AUSTIN & ANOR v COMMONWEALTH OF AUSTRALIA

Judges: Gleeson CJ
Gaudron J
Gummow J
Hayne J
McHugh J

Kirby J

Court:
Full High Court

MEDIA NEUTRAL CITATION: [2003] HCA 3

Judgment date: 3 February 2003

Kirby J

235. This Court has before it questions reserved on a case stated. [287] The case was stated by Hayne J pursuant to the Judiciary Act 1903 (Cth), s 18. As explained in the reasons of Gaudron, Gummow and Hayne JJ (``the joint reasons''), the questions for decision

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present two issues. [288] See the joint reasons at [ 38]- [ 39]. The first is a construction issue concerned with whether, pursuant to federal legislation, the two plaintiffs are liable to pay a superannuation contributions surcharge (``the surcharge''). The second issue involves the alternative attack that the plaintiffs have mounted on the legislation, suggesting that, if it applies to them or either of them, it exceeds the constitutional powers of the Federal Parliament.

Background facts, history and context

236. The facts and legislation : The facts are set out in the stated case. Most of them necessary for my opinion are explained in the joint reasons.

237. The first plaintiff (Justice Robert Austin) was appointed a judge of the Supreme Court of New South Wales on 31 August 1998. The second plaintiff (Master Kathryn Kings) was appointed the Listing Master of the Supreme Court of Victoria on 23 March 1993. On 20 July 1993 she was appointed a Master of that Court. Each of the plaintiffs has been supported in this Court by submissions of the Attorney-General for his or her State and by Attorneys- General of other States, intervening. The Commonwealth has disputed the plaintiffs' arguments. It submits that the legislation is valid and applicable to each of them.

238. Because the joint reasons set out a description of the federal legislation (both that impugned and other laws relevant to the issues), [289] Joint reasons at [ 49]- [ 69]. it is unnecessary for me to repeat that detail. The unpleasant complexity of federal superannuation law has already been the subject of attention in this Court. [290] Attorney-General (Cth) v Breckler (1999) 197 CLR 83 . I shall adopt the description of the legislation, federal and State, used by my colleagues.

239. Historical setting : The sources of the plaintiffs' arguments do not lie only in the text of the Constitution and the detail of the impugned legislation. They lie deep in constitutional history and in issues of basic principle. So far as history is concerned, the plaintiffs submitted that their arguments could be understood only if this Court recalled the long struggle for the integrity of the judicial institution to which the Australian judiciary is heir.

240. In the time of the Norman Kings of England, the judicial power (at least in non- ecclesiastical matters) reposed in the hands of the King personally and his immediate entourage (the Curia Regis ). [291] Re Provincial Court Judges [ 1997] 3 SCR 3 at 176 [ 305] ; see also Lederman, ``The Independence of the Judiciary'', (1956) 34 Canadian Bar Review 769. Royal participation in the judicial function diminished over ensuing centuries in favour of professional judges. However, those judges were, at first, dependant for their offices and remuneration upon the King's pleasure. The abuse of that power by the Stuart Kings contributed to the revolution of 1688 and The Act of Settlement of 1700. [292] 12 and 13 Will 3 c 2. By that law, confirmed by George I in 1714, [293] 1 Geo 1 c 4. it was enacted that the judges of the Kingdom should hold office during good behaviour and that their salaries should be ``ascertained and established'' by law. [294] s 3. See Re Provincial Court Judges [ 1997] 3 SCR 3 at 177 [ 306] . In 1760, by an Act relating to the ``Commissions and Salaries of Judges'', [295] 1 Geo 3 c 23. another cause weakening the position of judges was removed. It was provided that Royal appointees, including judges, would no longer vacate their offices, and lose their salaries, upon the demise of the Crown. [296] cf Re Provincial Court Judges [ 1997] 3 SCR 3 at 177 [ 306] .

