MUTUAL POOLS & STAFF PTY LTD v THE COMMONWEALTH OF AUSTRALIA

Judges: Mason CJ
Brennan J
Deane J

Dawson J
Gaudron J
McHugh J
Toohey J

Court:
Full High Court

Judgment date: Judgment handed down 9 March 1994

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Dawson and Toohey JJ

In Mutual Pools & Staff Pty. Ltd. v. Federal Commissioner of Taxation ^[89] 92 ATC 4016; (1992) 173 CLR 450. this Court held that a tax which the defendant purported to impose upon the sale value of swimming pools constructed in situ was in breach of s. 55 of the Constitution and of no effect. The plaintiff, who was also the plaintiff in the previous litigation, carries on a business which includes the construction of swimming pools in situ . It is a member of a body called ``The Swimming Pool and Spa Association of Australia Ltd.'' (``SPASA''), which represents the swimming pool and spa industry in Australia. Before the question of the validity of the sales tax upon in situ swimming pools was decided by this Court, SPASA entered into an agreement (``the SPASA agreement'') on behalf of its members with the Commissioner of Taxation under which the members agreed to pay the tax upon the basis that, if the relevant legislation were ultimately found to be of no effect, all amounts paid would be repaid together with interest at the rate specified in the Taxation (Interest on Overpayments) Act 1983 (Cth).

On 12 February 1992 this Court decided that the in situ swimming pools tax provisions were of no effect, and on 21 September 1992 the Commonwealth Parliament enacted the Swimming Pools Tax Refund Act 1992 (Cth) (``the Refund Act''). Under that Act the Commonwealth is not liable to make any in situ pool tax refund except as provided ^[90] Swimming Pools Tax Refund Act 1992 (Cth), s. 4(1). . The tax is to be refunded to the pool builder only to the extent that the pool builder did not pass on the tax in the price of the pool to the pool purchaser or to the extent that the pool builder refunded the tax to the pool purchaser ^[91] ibid., s. 4(2). . If the pool builder passed on the tax to the pool purchaser and did not refund it, then the Commonwealth is obliged to refund the tax directly to the pool purchaser ^[92] ibid., s. 4(4). .

The plaintiff constructed a swimming pool in situ for a Mr and Mrs Chaplin and paid $1,522 to the Commissioner of Taxation as sales tax on the pool. It alleges that the payment was made pursuant to the SPASA agreement. The amount of $1,522 was passed on in whole by the plaintiff to Mr and Mrs Chaplin and it has refunded no part of that sum to them. The plaintiff contends that the defendant is liable to repay to it the amount of $1,522, but the defendant says that it is not liable to make the payment by reason of the provisions of the Refund Act. The defendant concedes that, if the amount of $1,522 was paid pursuant to the SPASA agreement as alleged by the plaintiff, the defendant was legally obliged, before the Refund Act was enacted, to repay that amount to the plaintiff. The first question reserved for the Court by the case stated should therefore be answered yes. The defendant argues, however, that the situation is now governed by the Refund Act. The only question raised for the determination of the Court is whether the Refund Act is invalid in its application to the circumstances of this case.

The plaintiff contends that the Commonwealth Parliament lacked power to pass the Refund Act. Apart from s. 51(xxxi), which provides for the acquisition of property on just terms for any purpose in respect of which the Parliament has power to make laws, the plaintiff argues that the defendant is unable to rely upon any other head of legislative power. And it says that, whilst the Refund Act is a law providing for the acquisition of property, it does not provide just terms and the acquisition which it effects is not for any purpose in respect of which the Parliament has power to make laws.

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ATC 4119

It is convenient to turn at once to s. 51(xxxi) because, if it applies, it does so to the exclusion of any other legislative power upon which the Commonwealth might seek to rely. It has been observed on a number of occasions that, were it not for s. 51(xxxi), many of the other legislative powers of the Commonwealth Parliament would extend incidentally to the acquisition of property. But the presence of s. 51(xxxi), requiring, as it does, the provision of just terms, abstracts from those other powers (including the incidental power under s. 51(xxxix) but excluding the territories power under s. 122 ^[93] Teori Tau v. The Commonwealth (1969) 119 CLR 564. ) the power to legislate with respect to the acquisition of property for any purpose in respect of which the Parliament has power to make laws and makes s. 51(xxxi) the exclusive repository of that power ^[94] Johnston Fear & Kingham & The Offset Printing Co. Pty. Ltd. v. The Commonwealth (1943) 67 CLR 314 at 317-318, 325, 331; P.J. Magennis Pty. Ltd. v. The Commonwealth (1949) 80 CLR 382 at 401-403; W.H. Blakeley & Co. Pty. Ltd. v. The Commonwealth (1953) 87 CLR 501 at 520-521; Attorney-General (Cth) v. Schmidt (1961) 105 CLR 361 at 370-373; TPC v. Tooth & Co. Ltd. & Anor (1979) ATPR ¶ 40-127 at 18,362, 18,387; (1979) 142 CLR 397 at 403, 445. .

