:

In my view, it should be regarded now as acceptable and settled doctrine that the tax will be a duty of excise if it is upon or in respect of goods at any point including the point of manufacture or production, as they pass to consumption.

I will come to the consumption point shortly:

This view, if I may respectfully say so, has been rightly taken, for a tax upon goods at any stage of their distribution will, in general, and sooner or later, according to circumstances, bear on the rate or level at which they are manufactured or produced or if not locally produced, on the extent of their importation. But there is no warrant, in my opinion, to require it to be established in any particular case that the tax in question will in fact so bear on manufacture or production. Its relevant effect will be presumed –

That is the idea that one sees behind the general tendency of the tax language in Philip Morris, which I will not take your Honours back to, but Chief Justice Mason and Justice Deane in Philip Morris at 436, point 7, use that language – it is used by the majority in Capital Duplicators in passages your Honours have gone to.

Can I give your Honours one final reference on this point which is in an academic article written by Professor Sawer. It is in the materials in volume 9 at tab 53. It is fair to say that Professor Sawer is reasonably critical in various respects of the Court’s section 90 jurisprudence up to that point in time. This article was written, I think, in the early 1970s. But if your Honours go to page 200 of the article, which is page 2396 in the joint book, he says by reference to Justice Dixon in Matthews – he quotes, about six or seven lines down, Justice Dixon’s observation that:

‘A tax upon a commodity at any point in the course of distribution before it reaches the consumer produces the same effect as a tax upon its manufacture or production.’

And then critiques that, saying:

Obviously the most that can be said . . . is that it may have an effect for the same commodity at the manufacturing end, but its effect may be on some other commodity . . . or on some other feature of the behaviour of the person taxed –

But then – and this is the point that I seek to emphasise – Professor Sawer’s analysis is:

The importance of this point is that the High Court has in general sought to avoid basing constitutional doctrines on actual causes or consequences of an economic character, where the latter are diffuse, ‘indirect’ or disputable. The proposition that a tax on production or on any stage in distribution tends to be passed on and to enter into the ultimate price . . . is based on common experience and is inherently rational, though of course it is also subject to disproof –

So, Professor Sawer’s analysis is, we submit, consistent with the case law and our submission that what your Honour’s are called to do in the evaluative inquiry is to look at the general tendency of the tax to affect the class of goods as articles of commerce, and that is all.

Here, in our submission, the general tendency of a tax on use, just like my maintenance car example, is to make the car less desirable. There may be some individual people who are not deterred. By all means, I accept that, as your Honour Justice Steward has put to me. But the fact that some individual people will be uninfluenced is not the point. The point is the general tendency on the class of ZLEVs as articles of commerce in the market. And they, in our submission, are affected, for the reasons I have identified.

Can I move then, your Honours, to – and really by way of footnote to that general proposition, we just became aware that last week the South Australian Parliament repealed its equivalent to the ZLEV Charge Act, in doing so, stating that it wanted to encourage South Australians to buy electric vehicles and that the levy – this is a use charge – would have the opposite effect. And, in doing so, it referred to evidence that seven in 10 South Australians would be less likely to purchase such a vehicle due to the levy. So, the ordinary effect that I am putting to your Honours that you should infer, it seems, has been accepted by the South Australian Parliament. I can hand you that bill – the bill has passed Parliament but not yet received Royal assent, it is the Motor Vehicles (Electric Vehicle Levy) Amendment Repeal Bill of 2023. If your Honours would like us to hand that up, I can do that at the adjournment.

Can I turn then, your Honours, to what the authorities say about consumption taxes. I will do this quickly until I get to Dickenson’s. Your Honours heard from the plaintiff yesterday that the original formulation Justice Dixon gave in Matthews included taxes on consumption of goods; we submit, correctly. The plaintiff took you through – and I will not repeat it – what then happened with his Honour, rather tentatively, in Parton, saying – your Honours will recall the qualified language, but under the influence of Atlantic Smoke Shops, his Honour resiled from his original view about the inclusion of consumption tax as excises. I respectfully adopt what was put to your Honours about the error involved in that analysis and why Atlantic Smoke did not require that qualification. Your Honours will recall Justice Dawson saying he thought it was inexplicable that Justice Dixon had felt compelled to qualify the definition in that way.

But whether or not required, the fact of the matter is that Justice Dixon did qualify the test that he had articulated in Matthews, and that was important because of what then followed under the influence of that formulation. If your Honours could go back very briefly to Dennis Hotels [1960] HCA 10; 104 CLR 529, which is volume 4, tab 20, what you see there – and I will just take your Honours to Justice Kitto’s judgment. Sorry, your Honours, if you will pardon me for a moment. I have just mislaid the reference that I was intending to take your Honours to, which I will – at page 559 of Justice Kitto’s judgment there is a reference to Matthews and the formulation:

“The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as . . . articles of commerce”.

The passage I have relied upon repeatedly. And then, immediately after that, his Honour says:

The reference to consumption must be considered as omitted now, in view of what his Honour said later in Parton –

So, we have direct acknowledgement of the change in the formulation because of Justice Dixon in Parton. And then, later on the same page, at about point 8, his Honour says:

What is insisted upon may, I think, be expressed by saying that a tax is not a duty of excise unless the criterion of liability is the taking of a step in a process of bringing goods into existence or to a consumable state, or passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer.

That formulation that I have just read is the passage that was quoted by the unanimous Court in Bolton v Madsen in formulating the criterion of liability test. That is where the criterion of liability test was first formulated, and it was first formulated immediately after a discussion of Matthews that then excludes consumption because of Parton.

So, in our submission, you see on that page of Dennis Hotels a direct line from Matthews, through the error in Parton, to an articulation of a test that excludes consumption; that is, the error that Mr Merkel identified yesterday in Atlantic Smoke Shops was incorporated into the criterion of liability test. Then every case after that that applies Bolton v Madsen applies the formulation framed in that way. None of the cases, until Dickenson’s, are consumption tax cases. So, the fact that you see the repeated expression of that criterion of liability formula, one, is infected by the area that the plaintiff identified yesterday, but, two, tells you very little as to – in my submission, tells you nothing as to how one should appropriately analyse consumption taxes within the framework because it was repeated simply because it had been built into what became for a significant period of time the authoritative test.

It was really only when you get to Dickenson’s that the Court actually turns its mind to the correctness of that exclusion – that point of consumption exclusion. It is Dickenson’s to the extent that it has any ongoing authority that stands in the way of the plaintiff and the Commonwealth’s argument, but not the more general criterion of liability formulation. It is, therefore, to Dickenson’s (1974) 130 CLR 177 that I would ask your Honours now to turn – volume 4, tab 21.

Can I start just by showing your Honours, briefly, the relevant part of the Act, which you see in Justice Gibbs’ reasons at 213 and 214. His Honour’s reasons start at 213 and then at 214, on the top line, your Honours will see Justice Gibbs saying:

The Act and regulations impose two taxes which call for separate consideration.

And there are two quite different issues in this case. The first tax is that imposed by Part II, which his Honour then summarises. It is Part II that imposes what was described as a:

“tax on the consumption of tobacco”.

That tax, as you can see – you can see it imposed by section 3 – the amount was:

seven and a half per cent of the value of the tobacco consumed. Unpaid tax is recoverable by the Commissioner of Taxes “as a debt due to the Crown incurred by the person by whom the tobacco was consumed.

So that the taxing point was upon the consumer of the tobacco. But, as you see at the bottom of that page, provision was made for the payment and collection of the tax by regulations. Amongst other things, as you can see on the last two lines of the page, it was made an offence for the retailer to carry on business without having made arrangements to collect the tax. So, the practical arrangement was – and you can see Justice Gibbs acknowledging this about four lines down on page 215:

The obvious intention of the regulations is that an intending consumer, who buys tobacco from a retailer, will pay the tax to the collector, who will no doubt be the retailer –

The idea was that you still pay the shop, but instead of imposing the obligation of the sales tax upon the shop owner, the attempt was made to put it in later. The Sawer article that I mentioned to your Honours earlier seems to explain this as a product of Professor Sawer having suggested that someone should have a look at this at a conference, and the Tasmanian drafters having taken up his suggestion and endeavoured to structure the tax in that way.

Justice Mason, in disposing of the case, thought that that feature of the regulations meant that the Act then – that what was imposed was an excise. So, his Honour held that Part II by itself was valid but that the regulations were invalid. The other members of the majority held that Part II was valid and the regulations were also valid, and Chief Justice Barwick and Justice McTiernan in dissent held that Part II was invalid.

That is the only part of the case that matters for present purposes. The other tax, separately analysed, was imposed by Part III, and that was a Dennis Hotels tax on the retail license formula. Your Honours do not need to concern yourselves with that part of the reasoning, but it is that part of the reasoning that was caught up in the repeated challenges to Dennis Hotels. So, when Victoria and the interveners put against us that Dennis Hotels has been challenged multiple times and not overruled, that is all about Part III, it is not about Part II, and therefore it does not stand in any significant way against us, because it was always – those challenges were always part of a rolled-up challenge to the Dennis Hotels formula.

Now, if your Honours look at the argument that the defendant made to defend Part II, you can see that on page – reported on page 181 of the CLR report. There was an argument put by Mr Aickin, QC, as his Honour then ways – and it was a Bolton v Madsen criterion of liability argument. So, from the bottom of page 181:

Bolton v. Madsen establishes that the economic effect of an impost will not give it the character of an excise when it is not imposed directly by reference to the goods. Accordingly the argument that the effect of the legislation is the same as that of a tax upon sale and that the tax is therefore an excise is unsustainable.

And then about point 4 or point 5:

Since Bolton v. Madsen it is no longer permissible to look at the overall operation of legislation and conclude that the effect is the same as if the imposition were upon sale.

Then over the page on 183:

The “consumption tax” cannot be an excise, because it is imposed on the person who consumes . . . All formulations since Bolton v. Madsen have excluded a tax on consumption from the field of excise . . . It is irrelevant to the question of characterization that a consumption tax will bear on the rate or level of manufacture in the same way as a tax on the retail sale. That is an economic effect. Similarly the likelihood that the tax will be collected by the retailer does not make it an excise if it is not otherwise one. It is not a legal criterion, and cannot be regarded.

So, the argument was, it just does not matter as a matter of substance if this is the same as a sales tax. On Bolton v Madsen, that is not a legal criteria, and therefore a consumption tax is not an excise. That is the argument and that is what prevailed. That is what the majority accepted. To make that good, I will take your Honours briefly to each of the full majority judgments. Justice Menzies, relevantly, at 209 at about point 3 or point 4, cites Bolton v. Madsen as establishing:

quite definitely that “for constitutional purposes duties of excise are taxes directly related to goods imposed at some step . . . before they reach the hands of consumers”.

Cites some cases:

A tax upon consumption is, therefore, not a duty of excise.

That is his Honour’s reasoning on Part II, in effect. It is just criterion of liability, and this is not within it.

STEWARD J: Not quite. He goes on at 213 to offer the explanation that he associates the word “production” with “excise” and therefore he says it is because of that connotation that he also thinks that a consumption tax is out.

MR DONAGHUE: Your Honour, I will look at that again. I thought at that point of his Honour’s judgment he was looking at Part III. I may be wrong, but I thought he was ‑ ‑ ‑

STEWARD J: I may be wrong too.

GORDON J: Is that the same in relation to what his Honour says at 222?

MR DONAGHUE: At 222?

GORDON J: When he is dealing with consumption tax and “the control by the Commonwealth Parliament of the taxation of goods” not being complete.

MR DONAGHUE: Page 222 being Justice Gibbs, your Honour?

GORDON J: Yes.

MR DONAGHUE: I am sorry, I about to come to Justice Gibbs. Can I take that in steps. So, Justice Gibbs, relevantly from 217 of his Honour’s reasons identifies four questions raised by the case at about point 3 on the page:

To decide whether these imposts are duties . . . it is necessary to answer four questions . . . The first is whether a tax imposed on consumption of goods is a duty of excise. The second . . . is whether the practical or economic effect of the legislation, rather than the criterion of liability . . . determines whether or not the tax is a duty of excise.

They are the two that were relevant to the validity of Part II. His Honour then goes on to address those questions. He says, your Honours will see at about the point 6 at the beginning of the paragraph:

The question whether a duty imposed on the consumption of goods is a duty of excise has never been the subject of any direct decision by this Court.

Over the page on 218 his Honour identifies a number of different lines of thought in the authorities which he then examines one by one. Under the quote from Parton in the middle of the page his Honour says:

If a tax on the sale of goods can be regarded as a method of taxing their production or manufacture, it is difficult to see why a tax on their consumption should not be similarly regarded, and had it not been for the qualification, then supported by authority but more doubtful in the light of later discussion, that the tax would not be an excise unless it was –

going to be:

passed on . . . this statement could have been regarded as leading logically to the conclusion that a tax on consumption is an excise.

So, his Honour does not see the distinction except as a matter of authority. He quotes Justice Higgins at the bottom of the page:

“it matters not whether the duty is imposed at the moment of actual sale or not, or sale and delivery, or consumption”.

So, as a matter of principle, it is not clear why consumption taxes are out, but nevertheless they were acknowledged to be out as a matter of authority, although over the page on 219 at about halfway down, just under the quote – again, this is the quote your Honours have seen many times about the purpose of section 90 from Parton. His Honour said:

if it is permissible to consider the economic effect of the tax –

If it is:

it is impossible, in my opinion, to draw a line between the last retail sale and the act of consumption. A tax on consumption might produce exactly the same economic effect on production and manufacture as would a tax on the last retail sale. The power of the Commonwealth Parliament to tax commodities would be incomplete, and its fiscal policies possibly liable to some frustration, if the power did not extend to taxes on consumption.

We respectfully agree. So, his Honour was not denying ‑ ‑ ‑

STEWARD J: But what does he mean by a tax on consumption? Is he talking about what we have here, an ongoing charge for use that might theoretically go for 20 years, 25 years?

MR DONAGHUE: Your Honour, the short answer to that is his Honour does not say.

STEWARD J: No.

MR DONAGHUE: But, in my submission, it comes back to the points that I made yesterday that if a usage charge of a large amount a short time after sale is included, because it is obviously functionally equivalent to a sales tax, then the debate moves from a debate about whether consumption taxes are included to whether or not a particular tax on usage has the potential to affect articles of commerce, and that is really all I am trying to persuade your Honours of at this ‑ ‑ ‑

STEWARD J: That may be what his Honour is saying here when he says it is illogical to exclude consumption if you have included last retail sale.

MR DONAGHUE: Yes. But States and interveners ask your Honours to draw that as a hard line.

STEWARD J: I understand.

MR DONAGHUE: As I submitted yesterday, I am not saying without any further inquiry any tax imposed on use is necessarily an excise. I am not saying that at all. But it might, if as a matter of substance – and his Honour accepted if you can look at the substance that you would reach that conclusion, but at this point in time, because of Bolton v Madsen, you could not look at the substance.

Over the page on 220 there is a discussion, which I will take your Honours through, of Matthews and then of Atlantic Smoke, making similar points to the point that were made yesterday. Then at 221, point 5 there is a reference to – sorry, at the top of 221 there is a reference to Justice Dixon modifying his view in Parton and that:

Since Parton v Milk Board (Vict.) no member of the Court has dissented from –

that exclusion and a reference to the “criterion of liability” test as formulated by Justice Kitto in a passage I have already taken your Honours to and adopted by the Court in Bolton. His Honour then says at the bottom of 221:

It might be said that these expressions of opinion are not binding because it was not necessary to decide in any of these cases whether a tax imposed on consumption was an excise, but the very greatest weight should be given to the fact that on this issue unanimity has been reached after a fluctuation of judicial opinion.

So, in our submission, in effect what one sees ‑ ‑ ‑

STEWARD J: What do you say about what Sir Harry Gibbs says straight after that, where he seems to be influenced by the dictionary meanings? He says at the bottom of 221:

Although the expression “excise” has, as I have said, sometimes been used to include taxes on consumption, a more precise definition of the word is that given by the Encyclopaedia Britannica –

And he cites that, and then by the Encyclopedia of Social Sciences. That seems to be part of the reasoning.

MR DONAGHUE: It does. There seems to be two strands of his Honour’s reasoning. There is the authority‑based strand, and then on that page that your Honour puts to me there is some discussion of the dictionary definitions which his Honour seems to derive some comfort from, or support from, from the authorities that have reached that ‑ ‑ ‑

STEWARD J: What do you say about those definitions?

MR DONAGHUE: That is really the same point that Justice Dixon made so long ago in Matthews, is that there are certainly some definitions and some usages of “excise” of that kind, but there are others that are wider and different, and one cannot logically reason from the fact that certain things are included within the category to the conclusion that other things are not included within the category and we respectfully agree with Justice Dixon’s statement that there was not a clearly settled meaning.

Our researches show in the Australian colonies no example of the use of an “excise” in colonial legislation before 1880, so there was not a long‑established colonial process of excises. There were excise Acts that start from around 1880, and they included mainly tobacco and alcohol, but there is, in our submission, no reason to think that that practice was to set the outer bounds of the concept. If your Honours accept the purpose identified in Capital Duplicators, Ha and Betfair, it would make no sense, in our submission, to limit it in that way.

KIEFEL CJ: Is it possible that Justice Gibbs, having accepted the state of the authorities, was pointing to definitions which gave some support to the authority?

MR DONAGHUE: Your Honour, I think that is possible, that his Honour ‑ his Honour was not ‑ ‑ ‑

KIEFEL CJ: His Honour was a great believer in precedent and following precedent.

MR DONAGHUE: Yes, and that, in my submission, is the explanation for what his Honour did. His Honour is a member of the majority holding that Part II is not an excise, but, in my submission, his Honour gets there for that reason. He says, well, as a matter of logic it is not clear to me why that is the answer because the economic effects are the same.

KIEFEL CJ: As you say, there are many definitions available, these are two that are chosen.

MR DONAGHUE: Which accord with the position that, as a matter of authority, his Honour is bound to accept.

KIEFEL CJ: Yes.

MR DONAGHUE: And his Honour then goes on, coming to the second question that he had identified on the outset on page 223 to ‑ ‑ ‑

GORDON J: Do you propose to deal with what is on 222, Mr Solicitor, which is what I put to you before.

MR DONAGHUE: I am sorry your Honour.

GORDON J: So, you were right, I think, that there are two strands: one is the authority strand, second is some attempt by Chief Justice Gibbs to deal with the history strand, to put it – as distinct from authority, that is, what excise means. It seems in 222 his Honour draws a distinction between the British system and – these really arise out of questions I think Justice Gleeson asked you yesterday, and it leads him to reach a conclusion that upon its proper construction 90 stops short of denying the power to the States to impose taxes on consumption.

MR DONAGHUE: Without any disrespect to his Honour in relation to that page, there is a huge amount about the history, colonial history, and usage of the – that is not – that does not find expression there, that was the subject of the very thorough litigation in this Court in Capital Duplicators and Ha, which delved into it in much more detail than that. And which the States and Territories are now repeating in this Court.

But in our submission, it does not go higher than establishing that some of the definitions and the history that his Honour mentions were there, but that they do not define the outer bounds of the concept. And in the middle of the page, your Honours will see the parenthetical words, there is a reference to:

established usage (notwithstanding some divagations) favours the conclusion –

So, his Honour acknowledges that it is not a uniform experience, and ultimately in our submission – but it is the more complete examination of those matters that one finds in Capital Duplicators and Ha that should govern. His Honour, the top of the next page, 223, expresses regret that the indirect/direct dichotomy ever came into the section 90, or into the orbit of section 90. And then, in the context, again, of referring to this idea that a tax on consumption could never be an indirect tax. And he then turns to the second question and cites Bolton v Madsen, stating the criteria of liability of test and says at about point 4 or point 5:

The Court went on to make it clear that in its opinion it is the criterion of liability that determines whether or not a tax is a duty of excise. It is not enough that the imposition produces a similar, or even the same, economic or practical effect as that which a duty of excise would have produced.

So, again, his Honour is not looking at the substance, avowedly and deliberately not looking at the substance of the matter. It is the legal criterion. And your Honours can see that, also, on page 224 about halfway down, which is the conclusion of his Honours reasoning on Part IKI, where his Honour says, at the end of that discussion, in the middle of the page:

It is immaterial, if in fact it is true, that the tax has substantially the same practical effect as a tax imposed on the last retail sale. The criterion of liability is consumption. The tax is not an excise.

That is accepting the argument Mr Aickin put. And it is formalist in its terms. Justice Stephen at 229 addresses Part II and says:

If, on its true construction . . . tax only upon the consumption . . . I do not regard it as within . . . s. 90 –

Over the page at 230, there is a reference to Bolton v Madsen, and his Honour then makes the point in the middle of the middle paragraph of 230 that this is not an area where there is an absolute to be discovered by the search for meaning:

no ultimate truth lies concealed in the phrase “duty of excise”, there awaiting recognition by the judicial fossicker –

There is reference to Matthews:

The degree of certainty which has been conferred upon the phrase . . . has been hard won and should not lightly be disturbed . . .

No convincing reasons have . . . been advanced –

for including taxes on consumption. At about point 8:

That the economic effect of such a tax is, like that of acknowledged duties of excise, reflected back upon the manufacturer or producer is no doubt true; however this affords no demonstration that such a tax is a duty of excise. This economic effect cannot constitute any conclusive determinant of the character of a tax as an excise.

EDELMAN J: It may not matter to any great degree, but it cannot be right, can it, to say that, as Justice Dixon did in the passage that is quoted, that the word “excise” has never possessed any certain connotation? I mean, your very case is that there is a core connotation of it which is a tax on goods. The question is, how much further that can or does extend, or whether any limitations get built into the application of that core concept.

MR DONAGHUE: What makes something a tax on goods is what has agitated this Court over a very long period of time. So, it is not denied that that is what one is looking for.

EDELMAN J: It has got to have some certain connotation. A tax on services, for example, is not an excise.

MR DONAGHUE: Indeed, and that is how I answered your Honour before as to why there is a limit, why it is not that any factors can be relevant. But what there was not, and what there had not been, at the time of Federation, is there had just been no legal need to drill into the questions that have been occupying the Court since Federation. There had been no need to try to get the concept any precise definition, and so people had not done so.

But the point I am seeking to make from these passages is that, for the three members of the majority that I have taken your Honours to so far, it is in our submission clear that their Honours had no difficulty accepting the idea that a tax on consumption might have exactly the same effect, economic effects, as taxes at the earlier points that they acknowledged were duties of excise, and that the reason that they did not reach that conclusion was that the economic effects were thought to be irrelevant, and that the criteria of the liability was thought to be determinative.