241. These constitutional advances, won in England, were not initially observed in England's colonies. One of the complaints made by the American colonists in the Declaration of Independence was that the King had ``made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries''. [297] § 11. See United States v Hatter 532 US 557 at 568 (2001) . It was this defect in government that led, among other things, to the ``Compensation Clause'' in the United States Constitution, [298] Art III s 1. guaranteeing federal judges a ``Compensation, which shall not be diminished during their Continuance in Office''.

242. Australian judicial pensions : The first provisions for judicial pensions in the Australian colonies were introduced by the New South Wales and Victorian Constitution Acts. [299] New South Wales Constitution Act 1853, s 59 (17 Vict No 41); Victoria Constitution Act 1855, Sched 1 cl 49 (18 & 19 Vict c 55). Such provisions were confirmed, and formalised, by later colonial [300] Judges' Pensions Act of 1859 (NSW) (23 Vict No 2) and Supreme Court and Circuit Courts Act 1900 (NSW). and State [301] eg Judges Retirement Act 1918 (NSW) and Supreme Court (Judges Retirement) Act 1936 (Vic). The present source of the judicial pension for judges and Masters of the Supreme Court of New South Wales is the Judges' Pensions Act 1953 (NSW). The present source of the judicial pension for Masters of the Supreme Court of Victoria is the Supreme Court Act 1986 (Vic), Pt 7. See the joint reasons at [ 46]. statutes. In respect of federal judges, provision for pensions was made in the first draft of the Judiciary Bill. [302] Australia, House of Representatives, Parliamentary Debates (Hansard), 18 March 1902 at 10976. However, that provision was deleted when the Judiciary Act 1903 (Cth) was passed. In 1918, a special measure was enacted for the entitlements of Griffith CJ, who had enjoyed pension rights as Chief Justice of Queensland which he lost upon his federal appointment. [303] Chief Justice's Pension Act 1918 (Cth). A general provision for pensions for federal judges was not enacted until 1926. [304] Judiciary Act 1926 (Cth). This was later amended by the Judges' Pensions Act 1948 (Cth). The present source of judicial pensions for federal judges is the Judges' Pensions Act 1968 (Cth).

243. Judicial pensions were introduced over time in the Australian colonies. [305] Queensland: Supreme Court Constitution Amendment Act of 1861 (Q), s 8 (25 Vict No 13); Tasmania: Supreme Court Judges' Retiring Allowances Act 1880 (Tas) (44 Vict No 28); Western Australia: Judges' Pensions Act 1896 (WA) (60 Vict No 24). In Queensland and South Australia the pension provisions so introduced were abolished but

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later restored. [306] Queensland: Judges' Retirement Act 1921 (Q) (12 Geo 5 No 14). Pensions were reintroduced by the Judges' Pensions Act of 1957 (Q) (6 Eliz 2 No 38). South Australia: An Act to repeal an Act No 186 of 1880 1886 (SA) (49 & 50 Vict No 381). Pensions were reintroduced by the Supreme Court Act Amendment Act 1944 (SA). The common feature of most of the Australian judicial pension statutes was that they provided a ``non-contributory'' pension (that is, one to which the judge did not directly contribute financially) paid to the judge upon qualifying retirement or, upon death, to the judge's legal personal representative or specified family members. Only in two States was provision made for contributions by a judge to such pension entitlements. In South Australia, when pensions were restored after an interval of fifty-eight years, they were at first contributory. [307] Supreme Court Act Amendment Act 1944 (SA). The present non-contributory scheme in that State only commenced in 1971. [308] Judges' Pensions Act 1971 (SA). The Judges' Contributory Pensions Act 1968 (Tas) provides, as its short title suggests, for judicial contributions to the benefits payable under that Act. All other judicial pension schemes in Australia, federal and State, are non-contributory and ``unfunded'' (that is, paid out of consolidated revenue rather than from a specific fund established for the purpose).