The property which the plaintiff identifies for the purposes of its argument concerning the application of s. 51(xxxi) is its right of action - its chose in action - against the Commonwealth under the SPASA agreement to recover the amount of $1,522 paid by way of sales tax on the Chaplins' pool. The Refund Act purports to extinguish that right of action and in doing so, the plaintiff says, the Commonwealth purports to acquire its property upon terms which are not just.

There can be no doubt that the plaintiff's chose in action, which the Commonwealth concedes may have existed before the Refund Act came into force ^[95] See Precision Pools Pty Ltd v. FC of T & Anor Qld Pool & Spa Const Pty Ltd v FC of T & Anor 92 ATC 4549 ; (1992) 109 ALR 679 . , constituted property within the meaning of s. 51(xxxi) ^[96] Minister of State for the Army v. Dalziel (1943-1944) 68 CLR 261 at 290; Bank of N.S.W. v. The Commonwealth (``the Bank Nationalization Case'') (1948) 76 CLR 1 at 212-214, 267, 299, 349. . The question is whether the Commonwealth acquired that property under the Refund Act by extinguishing it.

If one person loses property rights, it does not necessarily follow that they are acquired by another. In The Commonwealth v. Tasmania ( The Tasmanian Dam Case ) Mason J. said ^[97] (1983) 158 CLR 1 at 145. :

``The emphasis in s. 51(xxxi) is not on a `taking' of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be.''

And in the same case Brennan J. agreed ^[98] ibid. at 247. with the observation of Gibbs J. in Trade Practices Commission v. Tooth & Co. Ltd. ^[99] (1979) ATPR at 18,365; (1979) 142 CLR at 408. that ``not every compulsory divesting of property is an acquisition within s. 51(xxxi)'' ^[100] See also R v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636 at 653; Australian Capital Television Pty. Ltd. v. The Commonwealth (1992) 177 CLR 106 at 166, 198-199, 245. .

The distinction between extinguishing rights in property and acquiring them is one that must be maintained in the application of s. 51(xxxi) ^[101] R v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR at 653. . Of course, in some instances to extinguish the rights of one person may result in the acquisition of rights by another. For example, when a leasehold interest is extinguished the reversioner acquires additional or increased rights. And in that case the rights acquired are in the nature of property. The property comprises the right to enjoy the land for the period of the lease and is regained by the reversioner. In this case however, the property right - the right to receive money - is not acquired by the Commonwealth. In Bone v. Commissioner of Stamp Duties (N.S.W.) ^[102] Bone v Commissioner of Stamp Duties (NSW) (1974) 132 CLR 38 at 56 . Mason J., with the agreement of a majority, spoke of the release of a debt owed by an executor of a will. He said:

``What is material is that the release in equity, when it takes effect on death, destroys or annihilates the chose in action or, if you like, the debt. It does not vest the chose in action in the executor or the debtor. It would be incongruous to regard a provision for the release of a debt as having the effect of vesting in the debtor a right to sue himself.''

The decision in Bone v. Commissioner of Stamp Duties (N.S.W.) was reversed by the Privy Council ^[103] Commissioner of Stamp Duties (N.S.W.) v. Bone (1976) 135 CLR 223 ; [1977] AC 511 . The decision of the Privy Council was upon the basis that there was no true release or extinction of the debt. but the observation of Mason J. which we have cited stands unaffected. His remarks make it clear that when a chose in action is extinguished, the debtor receives merely a financial advantage, not a proprietary interest in the chose in action.