STEWARD J: But that, again, may not quite be right because Sir Ninian Stephen goes on in the next paragraph to give two substantive reasons for why consumption tax is not an excise, one being that it is personal and not indirect, and he acknowledges that distinction between direct and indirect is not determinate, he says that is a factor.

And the second factor is that it cannot be passed on and is wholly absorbed. And in that paragraph, he refers to a passage from Matthews from Sir Owen Dixon’s definition, where Sir Owen said:

that a tax imposed upon a person filling a particular description or engaged in a hidden pursuit did not amount to an excise.

Is that not what this tax is? It is a tax on a pursuit, that is, driving a card on a public road.

MR DONAGHUE: Well, in my submission, not.

STEWARD J: What do you say of those two factors, then, as a matter of substance?

MR DONAGHUE: Well, his Honour was acknowledging the need to identify the nexus, what I have called the sufficient connection between the tax and the goods, and giving some examples of things that would not meet that criteria but such so that if you tax someone for holding an office and there were taxes of that kind, were certainly known, then that is not going to – and it would matter if that enters into the price of goods in some way. It would not have a sufficient connection to goods. That, in my submission, is the kind of thing that his Honour has in mind there.

STEWARD J: But you say these are just part of the evaluative factors that we need to consider.

MR DONAGHUE: I do. These are some of the possibilities that might cause you to conclude that there is not the connection that you ultimately need there. It is true that Sir Ninian did refer to the direct/indirect distinction, he was the only member of the majority to do so and that is not a strand of reasoning that has much support in the later cases, in my submission. Insofar as it is relevant whether the - - -

STEWARD J: I think it is still considered to be a relevant consideration.

MR DONAGHUE: It is listed in, certainly, Chief Justice Barwick’s list in Anderson’s that your Honour Justice Gordon has noted. It does include the indirectness. I do not need to say it cannot be relevant, but I do make this point, that in being passed on to the consumer, the relevance of the tax being passed on to the consumer is, in my submission, because of, ultimately, that that is the way that the tax has a tendency to affect the goods as articles of commerce. If it is being passed on to the consumer, then it will have that effect on the market, on demand.

One can go there much more directly if one just taxes the consumer in a way that has the same distorting effect – potential effect on the market so that, in my submission, that is ultimately why the direct/indirect burden does not help us, is that where the tax falls will depend upon economic factors but if it is distorting in the market, then that is enough, in our submission, as to satisfy that evaluative factor.

The last member of the majority is Justice Mason. His Honour’s reasoning was a little different in that – and, your Honours, if you could start at 238, you will see that at the bottom of 238, his Honour expresses the view that:

If the absence of a power to control taxes on the sale of goods deprives the Commonwealth Parliament of a real power to control the taxation of commodities, the absence of a power to control taxes on the consumption of goods might be thought perhaps to constitute an unacceptable limitation on the power of control which it was the purpose of the section to repose –

in section 90. So, his Honour recognises the link between being able to tax consumption and the chief purpose of section 90. He recognises that the Matthews qualification was qualified in Parton, and then says, in the middle of that page:

These statements must . . . be regarded as establishing at this time that a tax on consumption of goods is not an excise.

There is a temporal qualification there – his Honour does not seem entirely satisfied with the state of the authorities. He then says:

The limitation –

on Commonwealth power:

involves a restriction on the power of the Commonwealth to control the taxation of commodities –

the accepted purpose since Parton, but then says perhaps the limit does not matter much, because:

a tax on consumption which is not also a tax on sale of goods is a phenomenon infrequently encountered, the restriction concedes to the Commonwealth a large measure of control.

So, at the moment, consumption taxes are out, it is inconsistent with the purpose but it might not matter because they are rare, and then his Honour proffers a justification – and this is what prompted me to say to your Honour Justice Steward yesterday that his Honour seems to be rationalising the state of the authorities based on the notion that consumption is not sufficiently proximate – as to that, I would say, one, in my submission, a fair reading is not to say that Justice Mason was endorsing that as the preferred view – but I do not have a difficulty with that observation because – as I have now submitted on a number of occasions – I do not seek a definitive ruling from the Court that any tax on use or consumption is an excise.

KIEFEL CJ: Is that a reference to direct and indirect effects, or is it something else – the reference to proximity?

MR DONAGHUE: In my submission, it is something else. It is about the closeness of the connection to the tax – the close relation that Justice Dixon spoke of, so ‑ ‑ ‑

GORDON J: I had understood it was a reference to what I put to you this morning and that is this tethering of this idea to production and manufacture, it has just been subsequently criticised, I accept, and to section 93.

MR DONAGHUE: Yes. My answer to that, really, is that the key passage at the bottom of 499 Ha says “production, manufacture, sale or distribution”, whether local or not. So, a sales tax on a foreign‑produced good just does not have that tether back, and so in my submission that part of the analysis has not held.

Your Honours, I am very much pushing up against my time. Can I give your Honours a reference to page 185 in the dissent of Chief Justice Barwick who – at 185, at about point 3 – accepts that the purpose is about the:

the unity of the national economy –

the currently received purpose – and, at 185, point 7, says there is “no logical reason” to exclude consumption and criticises the change that was made under the influence of Atlantic Smoke, at about point 7 on that page. Justice McTiernan went even further and thought that there was just no logical reason at all – or would have held that a tax on consumption was within section 90.

So, in summary, in our submission, you have at least three members of the majority – Justices Menzies, Gibbs and Stephen – where the criterion of liability was applied, in effect, as the exclusive determinant of whether a tax was an excise with each of their Honours – except Justice Menzies – accepting that, if you could look at economic effects, consumption taxes would not logically be capable of being distinguished from taxes on sale.

Our essential point is that it has been clear since Philip Morris – and strongly reaffirmed in Capital Duplicators and Ha – that now you can look at the substance and now that criterion of liability is not determinative. Once you take those two clear aspects of the Court’s current section 90 jurisprudence, there is nothing left of the majority reasoning in Dickenson’s.

That submission, in our submission, is strongly supported by the analysis in Barley Marketing Board v Norman, which you were taken to briefly yesterday. Can I ask your Honours to go back to that case. It is volume 3, tab 3[1990] HCA 50; , 171 CLR 182. This was a case decided about – as one can see – the Barley Marketing Board, which was a board that had the power to – the Governor had power by proclamation to declare that a particular commodity was divested from producers and became vested in the Board. There were lots of section 92 cases about marketing schemes of that kind and, pre‑Cole v Whitfield, they were commonly held to be invalid.

There are a number of cases to that effect which are cited at the bottom of page 198 – this is in an unanimous judgment of the Court. At 200, there is a discussion of marketing schemes – about point 2 on the page:

Marketing schemes have often come into conflict with s. 92.

There is a quote in the middle of that page from the Peanut Case:

“Restraints and impediments are forbitten although they do not discriminate between inter‑State and intra‑State commerce, but affect trade, commerce and intercourse uniformly.”

That was the old doctrine of the Court upheld in the Peanut Case. Over the page on 201, the Court says:

The decisions to which we have referred proceeded according to the so‑called “individual rights” theory of s. 92 –

That did prevail:

until it was displaced by Cole v. Whitfield –

Then, halfway down:

Once that view was displaced by the interpretation adopted in Cole v. Whitfield, it necessarily followed that the authority of earlier decisions of the Court, including the Peanut Case, North Eastern Dairy and Coarse Grains, was open to question to the extent to which those decisions were decided by reference to an interpretation of the section that could no longer be supported.

Accordingly, there is no force in the defendants’ contention that the present case is governed by the Peanut Case . . . But the Court’s conclusion –

I will skip over – I rely on that whole paragraph. But, at the end:

So, the Peanut Case has nothing to say on the critical question whether the legislation here in question is discriminatory in a protectionist sense.

By parity of reasoning, your Honours, when you look at what was decided in Dickenson’s by the majority, substance does not matter, criterion of liability – and you remove those two planks – the case, in our submission, has nothing to say about whether, as a matter of substance, this tax is a tax on goods, applying the Capital Duplicators and Ha approach, as I have sought to develop it. If that be right, the idea that it is necessary to seek leave to reopen it has no traction. It has already been impliedly overruled by what the Court said in Ha and Capital Duplicators.

So, if your Honours accept that submission, we do not need to reopen. If we do need to apply for a leave to reopen – like the plaintiffs would seek it – and in view of the time, I respectfully adopt the submissions that Mr Lenehan advanced on that point yesterday. The only final point I would make is that it is put against us by Victoria that the Commonwealth made submissions to reopen Dickenson’s in Capital Duplicators and Ha, our researches suggest that that is not accurate. In Capital Duplicators, Mr Griffith did make submissions that consumption taxes fell within
section 90, but he did so – and the report of the case reflects this – having said at the outset:

The Commonwealth supports the status quo.

The CLR report for that at the top of page 565. But there was an application in Capital Duplicators to reopen everything from Parton, and what Mr Griffiths said was that if everything is reopened, then the proper view was that consumption tax was included. So, it seems to be that that is the reason why there was no reopening application, as best we can tell – is that the submissions were being advanced on the basis that everything was being reopened, and it was being looked at again.

In Ha, the issue just did not arise. The Commonwealth made, as far as we can tell, no submission on that topic other than that it was – it did not fall to be decided, Ha not involving consumption taxes. So, if we do need to seek leave to reopen, we are seeking it, we think, for the first time, and for the reasons Mr Lenehan gave and that are bound up in what I have already said, we submit that it should be granted, and the case should be overruled.

Can I ask Mr Thomas to address your Honours on the final part of our submissions in chief, which is the application to the ZLEV charge of the principles I have identified.

KIEFEL CJ: Yes, Mr Thomas.

MR THOMAS: May it please the Court. Your Honours were taken briefly yesterday to the Act, but can I return to it and proceed as efficiently as I can. The Act is in volume 1 of the bundle at tab 4. The relevant operative provision, as your Honours know, is section 7 and the task that we invite ‑ ‑ ‑

KIEFEL CJ: Could you speak up a little please, Mr Thomas?

MR THOMAS: I am sorry, your Honour. The task we invite your Honours to undertake is one of characterisation and the question is whether the impost – the tax imposed by section 7(1) – is sufficiently connected to goods to bear the characterisation as a tax on goods.

The Solicitor‑General has identified four key considerations that we say inform that question. The first of them is whether or not the tax has a natural tendency to affect demand for ZLEVs in the market for such vehicles. Your Honours, I think, understand the burden of the argument we put in relation to that consideration. In short, we say that that tendency does exist in this case and it arises from the fact that the charge increases the cost of use of these vehicles in almost all circumstances.

Can I just unpack that last bit, because that is the key to the submission. This is not a narrowly defined impost or tax. It fixes upon the primary – and we would say, effectively, only way – in which an owner of this type of good, being a vehicle, can use it – namely, driving – and that is section 7(1). The definition of “specified roads” is so expansive that, combined with section 7(1), it is practically impossible to avoid liability for the charge. So those are the two features of the Act that I emphasise at the outset.

The third feature is that by the combined operation of section 8 and section 15, the amount of the charge is commensurate to the amount of use, which is a further, we would say, direct connection between, as it were, the quantity of the tax and the extent to which the vehicle or good is used. The tax is not capped at a de minimis amount. It is effectively uncapped and is, as your Honours see from the formula in section 15, directly proportionate to the amount or quantity of use.

The final feature that we wish to emphasise orally as to the scheme of the Act is in Part 3, which your Honours were not taken to yesterday. One reason why the charge is impossible to avoid is that if you do not pay the charge, you will or risk being unable lawfully to use your vehicle to drive it. Your Honours see from Part 3 a number of features, firstly in section 29(1) that:

the Secretary . . . may suspend the registration of a ZLEV if the registered operator has not –

. . .

(b) paid an invoice in respect of the ZLEV on or before the date for payment stated in the invoice –

By section 31, the effect of the registration of the vehicle being suspended is that:

the ZLEV is unregistered for the purposes of Part 2 of the Road Safety Act –

to which I will come. Then in section 35, the Secretary also has a power to cancel registration of the vehicle, and your Honours see from section 37 that that would result in the number plates for the vehicle having to be returned.

Now, I mentioned the Road Safety Act, that is in volume 2 at tab 8, just to complete the point. Your Honours were taken to section 7 by Mr Merkel on a different point, but I wish to make this point, that section 7 makes it an offence to use a vehicle where it is unregistered. We say that suite of provisions further connect the liability to pay the charge with the ability to enjoy by way of use this particular good and so this is not an impost or tax which is a mere debt to the State of Victoria.

As your Honours, I think, appreciate, our submission is that an increase in the cost of use of ZLEVs has a natural tendency to reduce the demand for the class of those vehicles in Victoria because a rational consumer can be expected to take into account that cost in making their purchasing decisions. In short, the ZLEV upon its introduction in 2021 made ZLEVs in Victoria less attractive than they were prior to the introduction of that regime.

That gives rise to, we would say on its face, a clear differential tax treatment of ZLEVs as between the polities of the Commonwealth. At the moment, the only polity with an operative ZLEV charge is Victoria, but that means that ZLEVs registered in that jurisdiction are less attractive ‑ ‑ ‑

KIEFEL CJ: What is the relevance of differential treatment to whether it is an excise?

MR THOMAS: I am thinking there, your Honour, to pick up in a sense the tether that her Honour Justice Gordon identified and the idea of a prohibition on or a concern to avoid differential taxation of goods, because differential taxation would preclude the existence of an economic union. So it is a further reason, we say, why one could confidently identify and recognise the effect, or the tendency to affect that the Solicitor‑General identified. The second consideration ‑ ‑ ‑

EDELMAN J: Just before you move on from that, you do not need to take me to it, but do the regulations exempt from registration any vehicle that has a garage address outside Victoria; so that is vehicles that do not fall within 6A?

MR THOMAS: Can I check it over the adjournment, your Honour? That is my understanding. The second consideration that we posit as speaking in favour of the existence of an excise is that the charge makes the criterion of liability to pay the tax the taking of a step in dealing with goods. Now, the burden of the submission there is that a dealing in goods should and does include use of the goods, but the features of sections 7, 8 and 15 of the Act on any view bite on in an entirely proportionate way use of the vehicle as giving rise to the liability to pay the tax, so we invoke the criterion of liability principles in our favour as our second consideration.

The third consideration is that the amount of the tax relates directly to the quantity of the relevant dealing in ZLEVs – and that relevant dealing here is use – and it is the same suite of provisions in the Act by way of architecture that means that the concept of directness exists.

The fourth, your Honours, is that the purpose of this Act is, self‑evidently, revenue raising rather than regulatory in nature. That seems to be accepted by Victoria in their submissions at paragraph 13, in that they accept that the main purpose of the tax is the raising of funds, but can I take your Honours to the second reading speech of the Act which informs that question as well. That is in volume 9, tab 67, the second last tab. At the bottom of page 2556, second last paragraph, it says:

The reforms in this Bill establish a fairer and more sustainable framework for road users to contribute to the maintenance and expansion of Victoria’s road network.

Why that is perceived to be needed is made clear about point 4 on page 2557, and if your Honours see a paragraph beginning “Most Australian Drivers pay fuel excise”. Now, that reference to fuel excise is revealing. They rightly note that:

Fuel excise is an important source of revenue that contributes to building and maintaining roads –

and then the next paragraph, it is the position of the Victorian Parliament or government that:

this funding mechanism is not financially sustainable –

That provides a basis for the next paragraph where the Minister recognised that electric vehicles:

currently face a lower tax burden relative to traditional ICEVs and do not contribute to the costs of road network provision commensurate with the costs they impose on the network.

Then there is reference in the next paragraph to:

contribute their fair share to the cost of funding.

Then, over the page, there is an indication of fuel excise and the way in which fuel excise operates to support the per‑kilometre charge. Now, in our respectful submission, an apprehension on the part of the State that the Commonwealth uniform fuel excise is deficient in some fashion and needs to be supplemented at the State level tells in favour of this charge and this Act being characterised as an excise, because it would be anathema to section 90 and, as understood in Ha and the authorities, for individual States and Territories to be able to enact taxing regimes which are effectively on goods, in that they impose a burden on goods – to use the language in the reading speech – that is, by definition, non‑uniform.

Your Honours, in the few minutes I have left before the adjournment, can I turn to the next topic, which is characterisation of the Act and, namely, whether or not this is an Act that taxes the activity of using a vehicle or taxes use.

Now, I make two principal submissions in relation to that question. The first is that on any sensible and fair reading of the Act, this is a tax on use. That is the language used in section 7(1) itself. So, the idea that there is a useful distinction to be drawn between a tax on use and a tax on activity of using, we say, is unreal and contrary to the approach taken in this Court for many years, which recognises substance over form. So, the terms of the Act on an orthodox construction do not sit with Victoria’s argument.

The second, your Honours, is the jurisprudence. I was going to give your Honours some references to three cases if I can, which make clear that the distinction sought to be drawn by Victoria is unreal and unhelpful by reference to those authorities. The first is Hematite Petroleum [1983] HCA 23; 151 CLR 599, volume 5, tab 25, where the Court was required to consider a pipeline operation fee payable on the activity of constructing or operating a pipeline, and one sees that at 626 to 627.

Your Honours, I see the time. I suspect it would be forensically advantageous to me to take your Honours to that judgment but no other. If your Honours please, I would then seek therefore a short extension of the Commonwealth’s time.

KIEFEL CJ: Yes, Mr Thomas.

MR THOMAS: May it please the Court. Would your Honours propose to adjourn now?

KIEFEL CJ: Yes.

MR THOMAS: Yes.

KIEFEL CJ: The Court will adjourn for 15 minutes.

AT 11.16 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.31 AM:

KIEFEL CJ: Yes, Mr Thomas.

MR THOMAS: Thank you, your Honour. Your Honour Justice Edelman asked me a question around whether or not there were exemptions relevantly to ZLEVs in section 7 of the Road Safety Act, the short answer is no, there are no relevant exemptions.

EDELMAN J: So, how does 7 work with 6A, then, if an interstate vehicle cannot be registered in Victoria but then is caught by section 7? Does that mean the purpose of section 7 is to catch all vehicles driving on Victorian roads, but then there is an offence if you have got an interstate vehicle?

MR THOMAS: The slightly longer answer to your Honour’s question is that the combination – one needs to read section 6A, which your Honour is aware of, with section 3(1) of the Road Safety Act which gives a definition of “garage” as:

the place where the vehicle was normally kept –

Then the definition of “registered operator” in the ZLEV Act, to which Mr Merkel took the Court yesterday, which refers to the definition back in the Road Safety Act, and section 3 of the Road Safety Act refers to a registered operator as:

the person recorded on the register as the person responsible for the vehicle –

The submission that I made, and I maintain, is that nothing in the exemption provisions in section 7 takes away from the point that if you do not pay your ZLEV charge you are at risk of suspension and cancellation, and on either of those two bases you would be committing an offence if you were purporting or sought to use your vehicle. That is what I would say in relation to your Honour’s question.

Your Honours, can I turn then to the section 90 jurisprudence in relation to whether or not the Act should be characterised as a tax on the activity of use, as Victoria contends, or a tax on use. The only case I want to take your Honours to is Hematite [1983] HCA 23; 151 CLR 599, volume 5, tab 25. Can I ask the Court to go please to the judgment of Justice Mason at page 626. Your Honours will see at point 8 on that page, section 25 of the Act, which prohibited a person from constructing or, relevantly, operating a pipeline unless they held:

a licence issued by the Minister under this Part entitling the person to construct and operate the pipeline.

Then his Honour refers to section 3, by which:

“‘Operation’ includes . . . the maintenance removal and alteration of the pipeline.”

Then there was a correlative prohibition in section 35:

from operating a pipeline unless “the current pipeline operation fee” has been paid in respect of the pipeline.

Your Honours see from point 3 on page 627 that:

“The pipeline operation fee –

. . .

(a) in the case of a trunk pipeline [was] the amount of $10,000,000 –

which in 1983 was seen by the Court to be of very large magnitude. His Honour’s reasoning is usefully picked up at page 634, and at point 5 on the page his Honour undertakes a very practical, with respect, multifactorial analysis and identifies the “significant features” of the fee, in a way I sought to do before the adjournment, although I do not have, unfortunately, the $10 million fact to rely upon.

But your Honours see there is an analysis of the nature of the fee, where it is levied, what it is payable for, which is said to be “permission to operate a pipeline”, the quantum of the fee, and the fact that in that case – and I do not say that is here:

the fee is payable before an essential step in the production of refined spirit –

His Honour held that the co‑existence of those features indicated that the pipeline operation fee is not a mere fee for the privilege, it is a tax imposed on a step in production of refined petroleum products which is so
large that it will inevitably increase the price of products in the course of distribution to consumers. At the bottom of that page, in the final sentence:

To levy a tax on the operation of the pipelines is a convenient means of taxing what they convey for they are the only practicable method of conveying the hydrocarbons to the next processing point.

We embrace that flexibility in characterisation in our favour and say that when one is looking at the ZLEV Charge Act, what is occurring in form and in substance is a tax on the use of those goods, notwithstanding that it is imposed on the registered operator. The submissions to the contrary by my friends, we say, with respect, are redolent of formalism that the Court has and would reject.

Your Honours, can I just give your Honours, for the transcript, a reference to equivalent rationales in the other judgments of the Court – page 659, Justice Brennan; and pages 663 to 664 and 667 to 669 in the judgment of Justice Deane. Finally, in the same vein, can I give your Honours references to two other cases – both of which your Honours are very familiar with now. The first is Matthews [1938] HCA 38; 60 CLR 263, whereas your Honours have heard the tax was imposed on every producer of chicory for every half acre of land planted with chicory. That was held under a flexible characterisation approach to be a tax on goods.

The second – perhaps, most obviously, is Ha [1997] HCA 34; 189 CLR 465, whereas your Honours know the tax was imposed in the form of a retailer’s licence on the activity of operating a business which sells tobacco – an activity – but the minority, nevertheless, considered that that impost was an inland tax on goods.

May it please the Court.

KIEFEL CJ: Yes, thank you, Mr Thomas. The Solicitor‑General for Victoria.

MS ORR: If the Court pleases, there are four alternative pathways open to the Court to find that section 7(1) of the ZLEV Act does not impose an excise contrary to section 90 of the Constitution. None of those pathways relies on the success of any of the other pathways – there are truly independent. I will start by giving an overview of the four pathways and then the structure of my submissions will be to address each of those pathways in turn.