244. Australian taxation : South Australia was the first Australian jurisdiction to introduce income tax, in 1884. [309] Taxation Act 1884 (SA) (47 & 48 Vict No 323). Like taxes were introduced in New South Wales and Victoria in 1895. [310] Land and Income Tax Assessment Act of 1895 (NSW) (59 Vict No 15) and Income Tax Act 1895 (NSW) (59 Vict No 17); Income Tax Act 1895 (Vic) (58 Vict No 1374). The other colonies and States introduced that form of taxation at the same time or soon after. [311] Income Tax Act 1894 (Tas) (58 Vict No 16); Income Tax Act of 1902 (Q) (2 Edw VII No 10); Land Tax and Income Tax Act 1907 (WA) (7 Edw 7 No 16). The Federal Parliament first enacted taxes upon incomes in 1915. [312] Income Tax Act 1915 (Cth).

245. Despite objections of the Privy Council, [313] Webb v Outrim [ 1907] AC 81 . this Court initially embraced a view of the Constitution forbidding the imposition of taxation by one polity of the Commonwealth upon an instrumentality or officer of another, where such taxation would ``fetter, control, or interfere with, the free exercise of the legislative or executive power'' of the other. [314] See D'Emden v Pedder (1904) 1 CLR 91 at 111 . (emphasis added) Affirmed in Deakin v Webb (1904) 1 CLR 585 . This principle was held to be reciprocal. [315] Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1132-1133 . It therefore prohibited the interference of federal law with State governmental instrumentalities and officeholders. [316] The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employ é s Association (1906) 4 CLR 488 . However, the doctrine of intergovernmental immunities, which was the foundation for these rulings, was overthrown in 1920 by the decision of this Court in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (``the Engineers' Case ''). [317] (1920) 28 CLR 129. See the reasons of McHugh J at [ 212] and the remarks of Chief Justice Sir Garfield Barwick on his retirement (1981) 148 CLR v at ix-x; cf SGH Ltd v FC of T 2002 ATC 4366 at 4376-4376, 4381; (2002) 76 ALJR 780 at 790 [ 50], 797 [ 85]; 188 ALR 241 at 255, 264 .

246. At least after the Engineers' Case , there was no question that a State judge in Australia was obliged, like any other citizen, to pay taxes imposed by legislation enacted by the Federal Parliament under its constitutional power to make laws with respect to taxation. [318] Constitution, s 51(ii). Nor was it suggested that federal judges were wholly immune from such laws. This was so although, in the case of federal judges, a relevant express provision is made in s 72 of the Constitution:

``The Justices of the High Court and of the other courts created by the Parliament:

  • ...
  • (iii) shall receive such remuneration as the Parliament may fix; but the remuneration shall not be diminished during their continuance in office.''

247. The provision of s 72 is similar to the ``Compensation Clause'' in the United States Constitution. In that country it was originally held that the power of the Congress to ``lay and collect Taxes'' [319] United States Constitution, Art I s 8. did not extend to imposing federal taxation on State judges. [320] Collector v Day 78 US 113 (1870) ; cf Pollock v Farmers' Loan and Trust Company 157 US 429 (1895) . Similarly, it was held that, under the ``Compensation Clause'', federal judges were immune from liability to pay federal taxes. [321] Evans v Gore 253 US 245 (1920) . See also Miles v Graham 268 US 501 at 509 (1925) . During the Civil War an attempt by federal law to impose income tax on the Justices of the Supreme Court led to a communication to the Government by Taney CJ on behalf of the Court and to a subsequent refund to the Justices of the tax paid by them ``under protest''. See Miller, Lectures on the Constitution of the United States , (1893) at 247-248 cited in Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 at 1316 per Griffith CJ. However, in 1939, each of these immunities was overruled by the Supreme Court. That Court held that judges in the United States were liable to pay non-discriminatory federal taxes imposed by reference to their salaries. [322] O'Malley v Woodrough 307 US 277 (1939); cf United States v Hatter 532 US 577 (2001). A little earlier, a similar decision had been reached in respect of the judges of Canada. [323] Judges v Attorney-General of Saskatchewan [ 1937] 2 DLR 209 (PC) .