It may perhaps be argued that for the purposes of s. 51(xxxi) the property acquired must be the same as the property divested from the person seeking compensation. The result in this case would be that, as the Commonwealth has not in any event acquired the plaintiff's property, the Refund Act would not fall within s. 51(xxxi). That would be a sufficient basis to dispose of this case, and may be the basis of decisions on other occasions refusing to recognize the extinguishment of a chose in action as an acquisition of property ^[104] McMullen v. Commissioner for Superannuation (1985) 61 ALR 189 at 206-207 ; Minister for Primary Industry and Energy v. Davey (1993) 119 ALR 108 at 119-120 per Black C.J. and Gummow J., 128-129 per Burchett J.; Government of Malaysia v. Selangor Pilot Association [1978] AC 337 at 347-348; Hewlett v. Minister for Finance [1982] 1 SA 490 at 502, 508 . .

But even apart from an argument of that kind, the plaintiff's case cannot succeed. The plaintiff argued that in extinguishing the debt,

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ATC 4120

the Commonwealth, in effect, acquired the plaintiff's money. But it is essential to s. 51(xxxi) that the Commonwealth acquire property. Not every benefit which flows to another when a right is extinguished amounts to the acquisition of property by that other. That is so where the benefit consists only of a financial or monetary advantage. The nature of money does not lie in its physical characteristics and these may be disregarded. Money is a medium of exchange; it is not an object of exchange ^[105] Mann, The Legal Aspect of Money , 5th ed. (1992) at 24; Fama, ``Banking in the theory of finance'', (1980) 6 Journal of Monetary Economics 39 at 42. . It represents value, or purchasing power, in units of account <sup>[106]</sup> See Mill, ``Of Money'', in Principles of Political Economy , 7th ed. (1871), Bk 3, Ch.7; Friedman, ``Money'' in Encyclopaedia Britannica , 15th ed., vol.24 at 333. .

The reality of the distinction between the acquisition of value and the acquisition of property is well illustrated by the following example ^[107] Mann, ``Outlines of a History of Expropriation'', (1959) 75 Law Quarterly Review 188 at 214. :

``From the purely economic point of view there may, at first sight, be little practical distinction between the case, on the one hand, in which a statute imposes, for instance, upon patentees the duty to pay to the State one-half of the profits made as a result of the exploitation of the patent, and the case, on the other hand, in which patentees are required by statute to transfer to the State a half share in the patents. Yet the distinction is a real one. In the first case a patentee has the right to pay the tax out of his general resources, and is not required to part with the patent or a share in it. In the second case he has no option but to give up a share in the patent as such and, therefore, loses specific property which he can no longer use and exploit at his discretion and for which he is expected to be compensated.''

The distinction between the transfer of value and the acquisition of property is well established ^[108] See Ilich v. R (1986-1987) 162 CLR 110 at 128-129 . and is not dependent upon considerations of a constitutional nature ^[109] See, e.g., Ricket v. Directors etc of the Metropolitan Rly Co. (1867) LR 2 HL 175 at 194-195, 198 ; S.J.C. Construction Co. Ltd. v. Sutton London Borough Council (1975) 29 P & CR 322 at 325-326 . . It is a distinction which was assumed by those responsible for the drafting of s. 51(xxxi). Clearly, when that paragraph was added to the draft of the Constitution, what was envisaged was the acquisition of physical property, in particular land, and not the transfer of value ^[110] Official Report of the National Australian Convention Debates, Adelaide , 22 April 1897, at 1199; Official Record of the Debates of the Australasian Federal Convention , Melbourne, 25 January 1898, at 151-154; 4 March 1898, at 1874; see also Quick and Garran, The Annotated Constitution of the Australian Commonwealth , (1901) at 640-642. .

Value cannot constitute property within the meaning of s. 51(xxxi) because the phrase ``acquisition of property on just terms '' presupposes that the property acquired can be valued, whatever else the expression may entail, and it is meaningless to speak of the value of value. As will be seen, it is for this reason, amongst others, that taxation - the compulsory exaction of money as opposed to the acquisition of a specific debt or chose in action - does not involve the acquisition of property within the meaning of s. 51(xxxi).

Neither the creation nor the satisfaction of a chose in action, at least in the form of a debt, involves the acquisition of property. As we said in Australian Tape Manufacturers Association Ltd. v. The Commonwealth concerning the creation of a debt which is met by the payment of money ^[111] (1993) AIPC ¶ 90-965 at 39,200; (1991-1993) 176 CLR 480 at 527. :

``The debt itself is a chose in action the creation of which does not involve the acquisition of property from any person. Nor does the discharge of the liability by the payment of money, which is not transferred in specie but as a medium of exchange, involve the acquisition of property in any relevant sense.''