The first pathway to validity, in our submission, is that the ZLEV charge is not an excise because, on any view, an excise is a tax on goods – and the ZLEV charge is not a tax on goods. For that reason, it cannot be a tax on the use or consumption of goods. Instead, properly characterised, it is a tax on engaging in a particular activity, namely the activity of driving a ZLEV on specified roads. That is the first pathway.

If we are wrong about that characterisation and the charge is regarded by the Court as a tax on goods, the second pathway to validity is that the charge is a tax on the consumption of goods. As both the plaintiffs and the Commonwealth submit, that is the characterisation – and I will come to our understanding of the term “consumption”. But in that part of the case, on the current state of the law, it cannot be an excise. It has been settled law for nearly fifty years since Dickenson’s Arcade that a consumption tax is not a duty of excise, and the charge therefore cannot be invalid unless this Court grants leave to reopen Dickenson’s Arcade and we will explain why that leave should not be granted. We will also explain in that part of the case why Dickenson’s Arcade remains good law post‑Capital Duplicators and Ha, so that a leave application does need to be made.

The third pathway to validity is that if, contrary to that previous submission, the Court grants leave to reopen Dickenson’s Arcade, that decision should be affirmed. It should be affirmed because consumption taxes are different conceptually and legally to each of the other types of tax that are currently understood to be duties of excise. If the Court affirms Dickenson’s Arcade, then again, the ZLEV charge cannot be invalid because it is agreed that, if it is a tax on goods, it is a tax on the consumption of those goods.

None of the first three pathways requires any change to or development of the law. Acceptance of our submissions on any one of those pathways is sufficient to dispose of the proceeding in its entirety, and our fourth and final pathway will only arise for consideration if the Court finds against us that the ZLEV charge is a tax on goods, that Dickenson’s Arcade should be reopened, and that Dickenson’s Arcade should be departed from.

If that point is reached, our submission is that leave should also be granted to reopen two other more recent decisions, Capital Duplicators and Ha, and we would seek that leave on the basis that the case brought by the plaintiffs and the particular way in which that case is framed exposes the extent to which the prevailing view of what constitutes an excise has become unmoored from the text, context and purpose of section 90.

In that final submission, we would urge the Court to embrace the view of an excise articulated by Justices Dawson, Toohey and Gaudron in Capital Duplicators and Ha, namely that a tax that falls selectively upon locally‑produced goods is the concept of an excise. It is an agreed fact that the ZLEV charge is not such a charge because it falls without discrimination on all ZLEVs, regardless of where they are manufactured.

So, that is the overview of the four pathways by which I will structure our submissions, and I will deal with them in order. So, I will start with the first pathway to validity, which is our argument that this is not a tax that is on goods. As I have said, it is agreed that the concept of an excise requires a tax to be a tax on goods, that is an essential requirement. In this part of our case, for convenience, we have used a label to describe both the positive and the negative aspects of this. It is not a tax on goods, that is the negative proposition. The positive label we have used is that it is a tax on an activity.

Now, can I make clear at the outset, because the activity that we will deal with is an activity involving use of the good, what our conception of “consumption” is. We accept that it has the meaning that has been attributed to it by the plaintiffs and by the Commonwealth, by reference to the reasons of Chief Justice Barwick in Dickenson’s Arcade. And your Honours have heard that in that case the Chief Justice explained that, in relation to foodstuffs and the like, consumption implies their destruction by use; and in relation to goods generally, consumption involves the act of the person in possession of the goods using them or destroying them by use. So, charges imposed on using motor spirit in the Commonwealth Oil Refineries Case, or chewing or smoking tobacco in Dickenson’s Arcade, are examples consumption taxes.

But in this part of our case, in the first pathway to validity, it does not matter whether the current state of the law in relation to the exclusion of consumption taxes from the concept of an excise is correct or incorrect. Our submission, in this part of our case, addresses a more fundamental point, which is whether the charge is even capable of being characterised as a consumption tax or whether it is something else altogether. When the ZLEV charge is considered, both in respect of the terms of the statute and the practical operation of the statute, we say it becomes apparent that the charge is not properly characterised as a tax on the consumption of goods, but a tax on a specific activity of driving on specified roads. And there are three aspects of the statutory scheme that we are particularly significant. What the scheme says about when the charge is imposed, what is says about the way the charge is calculated, and the method by which the charge is collected.

Also significant, of course, is consideration of the practical effect of the scheme, which, as we will explain, gives effect to very specific and tailored objectives and can not be understood as a mere device designed to avoid the operation of section 90. So, could I start with the first relevant feature of the statutory scheme, and that is that the ZLEV charge is imposed only when a ZLEV is driven on a specified road.

KIEFEL CJ: So the activity is driving the car?

MS ORR: Driving the car on a specified road.

KIEFEL CJ: Driving a car, which is a use of a car. So, what does “on a specified road” – how does that change it from the use of a car?

MS ORR: Because that is the use that is taxed. Only if the car is driven on a specified road does the impost attach. If the car is driven on a road that is not a specified road – it is the discrimen.

KIEFEL CJ: Just as a grammatical question, how does a specified road somehow qualify activity or connect to activity?

MS ORR: Well, it is a form of activity, your Honour. It is the form of activity ‑ ‑ ‑

KIEFEL CJ: So, instead of off-road driving, we have specified-road driving?

MS ORR: Yes, it is only the activity of driving on those roads that this tax attaches to, and I will explain why this is a meaningful distinction. It is put against us that the majority of roads fall into that category and that this is essentially a device, and I will explain carefully why we say that submission should be rejected. But the Act makes very in section 7(1) that:

The registered operator of a ZLEV must pay a charge for use of the ZLEV on specified roads.

That is the language in 7(1). The same language is used in the mechanical provisions of the Act. In section 8(1), the rate of the charge is calculated by reference to:

each kilometre travelled on specified roads –

and in section 15(1) the amount of the charge payable is determined by the Secretary only taking into account the total distance travelled by the ZLEV in the relevant period, minus any distance travelled by the ZLEV not on specified roads.

GLEESON J: It is not levied on the driver, is it?

MS ORR: The registered operator has the responsibility to pay the impost, but it attaches to the activity of driving a ZLEV on particular roads.

JAGOT J: It is only registered – this charge is attracted to registered ZLEVs. You only register, do you not, so you can – what other use do you make of a registered vehicle other than driving it on a road?

MS ORR: Well, you might wish to drive it sometimes on specified roads and sometimes not on specified roads, your Honour, and it is important that this charge distinguishes between those types of activities and only attaches to one of them. I will say more about that.

KIEFEL CJ: So, it is driving on almost any road in Victoria type of activity?

MS ORR: It is driving on public roads in Victoria, and that is ‑ ‑ ‑

KIEFEL CJ: What you are saying is that is a distinct activity?

MS ORR: Yes, I am. Yes, it is the activity of driving on roads that are public roads and that is ‑ ‑ ‑

JAGOT J: Or outside Victoria.

MS ORR: I am sorry?

JAGOT J: Is it not or outside ‑ ‑ ‑

MS ORR: Yes, but public roads only.

JAGOT J: Anywhere, not just in Victoria?

MS ORR: Yes.

JAGOT J: Yes.

MS ORR: Yes, that is so, and I can explain a bit about that aspect of it as well, your Honour. But the key is that these are roads which are to be distinguished from roads for which the government has no responsibility because they are private roads. I will deal with the obvious intention that one sees when one looks at both the Victorian scheme and the New South Wales scheme for there to be coordination between the States in the future about collection of these taxes to cover scenarios where the vehicle is being driven on roads outside of the State. That is clearly apparent in the New South Wales scheme as the intention.

Bright lines obviously did need to be drawn about how to identify the roads that were going to be covered by this definition and because of the practical difficulties in administering a scheme, we accept that the scheme could be seen in some ways as over‑inclusive and in other ways as under‑inclusive, but lines needed to be drawn. We accept that it does cover driving – kilometres that are travelled outside of the State by ZLEVs registered in Victoria, that might be seen as the over‑inclusive aspect. But it is also under‑inclusive in the sense that it does not capture kilometres travelled within Victoria by ZLEVs registered in other States and Territories.

But the scheme in total can be understood as an attempt by the Victorian Parliament to come up with a concept that is being taxed which is a reasonable approximation of the kilometres travelled by all ZLEVs on Victorian roads. Your Honours will see the way that Parliament has attempted to do that. And, as I said, we concede that in doing that there is no perfect way of doing that, so there has to have been an element of over‑inclusion and under‑inclusion. But what is clear is that the intention is to levy charges for what is approximated to be driving on Victorian roads – Victorian public roads – by ZLEVs.

EDELMAN J: If there is a distinction, however fuzzy it might be, between a tax on an activity and a tax on goods, how does that distinction fit with the rationale of the majority in Ha and Capital Duplicators?

MS ORR: So, the rationale of the majority in Ha and Capital Duplicators in arriving at the steps approach, your Honour, to taxing production ‑ ‑ ‑

EDELMAN J: The rationale for why an excise would be prohibited for the States. So, why would it be that a tax on goods but not a tax on an activity that relates to goods – why would one be contrary to a fiscal union but the other not be?

MS ORR: The concept of excise was never intended to take completely away from the States fiscal levers that might affect the market in some way. It was never intended as complete control being given to the Commonwealth in that field, and that is why we speak of payroll. The majority acknowledged this in Ha and Capital Duplicators, that there are other fiscal levers that are available to the State which would necessarily impact goods in the market: payroll tax, income tax, quotas on production.

GLEESON J: If this was truly a tax on the activity – so it would be like the kind of licence that we have heard about as being excluded from the concept of excise because it was regulating an activity – then would you not expect the tax to be levied on the person who was engaged in the activity?

MS ORR: Well, that is another place, your Honour, where Parliament has had to come up with a practical way. It would be entirely impractical to try and tax each driver for each kilometre driven on specified roads. Parliament has chosen, we say, a sensible proxy for the driver, which is the registered operator – to do otherwise, would have been an impossible task, and it is not an unusual proxy for a driver to use the registered operator. So, these are all decisions that have been made by Parliament that are consistent, we say, with a desire to tax this particular activity.

Our proposition that if the tax is only charged when a person uses a good when engaging in specific activities and it is not charged when the person is engaged, or the good is used, in other activities, it will usually be more appropriately characterised as a tax on the relevant activity, rather than a tax on the good itself. So, we are talking about a tax on a defined subset of the total potential uses of a good and our position is that that will rarely be, in truth, a tax on the good.

Could I try to develop that proposition with some examples from the case law, because we say that this concept is not some novel concept that is inconsistent with the jurisprudence. If you consider the charge that was an issue in Dickenson’s Arcade, the tax on the consumption of cigarettes, that was imposed, not in respect – sorry. If your Honours hypothesise that that charge was imposed not in respect of the consumption of all cigarettes and tobacco but was instead imposed if the cigarette was smoked in a public place, we say it would be very odd to characterise a tax of that nature as a tax on the cigarettes. It would be, instead, a tax on the activity of smoking in a public place that would incur the charge, and that is why, in that scenario, we say that that would be more appropriately characterised as a tax on an activity. And you can understand why Parliament might want to tax that activity of smoking in a public place but not a person smoking in their private home.

Another example is the stamp duty that was in issue in Anderson’s v Victoria. That was a duty that was imposed on vendors who sold goods under particular hire purchase or credit agreements, and there the Court said that although the duty applied in relation to a step taken in dealing with the goods, which was the distribution or sale of the goods, it did not apply, Justice Kitto said, to the “whole genus” of sale. It was imposed only on “particular species” of sale, being those sales that were carried out under hire purchase or credit agreements. This is referred to at page 375 of Justice Kitto’s judgment.

The consequence of that – that it only applied to some sales – was that it was not in fact a tax on the goods that were being sold, but on the particular species of agreement which attracted the duty. That is how the reasoning in Anderson’s v Victoria can be understood quite compatibly, we say, with the concept that we are advancing in this part of our case. So here, the liability for the ZLEV charge does not accrue by the mere purchase of the ZLEV; it is only incurred when the activity of driving on those specified roads is undertaken.

Can I come to what we perceive to be a major plank of the case against us in this part of our case, which is the breadth of the definition of “specified road” in section 3. We have accepted that the definition captures all roads in Victoria over which the public has a right of way, but it does not include private roads such as those found on farms or mining sites, and it therefore follows – the first proposition is – that not all uses of the ZLEV incur the ZLEV charge.

To test the proposition put against us that this is, in effect, a device – that this is mere verbiage, I think it is said against us – designed to disguise the true operation of the Act, which is to capture all uses of ZLEVs – that argument clearly rests on the breadth of the definition, but it must be that the inverse of that argument – we think, as the plaintiff has conceded in oral argument yesterday – is that if Parliament had chosen to tax driving on a much smaller portion of Victorian roads, the tax would not suffer the same vice.

So, Mr Merkel yesterday said words to the effect of, if there was a good reason to draw the line, if it had been limited to particular roads with a particular rationale, the result would be different. So, for example, if “specified roads” had instead been defined to mean toll roads, it is hard to see, we say, how the ZLEV charge could be properly characterised as a tax on the use of ZLEVs, and so a tax on ZLEVs, because a ZLEV could clearly be used much of the time while avoiding toll roads altogether and not paying the tax.

On the other end of the spectrum, would be a tax imposed – if Parliament had done this, if Parliament had imposed the tax on a much larger portion of Victorian roads such as all public and private roads in Victoria except for a particular 50 square meter parcel of land in regional Victoria, we accept – as the plaintiffs and the Commonwealth, I think, are anxious to point out – that that sort of tax would likely be viewed as a device; a device designed to avoid section 90 by the inclusion of an arbitrary exception.

KIEFEL CJ: Ms Solicitor, is the purpose, or reason, for the tax relevant to characterising what it is; to identifying whether or not ‑ ‑ ‑

MS ORR: Yes, yes, and that is what I am coming to, your Honour.

KIEFEL CJ: So, the fact that these cars do not use fuel and fuel excise is, therefore, not paid, is relevant to determining the excise.

MS ORR: Yes, yes, it is, and I will come to that. The point I was seeking to make is that the argument against us reduces to the bare proposition that the ZLEV charge actually enacted by the Victorian Parliament, which is imposed on driving on roads over which there is a public right of way, is also a device designed to avoid the operation of section 90 by the inclusion of a very limited exception. We reject that proposition and we say that an examination of the statutory scheme and the extrinsic materials – which the Court has been taken to earlier – demonstrate that the exclusion of private roads from the definition of specified roads is not a device, let alone a device for avoiding section 90; the exclusion is a meaningful exclusion tailored to legitimate objectives.

GAGELER J: Ms Solicitor, this language of “device” is a carry‑over from the criterion of liability type of thinking.

MS ORR: Yes, yes, it is.

GAGELER J: So, you have the formalistic analysis, and then there were cases that just did not seem to be captured by that, but they still looked intuitively bad.

MS ORR: Yes.

GAGELER J: So, the Court said, it is a device. We have moved beyond that. We do not talk like that anymore.

MS ORR: I think our opponents are still making those arguments against us, your Honour.

GAGELER J: My understanding of the case being put against you is based on, first, the legal operation of the law, then its asserted practical operation, and then a characterisation that arises from that.

MS ORR: Yes.

GAGELER J: But, talking about a device is not, frankly, particularly helpful.

MS ORR: I understand, your Honour. The submissions that I make directed to that proposition are all submissions about the practical operation of the Act. That is what I am doing in this part of my submissions. Whether those submissions are seen as a rebuttal of a residual concept of a device or just as submissions about the true practical operation of the Act, in my submission, does not matter. They are certainly relevant for the latter purpose – and this is the part of my submissions where I am attempting to unpack not just what the statute says – this is not a criterion of liability approach that I am advancing. This is an approach that is asking your Honours to engage with the practical effect of these provisions, the practical effect of the definition of “specified roads”, and the reason that Parliament chose to define “specified roads” in this way. What I was about to come to is what the extrinsic materials and the statutory scheme reveal about Parliament’s intention in defining “specified roads” in that way.

As I said, your Honours have been taken to the extrinsic materials this morning. Your Honours have seen already that the ZLEV charge was introduced because of a very particular concern – a concern to ensure that there is adequate State funding for roads and road‑related infrastructure and transport networks in the coming years in circumstances where the uptake of ZLEVs is expected to increase and where registered operators of ZLEVs will pay little or no fuel excise. I say “little or no” because in the cases of plug‑in hybrid electrical vehicles, the engine is still at times being fuelled by petrol and so the fuel excise still applies, but for hydrogen‑powered and electric vehicles, that is not case.

So, your Honours were taken to the Treasurer’s second reading speech in relation to the Act where these matters were identified and where the Treasurer stated that the reforms introduced in this bill ensure all motorists contribute their fair share to the cost of funding Victorian roads and road‑related infrastructure. This is about supporting the financial sustainability of Victoria’s road network and ensuring that there can be a continued investment in transport networks in Victoria into the future.

That clearly articulated objective in the extrinsic materials is, we say, reflected in the scheme of the Act, which requires registered operators of ZLEVs rather than registered operators of traditional internal combustion engine vehicles to pay a charge for using their ZLEVs on public roads in Victoria.

KIEFEL CJ: So, on one view, it is a tax on the use of roads.

MS ORR: We do not make that argument, your Honour. We have conceded that this is a tax and that does not mean, we say – that concession does not mean we are precluded from pointing to the purpose of the Act in aid of this characterisation of the charge. The purpose is not only relevant in aid of an argument that it is not a tax, it is a fee for maintaining the roads.

The tax is imposed at a rate that directly reflects the extent to which the driver is otherwise contributing to the maintenance of Victorian roads through the fuel excise. So, that is why the drivers of plug-in hybrid vehicles, which are partially fuelled by petrol, pay the charge at a lower rate than the drivers of electric vehicles and hydrogen vehicles. The exclusion of private roads from the meaning of specified roads is obviously tailored to this objective, because the State has no financial stake in the maintenance of private roads on private property.

So, if a mining company, for example, purchased a ZLEV for use solely, or even predominantly, on the mining site, or a large farming operation purchased a ZLEV for use solely or predominantly within the large farm property, those uses would not be taxed because the State has no financial interest – no financial stake – in the maintenance of those roads.

EDELMAN J: That may all be correct as one of the practical effects, but why is another practical effect not that the tax on ZLEVs is a tax which will have an effect on the price of the ZLEV or the demand for the ZLEV? In the same as one might say, for example, that a tax on cigarettes at the point of sale might have a practical effect of reducing smoking, but another practical effect it would have would be to affect the single national market.

MS ORR: We do not concede, in the next part of our case – if we move to thinking about this as a consumption case, which is what I am arguing against at the moment – that this tax would have an effect on price or demand. In a different scenario, where it was obviously the case that it did, then I do not suggest that that would be an irrelevant factor, that would be part of the practical effect. But we do not accept that that is part of the practical effect here, for this charge.

KIEFEL CJ: Surely it would be a matter which those thinking of purchasing a car would take into account.

MS ORR: Yes, but this is – and I will ‑ ‑ ‑

KIEFEL CJ: I mean, they would be mad not to, really.

MS ORR: I will come to these submissions. The way they take that into account might be very variable. Some purchasers might say, I understand I have to pay that, I do not care; I would like to have an electric vehicle. Others might say, I see that I am going to have that cost, which, as I will explain when we come to this part of our case, is not a predictable cost. They do not know how long they are going to own the vehicle. They do not know how often they are going to be driving it on specified roads. There are a number of unknowables. But, even putting that to one side, the purchaser might say ‑ ‑ ‑

STEWARD J: Including the future price of electricity.

MS ORR: That is right. But the purchaser might say, I know all of that. I know that there are ongoing costs that I cannot predict with certainty, but I am going to account for that by taking some other course in my life that will open up more funds that I can then make available for that cost. So, we do not accept that there is any – this is very different to the input cost example that – or the characterisation that your Honour Justice Edelman spoke of yesterday. This is very different to things on the supply side of the equation, where it can be expected that there will be a direct consequence in the price. It can be ‑ ‑ ‑

STEWARD J: And it might also matter whether you are using the ZLEV car for business purposes or domestic. If it is for business purposes, you might be able to pass on the cost.

MS ORR: Yes. So, all of those are unknowns, which ‑ ‑ ‑

EDELMAN J: But does that not mean that, really, this first pathway collapses into your later submissions about economic effect? So, to test it this way, if there were irrefutable evidence that a consumer going to purchase a ZLEV would take into account in a very significant way the effect of this tax in the driving of the ZLEV, it would be very difficult to say that, from a substantive effects type of approach, this is not a tax on goods.

MS ORR: I accept that that would be relevant to the practical effect of the legislation, which is relevant to the characterisation of what is going on here as either a tax on goods or a tax on an activity, but it is not the case here. There is no evidence of that nature and we do not accept that there is even an inference available to be drawn about the relationship between this charge and price or demand.

So, for that reason, it falls outside the consideration of the practical effect of this statute, and I do not accept that there is a collapsing between the two arguments. This remains a distinct argument that does not require the Court to engage with whether it is a consumption and where the line should be drawn in the cases about whether a consumption tax is or is not an excise. This is about whether it is even capable of being thought of as a tax on goods. So, we do see these as quite distinct arguments.

STEWARD J: Ms Solicitor – I am sorry, Justice Gageler.

GAGELER J: Goods do not pay taxes.

MS ORR: No, of course, your Honour.

GAGELER J: People do. And people are taxed by reference to something they do with the goods.

MS ORR: Yes.

GAGELER J: So, every excise can at some level be described as a tax on an activity. You have to tell us why this distinction matters in this case, and that what we are waiting to hear, I think.

MS ORR: Yes. It matters, your Honour, because this is a tax on a subset of the available uses for the good. That is the distinction. I am not arguing a case about the activity being the entirety of what the relevant steps might be.

GAGELER J: Is that the only point?

MS ORR: That is the central point, your Honour, that is what makes it different, and that is why I sought to point out by reference to the slight transformation of Dickenson’s Arcade into a smoking in public places ‑ ‑ ‑

GAGELER J: Okay. If that is the main point, what else is there? Is there another point as well?

MS ORR: No, I think all of our points are directed to reinforcing that characterisation, your Honour, that is what ‑ ‑ ‑

STEWARD J: Can I ask you – I just want to know. In terms of the characterisation of this impost, is it your case, Ms Solicitor, that we should look at this at a species of a toll of some kind? Albeit a very big one?

MS ORR: Well, in the sense ‑ ‑ ‑

STEWARD J: Bearing in mind that some tolls do go under consolidated revenue.

