Dennis Hotels Pty Ltd v Victoria
[1960] HCA 10104 CLR 529
(Judgment by: McTiernan J)
Dennis Hotels Pty Ltd
vVictoria
Judges:
Dixon CJ
McTiernan JFullagar J
Kitto J
Taylor J
Menzies J
Windeyer J
Subject References:
Constitutional Law (Cth)
Duties of excise
Exclusive power of Commonwealth Parliament
Victualler's licence fee imposed under State law
Fee equal to six per cent of gross amount paid or payable for all liquor purchased for the licensed premises during the twelve months preceding application for renewal of licence
Temporary victualler's licence fee imposed under State law
Fee to include sum equal to six per cent of gross amount paid or payable for all liquor purchased for sale or disposal under such licence
Validity
The Constitution (63 & 64 Vict. c. 12), s. 90
Licensing Act 1958 (Vict.) (No. 6293), ss. 7, 19 (1) (a), (b).
Case References:
Parton v Milk Board (Vict) - [1949] HCA 67; (1949) 80 CLR 229
The Commonwealth and Commonwealth Oil Refineries v South Australia - [1926] HCA 47; (1926) 38 CLR 408
Matthews v Chicory Marketing Board (Vict) - (1938) 60 CLR 263
Meredith v Fitzgerald - [1948] HCA 11; (1948) 77 CLR 161
R v Caledonian Collieries - (1928) AC 358
Griffith v Constantine - [1954] HCA 80; (1954) 91 CLR 136
Browns Transport Pty Ltd v Kropp - [1958] HCA 49; (1958) 100 CLR 117
Peterswald v Bartley - [1904] HCA 21; (1904) 1 CLR 497
Crothers v Sheil - (1933) 49 CLR 399
Hartley v Walsh - [1937] HCA 34; (1937) 57 CLR 372
Hopper v Egg and Egg Pulp Marketing Board (Vict) - [1939] HCA 24; (1939) 61 CLR 665
Atlantic Smoke Shops Ltd v Conlon - (1943) AC 550
Brewers and Maltsters' Association of Ontario v Attorney-General for Ontario - (1897) AC 231
John Fairfax
&
Sons Ltd and Smith's Newspapers Ltd v New South Wales - (1927) 39 CLR 139
Browns Transport Pty Ltd v Kropp (1958) - [1958] HCA 49; 100 CLR 117
Hughes and Vale Pty Ltd v State of New South Wales - [1953] HCA 14; (1953) 87 CLR 49
Bank of Toronto v Lambe - (1887) 12 App Cas 575
Jones v Whittaker - (1870) LR 5
Attorney-General for British Columbia v Kingcome Navigation Company - (1934) AC 45
Bergin v Stack - [1953] HCA 53; (1953) 88 CLR 248
Meredith v Fitzgerald (1948) - [1948] HCA 11; 77 CLR 161
Attorney-General (NSW) v Homebush Flour Mills Ltd - [1937] HCA 3; (1937) 56 CLR 390
John Fairfax
&
Sons Ltd v New South Wales - [1927] HCA 3; (1927) 39 CLR 139
Henriksen v Grafton Hotel Ltd - [1942] 2 KB 184
Attorney-General for Manitoba v Attorney-General for Canada - (1925) AC 561
Brewers and Maltsters' Association of Ontario v Attorney-General for Ontario - (1897) AC 231
Sharpe v Wakefield - (1891) AC 173
Reg v Flintshire County Council County Licensing (Stage Plays) Committee Ex parte Barrett - (1957) 1 QB 350
Lancashire v Staffordshire Justices - (1857) 26 LJMC 171
Judgment date: 26 February 1960
Melbourne
Judgment by:
McTiernan J
In my opinion the demurrer should be decided in the plaintiff's favour. (at p548)
2. The plaintiff claims a declaration invalidating the provisions of the Licensing Acts cited in the statement of claim and reproduced by s. 19 (1) (a) of the Licensing Act 1958, also by s. 19 (1) (b). The interest of the plaintiff to claim this declaration is as holder of a victualler's licence and temporary victualler's licence. The plaintiff paid annually the fees provided by par. (a) for the victualler's licence, and the fees provided by par. (b) for the temporary victualler's licence. These provisions make it compulsory to pay the fees for the licences to which they apply. The fees go to revenue in order to be appropriated for public purposes. (at p548)
3. The fee provided by par. (a) is, in the case of a victualler's licence, a sum equal to six per cent of the purchases of liquor, including the duty thereon. These are purchases made during the period of twelve months ended 30th June prior to the application for the grant or renewal of the licence and intended to be sold on the licensed premises. Paragraph (b) provides for a daily fee of 1 pound for a temporary victualler's licence and in addition a further fee equal to six per cent of the purchases of liquor made for sale under the licence, including duty thereon. (at p548)