We relied upon what was said by Aickin J. in Trade Practices Commission v. Tooth & Co. Ltd. ^[112] (1979) ATPR at 18,392-18,393; (1979) 142 CLR at 453-454. and the majority in MacCormick v. Federal Commissioner of Taxation ^[113] 84 ATC 4230 at 4235-4236; (1984) 158 CLR 622 at 638. . In Trade Practices Commission v. Tooth & Co. Ltd. Aickin J. was speaking of taxation, but his remarks have a more general application. He said ^[114] (1979) ATPR at 18,392; (1979) 142 CLR at 453-454. :

``Taxation involves the compulsory payment of money to the Commonwealth according to prescribed criteria applicable to persons who fall within the specified categories in a manner capable of testing in the courts. Its imposition creates a debt but does not compulsorily acquire property. No doubt when payment is made property in the cas[h] or cheque passes to the Commonwealth but it is not a process capable of being categorized or described as `acquisition of property', save in a very unusual sense of that expression.''

And in MacCormick v. Federal Commissioner of Taxation the majority were also speaking of taxation when they said ^[115] 84 ATC at 4236; (1984) 158 CLR at 638. :

``It was suggested, albeit faintly, that the exaction may amount to an acquisition of property within the meaning of sec. 51(xxxi) of the Constitution so as to import the requirement of just terms. But, if it is in truth a tax, its very nature prevents it amounting to an acquisition of property. It is no more than the imposition of a pecuniary liability.''

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ATC 4121

Again, that observation was not dependent upon the fact that the liability in question was a tax liability. It emphasizes that, of its very nature, the creation or satisfaction of a pecuniary liability does not involve the acquisition of property within the meaning of s. 51(xxxi).

Taxation must lie outside the ambit of s. 51(xxxi). If the imposition of a tax were an acquisition of property requiring just terms, it would defeat the very purpose of the taxation power ^[116] s. 51(ii). which is to raise money for public purposes ^[117] FC of T v. Clyne (1958) 11 ATD 428 at 432; (1958) 100 CLR 246 at 263. . To treat the exaction of money as the acquisition of property and to require just terms would require the money to be repaid at the same time as it was exacted and clearly that cannot have been an intended result of s. 51(xxxi), having regard to the express power to make laws with respect to taxation in s. 51(ii). If taxation lies outside the ambit of s. 51(xxxi), it is crucial to distinguish between taxation and the acquisition of property. The distinction is between the acquisition of money or value, which is a tax, and the acquisition of specific property, which is not ^[118] See the illustration already cited from Mann, (1959), op.cit. .

Protection against misuse of the taxation power lies elsewhere and it is to be found in the requirements that a tax be neither a penalty nor arbitrary nor incontestable ^[119] MacCormick v. FC of T 84 ATC at 4236-4239; (1984) 158 CLR at 639-644. . Nevertheless, the ambit of the taxation power is reduced in some respects by s. 51(xxxi). The taxation power standing by itself ^[120] The incidental power in s. 51(xxxix) would not be relevant: see Le Mesurier v. Connor (1929) 42 CLR 481 at 497-498 . would carry with it the incidental power to legislate for the acquisition of property for taxation purposes - for example, to acquire a building for use as a taxation office. But s. 51(xxxi), and not s. 51(ii), is the source of the power to acquire property in those circumstances and just terms must be provided ^[121] cf. Attorney-General (Cth) v. Schmidt (1961) 105 CLR at 372. .

In arriving at the meaning of the phrase ``acquisition of property'' in s. 51(xxxi), it is necessary to have regard to the composite expression of which it forms part, namely, ``acquisition of property... for any purpose in respect of which the Parliament has power to make laws''. As Dixon C.J. pointed out in Attorney-General (Cth) v. Schmidt ^[122] ibid. , ``it refers to the use or application of the property in or towards carrying out or furthering a purpose comprised in some other legislative power''. Whilst the precise limits of that expression have proved elusive ^[123] TPC v. Tooth & Co. Ltd. (1979) ATPR at 18,365; (1979) 142 CLR at 408 per Gibbs J. , it does appear primarily to refer to the acquisition of real or personal property which itself is intended to be used by the government in administering laws made by the Parliament in the exercise of its legislative power ^[124] Attorney-General (Cth) v. Schmidt (1961) 105 CLR at 372 per Dixon C.J.; In re Tooth & Co. Ltd. (1978) ATPR ¶ 40-084 at 17,827-17,828; (1978) 34 FLR 112 at 146-147 . . Clearly this was the original intention lying behind s. 51(xxxi) ^[125] Grace Brothers Pty. Ltd. v. The Commonwealth (1946) 72 CLR 269 at 290-291 per Dixon J. . The terms of the section certainly do not describe the raising of moneys for public purposes, which is predominantly the function of the taxation power.