MS ORR: Yes, in the sense that a toll is charged for the activity of driving on toll roads rather than being a charge for the car ‑ ‑ ‑

STEWARD J: Does this not make the public roads for these types of cars toll roads? They have got to pay to use them.

MS ORR: Yes. I think that whether your Honour uses “toll” as the label or “specified roads” as a label, it is a subset of the roads in Victoria and therefore it is a subset of the available uses of the vehicle. That is the essence of our argument, your Honour, that is what we say means that you cannot jump to the next step, which is saying that it is a tax on the goods.

GORDON J: So is a differentiation drawn, as I understand it, at least in Victoria and I think also in New South Wales, in relation to tolls on roads where heavy trucks ‑ ‑ ‑

MS ORR: Yes.

GORDON J: ‑ ‑ ‑ are tolled at a different rate than normal sedans and the like, is that the analogy you are seeking to draw in the sense that there is an impost – because you accept this is a tax on an activity, driving on the road using a ZLEV which otherwise would not be the subject of an impost for the use of the road?

MS ORR: Yes, well, perhaps the analogy here is between the ZLEVs and the internal combustion engine vehicles so that the tax is levied in respect of particular activities by the ZLEVs ‑ ‑ ‑

KIEFEL CJ: At that point ‑ ‑ ‑

MS ORR: ‑ ‑ ‑ as opposed to the heavy ‑ ‑ ‑

KIEFEL CJ: I am sorry, please finish.

MS ORR: I am sorry. There is a purpose for fixing on the ZLEVs in the same way there is a purpose in that scenario for fixing on the heavy vehicles because they cause greater wear and tear to the roads. The purpose here is connected with the fact that the drivers of ZLEVs are not contributing to the maintenance of the roads in the same way as drivers of fuel‑powered cars.

KIEFEL CJ: Ms Solicitor, I was just going to say Justice Gordon’s question actually points out the problem if you are talking about tolls, because the discriminating feature here is it is not every use of the road which gives rise to a toll fee here ‑ ‑ ‑

MS ORR: Yes.

KIEFEL CJ: ‑ ‑ ‑ it is because of the particular use of the particular car, a good.

MS ORR: Yes.

KIEFEL CJ: That is what gives rise to the tax in this case, it is because a particular type of car is being used. It is not to do with the general tax on usage of roads, it is because a particular type of good is being used.

MS ORR: It is being used in a particular activity, which is driving on public roads, that is the ‑ ‑ ‑

KIEFEL CJ: Which everyone does.

MS ORR: Yes, that is so. But what is being taxed, we say, the discrimen here, is that engaging of driving by ZLEVs – I accept that it is only in relation to ZLEVs and I have sought to explain why it is only in relation to ZLEVs – on those particular roads.

KIEFEL CJ: Well, that is the rationale for it, but the fact is it is connected only to ZLEVs.

MS ORR: Yes, if it, and we do not see that ‑ ‑ ‑

KIEFEL CJ: It is because ZLEVs use roads that the tax arises.

MS ORR: Yes, the objective of the scheme is to fix on ZLEVs. I do not shy away from that.

KIEFEL CJ: Well, you cannot, because section 7 says it.

MS ORR: No, no, I do not want to shy away from that. The critical question, we say, is whether the charge is a tax on the ZLEVs or on something else. This part of our case is about attempting to persuade your Honours that it is a tax on something else, that something else being the activity. As I have said to your Honour Justice Gageler, it is very significant in this part of our case that that activity is a subset of the total uses of the good that are available, and that is what we say distinguishes it from the authorities in this Court in relation to taxes on goods.

JAGOT J: What is the rationale for separating out this subset point from every other indicia that would be relevant? I am not quite following why you pick this one out and make it determinative in a sort of a priori, sort of – if it is this, it cannot be that.

MS ORR: Because it is about the quest for understanding what is truly being taxed here, your Honour. And it is different to cases which are about the taxing of a step on production, manufacture, sale or distribution where it is very clear that that is about the creation of the good, or the passing of that good into the market. And, therefore, what is being taxed through the producer, the person; the producer, the person; the manufacturer; the distributor or the seller, is still the good.

JAGOT J: But why would not you just factor this one element to consider in an overall evaluation, if you are right about specified roads and that this discrimen is relevant, why is it not just another factor, why does it come in at the beginning, and – this may be just coming back to Justice Edelman’s point that really, is this just one part of proposition 2and not a separate proposition.

MS ORR: Yes, and we do seek to maintain the separate nature of this argument on the basis that this is about whether it attaches to the good. It is not about consumption taxes and which side of the line they fall on. It arises before you get to that question.

But perhaps if I could speak briefly to the two other features of the statutory scheme that we say support this characterisation, the second was that the charge is calculated solely by reference to the distance travelled by this ZLEV on specified roads. We say that would be a very unusual way to calculate a tax on goods. Taxes on goods are commonly, although we accept not always, but commonly calculated by reference to the value or the quantity of the good. We do not say that is an essential requirement, but it remains the fact that that is what we tend to see in the cases.

So, for example, the charge considered in Capital Duplicators was a charge of 40 per cent of the wholesale value of the videos sold in a particular period preceding the licence period. And, in contrast here, if two ZLEVs are both driven 100 kilometres, the registered operators of each will be required to pay exactly the same charge, even if one ZLEV cost $50,000 and the other cost $100,000. So, there is no correlation here between the value of the good and the charge that is incurred.

GLEESON J: But is not – the way that the legislation is drafted is predicated on the basis that the main way that a car is used is by travelling distances.

MS ORR: Yes. Yes, that is so. But we say that supports our characterisation and, to borrow the language of Justice Dixon in Matthews, the ZLEV charge does not become an excise just because the impost is calculated quantitatively. That is not sufficient. But the reason why a tax that is referrable to the value or quantity of goods is more readily understood to be a tax on those goods is because it tends to demonstrate that what is being taxed is the step of dealing in particular goods.

And so, for example, the fact that the tax in issue in Parton was based on the volume of milk distributed indicated that it was a tax on the milk. But here, the ZLEV charge is incurred based on the extent to which each individual ZLEV is used to engage in a particular activity. That is, the driving on a specified road. The distance-based nature of the charge, we say, reinforces that the charge is properly characterised as a tax on that individual activity of driving rather than on the ZLEV itself.

The final feature of the statutory scheme that we say is relevant to demonstrating that the charge is not a tax on goods is that it is collected periodically in relation to the ongoing use of a single good in a particular way after the point of sale. That distinguishes it from any tax previously considered to be a duty of excise by this Court because all those taxes have been charges imposed on a one-off basis on each good. Yesterday, the plaintiff ‑ ‑ ‑

KIEFEL CJ: It is a tax on a class of goods. Is it not?

MS ORR: Yes. The plaintiffs yesterday offered up Matthews as an example of a case where a good taxed periodically, over a time, was held to be an excise because the tax in that case was imposed on the planter of chicory each growing season, but, in our submission, that is not how Matthews should be understood. All three justices in the majority in Matthews treated the levy on the planting of chicory as an excise because it was, in effect, indistinguishable from a tax on the production of chicory, so while the same ‑ ‑ ‑

STEWARD J: It was a tax on production of individual crops of chicory.

MS ORR: Yes, that is right ‑ ‑ ‑

STEWARD J: So, it was once only ‑ ‑ ‑

MS ORR: That is the point I was just coming to make, your Honour.

STEWARD J: You are not taxing the same chicory every year.

MS ORR: That is right. So the same planter might incur the tax in successive planting seasons, but each season the tax is incurred in respect of a different good – being a different crop of chicory, and that is very different to the ZLEV charge, where the tax is imposed in respect of the same good, the same ZLEV each year, and that is what creates the possibility that your Honour Justice Steward identified yesterday of an owner of a second‑hand or a third‑hand ZLEV still incurring the ZLEV charge 15 years after the first sale.

Of course, it was the Matthews decision where Justice Dixon said, consistently, we say, with the conception that we are advancing in this part of the case, that:

A tax imposed upon a person filling a particular description or engaged in a given pursuit does not amount to an excise.

Your Honours were taken to that portion of Matthews at page 300 by Mr Merkel yesterday. Mr Merkel referred to the paragraph up until that sentence, but that sentence was not read. That is the sentence that your Honour Justice Steward, I think, referred to as having been adopted by Justice Stephen in Dickenson’s Arcade, and that concept that is being captured in that sentence is, we say, consistent with the concept that we are advancing in this part of our case.

STEWARD J: Are you able to assist us to understand what Sir Owen Dixon had in mind when he said, in this passage:

What is decided is that to be an excise the tax must be imposed in respect of commodities –

And then the next sentence, in contrast:

A tax imposed upon a person filling a particular description –

Well, we do not need to worry about that:

or engaged in a given pursuit does not amount to an excise.

What sort of impost do you think Sir Owen Dixon had in mind there? You may not be able to assist.

MS ORR: I can only speculate. He clearly did not have the ZLEV charge in mind ‑ ‑ ‑

STEWARD J: He did not, no.

MS ORR: But my submission is that the ZLEV charge is a very good example of precisely what he was referring to there: a tax that is about a person engaged in a given pursuit. Here, the pursuit of driving a ZLEV on specified roads.

JAGOT J: Does the assumption in section 15(3) – how do you say that relates to your characterisation that, absent evidence, you can just assume that it is – everything on the odometer is ‑ ‑ ‑

MS ORR: Only in very limited circumstances, we would say, your Honour. Your Honour, again, was taken selectively to this yesterday. Mr Merkel referred to section 15(3) but did not start with what we say is the starting point, which is 15(1). So, the Secretary is required to make a determination:

The Secretary must determine the amount of ZLEV charge payable by a registered operator of a ZLEV in accordance with the following formula –

Your Honours see that in subsection (1). Subsection (2):

The Secretary must determine the amount of the ZLEV charge from the declarations lodged by the registered operator unless –

(a) the registered fails to lodge a declaration . . . or

(b) a declaration does not contain sufficient information . . . or

(c) the Secretary reasonably believes that a declaration is false or misleading.

It is only in those sorts of circumstances that the Secretary’s ability under 15(3) to assume – in the absence of evidence – that all travel is on specified roads, arises. So that provision, we say, does no more than deal with the situation where there is no evidence of any driving on non‑specified roads. It does not remove the ability for a person to point to that evidence and, if that evidence is produced, the Secretary needs to deal with that in the determination.

It is again an administrative convenience provision, your Honour, to deal with the situation where a person elects not to provide evidence or provides inadequate evidence – it is no more than that, we say.

I was going to briefly refer to the mechanism for collecting the charge, which is relatively straightforward. Under section 11(1) of the Act – as we have just been discussing – a registered operator is required to make declarations in respect to the ZLEV at specified times. Most commonly they are to be made at the end of an annual registration period, and the declaration under section 11(3) has to set out the:

distance travelled by the ZLEV –

on specified roads:

since the previous declaration –

Then, under section 15(1), the determination that I have just referred to occurs, and the Secretary invoices the registered operator for payment of the amount determined.

The submission that we wish to make in connection with that is, again, that that would be a very unusual way of calculating and collecting a tax on goods. It is a method that is entirely divorced from the manner and time of the production, manufacture, sale or distribution of a ZLEV – those, of course being the steps that mark the current boundaries of the concept of an excise. It is a method that is substantially more disconnected from each of those steps than the mechanism for collecting the consumption tax in Dickenson’s Arcade – where, as your Honours will recall, the tax could be collected at the point of sale in anticipation of future consumption in accordance with the regulations.

But, in contract, the ZLEV charge is collected at periodic intervals, well after the point of sale. None of the taxes held by this Court to be an excise involves a periodic charge imposed multiple times in respect of one singular good throughout the course of its life cycle. The taxes held to be an excise have generally been imposed only once, in respect of the good, as that good passes through the tax step – whether that be manufacture, production, sale or distribution.

For those reasons, we say that an analysis of both the statutory scheme and its practical effect supports the characterisation of the ZLEV charge as a charge that is not on goods – it is not on ZLEVs but it is instead on the activity that I have identified. Acceptance of that proposition would mean that it is not an excise under section 90.

Can I just finally deal briefly with Hematite Petroleum, which was raised against us. In the passages that the Court was drawn to, it was clear that the Court regarded that charge as an excise because it was a tax on a step in the production of the goods. It was not treated as an excise because it was a tax on the activity of transporting oil through the pipeline – it was a tax on the manufacture or production of the products that resulted from the oil being transferred from the wells in Bass Strait through the pipeline to the processing plant to be used to create a product, and that is was made it a tax on a step in the production of those goods.

STEWARD J: Each hydrocarbon was taxed once?

MS ORR: Yes, yes, that is so, your Honour. Those are the submissions I wish to make about our first pathway. If I could move to the second pathway we say is available to the Court to find the charge valid. In this part of our case, we proceed on the basis that the ZLEV charge is a charge on goods and the common territory we then find ourselves in is that it is a particular type of tax on goods, being a tax on the consumption of goods – in the sense that all parties agree.

As your Honours have heard in Dickenson’s Arcade, five of the six judges constituting the Court held that a consumption tax is not a duty of excise. For the reasons that I will develop, Dickenson’s Arcade remains good law, and for the plaintiffs and the Commonwealth to succeed in their arguments, they require leave to reopen it.

The plaintiffs submitted yesterday, for the first time in oral argument, that leave to reopen Dickenson’s Arcade was not required because that decision is irreconcilable with Capital Duplicators and Ha. And one part of the plaintiffs’ submission appears to be that the Bolton v Madsen approach, which the plaintiffs say underlies Dickenson’s Arcade, was disapproved in this Court in Capital Duplicators and Ha. In our submission that is incorrect. The judgments in Capital Duplicators and Ha demonstrate that the majority justices in both of those cases embraced what they described as the fundamental proposition for which Bolton v Madsen stands and preceded expressly the basis that Dickenson’s Arcade remained good law.

So, can I seek to make good that proposition by asking your Honours to turn, firstly, to Capital Duplicators, tab 17 in the joint book of authorities. We make three principal submissions in response to the plaintiffs’ suggestion that Dickenson’s Arcade is irreconcilable with Capital Duplicators. The first is that the majority in Capital Duplicators clearly recognised and accepted that the prevailing law was that consumption taxes are not excises.

Second, that this was the prevailing law is confirmed by the fact that there was a challenge to Dickenson’s Arcade in Capital Duplicators. Whether that was by way of a formal reopening application or not we say is beside the point. It is clear that the proposition for which Dickenson’s Arcade stood was under attack in Capital Duplicators. I will make good these arguments. And the third submission is that, having received that attack in Capital Duplicators on Dickenson’s Arcade and the prevailing position that consumption taxes are not excises, the Court in Capital Duplicators did nothing to affect that prevailing position.

So, if I could take the Court through those three points. The first point, I would like to take your Honours to two passages of Capital Duplicators that we say particularly emphasise that the majority judges recognised and accepted that the prevailing law was that consumption taxes were not excises. The first is at page 583 where the majority considered the relevance of Bolton v Madsen and the cases that followed Bolton v Madsen. We just want to be clear, because we think at times there has been an elision here between the rejection of the criterion of liability aspect of the Bolton v Madsen formulation and what was instead described in Capital Duplicators as the fundamental proposition that Bolton v Madsen stood for. So, your Honours will see in the first full paragraph:

In Bolton v. Madsen and Dennis Hotels the character of an impost on goods, whether a duty of excise or a licence fee exacted only in respect of the business generally, was determined by reference solely to the terms of the relevant legislation. By construing the legislation, the characteristic “criterion of liability” was identified. The criterion of liability was the means –

This is important, because I want to distinguish the means from the principle, so it was:

the means by which it was ascertained whether an exaction was a tax “directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers”.

Subsequent cases have rejected both this application of the criterion of liability and, as McHugh J. explained in Philip Morris, the proposition that it is the exclusive determinant of the question whether an exaction is an excise. Instead, in determining whether an exaction is or is not an excise, the Court has regard to matters of substance rather than form. That approach, which looks to the practical or substantial operation of the statute as well as to its legal operation, requires that a variety of factors be taken into account. The rejection of the criterion of liability as an exclusive test has not disturbed general acceptance of the proposition that a tax in respect of goods at any step in the production or distribution to the point of consumption is an excise. That is the fundamental proposition for which Bolton v. Madsen stands as authority, subject only to the qualification that it speaks of taxes “directly related to goods”.

In our submission, that passage makes clear that the majority in Capital Duplicators proceeded on the express understanding that even in circumstances where the criterion of liability approach to assessing whether a particular tax was, in fact, an excise had been discarded as the exclusive determinate, Bolton v Madsen remained good law and a tax on goods once they had reached the hands of consumers was not to be considered an excise. If I could ask your Honours, then, to turn to page 587 ‑ ‑ ‑

KIEFEL CJ: Ms Solicitor, the reference there to what Bolton v Madsen hold in relation to steps up to the point of consumption ‑ ‑ ‑

MS ORR: Yes.

KIEFEL CJ: ‑ ‑ ‑ historically, the reason Bolton stated that view was because of the limitation in Parton which was then taken up in Dennis Hotels.

MS ORR: Yes.

KIEFEL CJ: That is the only reason that that limitation appears in Bolton and is then stated by the Court as a matter of fact as what the Court has held in Capital Duplicators.

MS ORR: I will come to deal with that.

KIEFEL CJ: Do you say that either Dennis or Bolton actually looked at the reasoning behind the limitation to the point of consumption?

MS ORR: No, I do not need to say that, is my answer, your Honour ‑ ‑ ‑

KIEFEL CJ: But you do not.

MS ORR: ‑ ‑ ‑ because Dickenson’s Arcade is where, undoubtedly ‑ ‑ ‑

KIEFEL CJ: Quite.

MS ORR: ‑ ‑ ‑ that detailed reconsideration occurred. The point I am trying to make at the moment is a different one which is the challenge ‑ ‑ ‑

KIEFEL CJ: No, but you rely upon Bolton and Madsen as stating that part of the fundamental proposition is not only that it is a substantive approach, and it is one which looks at tax on goods at any step in the production and distribution. But the limitation that was created in Parton was carried forward.

MS ORR: Yes.

KIEFEL CJ: The reason that it was carried forward was that neither Dennis nor Bolton looked in any detail to that.

MS ORR: Yes.

KIEFEL CJ: So, Capital Duplicators – if we are going to say that there is some basis given for the limitation, it has to arise from the individual judgments ‑ ‑ ‑

MS ORR: Yes.

KIEFEL CJ: ‑ ‑ ‑ in Dickenson’s itself.

MS ORR: And, I am sorry, I do want to come to deal with that, and perhaps I am not explaining myself very well because I am trying to make a narrower point at this stage, which is in response to the submission put against us by the plaintiffs, which is that they do not need leave to reopen Dickenson’s Arcade because Dickenson’s Arcade cannot sit with Capital Duplicators and Ha. It is an isolated anomaly that does not make sense anymore.

KIEFEL CJ: Yes, I understand.

MS ORR: And in responding to that submission, I am merely, at this stage, trying to point out that the Court in Capital Duplicators were well aware of this principle that the concept of an excise stopped on charges that were levied after the good was in the hands of the consumer, and they embraced that. Rather than this decision being irreconcilable it is perfectly reconcilable with Dickenson’s Arcade. I know I need to grapple with your Honours ‑ ‑ ‑

KIEFEL CJ: But both Capital Duplicators and Ha expressly left the question open.

MS ORR: Well, I will come to that. We do not accept that characterisation of the one line in each of the judgments to that effect. When I take your Honours through these passages, the submission that I will make at the end of that is that it was not left undecided for another day, it was merely that it did not arise on the facts of the case. There was no need, we say, this is what the Court was saying, there was no need to consider what would have been a very large question, which was to ‑ ‑ ‑

KIEFEL CJ: Well, therefore it was left for another day, because it did not arise on the facts of the case.

MS ORR: Well, no, I want to qualify that, your Honour. It did not ‑ ‑ ‑

KIEFEL CJ: This Court does not usually say there is no reason, no need, to deal with a point, if it is not leaving it open for the future.

MS ORR: The submission that I am ‑ ‑ ‑

KIEFEL CJ: it is identifying an area of the law.

MS ORR: It is put against us that by saying that there was no need to deal with that, the Court was saying that it was an open question, an open question that the Court needed to come to on another occasion. What I am ‑ ‑ ‑

KIEFEL CJ: Well, which is to say that it is – they do not consider it was finally resolved ‑ ‑ ‑

MS ORR: Yes.

KIEFEL CJ: ‑ ‑ ‑ given the current state of the law at the time that their Honours were deciding Capital Duplicators.

MS ORR: The submission I am trying to make is that that is not what happened here. That expression of it not being necessary to decide, when viewed against the backdrop of the passages that I am taking the Court through, cannot be understood as meaning what the plaintiffs and the Commonwealth say it should be taken as meaning, which is that no one knows whether a consumption tax is or is not an excise, we will have to think about that in an appropriate case when it arises. When that statement is viewed against the backdrop of the embracing of these propositions in other parts of the judgment, it can only mean that the Court was not leaving it open, they were accepting that the prevailing state of the law was that a consumption tax is not an excise and acknowledging that the very large question of undoing that prevailing state of the law did not arise in this case.

EDELMAN J: We had a submission from the Commonwealth last week that in a case like Bernasconi where almost all the premises of the judgment had been arguably stripped away, the failure to formally overrule the result meant that the decision still needed to be reopened and determined. As I understand your submission, you say you would adopt that approach of the Commonwealth but go a step further and say that actually in a number of these cases they are explicitly not overturning the result, explicitly preserving the result.

MS ORR: Exactly, your Honour, they are embracing the result. That is the proposition I am trying to make. And I know I need to come to your Honour the Chief Justice’s proposition about whether there was a sufficient foundation for what was said in Bolton v Madsen. That is a different point that I will come to. The point at the moment is just that we urge your Honours not to accept the proposition put against us that Capital Duplicators and Ha should be interpreted, firstly, as being incapable of being reconciled with Dickenson’s Arcade and, secondly, as leaving open, having expressed no view for another occasion, the question to be determined effectively for the first time – in brackets, I would say there – of whether consumption taxes are not an excise.

So I had said that there were two parts of Capital Duplicators that I wanted to go to to make good this proposition, and the second is on page 587, where their Honours were dealing with the application by the ACT and South Australia to return to a narrower meaning of “excise”. And in the context of explaining the existing state of the law, their Honours again referred, in the middle of the page, to Bolton and said:

As mentioned earlier, in Bolton v. Madsen it was decided unanimously that a tax on the taking of a step in the process of the production or distribution of goods before they reach consumers is an excise.