4. The plaintiff claims the declaration invalidating these provisions on the ground that the percentage fees are, in substance, duties of excise and therefore, by reason of s. 90 of the Constitution, beyond the powers of the Parliament of a State. The fees payable under the provisions in question have clearly the indicia of taxation, being exactions made for the purposes of government. They are not merely payments for services performed by the Government for licensees. It was argued for the defendants that the fees could be regarded rather as consideration for valuable rights than as taxation. This argument seems to me to involve the implication that the grant of a licence is a transaction with the licensee, and to give the fee the colour of the price of the grant. I think that the argument takes away too much of the character of the grant, which is rather a decision than a transaction, and deprives the fee of its character as an exaction. (at p549)
5. But the substantial issue between the parties is whether the percentage fees in question are duties of excise within the meaning of s. 90. Excise, like customs, is one of the divisions of indirect taxation. The association of the term "excise" with "customs" in s. 90 defines the field of taxation over which the Parliament of the Commonwealth is given exclusive power and shows that the meaning of duties of excise does not extend beyond indirect taxation, although in contexts other than the Constitution of the Commonwealth the term "excise" is often used to refer to taxes, irrespective of whether they are direct or indirect in their incidence. (at p549)
6. A tax is a duty of excise within the meaning of s. 90 which is payable on or in respect of goods and is intended or expected to be passed on and finally borne by the consumer or user of the goods as part of the price which he pays for them. The decision of the Court in Parton v. Milk Board (Vict.) [1949] HCA 67; (1949) 80 CLR 229 establishes, in my opinion, that duties of excise within the contemplation of s. 90 includes duties imposed subsequently to production or manufacture. I feel that it would be contrary to the decision of the majority in that case for me to adhere to the opinion which I expressed in that case as to the extent of the exclusive power to impose duties of excise. (at p549)
7. In my view, the effect of the provisions in s. 19 (1) (a) is that the fee payable for a victualler's licence is a tax payable on, or directly in respect of, the liquor "purchased for the premises" which those provisions require to be taken into account, because it is a sum equal to six per cent of the amount of such purchases, with duty thereon added. Such liquor is purchased for sale on the licensed premises. I apprehend that the consequence reasonably expected to follow from levying tax on goods purchased for sale is that the tax will be borne finally by the ultimate purchasers as part of the price which they pay for the goods. In my opinion, the provisions of s. 19 (3) do not operate to change the essential character of the fees from indirect to direct taxation. (at p549)
8. It is argued for the defendants that, if the fees in question are taxes, they are levied on the licences respectively for which they are prescribed and are direct taxes. I think that this argument is right in the case of the fees, other than the percentage fees. The latter fees only are computed by reference to purchases of liquor. (at p550)
9. In my judgment the percentage fees fixed by s. 19 (1) (a) or (b) are in the case of liquor produced in Australia, clearly duties of excise. It is unnecessary to decide whether duties of excise on goods imported into Australia are intended by s. 90 to be within the exclusive power of taxation which the section reserves to the Parliament of the Commonwealth. Even if that is the case the provisions which impose percentage fees are invalid in regard to liquor purchased in Australia because they are not capable of a distributive application to imported liquor on the one hand and home-produced liquor on the other. The provisions under attack must therefore be wholly invalid, except as regards the daily fee payable under s. 19 (1) (b). (at p550)