The view that s. 51(xxxi) is primarily concerned with the acquisition of property for use or application by the executive government was said by Murphy J. in Trade Practices Commission v. Tooth & Co. Ltd. ^[126] (1979) ATPR at 18,380; (1979) 142 CLR at 434. to have much force. But it cannot be taken too far, for it is now settled that s. 51(xxxi) applies where Commonwealth legislation provides for the acquisition of property by some person other than the Commonwealth or an agency of the Commonwealth ^[127] Jenkins v. The Commonwealth (1947) 74 CLR 400 at 406; McClintock v. The Commonwealth (1947) 75 CLR 1 at 23, 36; P.J. Magennis Pty. Ltd. v. The Commonwealth (1949) 80 CLR at 401-402, 411, 423; TPC v. Tooth & Co. Ltd. (1979) ATPR at 18,376, 18,390-18,392; (1979) 142 CLR at 427, 451-452; Australian Tape Manufacturers Association Ltd. v. The Commonwealth (1993) AIPC at 39,191-39,192, 39,200; (1991-1993) 176 CLR at 510-511, 526. . As Aickin J. observed in Trade Practices Commission v. Tooth & Co. Ltd. ^[128] (1979) ATPR at 18,391; (1979) 142 CLR at 452. :

``It would be a serious gap in the constitutional safeguard which is the manifest policy of para. (xxxi) if the Parliament could legislate for compulsory acquisition of property without just terms by statutory bodies which were not the Commonwealth itself or its agents or by persons or bodies having no connexion with the government. Neither the words of sec. 51 nor the context require the adoption of so anomalous a view.''

However, compulsory acquisition by a third person is not within the terms of s. 51(xxxi) unless it is for a purpose in respect of which the Parliament has power to make laws.

The restriction of s. 51(xxxi) to laws with respect to the acquisition of property for any purpose in respect of which the Parliament has power to make laws explains why the confiscation or forfeiture of property, as in the case of prohibited imports, is not an acquisition of property, at all events within the meaning of s. 51(xxxi), even though it involves the passing of property. Merely as a matter of nomenclature, forfeiture or confiscation is something different from acquisition. In addition, as Dixon C.J. said in Burton v. Honan ^[129] (1952) 86 CLR 169 at 180-181. in relation to a forfeiture:

``the whole matter lies outside the power given by s. 51(xxxi.). It is not an acquisition of property for any purpose in respect of which Parliament has power to make laws. It is nothing but forfeiture imposed on all persons in derogation of any rights such

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ATC 4122

persons might otherwise have in relation to the goods, a forfeiture imposed as part of the incidental power for the purpose of vindicating the Customs laws. It has no more to do with the acquisition of property for a purpose in respect of which the Parliament has power to make laws within s. 51(xxxi.) than has the imposition of taxation itself...''

Although the property in forfeited goods passes to the Commonwealth, it does not acquire the goods for any purpose for which the Parliament has power to make laws. The goods are not acquired with the object of putting them to any use or application falling within a head of legislative power ^[130] Query whether the acquisition of property of enemy aliens falls outside s. 51(xxxi) for this reason, but cf. Attorney-General (Cth) v. Schmidt (1961) 105 CLR 361. . The purpose of the acquisition is complete at the moment of acquisition. The acquisition is by way of penalty, but the imposition of a penalty is not a purpose in respect of which the Parliament has power to make laws, however much it may be an incident of purposes in respect of which the Parliament does have power to make laws. Of course, a penalty which is not an incident of such a purpose would lie outside Commonwealth power.