That authority, and others, led their Honours to conclude in the final sentence of the paragraph that acceptance of the ACT and South Australia’s submissions:

would require the Court to overrule no less than five previous decisions.

So again, we say, their Honours clearly signalled that Bolton and the exclusion of consumption taxes from the conception of an excise remained the prevailing law. The second point which perhaps I could make just briefly before the luncheon adjournment of the three points that I said I was going to make on this topic is that the binding and authoritative nature of Dickenson’s Arcade at the time of Capital Duplicators is reflected in the fact that the decision was directly challenged, perhaps by way of a reopening application, perhaps not, but no doubt the subject of challenge in Capital Duplicators.

There is a reference on page 584 of the judgment to the case for reopening the decisions in Dennis Hotels and Dickenson’s Arcade being before the Court, but we accept that there is some dispute about whether, in form, there was a reopening application. But the plaintiffs accept – and we say, as they must – that the Commonwealth advanced the submission in Capital Duplicators that a consumption tax is an excise. The record of the Commonwealth’s submissions at pages 565 to 566 in the report makes very clear that the Commonwealth expressly asked the Court to find that a consumption tax is an excise, contrary to the authority of Dickenson’s Arcade, as it is again doing in this case.

Not only was the Court faced with that direct submission from the Commonwealth, but the majority judgment makes clear – for example, at page 584 that, given the way the argument, in fact, proceeded in the case, it was impossible for the Court to decide the case without considering the jurisprudence on section 90 more generally, and Dickenson’s Arcade formed an important part of that jurisprudence.

KIEFEL CJ: Yes, thank you.

MS ORR: Thank you, your Honour.

KIEFEL CJ: The Court will adjourn until 2.00 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.00 PM:

KIEFEL CJ: Yes, Ms Solicitor.

MS ORR: If the Court pleases, I propose now to complete my submissions on why leave is required to reopen Dickenson’s Arcade. Your Honours will recall I was addressing the submission put against us, which is that Dickenson’s Arcade is irreconcilable with Capital Duplicators and Ha, and I had been dealing with Capital Duplicators and demonstrating why that decision is reconcilable with Dickenson’s Arcade.

Your Honours will recall that I had taken the Court to two particular passages in Capital Duplicators at 582 and 587. Can I just make the point that the passages I took the Court to bookended a lengthy discussion that we commend to your Honours in its entirety. Your Honours will see that those references to Bolton v Madsen and to consumption tax as not being part of the conception of excise endorsed in that decision are the start point and end point of the Court dealing with a request to return to the narrow view of excise, and the Court rejected that invitation to return to the narrow view and endorsed what was described as the broad view of an excise which was the Bolton v Madsen view of an excise. It was the view that an excise is a tax on taking a step in the process of production or distribution of goods before they reached consumers. That was the end point of that discussion, and I felt that I perhaps gave your Honours the starting end but did not explain the context and therefore the significance of that being both the start and the end point of that journey.

Now, the final point that I said I was going to make by reference to Capital Duplicators was that when the majority come to give their core statement of principle in Capital Duplicators, that core statement of principle does nothing to disturb the prevailing state of the law as I have just articulated it. The core statement of principle is at page 590 in Capital Duplicators, and I want to come shortly to explain why the plaintiffs’ and the Commonwealth’s reliance on language in that passage about “exhausting the categories of taxes on goods” is misplaced. I want to deal with that specifically, but for now focussing on the terms in which the majority restated the test – that an excise is a tax on production, manufacture, sale or distribution – that holding, we say, is entirely consistent with and, we would say, supported by, both Bolton v Madsen, and by implication Dickenson’s Arcade.

As I have already explained, the majority’s statement about a consumption tax and the question of a consumption tax being left open for another day, or unanswered, should not be taken to mean that the Court was disputing the prevailing state of the law or doing anything other than stating that that large question of whether Dickenson’s Arcade would be overturned at some point in the future did not arise in that case. So, nothing in that statement of principle, we say, disturbs the prevailing state of the law being the Bolton v Madsen and Dickenson’s Arcade state of the law.

I want to be briefer in my response to the submission put against us that Dickenson’s Arcade is irreconcilable with Ha. I can refer there just to two passages. The first is at page 490 of Ha. That is a passage that your Honour Justice Gordon referred to yesterday. There, in the context of dealing with New South Wales’ application that the Court return to a narrow view of excise, the Court said:

The principle that an inland tax on a step in production, manufacture, sale or distribution of goods is a duty of excise has been long established. As a criterion of a duty of excise, it was expressed by Kitto J in Dennis Hotels and adopted by a unanimous Court in Bolton v Madsen. It can be traced back to the judgments in Parton and, before that, to the judgment of Dixon J in Matthews –

There is then a reference to Justice Brennan’s statement in Philip Morris:

“If there be any rock in the sea of uncertain principle, it is that a tax on a step in the production or distribution of goods to the point of receipt by the consumer is a duty of excise.”

That passage, we say, is an answer to the submission against us that Ha is irreconcilable with Dickenson’s Arcade. The critical statement of principle at page 499 – that is the second passage that I want to take the Court to – must be understood in that context. There, their Honours reaffirmed:

that duties of excise are taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin.

That, we say, was a direct acknowledgement and endorsement of the principle that they had described as “long‑established” in the previous passage, at 490, and consistently with that previous passage, their Honours did not include consumption taxes in their list of steps capable of attracting an excise. Again, it was not necessary to consider the very large question of whether there should be a change in the law, given that the authorities had treated that matter as settled. For those reasons, we say, the plaintiffs’ submissions that Dickenson’s Arcade is irreconcilable with those two decisions should be rejected and that means that leave is required to depart from Dickenson’s Arcade.

KIEFEL CJ: Do we draw anything from the fact that the Court in Capital Duplicators and here in Ha do not refer to Dickenson’s as an authority for what they are deciding?

MS ORR: No. No, your Honour.

KIEFEL CJ: Their focus is on Matthews, Bolton v Madsen and Parton, for what those cases come to decide.

MS ORR: That is right.

KIEFEL CJ: And what those cases come to decide by reference to that line of authority is not the reason that has been advanced for saying that the basis for Dickenson’s has been undermined by these two cases, is it?

MS ORR: As I understood the submission against us, it was that Dickenson’s Arcade relied on Bolton v Madsen.

KIEFEL CJ: I might have misunderstood. I thought it was that Dickenson’s Arcade was decided by the larger part of the majority on the basis of a principle which Capital Duplicators and Ha have now found by reference to this line of authority and the ratio for which they stand, as being wrong.

MS ORR: I did not understand the submission that way. I understood the submission put by Mr Merkel to be to say that Dickenson’s Arcade was dependent upon Bolton v Madsen and to directly assert that Capital Duplicators and Ha are irreconcilable with the Bolton v Madsen formulation. And that it is because of the criterion of liability aspect, which I have sought to distinguish as the means rather than the principle, that I understand that submission was put.

I want to engage with the more fundamental questions that I think underlie some of the points your Honour the Chief Justice is making to me, but the point I am merely making at this point is that we are in territory where leave needs to be provided before your Honours can entertain the conception of an excise that is advanced by our friends.

EDELMAN J: It is difficult to say, though – I think as you suggested earlier – that the decision in Dickenson’s not to extend excise to a consumption tax was settled by the time of Ha, because in Ha and in Capital Duplicators the Court is quite consciously not deciding that point, which means they may not have regarded it as fully settled.

MS ORR: Well, our submission is that the passages that I have taken your Honour to show that they did regard the question as fully settled, your Honour, that they were not ‑ ‑ ‑

EDELMAN J: Well, if that were the case, they would not have gone on to say it is unnecessary to consider whether a tax on the consumption of goods would be classified as an excise.

MS ORR: We say that because that proposition had been put directly by parties in the proceeding that a consumption tax is not an excise – and that is an important part of my argument – there was a challenge before the Court to the correctness of Dickenson’s Arcade in some form, and the Court was merely saying that this was not a case that required that very large question, which would have involved reopening of Dickenson’s Arcade, to be decided.

GAGELER J: You keep calling it a very large question, but it is nowhere near as large as the questions that were decided in these two cases.

MS ORR: Yes, in the context of what those cases were about, that is so, your Honour. It looms larger in the present case, but I think the point that I am trying to make, your Honour, is that there was prevailing authority, that was Dickenson’s Arcade, and that rendered it a large question to suddenly say that consumption taxes were part of the conception of excise. There was authority that needed to be dealt with that stood in the way of that position being taken and we make the point really that that has not been grappled with and recognised in the way the submissions are put about Capital Duplicators and Ha being irreconcilable with Dickenson’s Arcade.

A lot is sought to be made of one line in each case, stating that it is not necessary to deal with the submission advanced that consumption taxes are, in fact, an excise. The core point really is that when those one‑line statements are viewed against the backdrop of the broader judgments, it is very clear that the Court was endorsing the prevailing view of the law. Had the Court wanted to say something more equivocal about consumption taxes, it is odd, we say, that they drew the line in their definitional statements in both judgments at the point of consumption expressly. So, there are multiple references to drawing the line at the point of consumption leading up to and within the definitional statements in each of those judgments.

KIEFEL CJ: Ms Solicitor, when I said before I understood the argument for saying the basis for Dickenson’s had gone – I am looking at the outline for the Commonwealth at paragraph 9 – what is relied upon is that three members of the Court treated the principle, which I was referring to before – namely, the criterion of liability test – as conclusive, and that, together with the rejection of the criterion of liability test in the subsequent Ha and Capital Duplicators is the basis for which – that is the basis for saying the plank is gone.

MS ORR: I do want to come to that point, your Honour. That I do not understand to have been deployed at this ‑ ‑ ‑

KIEFEL CJ: That is quite a different thing from saying that Dickenson’s has held definitively that the stopping of the point of consumption limitation on Matthews is good law. They are two quite different matters, and the first is the basis I understood that was put against you for saying that Dickenson’s – there is nothing to stand in the path of ignoring Dickenson’s basically.

MS ORR: Yes. The submission put against us, I think, is that Capital Duplicators and Ha result in Dickenson’s Arcade being bad law; it is incapable of being good law because of what is said in Dickenson’s ‑ ‑ ‑

KIEFEL CJ: Well, it has been overtaken by subsequent decisions in Capital Duplicators and Ha. Which is ‑ ‑ ‑

MS ORR: We say it has not been overtaken and the proposition that ‑ ‑ ‑

KIEFEL CJ: The propositions for which they stand, as I am saying. The question of whether or not one stopped short at the point of the consumer is a different question.

MS ORR: I am sorry, your Honour, a different question to which question?

KIEFEL CJ: To what Ha and Capital Duplicators decided ‑ ‑ ‑

MS ORR: Yes, yes.

KIEFEL CJ: ‑ ‑ ‑ in relation to the central tenet of Dickenson’s, which relied upon the liability principle, the criterion of liability.

MS ORR: The criterion of liability – well, I do not accept characterisation of that as a principle. I think that is where the confusions sometimes lie. The criterion of liability approach is, as I have tried to explain, a means, a form of – it is an application of a principle. It is a way of assessing whether a tax meets the definition of an excise, and it has been discarded as the exclusive way of answering that question.

KIEFEL CJ: I am sure we do not need to go into this. I am sure everyone understands what it means. But my point was simply that what is point against you is that Dickenson’s is no longer good law. Once you go beyond the criterion of liability and you have regard to the proper basis for considering the characterisation of something as an impost, as an excise, you take account of other factors which might point in a different direction towards a decision about consumer ‑ ‑ ‑

MS ORR: Could I come to deal with that basis, your Honour ‑ ‑ ‑

KIEFEL CJ: Yes.

MS ORR: ‑ ‑ ‑ and try and address your Honour’s questions in that way. At this point, perhaps the best way to lead into that is to give an overview of our submissions as to why we say leave should refused to reopen Dickenson’s Arcade. We are going to support that submission by reference to the John factors, which will involve me dealing with the questions that your Honour has raised about the trajectory of the authority. But before I get to the John factors, there are some observations that I want to make about the conceptions of an excise that are advanced by our opponents.

So, essentially, the reasons why they say Dickenson’s Arcade is wrong, the conception that they say should have been fixed upon in Dickenson’s Arcade – and I want to also address, because they do not fit neatly within the John factors analysis, three submissions that are put against by the plaintiffs and the Commonwealth that more broadly seek to show that the authority of Dickenson’s Arcade is weak. And this connects with the questions that your Honour the Chief Justice has been asking me.

GAGELER J: I am very interested in your 6(d).

MS ORR: Yes, your Honour?

GAGELER J: Are you going to expand on that at some point as well?

MS ORR: Yes. Yes, I am, your Honour. As part of the John factors – the fourth Johns factor. I will do that, your Honour. But if the Court would not mind bearing with me, I think, rather than starting with the Johns factors, I would prefer to deal, head-on, with the points that are put against us that do not really fit in the Johns framework by our opponents, before I move into an analysis of each of the John factors.

As I said, I also wanted to make some observations at the outset about the differing conceptions of an excise that are advanced by our opponents. It does appear to us, although it is not entirely clear, that the plaintiffs and the Commonwealth are advancing different conceptions of an excise.

There seems to have been some movement for both the plaintiffs and the Commonwealth between the conception advanced in writing and the conception advanced orally. The plaintiffs start with an acknowledgement that in Capital Duplicators and Ha, successive majorities of the Court held that an excise is a tax on the production, manufacture, sale or distribution of goods and, in their written submissions, they say that, in order to properly give effect to the purpose of section 90 articulated by Justice Dixon in Parton, the Court should add “consumption” to that list of steps that – if tax could constitute an excise.

But there are also references in their submissions to a sufficient connection style of test, such as the one advanced by the Commonwealth – but it does seem to us that, on the plaintiffs’ view, all consumption taxes would be an excise duty. There does not appear on their case to be a distinction between different types of consumption taxes.

The Commonwealth appear to start from a different point which we maintain, would result in an abandonment of the contours of the formulation arrived at in Ha and Capital Duplicators – the boundaries that are set for the concept by the majorities in those cases – that they ask the Court to identify an excise by looking more broadly to whether there is some type of connection between a tax and a good that is somehow sufficient for the tax to meet the description of being a tax on goods.

This seems to be the same type of submission that the Commonwealth advanced but which was not embraced in Capital Duplicators – but it is, contrary to what I think has been said, a conception of an excise that is different to the no closer connection test that was articulated by Justice Kitto in Dennis Hotels and subsequently explained by Justice Brennan in Philip Morris – which your Honours will recall the Ha majority said that they were expressly maintaining – and consistently with an observation made by your Honour Justice Gordon yesterday, we say that the no closer connection test is no more than a way of stating negatively the Ha majority’s positive formulation of the meaning of an excise as it applies in the licence fee contest. It requires an assessment of the connection between the tax and a particular step taken in dealing with the goods.

As I said, it seems based on the Commonwealth’s conception that not all consumption taxes would be excises, but the Commonwealth still seemed to press reliance on a statement in Capital Duplicators that I am going to come to that customs, duties and excise duties must be construed as exhausting the categories of taxes on goods.

On any view, it seems to us that the Commonwealth’s conception is one of considerable breadth. The Commonwealth’s conception appears to us to be broad enough to encompass other types of taxes that are not an excise on the current state of the law. For example, a tax on ownership of a good – as long as there is a sufficient connection between the tax and the good – would, on the Commonwealth’s conception, be an excise. Your Honours will know that in Logan Downs, the Court held that taxes on ownership are not excises.

Another example is a tax on the carriage of goods by road. Your Honours will recall the series of road transport cases and it does seem to us that on the Commonwealth’s conception it may be that a tax on the carriage of goods by road vehicle would be an excise as long as there is some form of sufficient connection between the tax and the goods. So, we want to point out the breadth of that conception and the consequences of that conception when viewed against the existing jurisprudence of the Court.

We also want to make clear that our concern is not that the Court must shy away from evaluative judgments. We heard the reference to your Honour Justice Gageler’s statement in Palmer. That is not the concern. But our concern relates to the potential adoption of a test which leads to real practical uncertainty as to which taxes are and which taxes are not excises, and there is an obvious imperative to ensure that States and Territories are able to determine in advance what is an is not an excise so that they can legislate on a basis that does not involve breaching the prohibition in section 90.

GAGELER J: So, are there State taxes on the ownership of goods?

MS ORR: I can seek instructions on that, your Honour, at least from the Victorian point of view. I am not presently able to answer that question. But at the moment the state of the law ‑ ‑ ‑

EDELMAN J: That was the Stock Act in Logan Downs, was it not?

MS ORR: That is right. So, your Honours may recall that the stock that was kept by the farmers in that case has included stock horses, who are not used for meat or for breeding. They were just used as horses on the farm and they were taxed as well as the cows and the sheep that were used for breeding or meat, and the view of the Court was that the tax, insofar as it related to the stock horses, which were no part of any production process, was not an excise.

EDELMAN J: I think the Commonwealth accepted yesterday at one point that it could potentially go further and extend not to just to taxes on ownership, but taxes on possession as well.

MS ORR: Yes.

GORDON J: I think, to be fair, the Solicitor said there would some cases where possession would be subject to additional criteria, but he at least accepted that possession was sufficient to constitute excise.

MS ORR: Yes.

EDELMAN J: If it had the requisite effect.

MS ORR: That is right, which we pause to note is a very difficult thing to understand precisely how the Commonwealth is expecting to be applied in different circumstances.

GAGELER J: Well, you would not tax the ownership of a pipeline, like in Hematite. There it was the operation, construction, ownership, possession – it could have been any of those criteria. But the legal criterion is not the point.

MS ORR: Hematite is obviously a very particular example at one end of the spectrum which appeared also to – the size of the permit fee in Hematite Petroleum, there is no doubt, on the reasons in that case, was a significant factor in the Court’s finding.

But the point that I am making is that originally, we faced, I think, an argument that you should just add consumption to the list of steps, that that was the way to answer this case by the plaintiffs.

We have moved into a world where the steps no longer are relevant and instead of looking at a step in relation to the goods you just strip it back and look at the goods and the tax and you find some relationship between the goods and the tax. And that is a very broad test which we say is capable of resulting in things that the Court has declared not to be an excise now falling within the concept of an excise. And there is no application to reopen either of those lines of authority in relation to ownership or road carriage charges.

EDELMAN J: Have you looked into whether any of the Waste Act-type schemes that might be, if they are characterised as taxes, would fall within a definition on the expanded view of excise?

MS ORR: We think that there is a very real risk that ours would in Victoria, your Honour, which is why we referred to it in paragraph 28 of our written submissions.

And that, if I can just say a little bit about the way that I understand that charge to work, to answer your Honour’s question, the first point is that those charges are not fees for service because, at least in Victoria, they are not charged in exchange for a service provided to the person who pays the charge. They are imposed on the person who operates the waste management facility by reference to the quantity of waste that they then receive at their facility.

And, therefore, we say that you start with the position that the waste disposal levy bears the positive indicia of a tax and the levies imposed in Victoria by the Environment Protection Act and is collected by the EPA and paid into several statutory funds which in turn fund various environment-related State agencies, there may be a question about whether some categories of waste are goods and in the decision of Eclipse Resources v The Minister for Environment, which is referred to in some of the interveners’ submissions, the Court of Appeal held that the particular waste in issue in that case was not.

EDELMAN J: This was the West Australian decision?

MS ORR: Yes. But they did not appear to foreclose the possibility that there would be a market for particular types of waste materials or that some waste materials might be saleable and as to how that sort of tax might be considered to fall on consumption, the levy works so that it is imposed on the receipt of the waste by the person who uses that waste in the course of their business by processing the waste or depositing the waste in the ground. And it imposed by reference to the amount of the waste that is processed or deposited.

So, we think that there is a real risk that the use of the waste by the waste management facility would create a risk that it is a type of tax that, on the Commonwealth’s conception, it might actually be a consumption tax and we might not need to consider the outer boundaries that I am trying to test via ownership and possession because it might already be a consumption tax. But that is one of the charges that we say, on the broad Commonwealth conception, is potentially vulnerable.

And I will come to deal with that again in more detail in the John factors, but I will say, at this stage, that the criticism seemed to be levied against us that we had not provided specific statutes, specific examples, of vulnerable taxes, and, with respect it is, we think, a quite unfair and unrealistic thing to expect a State to bring to a case like this – a shopping list of taxes that are vulnerable and could be the subject of challenge. So, I have chosen to engage with your Honours about a particular example, and I will come back to the Duties Act example, but in terms – and I will talk more about the onus that we say operates when we come to this part of the John analysis. But we think that the way we have handled that by pointing to potentially vulnerable types of charges is persuasive.

So, I had said, after making some observations about the conceptions of excise that are advanced against us that I wanted to deal some submissions that are made against that are not really John factor submissions. The first of those I have dealt with already, which is the idea that the question of whether consumption taxes are an excise was left open, or answered, in Capital Duplicators and Ha.

The second reason why the plaintiffs and the Commonwealth say the authority of Dickenson’s Arcade is weak is that in Capital Duplicators and Ha the Court observed that duties of customs and duties of excise exhaust the category of taxes on goods. Much reliance is placed by both our friends on that statement in Capital Duplicators, and immediately your Honours will notice that that submission is inconsistent with the submission that Capital Duplicators and Ha left open, the question of whether a consumption tax constitutes and excise. The Court could not have ‑ ‑ ‑

KIEFEL CJ: It might explain why they left it open.

MS ORR: Well, the Court, we say, could not have left open that question if it was simultaneously finding, as the plaintiffs and the Commonwealth are asking you to accept, it was finding that customs duties and duties of excise truly exhausted the categories of taxes on goods. Particularly given the way a duty of excise had been defined by the majorities in those cases. But in order to understand what we say was meant by the statement that customs and excise duties exhaust the categories of taxes on goods, we would like to ask the Court to examine the context in which that statement was made.

Which requires me to take the Court to page 590 of Capital Duplicators. This is the paragraph that I took the Court to earlier and which the Court, I think, has been taken to a number of times already in terms of setting out the core principle in Capital Duplicators. Your Honours will see that earlier in that paragraph the majority observed that:

Adhering to that view of the purpose –

Which Justice Dixon attributed to section 90 in Parton –

the term “duties of customs and of excise” in s. 90 must be construed as exhausting the categories of taxes on goods.

But if your Honours turn back to page 589, your Honours will that the paragraph begins with the identification of a submission made by the defendants and South Australia that:

deny the proposition that “duties of customs and of excise” in s. 90 exhaust the categories of taxes on goods.

In the following sentences, the majority judgment explains that the defendant and South Australia had accepted that a tax that fell on the:

importation of goods or on the local production or manufacture of goods would be –

an excise.

GORDON J: That was the narrow view.

MS ORR: Yes, and presumably on the basis that the first would be a customs duty and the second would be an excise duty, but, however, so the submission went, when a tax was imposed “indifferently on all goods”, rather than being imposed solely on imported goods or solely on locally produced goods, it was outside section 90. That was the submission that was being addressed in this paragraph, and at the top of page 590, the majority rejected that submission. In the majority’s view, an inland tax on certain types of dealings with goods could constitute an excise whether or not it applied equally to imported and locally produced goods. So, read in context, we say it is clear that that is what was meant by the characterisation of section 90 in the following sentence “as exhausting the categories of taxes on goods”.

What was meant is that section 90 covers, firstly, the category of tax that falls only imported goods, which would be a customs duty. Secondly, the category of tax that falls only on locally produced goods – which would be an excise. And thirdly, the category of tax that falls indiscriminately on both imported and locally produced goods, which would also be an excise. So, in other words, the majority was making clear in this statement that there is no gap in section 90 into which indiscriminate taxes fall, so that a State cannot avoid the operation of section 90 by framing a tax so that it falls both on local and imported goods.

Their Honours were not saying, as the plaintiffs and the Commonwealth would have it, that a tax on any step taken in dealing with goods is an excise. In fact, by going on to identify a list of specific steps in respect of which a tax on goods could be an excise: production, manufacture, distribution and sale, their Honours were saying exactly the opposite, and there would have been no need, we say, for their Honours to carve out the step of consuming a good or for them to list the specific steps of production, manufacture, sale and distribution if their intention was the intention that the plaintiffs advance, which is to pronounce that inland taxes on every step taken in connection with a good was now to be understood as an excise.

So that, we say, when the paragraph is read as a whole and the submission that is being responded to is understood, allows the Court to understand the meaning of the sentence to which much weight is given in the plaintiffs’ and the Commonwealth’s submissions.

STEWARD J: It used to be a common statement before Capital Duplicators in this Court to say that not every tax on goods is an excise. You are saying that that is preserved still within Capital Duplicators?

MS ORR: Yes. But the Court did not take the point any further in Ha. At page 488 of Ha – I do not need to take the Court to it, the majority simply quoted the whole of the relevant paragraph from Capital Duplicators, including the important context that I have taken the Court to now from the beginning of the paragraph, showing that the Court’s reasoning was a response to the submission that taxes imposed indifferently on all goods, locally and foreign produced, were outside section 90. So, in neither of the cases did the Court find that duties of excise meant that every tax on inland goods regardless of the step which attracts the tax. That submission put against us, we say, should be rejected.

Then the final criticism of Dickenson’s Arcade that is made by the plaintiffs and the Commonwealth that I want to address as a preliminary matter has two parts. The first aspect of the criticism is that Justice Dixon’s exclusion of consumption taxes from the concept of an excise in Parton was motivated solely by the Privy Council’s decision in Atlantic Smoke Shops. The second is that the reasoning of the majority in Dickenson’s Arcade was the result of this – what is described as unwarranted deference that Justice Dixon is said to have given to Atlantic Smoke Shops in Parton.

I want to start with the first aspect of that criticism, and we say that on a fair reading of Parton it cannot be sustained, and I will ask your Honours to turn up Parton at volume 6, tab 33 to explain why that is so. If your Honours could start at page 259, page 259 involves an identification by Justice Dixon of a number of considerations that he regarded as positive indicia of an excise, including that this was a trading tax, that it was a sales tax, that it fell within the Oxford English Dictionary of excise, that the concept fell within. So, having identified those positive indicia on the bulk of that page, his Honour says at the bottom of the page:

Only if the conception of what is an excise is limited by the condition that the tax must be levied on the manufacturer, that is to say upon the goods while they are still in his hands, can I see any escape from the conclusion that the levy of the contribution is an excise.

So, it looked like an excise and the submission that his Honour was grappling with was, but it is not an excise because it was not imposed on the manufacturer, and it must be. Justice Dixon then said in the next paragraph on page 260:

I cannot adopt the view that this is an essential feature of the conception. What probably is essential is that it should be a tax upon goods before they reach the consumer.

Now, the basis for that conclusion appears in the remainder of the paragraph. So, after a reference to the contrary view which had been taken by Justice Higgins in Commonwealth Oil Refineries – you Honour will see a reference to that in the next part of the paragraph – his Honour then set out, or rather assumed, what has since come to be recognised as the purpose of section 90. His Honour said:

In making the power of the Parliament of the Commonwealth to impose duties of customs and of excise exclusive it may be assumed that it was intended to give the Parliament a real control of the taxation of commodities and to ensure that the execution of whatever policy it adopted should not be hampered or defeated by State action.

I will briefly pause there to note that that passage was, of course, affirmed by the Court in both Capital Duplicators and Ha, and we are prepared to proceed in this part of our case on the basis that that is a correct statement of the purpose of section 90. His Honour then, having identified that purpose, said:

A tax upon a commodity at any point in the course of distribution before it reaches the consumer produces the same effect as a tax upon its manufacture or production.

When that paragraph is read, as a whole, it is clear that his Honour reached the view that consumption taxes were not excises because they could not be said to have the same effect as taxes imposed on goods before they reach consumers – whether imposed on manufacture, production or distribution. That matter was important because of the purpose of section 90, which drew attention to the effect of State action on hampering or defeating Commonwealth policy. His Honour made no reference here to Atlantic Smoke Shops – I am going to come to the fact that, of course, on the next page he did refer to it. But our submission is that this is a chain of reasoning – the principal chain of reasoning that his Honour adopted in excluding consumption taxes from the concept of an excise.

His Honour, of course, went on, on page 261, to acknowledge – as he needed to – that this was a different view of excise to the one that he had previously taken in Matthews, which he then sets out – his Matthews explanation is set out at the top of page 261. In that same paragraph, his Honour said that:

It is probably a safe inference from Atlantic Smoke Shops . . . that a tax on . . . consumption cannot be an excise.

And that Atlantic Smoke Shops:

perhaps makes it necessary . . . to modify –

that position that his Honour had expressed in Matthews. But, in our submission, fairly read, his Honour had already expressed an independent basis – a basis that has come to be adopted in the cases – for reaching the conclusion that a consumption tax is not an excise, on the previous page, without any reference to Privy Council authority.

Can I pause there, briefly, to note that Justice Dixon did not provide any pinpoint to a passage in Atlantic Smoke Shops that he regarded as relevant, but the part that we submit is most directly relevant, and which Justice Gibbs in Dickenson’s Arcade took Justice Dixon to have been referring to here, is set out – I will take your Honours to the passage in Justice Gibbs’ judgment in Dickenson’s Arcade. If your Honours could turn that up, at volume 4, tab 21, and turn to page 221.

Your Honours will see on page 220 that Justice Gibbs’ treatment of Atlantic Smoke Shops begins in the middle of that page, on page 220. Then, at the bottom of the page, Justice Gibbs noted that in the course of discussion in Atlantic Smoke Shops, their Lordships had said:

“‘Excise’ is a word of vague and somewhat ambiguous meaning.

Your Honours will recall being taken to this same passage in Atlantic Smoke Shops by the plaintiffs yesterday:

“‘Excise’ is a word of vague and somewhat ambiguous meaning. Dr. Johnson’s famous definition in his dictionary is distinguished by acerbity rather than precision. The word is usually (though by no means always) employed to indicate a duty imposed on home‑manufactured articles in the course of manufacture before they reach the consumer. So regarded, an excise duty is plainly indirect.”

Now, we accept that Atlantic Smoke Shops was decided in a very different constitutional setting to that in Australia, and caution therefore needed to be taken in drawing principles from it, but, in our submission, if this is the passage on which Justice Dixon was relying – as Justice Gibbs believed it was – his Honour’s view as to the exclusion of consumption taxes could have been based either upon the definition of excise provided:

usually . . . a duty imposed on home‑manufactured articles in the course of manufacture before they reach the consumer.

or upon the statement in the last sentence that an excise was plainly an indirect tax, in circumstances where a consumption tax is a direct tax. But whichever of those aspects of Atlantic Smoke Shops his Honour found compelling, neither was out of step with Australian jurisprudence at that time that Parton was decided. We say that the criticism that has been levied against Justice Dixon for referring to Atlantic Smoke Shops may well therefore be overstated. Our core response ‑ ‑ ‑

KIEFEL CJ: Do you think Justice Gibbs drew a wrong inference about the reasons Justice Dixon gave in Parton?

MS ORR: An incomplete reason, we would say, your Honour, rather than wrong. There is no doubt ‑ ‑ ‑

KIEFEL CJ: Justice Gibbs was not the only justice of this Court to think that that was the motivating reason.

MS ORR: No. We accept that, your Honour, and I have attempted to mount an argument that that criticism – when your Honours look at the relevant parts of Atlantic Smoke Shops – what appears to be the relevant part may be unduly harsh. But I do not want that point to detract from the core submission that we make. We felt that it was important to draw your Honours to this point. The core submission that we make – the core response we make to the suggestion that Justice Dixon was motivated in Parton solely by the decision in Atlantic Smoke Shops is that a close reading of his Honour’s reasons does not support that conclusion, because his Honour had already expressed an independent basis for reaching that conclusion that consumption taxes were not an excise.

STEWARD J: Ms Solicitor, can I ask you a question. The passage you took us to in Parton is Justice Dixon’s explanation for why the concept of an excise had to be expanded beyond Peterswald. And the reason given – it is very clear – is because any tax on the goods before it reaches a consumer produces the same effect.

MS ORR: Yes.

STEWARD J: Are there any judgments of this Court that say that a tax on consumption would produce the same effect as a tax on manufacture?

MS ORR: No.

STEWARD J: I am thinking here potentially of Justice McTiernan who always would have a strong view about this issue, but is there anything in any of the authorities which can support the next proposition down, as it were?

MS ORR: My answer is no, your Honour. In giving that answer, I do not disregard the fact that there are statements such as those made by Justice Dawson querying the logicality of drawing the line here. But I think your Honour’s question is a different one, were there any ‑ ‑ ‑

STEWARD J: It is, which is, it is specifically focusing on whether a tax on consumption produces the same effect as a tax on manufacture, and thus could be conceived as an excise.

MS ORR: My answer, your Honour – and I stand to be corrected – but my answer is no, there is nothing in the authorities where anyone has decided what again, at the risk of overusing a characterisation, would be a very large question, we say, that to attribute, to say, to draw out from the idea that taxes on sale and distribution have the same effect as taxes on production and manufacture – to draw out from that that taxes on consumption also have the same effect, we say that there is no statement to that effect in the authorities. That is a very large plank of the case put against us, that your Honours should accept that it is the same effect for consumption taxes as it is for production, manufacture, distribution and sale.

GAGELER J: Do you know which was the earliest case to hold that a tax on a retail sale could be an excise?

MS ORR: I am thinking about whether it is Parton itself, your Honour, because it is a distribution tax. It probably does not quite fit. But could I take that under consideration and give your Honour a firmer answer to that question? This is certainly the case, as his Honour Justice Steward pointed out, where the submission is put that it should be extended beyond production and manufacture to distribution, and that was accepted in this case, but perhaps that does not quite answer your Honour Justice Gageler’s question. It depends on the characterisation of a retail sale.

STEWARD J: I may have misheard Justice Gageler’s question, but did not Justice Mason characterise the regulations in Dickenson’s as effectively giving rise to a tax on a retail sale by the retailer of the tobacco?

MS ORR: Yes.

STEWARD J: Because they collected it.

MS ORR: There was a characterisation by some judges in Dickenson’s Arcade of what was otherwise accepted to be a consumption tax as a tax on sale, but I do wonder if there was something earlier than that.

GORDON J: The debate at the time was – and this, I think, is directed at your question about the assumption being drawn that Chief Justice Gibbs identified where one says, well, listen, I can identify these input costs – which is picking up Justice Edelman’s point – because I can identify them and I can draw the conclusion, consistent with human experience, that they are going to affect retail sale. They are going to affect the price at which it gets into the hands of the consumer, and so it was artificial to take one or two steps of production and manufacture and not recognise that it was going to affect other steps.

MS ORR: Yes, because on the supply side, all steps were capable of being seen in that way.

STEWARD J: And as a trading tax, each businessperson would want to recover and pass on the costs.

MS ORR: Yes, and they have the ability to do that by immediately factoring that cost into the price of the goods, which is not possible when the tax is on use once the good has ceased to be something making its way to the market.

EDELMAN J: It is not always possible on the supply side either, if you have one party in a chain of supply who has no ability to adjust their prices for sale.

MS ORR: Yes, that is true. But there is a far more direct relationship in terms of the ability to factor that into the price on the supply side, with exceptions perhaps where it cannot be quantified or it is too many steps removed.

EDELMAN J: This may just be one of the difficulties with judges hiding economic judgments under language of natural tendency.

MS ORR: So, having taken your Honours through Parton in that way, and the references to Atlantic Smoke Shops, I have dealt with the first aspect of the two-part criticisms about Justice Dixon. The answer I have given to that criticism, we say, undermines the premise of the second part of our opponent’s criticism because it cannot be said that the reasoning of the majority in Dickenson’s Arcade was the result, as is said against us, on a single occasion of unwarranted deference being afforded to Atlantic Smoke Shops, if Parton was not decided solely on the basis of that authority.

But, in any event, as your Honours will see when I come to the second John factor and the Dickenson’s Arcade judgments, in Dickenson’s Arcade, each of Justice Menzies, Gibbs, Stephen, and Mason reached the view that a tax on consumption of goods is not an excise, having undertaken for themselves an orthodox constitutional analysis of section 90 and considering the merits of that view for themselves. So, those were the points that I wanted to deal with that are put directly against us, before I deal with the John factors, in relation to the reopening application.

So, commencing with the first John factor, that of course calls for an assessment of whether Dickenson’s Arcade rests upon a principle carefully worked out following a significant succession of cases. And the principle that a consumption tax is not an excise was first articulated in the Australian context by Justice Dixon in Parton, but of course it was subsequently embraced by either the entirety of the Court or a majority of the Court in a number of cases prior to Dickenson’s Arcade, including Dennis Hotels, Bolton v Madsen, Anderson’s Case, and Chamberlain Industries.

I want to make very clear at the outset that I do not say that those cases involve detailed consideration of the question of whether a consumption tax is an excise, and I do not propose to take the Court to any of those judgments. But I do, instead, want to provide references to the parts of those judgments in which numerous members of this Court in the 25 years prior to Dickenson’s Arcade nonetheless affirmed a concept of an excise duty that covered only taxes on goods before they reached the hands of the consumer. Because the John factor – the first John factor – does require consideration of what has come before the decision sought to be reopened.

And the judges who affirmed the exclusion of consumption taxes in that 25 year period were Justices Dixon, Kitto, Taylor, Menzies, Fullagar, Windeyer, Owen, Walsh, and Chief Justice Barwick. And the affirmation by those judges of that concept occurred in at least five cases: Parton (1949); Dennis Hotels (1960); Bolton v Madsen (1963), in the unanimous judgement; Anderson’s v Victoria (1964); and Western Australia v Chamberlain (1970).

And in the cases that came after Bolton v Madsen, it was the unanimous statement that duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers that came to be what was frequently cited and applied. And that number of cases rises to six, if one adds in Matthews v Chicory Marketing Board, in which the status of consumption taxes was first squarely considered. That was where the topic came up for the first time. And seven, if one adds in – as Justices Kitto and Menzies did in Dennis Hotels – Browns Transport v Kropp.

As I have said, I do not make the case that there was a detailed consideration of whether it was correct to exclude consumption taxes in those cases. But I do make the point that many of those judgments involved a reappraisal of the authorities on section 90 as well as the provision’s purpose and its practical operation. And, by the later decisions in that period, certainly from Bolton onwards, the view that an excise was a tax on goods up until they reached the hands of consumers, became the consistent position of a majority of justices on the court. That was what led Justice Gibbs to observe in Dickenson’s Arcade, that since Parton no member of the Court has dissented from and almost every member who has had occasion to discuss the matter has expressly affirmed the proposition that a tax imposed on consumption is not a duty of excise. The page reference for that passage is 221 in Dickenson’s Arcade.

Dickenson’s Arcade, of course, was itself decided in 1974 and, as I have mentioned already in that case, five of the six judges constituting the Court expressly, and, we say, authoritatively affirmed that a tax on consumption is not a duty of excise. And I will come to Dickenson’s Arcade shortly in the context of the second John factor.

We do say it is also relevant to the first John factor that since Dickenson’s Arcade, challenges to Dickenson’s Arcade have been made and rejected by the court, in total on five occasions. The five occasions are HC Sleigh, Evda Nominees, Philip Morris, Capital Duplicators and Ha. And whilst two of those five challenges, we accept, were framed in a way that did not challenge the correctness of the consumption tax holding, three of those challenges were framed sufficiently widely that it was necessary for the Court to consider and engage with the nature and scope of section 90 more broadly, including the principle that a consumption tax is not an excise.

Those three cases were Philip Morris, Capital Duplicators and Ha. On none of those occasions did the court consider it appropriate or necessary to overturn the consumption tax holding. The principle for which Dickenson’s Arcade stands therefore not only followed a significant succession of cases but has been recognised, and the Court has also refused to depart from it, in a subsequent succession of cases. So, we submit that the first John factor weighs strongly against the grant of leave to reopen Dickenson’s Arcade.

Can I just, in connection with that submission about the trajectory of the authorities, make the point that yesterday Mr Merkel for the plaintiff submitted twice in, we say, quite stark terms that in “judgment after judgment” it had been said that consumption taxes had the “same natural and general tendency” as taxes on sale and distribution:

because it is a burden imposed on demand for the goods by reason of an increased cost.

There is a reference at page 17 of yesterday’s transcript. We submit that that is not a correct statement of the jurisprudence.

We have only been able to identify two judgments in which statements going anywhere near that sort of concept were made, and, as I said earlier in answer to your Honour Justice Steward’s question, one of them is the dissenting judgment of Justice Dawson in Capital Duplicators. There are also some comments that I will come to deal with in more detail in Dickenson’s Arcade made by some of the judges.

EDELMAN J: Are you going to come at some stage to whether the statement is right?

MS ORR: Yes, yes. I am sorry, I do feel that I need to deal with this ‑ ‑ ‑

EDELMAN J: Certainly.

MS ORR: ‑ ‑ ‑ as the reopening application first, and then if your Honours are against me and decide that the decision needs to be reopened, I propose to make detailed submissions about why it should be affirmed.

Now, could I turn then – I will try and move reasonably quickly through the John factors, but I do not want to move too quickly because they have not, we say, been given sufficient attention in the submissions that are made against us, and we say that the Court does need to engage with the John factors before deciding to reopen Dickenson’s Arcade.

So, the second John factor calls for an assessment of the degrees of difference in the reasoning in the case that is sought to be overturned, and we have accepted in our written submissions that the judgments of those who held that a consumption tax was not an excise did differ in some respects. There are differences of expression and emphasis of the kind that one would expect to see in circumstances where each of those Judges wrote separately. The five of the six judges constituting the Court in that case who held that a consumption tax was not a duty of excise were Chief Justice Barwick and Justices Menzies, Gibbs, Stephen and Mason.

With the exception of Chief Justice Barwick, whose reasons are somewhat distinct, we say there are common core aspects to the reasons of each of the other four judges and those common aspects are, firstly, the significance that they each accorded to the text of section 90. Secondly, the significance that they accorded to the function of section 90 in effecting a distribution of powers between the Commonwealth and the States. Thirdly, the fact that the exclusion of consumption taxes from the concept of an excise was a matter on which unanimity had been reached in previous decisions.

There is no doubt that their Honours had regard to previous authority in reaching their conclusions in Dickenson’s Arcade, including Bolton v Madsen, but there is also, we say, no doubt that they, in addition to considering that authority, reconsidered the question for themselves.
And I propose to take the Court to the reasons of those judges. I hope reasonably briefly. I do want to draw attention to those commonalities.

If we could start with Justice Menzies – so, tab 21, Dickenson’s Arcade, if we could start at page 209. Could I make an observation at the outset before we move to each of these judgments? There was a strong flavour in the journey through these judgments that the Commonwealth Solicitor‑General engaged in – criterion of liability was focused on by the Commonwealth Solicitor-General, and I think the underlying submission is that Dickenson’s Arcade can be disregarded because it is infected in some way by criterion of liability reasoning. And I do want to, at the risk of labouring the point, make again the point at the outset that the criterion of liability approach is relevant only to the proper characterisation of the charge in issue in the proceeding so, in Dickenson’s Arcade, it was relevant to whether Part II of the Act in fact imposed a tax on consumption.

That is where the criterion of liability approach comes in, because it is a methodology, it is a methodology that is about looking only at the statute to assess whether an exaction meets the criteria for being an excise. It says nothing about what those criteria are. It is not a statement of principle; it is a methodology for applying the principle. And that is an important point, because that means that the subsequent abandonment of the criterion of liability methodology as the exclusive methodology for answering the question of whether a tax meets the criteria of being an excise does not infect the reasoning in Dickenson’s Arcade to the principle that a consumption tax is not an excise.

The two are distinct and, with respect, we feel that they were blurred in the submissions that were made by the Commonwealth as your Honours were taken through these judgments. So again, if I could start with Justice Menzies, and I appreciate that your Honours have been taken to a number of these passages already, but your Honours will see that his Honour commenced his examination of the meaning of excise at page 209 and about a third of the way down the page, as the Commonwealth Solicitor‑General took you to, his Honour said that:

the unanimous decision of the Court in Bolton v. Madsen has established quite definitely that “for constitutional purposes duties of excise are taxes directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers” .

His Honour then noted that Bolton had been accepted and applied in Anderson’s Case and Chamberlain before concluding that:

A tax upon consumption is, therefore, not a duty of excise.

We say that, while that provided a basis for his Honour to hold that Part II read with the regulations imposed an excise, his Honour went on to say more about section 90 in the context of considering Part III of the Act at pages 212 to 213. I think these were the passages that your Honour Justice Steward had in mind this morning. And there, having undertaken a brief analysis of constitutional text and context, his Honour expressed the view, about 10 lines from the top of page 213, that the subject matter of section 90:

is not indirect taxation nor control of the economy of Australia. A wide conception of what is a duty on production has eventually been established but that conception is still confined to a tax directly related to goods imposed at some step of their production or distribution.