It is true that no narrow view is to be taken of what constitutes ``property'' for the purposes of s. 51(xxxi) ^[131] Minister of State for the Army v. Dalziel (1943-1944) 68 CLR at 276, 285, 290, 295. . As Dixon J. said in the Bank Nationalization Case ^[132] (1948) 76 CLR at 349. :

``I take Minister of State for the Army v. Dalziel <sup>[133]</sup> ``(1944) 68 C.L.R. 261''. to mean that s. 51(xxxi.) is not to be confined pedantically to the taking of title by the Commonwealth to some specific estate or interest in land recognized at law or in equity and to some specific form of property in a chattel or chose in action similarly recognized, but that it extends to innominate and anomalous interests and includes the assumption and indefinite continuance of exclusive possession and control for the purposes of the Commonwealth of any subject of property. Section 51(xxxi.) serves a double purpose. It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time as a condition upon the exercise of the power it provides the individual or the State, affected with a protection against governmental interferences with his proprietary rights without just recompense.''

Nevertheless, it is with the compulsory acquisition of property that s. 51(xxxi) deals and that means that the paragraph requires an acquisition of some real and not merely a notional interest in property.

Murphy J. did not think that s. 51(xxxi) encompassed laws for the acquisition of property by third parties ^[134] The Tasmanian Dam Case (1983) 158 CLR at 181-182. , but the note of caution which he sounded in Trade Practices Commission v. Tooth & Co. Ltd. ^[135] (1979) ATPR at 18,380; (1979) 142 CLR at 434. , in observing that many federal laws provide for the alteration of rights and obligations between citizens, serves to emphasize that giving the word ``property'' in s. 51(xxxi) an extended or notional meaning would be likely to produce some remarkable and unexpected results. Murphy J. instanced the invalidity of long- standing sections of the Conciliation and Arbitration Act 1904 (Cth) and it is not difficult to think of other examples ^[136] e.g., the legislation altering contractual rights in Peacock v. Newtown Marrickville and General Co- operative Building Society No. 4 Ltd. (1943) 67 CLR 25 and prohibition legislation instanced in Hewlett v. Minister for Finance [1982] 1 SA at 502. .

In Australian Tape Manufacturers Association Ltd. v. The Commonwealth ^[137] (1993) AIPC at 39,191; (1991-1993) 176 CLR at 509. , in a passage which was ``strictly unnecessary'' to their judgment, the majority expressed the following view:

``In the context of s. 51(xxxi), the word `property' must also be construed as extending to money and the right to receive a payment of money. If it were otherwise, money or the right to receive money could compulsorily be acquired for any purpose in respect of which the Parliament has power to make laws and without compensation, provided the money or the right to receive it was not revenue raised by taxation, a proviso which might be satisfied whenever the relevant purpose was to confer a private and direct benefit on a person or group. The guarantee which s. 51(xxxi) was intended to give in protection of property would then largely be illusory.''

There can, of course, be no question that a right to receive money - a chose in action - is property which may be acquired. However, with the greatest of respect, we are unable to accept that money constitutes property, at all events property which under s. 51(xxxi) may only be acquired on just terms. As we have said, money merely represents value and it is hardly sensible to speak of the acquisition of value on just terms. A compulsory acquisition of money by way of exaction is a tax. But if money were property for the purposes of s. 51(xxxi), no distinction could be drawn between an acquisition of property and a tax, nor does the passage which we have just cited

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ATC 4123

offer any distinction. And to confer a private and direct monetary advantage on a person or group at the expense of some other person or group does not, in our view, involve either the acquisition of property or a tax. Clearly there are laws providing for the compulsory transfer of money ^[138] See, e.g., Child Support (Assessment) Act 1989 (Cth) requiring a parent to provide financial support for the maintenance of a child. which neither impose a tax nor compulsorily acquire property.

It was also suggested by the majority in Australian Tape Manufacturers Association Ltd. v. The Commonwealth ^[139] (1993) AIPC at 39,191; (1991-1993) 176 CLR at 509-510. that if:

``a law did no more than provide that a particular named person was under an obligation to pay to the Commonwealth an amount of money equal to the total value of all his or her property, the law would effect an acquisition of property for the purposes of s. 51(xxxi), notwithstanding the fact that it imposed merely an obligation to pay money and did not directly expropriate specific notes or coins.''

But an exaction calculated as a percentage of a person's assets is no more than a wealth tax; it is not the acquisition of property. True it is that an obligation imposed by law upon a specified person to pay the total value of his or her assets may not be a tax, but that would be because it was arbitrary, liability being imposed according to criteria which are not of general application ^[140] See MacCormick v. FC of T 84 ATC at 4236; (1984) 158 CLR at 639. . Being neither an acquisition of property under s. 51(xxxi), nor a tax under s. 51(ii), the law would lie outside Commonwealth legislative power. In some circumstances it may even amount to a bill of attainder or of pains and penalties and so constitute a usurpation of judicial power in contravention of s. 71 of the Constitution ^[141] cf. Polyukhovich v. The Commonwealth (1990-1991) 172 CLR 501 at 535-536, 645-651, 685-686. .