And after referring once again with approval to Bolton v Madsen, and also referring with approval to Justice Kitto’s formulation of an excise in Dennis Hotels, his Honour emphasised that:

A tax falling within these formulations is a duty of excise; a tax which does not so fall is not a duty of excise notwithstanding that it may be indirect and may affect the economy.

So, we say that influenced both by precedent, but also by constitutional text and context, his Honour reached his own view that consumption taxes were not excises. Justice Gibbs’ reasons contain the most detailed consideration of the meaning of “excise” in Dickenson’s Arcade. It was suggested that Justice Gibbs was very largely influenced by precedent, by following authority and, with respect, if Justice Gibbs had wanted to write a judgment that made clear that he was reaching the conclusion that a consumption tax was not an excise because he was following authority, he need not have written such a lengthy judgment dealing with, we say, comprehensively, a number of threads of reasoning as to why a consumption tax should be excluded from the conception of an excise.

GAGELER J: I am just trying to understand your point about Justice Menzies. Is it part of your submission that what his Honour said at page 213 has survived Ha? I can understand it in its own terms, but is that reasoning that can now be accepted?

MS ORR: Well, to the extent that his Honour relied on an indirect or direct tax distinction, we accept that that has fallen out of favour. But his Honour is considering the effect on the economy in the final part of that passage and at the top of that page he is doing a textual analysis of section 90 that we say does survive. He is ‑ ‑ ‑

GAGELER J: He seems to be linking it to a tax on production.

MS ORR: Yes, there is an element that is ‑ ‑ ‑

GAGELER J: That seems to be the gist of what he is saying. I just find it difficult to reconcile with ‑ ‑ ‑

MS ORR: We accept that that is an element, your Honour, but he is also, we say, dealing with the colocation of duties of customs and excise in the Constitution – I accept that that supports the linkage to production and manufacture, but I think the point that we want to emphasise at this stage is that this involves independent consideration of the question of whether a consumption tax is an excise. It does involve orthodox constitutional method – focus on – and this is of course a submission that we are making about commonalities between the reasoning of the judges. I do not suggest that they did all reason in exactly the same way, but there are important strands to the reasoning that we say you can see across each of these judgments.

STEWARD J: I must say, I read, though, that passage as being really analogous to what Justice Mason said because Justice Menzies goes on to say that we have exported out the concept from production to any step in distribution, but the point he was making is one of proximity ‑ ‑ ‑

MS ORR: Yes.

STEWARD J: ‑ ‑ ‑ that you commence with the concept of an excise being about production and manufacture, and the further away you get from that, the less likely you are an excise.

MS ORR: Yes. We would accept that, your Honour.

GAGELER J: Do you assert that it is consistent with Ha?

MS ORR: The rationale that emerges more strongly in Capital Duplicators and Ha for the extension through to sale and distribution is the analysis of effect – effect of taxes on distribution and sale being the equivalent to taxes on production and manufacture. There are elements of that within this analysis but there are other elements as well, we accept that.

GORDON J: Just so I understand it, the commonality here is, we start with text, we extend what has been, up until at least some of the earlier cases, a focus on production and manufacture to recognise that the effect on the economy in relation to those concepts must extend to include sale and distribution ‑ ‑ ‑

MS ORR: Yes.

GORDON J: What else do we get out of this passage?

MS ORR: No more than that, your Honour.

GORDON J: Thank you. And you say that is consistent with Ha, to that extent?

MS ORR: Elements of this are consistent with Ha. Yes, I do.

GORDON J: That is those two propositions being the commonality you seek to draw from these passages.

MS ORR: Yes, yes.

GLEESON J: Can I just seek to clarify that last point. Justice Menzies says the subject matter is not indirect taxation nor control of the economy. He then goes on to say that the conception is confined to a tax directly related to goods imposed at some step of their production on distribution. So, what is your second point about the economy?

MS ORR: But I think that needs to be read, your Honour, with what follows from that, by reference to Justice Kitto in Dennis Hotels and Bolton v Madsen. I do not think his Honour stops at that point.

GORDON J: Sorry, I misunderstood then. I thought your point was, he was saying the subject matter may not be, but by the time you get to the end of the paragraph he in effect summarises the formulation which is now adopted by saying ‑ ‑ ‑

MS ORR: That is right. But the subject matter – and I think this is a point made against us – that reference to subject matter – I think all his Honour is saying there is that the subject matter is custom duties, excise duties and bounties. The subject matter is not indirect taxation. So, I do not think that our friends can take as much from that reference as they seek to in their submissions.

But if I could turn to Justice Gibbs, could I ask the Court to look at page 217, and your Honours will see that Justice Gibbs commenced by noting, about two‑thirds of the way down the page, that:

The question whether a duty imposed on the consumption of goods is a duty of excise has never been the subject of any direct decision by this Court.

His Honour went on to note that if the original conception of excise in Peterswald had prevailed:

it would have been clear that a duty imposed on consumption was not an excise.

But his Honour recognised at the top of page 218, that the Peterswald:

description of “excise” . . . has been expanded, or perhaps eroded, by later decisions.

A significant part of his Honour’s reasons was then spent identifying:

three different lines of thought which led to the conclusion that was finally reached by the majority of the Court in Parton –

That is the language of Justice Gibbs – that taxes on the distribution of goods, not merely on production or manufacture, could be an excise. The first line of thought was captured by a passage from the reasons of Justices Rich and Williams in Parton who said, to paraphrase, that a tax can be on production and manufacture whenever it is imposed in respect of a dealing with the good, provided that the ultimate costs of the tax will be passed on to the consumer. Justice Gibbs noted that the indirect tax reasoning, which underpinned that first line of thought, had become:

more doubtful in the light of later discussion –

His Honour then said that had it not been for that style of reasoning, the first line of thought:

could have been regarded as leading logically to the conclusion that a tax on consumption is an excise.

I will say something briefly about the second line of thought and then I will come back to that passage. The second line of though was identified on page 219. It was the notion that:

“A tax upon a commodity at any point . . . before it reaches the consumer produces the same effect as a tax upon its manufacture or production.

In a passage on which the Commonwealth relies, Justice Gibbs said the following about this line of thought:

if it is permissible to consider the economic effect of the tax, it is impossible, in my opinion, to draw a line between the last retail sale and the act of consumption. A tax on consumption might produce exactly the same economic effect on production and manufacture as would a tax on the last retail sale. The power of the Commonwealth Parliament to tax commodities would be incomplete, and its fiscal policies possibly liable to some frustration, if the power did not extend to taxes on consumption.

Now, the comments of Justice Gibbs on the first two lines of thought – which I have just taken your Honours to – we say, mean what they say – that is, that if one accepts the starting premise of either line of thought, it is difficult to see why one would draw the line at consumption. But, critically, it becomes very clear from Justice Gibbs’ judgment that his Honour does not embrace either starting premise and, rather, at page 220, his Honour repeats again that he is not bound by any direct decision of the Court and then proceeds, over the next several pages, to explain the reasons why his Honour reached the view for himself that a consumption tax is not an excise.

And at page 221, commencing in the second paragraph, his Honour gave considerable weight to the views expressed on the status of consumption taxes in the decisions of the Court since Parton, including Dennis Hotels, Bolton, Anderson’s Case, and Chamberlain Industries. Indeed, his Honour said, in the last few lines on page 221, that:

the very greatest weight should be given to the fact that on this issue unanimity has been reached after a fluctuation of judicial opinion.

So, there is no doubt that that was a strand – precedent was a strand of his Honour’s reasoning. But there were other strands. From the top of page 222, his Honour considered several dictionary definitions of excise and concluded, about a third of the way down that page that the:

established usage –

of “excise”:

(notwithstanding some divagations) favours the conclusion that a tax on the consumption of goods is not a duty of excise within the meaning of that expression as used in s. 90 –

And a few lines later, a third strand emerges where his Honour observed that his views as to the meaning of the term were supported by his understanding of constitutional context, and particularly the balance to be struck by section 90. His Honour said that:

The Constitution is a federal constitution, and s. 90 is intended to effect a distribution of the power to impose taxation between the Commonwealth and the States.

Reading Justice Gibbs’ reasons as a whole, we accept that there is no question that his Honour expressed some doubt about the trajectory of the section 90 jurisprudence between Peterswald and Parton, particularly at pages 218 and 219. But that should not be read isolated from, in particular, pages 222 to 223 of the judgment, where his Honour clearly finds that the established usage of excise, taken with the federal nature of the Constitution, provides a safe basis for concluding that section 90 does not deny the State’s power to impose taxes on consumption.

Justice Stephen’s analysis is relatively concise. His Honour’s analysis commenced at 229 – I am sorry, at 229 the analysis commences with and returns to, at 231, the fact that consumption taxes were excluded from the concept of excise by Justice Dixon in Parton, and that that exclusion was endorsed by the Court in Bolton v Madsen. At the top of page 230 his Honour emphasised that since Bolton, a meaning of excise that excluded consumption taxes:

has not been departed from in any relevant respect and the subsequent judgments of this Court have reflected the view that what is for constitutional purposes a duty of excise stops short of a tax imposed upon the act of consumption.

And in the balance of his Honour’s reasons, Justice Stephen turned his mind to whether there was any reason in principle why the view reached in the authority should be departed from. And his Honour firstly said, in effect, that he did not find the meaning of the term illuminating at page 230, but his Honour emphasised the importance of maintaining certainty about the position of consumption taxes, seemingly given the federal compact. His Honour said, about halfway down page 230:

The degree of certainty which has been conferred upon the phrase, at least in relation to that point on the journey of goods from producer to consumer beyond which a tax is no longer viewed as an excise, has been hard won and should not lightly be disturbed in this important aspect of constitutional law concerned with the delineation of the boundary between State and federal legislative competence in the taxation of the citizen.

Being satisfied that the meaning of “excise” as expressed in authorities such as Bolton, that it had been expressed in that way and that there were, in his Honour’s terms:

No convincing reasons . . . advanced before us for the adoption now of any new meaning –

of that term. At pages 230 to 231 Justice Stephen found that the Bolton formulation concluded the present question in favour of the respondents, and we also note the passages at page 231 – the further passages that were the subject of discussion between your Honour Justice Steward and the Commonwealth Solicitor‑General this morning.

Justice Mason is the final of the four majority justices whose reasons we say share common aspects. Justice Mason’s analysis is also relatively concise. At page 238 Justice Mason begins by tracing through some of authorities – Peterswald, Commonwealth Oil Refiners, and Parton – before coming to Bolton, and relying on the Bolton formulation, his Honour says, towards the bottom of the page, that:

inevitably as it may seem, the Court has accepted that the concept of an excise extends to a tax on the sale of goods, levied on a person who is not the producer or manufacturer, at least when the tax is “directly related to goods imposed at some step in their production or distribution before they reach the hands of consumers” –

And at the bottom of page 238 and over to 239, by reference to the purpose of section 90 articulated by Justice Dixon in Parton, Justice Mason recognised that:

the absence of a power to control taxes on the consumption of goods . . . might be thought perhaps to constitute an unacceptable limitation on the power of control which it was the purpose of the section to repose in the Parliament.

But, despite that, at page 239, at the top of the page, his Honour observed that with the exception of the judgment in Matthews:

it has not been suggested that an excise extends to a tax on consumption of goods –

While the Commonwealth seeks to rely on that passage to suggest that Justice Mason held doubts about the conclusion that a consumption tax was not an excise, we submit that, read fairly, Justice Mason was doing no more than recognising a potential concern, and that his Honour’s language indicates that it was not one that he shared because, having identified that potential concern, in the second paragraph on page 239, his Honour went on to emphasise that the recent decisions of the Court all defined or described:

an excise duty in such terms as would exclude a tax imposed on goods after they have passed into the hands of a consumer –

Which Justice Mason said had to:

be regarded as establishing at this time that a tax on consumption of goods is not an excise.

But having expressed that view by reference to authority, his Honour then identified a further independent basis which supported the view that a consumption tax was not an excise, a basis that was sourced in constitutional text and context. Your Honour Justice Steward has drawn attention to that basis in the course of the hearing. Justice Mason said around the middle of page 239 that:

The justification for the restriction –

of Commonwealth legislative power, insofar as consumption taxes were excises, was:

evidently based on the notion that consumption is not sufficiently proximate to the production and manufacture of goods –

His Honour explained that the “concept of proximity” derived:

from the reference in s. 93 to “taxes paid on the production and manufacture of goods” and from the circumstance that s. 90 deals with bounties on production as well as duties of excise.

Now, I do not propose to take the Court to the reasons of Chief Justice Barwick in any detail because we accept that, fairly viewed, those reasons are somewhat distinct from the other four majority judges, but for completeness I do note that despite the misgivings that Chief Justice Barwick held about the logic of excluding consumption taxes from an excise conception, his Honour noted that he would accept the limitation in deference to the views expressed by the other Justices.

Now, in light of that exercise of viewing the judgments in Dickenson’s Arcade, our submission is that although there are some differences in the reasons of Justice Menzies, Stephen, Gibbs and Mason, there are core overlapping aspects to each of the reasons. Four of those judges, Justices Menzies, Gibbs, Stephen and Mason, analysed the text of section 90 and considered the position of section 90 in the wider context of Chapter IV of the Constitution. Each of the four judges took account of the function of section 90 in effecting a distribution of powers between the Commonwealth and States in a Federation, and each of the four judges placed significant weight on prior authority and in particular the unanimity that had been reached in the authorities.

As against those commonalities, the plaintiffs have identified in their written submissions three purported differences in the reasons of the majority judges which they say are material. They were not addressed orally, and we are content to rely on the detailed response to those that is provided in paragraph 17 of New South Wales’ written submissions and the higher level response that is provided in paragraph 26 of Tasmania’s written submissions.

But if we could just make two additional short points. In relation to paragraph 40.2 of the plaintiffs’ submissions we say that all five of the judges either accepted the purpose of section 90 identified by Justice Dixon in Parton, which was the case for Chief Justice Barwick and Justice Mason, or said nothing to the contrary to that purpose, which was the case for Justice Menzies, Justice Gibbs and Justice Stephen.

Secondly, in relation to the plaintiffs’ submission at 40.3 that Justice Stephen alone placed significance on the distinction between direct and indirect taxes, we make the point that Justice Stephen did not place any decisive significance on that distinction for the reasons explained in paragraph 17(d) of New South Wales’ submissions, but in addition and in any event, both Justice Gibbs and Justice Mason also acknowledged the relationship between the directness of a tax and whether it falls within the meaning of an excise, like Justice Stephen, without regarding it as decisive. While Justice Menzies rejected the notion that the indirectness of a tax was the sole criterion of relevance, his Honour did not suggest that it was a distinction that lacked utility altogether.

Now, that is all I wanted to say about the second John factor. And I think, in the interests of moving quickly through the submissions, I am content to rely on our written submissions in relation to the third John factor, that the submission that we respond to in writing in relation to the third John factor is the submission put against us, the only assertion of inconvenience put against us as a result of Dickenson’s Arcade is the emergence of a so-called anomaly, which we understand to be a discrepancy between the purpose of section 90 and its scope of operation.

And our position is that that anomaly does not make very much sense and we have analysed the purpose of section 90 as having remained materially unchanged since it was articulated by Justice Dixon in Parton. And we make points in response to that anomaly, which I think was not pressed orally, in our written submissions.

So, if I could move to the fourth John factor. Our submission is that the plaintiffs had not shown that Dickenson’s Arcade has not been independently acted on in a manner which militates against reconsideration. Now, yesterday, the plaintiffs accepted that they bore what Mr Lenehan called the persuasive onus in relation to their application to reopen Dickenson’s Arcade and, given that the plaintiffs are the moving party in respect of that application, we say that concession was correctly made.

And Williams (No 2) is an example of a case where the issue of onus was not directly an issue but the Court’s analysis, we say, of the John factors at paragraph 65 of that judgement reveals that their Honours there considered that the onus was on the Commonwealth, the moving party on the John application, to establish that leave should be granted to reopen Williams (No 1).

As to what that means in practice, it is clear that the plaintiffs must satisfy the Court that leave to reopen should be granted. And if they wish to do so without adducing any evidence in respect of the fourth John factor, then that is a matter for them, but in our submission, the plaintiffs ‑ ‑ ‑

KIEFEL CJ: You mean, just to take your fourth point, they have to establish that you have not legislated?

MS ORR: That we have not independently acted, which might involve – and we say does involve – legislation. This is, we say, an area where ‑ ‑ ‑

KIEFEL CJ: Or they could just assert it and then the onus would shift to you, the persuasive onus then would shift to you.

MS ORR: We do not accept that the persuasive owner shifts to us, we say that it is not enough for the plaintiff to make a bare assertion, as they do in their written submissions ‑ ‑ ‑

KIEFEL CJ: Well, how did they establish that you have not done anything?

MS ORR: Well, the assertion that they make, firstly, is that there is no decision of this Court in which the principle that a consumption tax is not an excise has been applied to uphold the validity of the consumption tax.

The first thing we say is that that does not take them very far. The plaintiffs have chosen not to make use of the special case procedure to show that Dickenson’s Arcade has not been independently acted upon. And, can I say, it is not surprising that the plaintiffs were not able to find any cases determined by the Court since Dickenson’s Arcade, in which consumption cases have been challenged on constitutional grounds.

KIEFEL CJ: But, Ms Solicitor, surely Victoria is in a position to point to at least a couple of examples of where there has been legislation that has been acted upon.

MS ORR: Yes, and sorry, I ‑ ‑ ‑

KIEFEL CJ: It is readily within ‑ ‑ ‑

MS ORR: I am coming to that. I am responding to, at the moment, 42.2 of the plaintiffs’ submissions, which is about cases. I want to come to legislation. So, the only point I want to make about the assertion that they make about cases is that it is entirely unsurprising that there are no cases about this, because since 1974 – when Dickenson’s Arcade was decided – there has been a binding majority decision of this Court making clear to potential litigants that such a challenge would fail – and, if one wants evidence that Dickenson’s Arcade has been relied on, you need to look at the State and Territory Statute books, not Law Reports.

Bearing that in mind, we explained in paragraph 28 of our written submissions – we gave a high‑level overview of the kinds of charges implemented by States and Territories, in addition to charges like the ZLEV charge, which might be viewed as taxes on goods after they reach the hands of consumers and which therefore might be vulnerable if Dickenson’s Arcade is reopened.

Of course, it is not possible for us to be exhaustive or specific about the laws that would be called into question if Dickenson’s Arcade was overturned, because that would depend on whether the settled position is replaced with the plaintiffs’ conception of an excise, the Commonwealth’s conception of an excise, or something else altogether.

EDELMAN J: Strictly, if you did bear the substantive onus to establish that, you would have to stand up and argue why all of your legislation – or particular pieces of legislation – are invalid.

MS ORR: Yes. And, as I said earlier, there are obvious concerns with requiring us in responding to a John application to advance a shopping list of legislation that, we say, is susceptible to challenge because it has been enacted in reliance on a ruling of this Court.

We say the bare assertions made by the plaintiffs are not enough. We say we have engaged materially with this factor by producing a list of the types of taxes that, we say, are potentially imperilled. And I have already dealt in some detail earlier today with one example on that list, which was the waste disposal levies. Your Honours Justice Gordon and Justice Steward referred to duties on transfer or conveyance of goods as part of dutiable transactions – those duties are provided for in Chapter 2 of the Duties Act. I understand that the position reached by Mr Lenehan after lunch yesterday was that such duties may already be excises by reason of the broad definition of excise in Ha – and independently of the question of whether consumption taxes are part of the conception. But, we submit that, at least insofar as those duties apply to the transfer of goods already in the hands of the consumer, a departure from Dickenson’s Arcade renders those vulnerable.

Another example that we gave in our list, in paragraph 28 of our submissions, was gaming machine levies, which are provided for in the Gambling Regulation Act 2003 (Vic). As we understand, all other States and Territories have similar taxes. The Victorian levies are imposed on the operator of the relevant venue on a monthly basis by reference to the net income generated by gaming machines – being a machine that is necessarily and solely used for the purpose of placing bets – and the tax is therefore closely connected with the use that is being made of the machine, both by players, by inserting money into the machine, and by the operator, on whom the tax falls, who is making the machine available to customers which, we say, necessarily involves a use of the machine. So, that is another example of a tax on the Statute books that, we say, is vulnerable if your Honours were to reopen Dickenson’s Arcade and overturn it.

STEWARD J: Would you say that a congestion tax might be imperilled by the plaintiff and the Commonwealth’s view of section 90? We do not have a congestion tax in Victoria, but it is often raised as a possibility.

MS ORR: Yes, I think I would say it is capable of being imperilled, your Honour.

GORDON J: Do you rely upon any of the other what I might call downstream effects? I had a look at the Gambling Regulation Act – which has been around, I think, probably since early 2000s, if my political history is any good – where it has downstream flows to mental health and community payments. Are they effects which are to be taken into account by us which are on the Statute book?

MS ORR: Yes. We say it is important for your Honours to consider the purpose that those imperilled statutes serve and if those statutes are rendered invalid by a decision of this Court, the consequences of rendering them invalid is part of your Honours’ consideration of whether the decisions should be reopened.

GORDON J: In your paragraph 20, you deal with dutiable transactions which I think is one of the things that was raised with you yesterday which you have just addressed.

MS ORR: Yes, your Honour.

GORDON J: “Motor vehicle duties and vehicle registration charges”.

MS ORR: Is this 28, your Honour?

GORDON J: I meant to say 28, I apologise. Not listed there are the tolls that are imposed which, on one view of the tax here, given the discussion I think you had with Justice Steward or it might have been with the other judges about the way in which you look at this tax which is imposed by the ZLEV Act, we have no evidence before us of anything about the arrangements in which the PPPs have been created in relation to those. So how do we deal with those kinds of issues? We just ignore them, do we? The impacts of those sort of commercial arrangements.

So, when we are talking about has it been acted upon, at the moment we are struggling on both sides of the record. We have nothing from the Commonwealth, but we also have very little from you to indicate what we should do with it other than to look at, as you would have it, the Statute book. And I accept in the Gambling Regulation Act from 2003 onwards one might be able to do that on the book but ‑ ‑ ‑

MS ORR: Yes. I think our submission is that it is the statutes, and an understanding of how these taxes operate, and why they are operating in this way, and the consequences of those taxes being invalidated to the extent that that can be discerned from the statute. That is what we ask the Court to take into account. And, as I said, we resist a treatment of this factor that would impose a burden on the respondent to a John application to provide detailed explanations of each statute enacted in reliance on particular decisions of this Court. That would be a very difficult development, if States needed to come to this Court with that sort of list in each of these circumstances.