In the United States the Fifth Amendment prohibits the taking of private property for public use without just compensation. The prohibition is extended to the States by means of the due process clause in the Fourteenth Amendment. There are, of course, important differences between a prohibition against taking property and a provision which confers legislative power to acquire property compulsorily. For that reason, and because the prohibition in the United States is associated with due process, the American cases upon the subject have a limited application in this country ^[142] Minister of State for the Army v. Dalziel (1943-1944) 68 CLR at 294-295; Grace Brothers Pty. Ltd. v. The Commonwealth (1946) 72 CLR at 289-290; The Tasmanian Dam Case (1983) 158 CLR at 144-145; and see also Government of Malaysia v. Selangor Pilot Association [1978] AC 337 at 347-348. Similarly, the distinction between ``deprivation'' and ``acquisition'' of property means that the remarks of the Privy Council in Soci é t é United Docks v. Government of Mauritius [1985] AC 585 are not relevant to the interpretation of s. 51(xxxi). . The United States cases dealing with the indirect taking of property by State regulation have interpreted broadly the concepts of property and of taking. The history of that interpretation is traced in Lucas v. South Carolina Coastal Council ^[143] Lucas v South Carolina Coastal Council (1992) 120 L Ed 2d 798 ; see also TPC v. Tooth & Co. Ltd. (1979) ATPR at 18,368-18,369; (1979) 142 CLR at 414-415 per Stephen J.; The Tasmanian Dam Case (1983) 158 CLR at 144-145 per Mason J., 284 per Deane J. . In Lucas ^[144] (1992) 120 L Ed at 813, citing Agins v. Tiburon (1980) 447 US 255 at 260 . the Supreme Court of the United States affirmed that ``the Fifth Amendment is violated when land use regulation `does not substantially advance legitimate state interests or denies an owner economically viable use of his land ''' <sup>[145]</sup> Emphasis added in Lucas v. South Carolina Coastal Council . It is suggested that the justification for the rule is, perhaps, ``that total deprivation of beneficial use is, from the landowner's point of view, the equivalent of a physical appropriation'' ^[146] (1992) 120 L Ed at 814. . Whilst that may amount to a taking from a landowner's point of view, even regulation which leaves property economically idle does not of itself amount to the acquisition of the property by anyone and it is upon acquisition that s. 51(xxxi) of the Australian Constitution places emphasis. However, where the regulation amounts to the use of the property by the Commonwealth, the view is open that it constitutes an acquisition ^[147] See The Tasmanian Dam Case (1983) 158 CLR at 286-287 per Deane J.; but cf. Minister for Primary Industry and Energy v. Davey (1993) 119 ALR 108. .