We have attempted to do something that is materially the same, which is to identify broad categories of taxes, and I have taken the Court to the details of some of those taxes. But in circumstances where the burden, we say, still remains on the plaintiffs, and we have engaged by producing material by way of references to taxes, the fourth John factor we say does not weigh in the plaintiffs’ favour on this application.

EDELMAN J: Without obviously requiring you to make lengthy and substantive arguments about why your own legislation is invalid, what you have not done, though, is provide the reference to the type of statutes, or some types of statutes, within those broad areas. I do not think many of the other States have done that.

MS ORR: No, and we gave consideration to that, your Honour. We gave careful consideration to that. It was a matter – instructions were sought – your Honour can appreciate that there is a very high degree of reluctance for those within government to file submissions in this Court identifying particular statutory provisions that are, on the State’s case, imperilled.

GORDON J: I suppose one – is another answer – and I do not know the answer to this, but in some of the earlier authorities one can see a discussion by the Court of the balance that has been struck between Commonwealth and State. And a number of the judgments refer to the fact that not only has legislation been drafted, but in effect the relationship between the Commonwealth and the State on funding arrangements – not in the modern sense, I am putting that in what I will call the pre-modern view of funding arrangements between the Commonwealth and States – were established based upon what had been jurisprudence of the Court. We find no reference to that either.

MS ORR: No. No, your Honour.

GAGELER J: And it is in stark contrast to paragraph 60 of the special case, where we see exactly what was at stake for each of the States in quantitative terms in the decision in Ha. I mean, if this factor – maybe it just goes nowhere, maybe the factor is neutral.

MS ORR: Your Honour, that material is there because we accept that we bear the burden on that application and we have endeavoured – we have spent a considerable amount of time endeavouring to use the special case procedure to put material before the Court in support of our John application.

GAGELER J: But if you want to say we will be ruined because we have acted on this doctrine ‑ ‑ ‑

MS ORR: Yes.

GAGELER J: ‑ ‑ ‑ that is the sort of thing one would expect.

MS ORR: Well, that is what we are saying in our John application. The plaintiffs have not discharged the burden to say that on their John application, and we have ‑ ‑ ‑

KIEFEL CJ: So, really, you are proceeding upon the onus of proof position.

MS ORR: No, not ‑ ‑ ‑

KIEFEL CJ: Well, you either are or you are not.

MS ORR: Well, I say no, your Honour, because we have engaged with the matter by listing categories of taxes that are imperilled. We have not stood silent, we have provided information to the Court, but we do not say that by doing that we have displaced the onus and moved the onus across to us.

We have attempted to be of assistance to the Court, to have a constructive approach rather than just saying this is a matter for the plaintiffs to deal with, and they have said nothing and that is the end of the story. We have attempted to do that within the confines of instructions and protecting the government’s position on potentially invalid statutes. We have made a real effort, with respect, your Honour, to assist the Court on this factor.

GORDON J: Well, then, can I ask a follow-up question that was raised: what are we to make of, because there is no reference to the things that are set out in sections F in the special case book.

MS ORR: On this application, your Honour?

GORDON J: Just generally.

STEWARD J: Can I ask a more specific question about all of that, and that is: is it possible to infer from the special case that when the decision of this Court was handed down in Ha, and the States and the Commonwealth had to get together and work out what to do, they had to work out what to do based upon what Ha decided and what it did not decide.

MS ORR: Yes.

STEWARD J: And we had some emergency arrangements put in place. Then, following those emergency arrangements, we had the GST. And that was all premised – and the deal that was done with the States was all premised, as far as I can remember, on a belief in the state of the law as was described in Ha. Is that an inference we should draw, or that you ask us to draw?

MS ORR: In that part of our case, your Honour?

STEWARD J: Yes.

MS ORR: Yes.

STEWARD J: All right.

GORDON J: So, there are really two questions. I am sorry to go back to this.

MS ORR: Yes.

GORDON J: One is, in section F deals with, in effect, be very careful because this is what happened both before and after Ha.

MS ORR: Yes.

GORDON J: We do not have even, as I understand it, anything which is directed to that here. Then in the second part, as I read it – and maybe I am wrong – is it not, in effect, addressing the current arrangements? We have no submissions about the effect it would have on those arrangements other than are we to take judicial notice that it would be similar kinds of renegotiations both in terms of the financing arrangements between the Commonwealth and the State, the readjustment of the GST revenues, or are those matters entirely irrelevant?

MS ORR: Well, they are matters that I think, your Honour, I cannot make submissions about without knowing what this Court would replace the existing state of the law with. That is why we say it is very difficult to be definitive about precisely what would go wrong if your Honours overturned Dickenson’s Arcade because there are competing conceptions of an excise that are advanced in substitution for the Dickenson’s Arcade holding, and we have attempted to grapple with the sorts of charges that are potentially capable of falling within a competing conception.

GORDON J: So is it not possible to be more precise by saying if you adopt – let us take the range that has been proffered, and you outlined the range to us – you have the Commonwealth view, which on one view is, in their written submissions, a tax on goods, in a general sense connected to, using the language at page 300 and so on – not to say there is a range of charges that are currently at issue, or is that because you are not capable of doing it in the sense of politically capable?

MS ORR: Well, I think we have done that in paragraph 28. That is the range of charges that we say are in issue and are potentially imperilled by ‑ ‑ ‑

EDELMAN J: But without reference to any statutes. I mean, I appreciate the concern of the State, but, on the other hand, if your submissions are not accepted there may be, I think, hovering over the submission is the suggestion there may be, say, 20, 30 years of litigation. These statutes will be uncovered at some point.

MS ORR: Yes.

EDELMAN J: So, the need for the State to reserve its position is hard to see.

MS ORR: I do not think we are ‑ ‑ ‑

EDELMAN J: It is one thing for the State to say, look, we do not want to stand up and argue the minutiae of why we lose and why all of these particular pieces of legislation are invalid. It is another thing to say, well, here is a list of 60 statutes that may, arguably – depending upon the breadth of the conception of the consumption tax – be imperilled.

MS ORR: That, we say, would be to impose a very large burden on the respondent to a John application on this factor, a very large burden.

GAGELER J: What is the limitation period in Victoria for the recovery of invalid taxes?

MS ORR: I want to say six years, but I would like to check that, your Honour. I know that it is under sections 20A and 20B of the Limitations Act in Victoria, but could I seek confirmation of that?

GAGELER J: As I understand it, you are not really putting a quantitative argument. You are not really saying to us, this is going to cost a lot of money. You are saying there are, possibly, potentially – depending on future litigation – some other legislative schemes that might have to be abandoned or redesigned. Is that the way you are really putting it?

MS ORR: Yes, yes, it is.

GORDON J: Just so I am clear on that – I did not quite understand the question and that answer. Is that to say that there is no retrospective concern, only a prospective concern?

MS ORR: No, no, but the prospective action of bringing the litigation would reveal the retrospective concern.

GORDON J: When I read it, I thought there were three streams of concern. One was retrospective – things like Roxburgh Park and all of those kind of considerations ‑ ‑ ‑

MS ORR: Yes, yes.

GORDON J: ‑ ‑ ‑ unquantified. Second, current Statute book, litigation, challenges, what do we do about it? Then, the third was, probably, what I might describe as a higher level concern, and that is this revenue stream arrangements.

MS ORR: Yes, and I accept your Honours have no evidence about loss of revenue stream to the State. That is not part of the – we have not sought to quantify revenue streams flowing from these statutes and put evidence of that before your Honours.

GORDON J: So, is it – sorry to go on about this, I just want to make clear. So, these are the primary revenue‑raising sources available to the States and Territories. They are identified in the special case book, and they are the ones about which we are concerned.

MS ORR: I am sorry, I am hesitating, your Honour, because I am not sure that there is a relationship between the revenue streams identified in the special case book in support of our John application and these particular ‑ ‑ ‑

GORDON J: No, I am just dealing with Dickenson’s at the moment, trying to work out ‑ ‑ ‑

MS ORR: Yes. So, I do not think that anything about revenue streams in the special case book connects up with this argument.

GORDON J: I see. Thank you.

MS ORR: That material is all there in support of the other reopening application in our final part of our case. So, I do not think I can put the matter any more highly than that. As I said, we have sought to engage with this in a meaningful way. It is a matter for your Honour, I think, ultimately, whether you are satisfied by the way that we have done that. I am told, your Honour, that 12 months is the limitation period under those provisions.

Yes, I am sorry, Ms Zeleznikow reminds that there is one more thread to our points in this part of the case, which builds on a point made by the Commonwealth in their submissions about modern technology having the potential to create new ways of tracking consumption of goods and therefore, allowing taxes on consumption to be levied in circumstances that on present technology cannot be envisaged.

So, the Commonwealth has raised that point about the possibility that consumption taxes may become a more commonly used tax within the States on the basis of changes in technology, and we embrace that point. That is the case, that if it became easier with technological developments to track consumption and attach a charge to it, consumption taxes may form a larger part of the taxing statutes on the State’s books.

KIEFEL CJ: How does that feed in to the fourth Johns point?

MS ORR: It is relevant to the consequences of your Honours overturning Dickenson’s Arcade and removing ‑ ‑ ‑

KIEFEL CJ: But not in relation to the State. Not in relation to what the State has done in reliance upon Dickenson’s.

MS ORR: No, it is a prospective – it is in relation to the State’s capacity to do that in the future. That would be taken away if Dickenson’s Arcade was overruled, and we say it is relevant only for that narrow purpose.

STEWARD J: The one point you might want to check overnight – the effect of the plaintiffs’ submissions is that, leaving aside the use, a tax on the sale of all second-hand goods would be an excise. I think the Duties Act requires duty to be paid on the sale of cows, pigs, and goats. But I do not remember the detail, whether it is only the first retail sale or subsequent sales, or what have you.

MS ORR: In relation to cows, pigs, and goats, your Honour?

STEWARD J: Yes.

MS ORR: Yes, I am happy to look into that.

STEWARD J: You never know – Mr Lenehan may have told me that it has been repealed, but that is my memory.

MS ORR: And Mr Lenehan was correct about the repealing of the higher agreements. If I could, I would like to move to our third pathway to validity, which is the submission that Dickenson’s Arcade, if reopened, should be affirmed. There are four reasons why we say the central holding in Dickenson’s Arcade should be affirmed if your Honours do choose to reopen it. The first is that an excise ought to mean a tax on the production, manufacture, sale or distribution of goods and not a tax on consumption of goods because a duty of excise has long been understood, at its core, to be a tax on articles or integers of commerce.

This characterisation is referred to in the submissions of a number of the interveners in this proceeding, and it was also accepted yesterday by the Commonwealth as a relevant consideration when evaluating whether a tax is on goods. There are many, many cases in which judges of this Court have described the essence of an excise in this way. And I do not propose to go through all the references in detail, but I do want to mention four examples, and then deal with Ha in a little more detail.

The first example is Matthews. At page 301 in Matthews, Justice Dixon referred with approval to the Privy Council decision of Attorney-General of British Columbia v Kingcome Navigation Company, which had described excises in their essence as trading taxes on commodities. And when his Honour came to articulate his concept of an excise at page 304, he explained that it was a tax “upon goods” which meant that:

The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce.

And of course, as I have explained, his Honour subsequently excluded consumption taxes in Parton, but the idea that an excise is at its core, a tax on goods as articles of commerce ‑ ‑ ‑

KIEFEL CJ: Is that a reference to sale?

MS ORR: Is what a ‑ ‑ ‑

KIEFEL CJ: Sale as articles of commerce, something which is bought and sold.

MS ORR: Yes, that is one way that ‑ ‑ ‑

KIEFEL CJ: What else is it?

MS ORR: Well, it is an article of commerce, we say, when it is on its way to sale, when it is being produced and manufactured and distributed. It is all with a view to its finding a way to a market, ultimately for sale as a commodity on the market as an article of commerce. That is all part of a chain ‑ ‑ ‑

EDELMAN J: Distribution may be a market in itself and ‑ ‑ ‑

MS ORR: Yes, it might, your Honour, but it is all part of a chain of commerce that leads to the article entering a market for sale as an article of commerce.

STEWARD J: Do you say that Sir Owen Dixon’s concept of a consumption tax in that passage must be one that is closely related to the moment after sale because it has to be an article of commerce? So, for example, a tax on the purchaser of goods by reference to their value would be a consumption tax. It might be one on something which still has the character of an article of commerce as the end point but not 15 years of continuous ‑ ‑ ‑

MS ORR: Yes, your Honour. Yes, we agree with that.

STEWARD J: Of domestic cars.

MS ORR: Yes.

STEWARD J: Yes.

MS ORR: The second example ‑ ‑ ‑

EDELMAN J: So, is that proposition that you are agreeing to, though, then one that accepts that consumption of goods may fall within the definition of excise, for example, if it were properly characterised as a tax that is really a deferred tax upon sale? In other words, a tax in the hands of the consumer but let us say six months after sale and a tax on possession of the goods for six months after sale.

MS ORR: Yes, we think that that could be capable of being construed in that way. It would require a close assessment of the particular statute and the practical effect of the statute, but we think it is capable of being treated, really, as part of the sale, rather than a distinct consumption episode. But it would depend on factors such as the proximity of the time of payment to sale, probably factors involving a comparison between the purchase price – the relationship between the purchase price and what needs to be paid by way of that deferred payment. But I think we would, concede – or not concede, we would accept that that is capable of being viewed as connected with the sale, rather than consumption.

GAGELER J: It really means the difference between you and the Solicitor-General for the Commonwealth is vanishing. I am not even sure that I understand what it is, now. He defines, I think, an excise in exactly the same way as you, as a tax on goods, which he calls commodities, which he calls articles of commerce. As with the question on when do you find a tax on goods.

MS ORR: Not in this charge, your Honour.

GORDON J: I mean, it seems the points of distinction between the two of you, given what you have just said to Justices Edelman and Steward, is really a question of proximity, as I understand it – picking up what Justice Gageler just put to you. So, as I understand it, you would accept that it is open to find a consumption tax being an excise where it has proximity to a purchase price itself. And, as I understand it, what you put to us earlier today, the rationale being that one can identify it as being an input, really, into the ultimate purchase price, able to draw the kinds of inferences and conclusions, were the subject of what was in Chamberlain, et cetera, et cetera.

MS ORR: Yes.

GORDON J: But you would then bring down the guillotine because you once you have, in effect, lost that proximity to that point of it arriving in the hands of the consumer, you have lost the characteristics to pick up the Solicitor-General’s idea of these relevant factors. And here – we will come to it – the lack of proximity includes: distance; time – not talking about the time charge itself, but the distance of the charge away from the attachment to the purchase price, in terms of the ZLEV charge, et cetera, et cetera. Is that a fair distinction being drawn between you and the Commonwealth?

MS ORR: Yes, it is, and I think ‑ ‑ ‑

GORDON J: Have I omitted anything?

MS ORR: I do not think so, your Honour. I think, coming back to your Honour Justice Edelman’s question, a very important factor in assessing the true nature of that tax will be whether that deferred payment is capable of being viewed as an input cost into the price, and the factors that I referred to are factors that would help in the assessment of whether it truly is an input cost into the price.

So our starting point is that consumption taxes as a species are not taxes where the amount taxed is an input cost in the price. True consumption taxes cannot be viewed in that way. But we accept that there are some categories of what might be described as a consumption tax because it is paid once the good is in the hands of the consumer that mean, in truth, that price is – that amount that is being paid is part of the input costs into the price, in truth. I do not think that will be a particularly ‑ ‑ ‑

EDELMAN J: The rationale for that then is that that is part of the commercial dealing.

MS ORR: Yes.

EDELMAN J: And there is no magic in the labels “consumption tax” or “production tax”, nor is there magic in a single point in time of sale, but the commercial dealing will end at some point in time around the sale, perhaps.

MS ORR: Yes, and it might be that if you have imposed a tax that can truly be seen as deferring a component of the purchase price and therefore the tax is capable of being understood as an input cost that factors into the price ‑ ‑ ‑

STEWARD J: Does that mean then really what Sir Anthony Mason gave as the justification in Dickenson’s Arcade is right, proximity to be tested by reference to the various factors you have mentioned?

MS ORR: Yes, we would agree with that.

STEWARD J: As a matter of substance?

GORDON J: So, does that mean that it ends once it is in – the first to use it, the first purchaser? So, what I then want to ask you is, if that rationale is right and that principle is right, what do you do about secondary markets? So, that is one consideration which we have not yet talked about and that means the other point of difference, I think, between you and the Solicitor, becomes usage. So, the label of usage would mean that would fall outside of your acceptance of what you have put to us.

MS ORR: That is right, that is right.

GORDON J: But for what might be described as “artificial” mechanisms, which ‑ ‑ ‑

MS ORR: Yes.

GORDON J: ‑ ‑ ‑ are trying to distract from the imposition of an impost which has sufficient proximity to it arriving in the hands of the ultimate consumer giving rise to an import component of the ultimate purchase price.

MS ORR: Yes, and I think that is why my answer to Justice Edelman is the answer I give, because we say that that would be an artificial distinction at that point if you were truly capable of viewing that deferred tax as part of the purchase price. It would be an artifice to say, but because it is paid by the consumer, the identity of the person who pays it is what causes you to draw the line, because we accept that you need to look at the practical effect of what is occurring and assess it in that way.

So, the closer that payment is to the time of purchase, the more related it is to the purchase – the event of the purchase itself – the more likely that tax might be found to be in an unusual situation where it is not, in truth, a consumption tax. But our starting proposition is that consumption taxes – true consumption taxes – are not an excise and this is the first of the four reasons that I am proposing to give about why that is the case. But, for us, defining a consumption tax is not as simple as saying the person who pays the consumption tax is the consumer. We accept that there will be a narrow category of circumstances where it may be the case that even though the tax is being paid by the consumer, it is not, in truth, a consumption tax.

I do not think my answer to your Honour Justice Edelman’s question is that it will, necessarily, cease being a consumption tax. It is just an answer which reflects that it is necessary to consider more closely what, in truth, it is.

So, I had been dealing with the references in the case law to the concept of articles of commerce as a central concept to the conception of excise. I had taken the Court to Matthews; I was also going to refer to Parton, where Justice Dixon, again, referred with approval to Kingcome Navigation, the same decision that he had referred to in Matthews. And when his Honour came to identify the purpose of section 90, he once again referred to the concept of commodities, explaining that section 90 was intended to give the Parliament real control of the taxation of commodities.

That use of the term “commodities”, we say, is significant, because it refers to goods not in a general sense, but rather to goods as articles of trade and commerce. And the other justices constituting the majority in Parton – Justices Rich and Williams – also invoked the articles of commerce concept when considering the taxing issue in that case.

The third example is Bolton v Madsen, and whilst not expressed in the same terms, the characterisation of goods that were capable of being the subject of an excise as articles of commerce clearly underpins the unanimous articulation of an excise in Bolton v Madsen. The language used in the Bolton v Madsen formulation conveys the notion that an excise is at tax upon a commercial dealing with a good, being one which occurs on the supply side before or during the period that the good is a commodity in the market; and, generally, before it reaches the hands of consumers. And, as I have explained, that Bolton formulation was endorsed in a number of subsequent judgments.

The fourth example is Dickenson’s Arcade, where a number of judges endorsed a similar conception and, perhaps most explicitly, Justice Stephen at 231, “excises”:

are duties imposed in respect of commercial dealings in commodities and are, in their essence, trading taxes –

Turning to Ha, the majority developed a very similar theme in their reasons. Having explained at page 494 that one objective of the movement to Federation was to secure inter-colonial free trade, as recognised in Cole v Whitfield, their Honours went on to discuss the scope and operation of section 90, and about halfway down page 497, their Honours said:

As earlier noted, the imposition of State taxes upon other inland dealings with goods as integers of commerce, even if those taxes were not protectionist, would have created impediments to free trade throughout the Commonwealth. Why –

their Honours asked:

should s 90 be construed so as to subvert an objective which Federation was designed to achieve (119)?

And we submit that it is plain from that passage that their Honours assessed that the aspect of legislative power that section 90 removed from the States and Territories was the imposition of taxes on dealings with goods as integers of commerce. And that conception appears in the majority’s critical statement of principle at page 499 where their Honours added that customs and excise duties:

are taxes on goods, that is to say, they are taxes on some step taken in dealing with goods.

In our submission, when consideration is given to what the majority said about “integers of commerce” on page 497, it is plain that the concept of a dealing with a good as referred to in that passage is intended to convey a dealing of a commercial nature. So, in our submission, an excise is understood as a tax on the steps of production, manufacture, sale or distribution of goods, because a tax on those steps will necessarily affect the relevant good as a commodity in a market. But a tax on consumption, by its nature, is not a tax upon goods as articles of commerce. It is a tax that is imposed on an individual’s use or destruction of the good, and it is necessarily imposed after the relevant goods have reached the hands of the consumer and ceased being an article of commerce.

Again, returning to your Honour Justice Edelman’s example, part of the analysis of the true nature of that tax would be whether, having passed into the hands of the consumer, the article – the good had ceased to be an article of commerce. The need to be able to characterise goods that are taxed by an excise as articles of commerce is also, we think, capable of explaining the division of the Court in Logan Downs, which I referred to earlier. There, five of the six judges were in agreement that the tax on the ownership of goods was not an excise, being the levy on the ownership of the stock horses, because they were not used for production and kept only for use in working on the property.

But two of the five judges – Justices Gibbs and Jacobs – would have held that the levy was also not an excise in its application to the other stock animals that were used for production because the tax did not affect the animals as articles of commerce, even though they might become commodities at some point. But at that point when the tax was imposed, it was imposed simply in respect of the ownership of those animals. At page 65, Justice Gibbs said:

It would, I think, be obvious enough that a tax on the ownership of goods not held for commercial purposes would not be a duty of excise. For example, a tax on the domestic furniture owned by the taxpayer would not answer that description, and if the tax in

Dickenson’s Arcade Pty. Ltd v Tasmania had been imposed upon the ownership of tobacco by the consumer it would still not have been an excise.

Justice Gibbs and Justice Stephen both used the phrase “articles of commerce” in characterising goods that are the subject of excise duties on multiple occasions throughout their judgments. I want to turn to the second reason, which relates to economic effect, and say quite a bit about that factor, but I see the time and I ‑ ‑ ‑

KIEFEL CJ: Yes, that is a convenient time. Thank you, Ms Solicitor.

MS ORR: Thank you, your Honour.

KIEFEL CJ: The Court will adjourn until 9.45 am tomorrow.

AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 16 FEBRUARY 2023