The American cases have, however, recognized a distinction between the taking of property and of value. In Penn Central Transportation Co. v. New York City ^[148] Penn Central Transportation Co v New York City (1978) 438 US 104 at 124-125 ; approved in Lucas v. South Carolina Coastal Council (1992) 120 L Ed 2d at 814; and see British Medical Association v. The Commonwealth (1949) 79 CLR 201 at 270. Brennan J. speaking for the Court said:

```Government could hardly go on if to some extent values incident to property could not be diminished without paying for every such change in the general law,' ^[149] Pennsylvania Coal Co. v. Mahon (1922) 260 US 393 at 413 . and this Court has accordingly recognized, in a wide variety of contexts, that government may execute laws or programs that adversely affect recognized economic values. Exercises of the taxing power are one obvious example. A second are the decisions in which this Court has dismissed `taking' challenges on the ground that, while the challenged government action caused economic harm, it did not interfere with interests that were sufficiently bound up with the reasonable expectations of the claimant to constitute `property' for Fifth Amendment purposes.''

It follows from what we have said that we do not regard the Refund Act as effecting an acquisition of property by the Commonwealth or anyone else. No doubt the right of action on the part of the plaintiff to recover from the Commonwealth the amount paid by way of sales tax upon the Chaplins' pool is extinguished. But that has not resulted in any acquisition of property by the Commonwealth, even if the Commonwealth has acquired a

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financial advantage or benefit (although the Commonwealth is obliged to refund moneys under the Refund Act). Indeed, it may be argued that s. 51(xxxi) has never been thought to prevent the Commonwealth from extinguishing a right of action against it. In Werrin v. The Commonwealth , in which the effect of s. 51(xxxi) was considered ^[150] (1937-1938) 59 CLR 150 at 163 per Starke J. , Dixon J. observed ^[151] ibid. at 165. :

``There is, I think, no constitutional provision preventing the Parliament from extinguishing a cause of action against the Commonwealth, unless implications be discovered in sec. 75 which do so.''

If the Refund Act is a valid enactment it must, therefore, be supported by a legislative power other than s. 51(xxxi). In our view, that power is to be found either in s. 51(ii), the taxation power, or in s. 61, the executive power, coupled with the incidental power, s. 51(xxxix). Either would, we think, suffice.

In Werrin v. The Commonwealth the Court considered the validity of s. 12A of the Sales Tax Procedure Act 1934 (Cth) which provided that no one should be entitled to a refund of payments made as sales tax on the ground that the goods had gone into use or consumption in Australia before the transaction by reason of which the sales tax payments were made, if the payments were made before a certain date. That provision was enacted following the decision in Deputy Federal Commissioner of Taxation (S.A.) v. Ellis & Clark Ltd. ^[152] DFC of T v Ellis & Clark Ltd (1934) 3 ATD 98 ; (1934) 52 CLR 85 . that sales tax was not payable on second hand goods, that is to say, goods that had gone into use and consumption in Australia. Latham C.J. found it unnecessary to consider the validity of s. 12A, but Rich J. expressed the view ^[153] (1937-1938) 59 CLR at 161. :

``As to the validity of the section, I should have thought it was clearly within the competence of the Federal Parliament to say that a sum of money erroneously collected under a tax Act by administrative officers acting in good faith should be retained.''

Starke J. said ^[154] ibid. at 163. :

``But the provision, if not a tax, is, in my judgment, clearly a law with respect to taxation and within the competence of Parliament.''

Dixon J. expressed the alternative view ^[155] ibid. at 165. :

``I think that sec. 12A is clearly a law with respect to a matter incidental to the execution of a power vested by the Constitution in the government of the Commonwealth within the meaning of sec. 51(xxxix.) of the Constitution. For the enforcement of the taxation laws, as of other laws, is the function of the government under sec. 61 and it is a matter incidental to that function or power to receive payments on account of tax including sums which, through some mistake of fact or law, are collected although not strictly payable.''

It was argued that the levy in this case was deprived of its character as a tax because it was not exacted by a valid law. But money collected under an invalid law is still a ``compulsory exaction of money'' ^[156] See Matthews v. Chicory Marketing Board (Vict.) (1938) 60 CLR 263 at 276 . . It may be a tax invalidly collected, but it is nevertheless a tax. A subsequent law for its refund is thus a law with respect to taxation.

In our view the reasoning in Werrin v. The Commonwealth is applicable to this case. The Refund Act may not itself impose a tax but it is a law with respect to taxation because it provides a method of refunding a tax wrongly collected under a law which purported to impose the tax but which was of no effect because it failed to comply with s. 55 of the Constitution. It must, we think, be incidental to the taxation power to provide for the retention or disposal of moneys collected as taxes but which, through a failure to comply with the requirements of a provision such as s. 55, cannot be regarded as having been validly exacted. On the other hand, if the collection of the moneys under the SPASA agreement be regarded as an executive action, it must be within the express incidental power to provide for the manner in which the moneys are to be dealt with when it appears that there was no legislative support for their collection.

We should add that it was not argued that the payment of the money to the Commonwealth pursuant to the SPASA agreement was not voluntary. Nor was it submitted that the Commonwealth's refusal to repay the money except according to the Refund Act was in breach of any constitutional protection save for that to be found in s. 51(xxxi) ^[157] cf. Mason v. New South Wales (1958-1959) 102 CLR 108 . . In particular, it was not argued that the Refund Act is a law imposing taxation or that, if it is, it is in breach of s. 55 of the Constitution. An argument that the Refund Act is in breach of s. 55 by trying to do indirectly what could not be done directly was expressly withdrawn ^[158] cf. Antill Ranger & Co. Pty. Ltd. v. Commissioner for Motor Transport (1955) 93 CLR 83, affd (1956) 94 CLR 177; Barton v. Commissioner for Motor Transport (1957) 97 CLR 633. .

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For these reasons, we would answer yes to the first question in the case stated and no to the second question.