248. Exempting current officeholders from the new tax : A final contextual consideration must be mentioned before I turn to the plaintiffs' legal challenges. The last time an Australian judge contested the applicability of taxes to his judicial income, as a matter of general principle, was in 1907. Sir Pope Cooper, Chief Justice of Queensland, disputed the application of State income tax law to judicial salaries. [324] Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 . This Court dismissed the challenge. One reason for the absence of judicial proceedings questioning the applicability to judges of Australian taxation laws may have been the care which Australian governments and parliaments have normally observed to respect the principle that judges should only be rendered liable to taxation laws of general application and to respect the convention otherwise protecting the remuneration of serving judges from effective diminution.

249. There is no express equivalent in the Australian Constitution, similar to s 72(iii), protecting the remuneration of State judges. There are relevant State laws to restrain the reduction of the salaries and allowances payable to judges of State Supreme Courts. [325] eg Constitution Act 1975 (Vic), s 82(6B). However,

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such laws are obviously addressed only to State reductions. They could not prevent the operation of a valid federal law having that effect. It may be argued that there is a convention, and possibly an implication in Ch III of the Constitution, protecting the remuneration of appointed State judges. Whatever might be said as to the existence, or scope, of any such protection (a matter that might consume much time to clarify) in this case a decision was made by the Federal Parliament to draw no distinctions between Australia's judges already in office who were entitled to a judicial pension. Relevantly, by s 7 of the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) (``the Protected Funds Assessment Act''), it is provided that the Act ``does not apply to a person who is a member because he or she is a judge of a court of a State at the commencement of this Act''.

Application of interpretative principles

250. No issue is raised in these proceedings concerning the taxation obligations of federal judges. This case is concerned only with the application of the impugned laws with respect to the two plaintiffs who are State judicial officers. The outcome thus depends upon the construction of the laws in question and, should either or both of the plaintiffs fall within their operation, whether such laws are constitutionally valid.

251. In the performance of the function of statutory construction a court must conform to applicable statutory and common law rules devised to facilitate that task and to ensure that it is carried out in a consistent manner. One such rule is the ``plain meaning'' principle. Another is that commonly described as the ``purposive'' principle. [326] cf Kingston & Anor v Keprose Pty Ltd (1988) 6 ACLC 226 at 241; (1987) 11 NSWLR 404 at 423-424 per McHugh JA. In the case of federal legislation, the latter principle is supported by provisions of the Acts Interpretation Act 1901 (Cth). [327] s 15AA. It is also supported by the common law as elaborated by this Court. [328] See eg Bropho v Western Australia (1990) 171 CLR 1 at 16-17 ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [ 69]- [ 70] . In earlier times it used to be said that legislation imposing taxation was subject to a strict construction, in favour of the taxpayer. However, in more recent times, this Court has departed from the narrow and literal interpretation of words appearing in legislation, including that imposing taxation, in favour of an interpretation that seeks to achieve the apparent purposes or objects of the enactment as expressed in its terms. [329] Cooper Brookes (Wollongong) Pty Ltd v FC of T 81 ATC 4292 at 4297 per Gibbs CJ, 4299 and 4301 per Stephen J, 4307 per Mason and Wilson JJ; (1980-1981) 147 CLR 297 at 307 per Gibbs CJ, 310 and 313 per Stephen J, 323 per Mason and Wilson JJ ; cf joint reasons in this case at [ 102]. See also Newton & Ors v FC of T (1958) 11 ATD 442 at 445-446; (1958) 98 CLR 1 at 7-9; [ 1958] AC 450 at 465-466 .

252. There is another principle of interpretation important for this case. It affects my approach both to the suggested ambiguities of the federal legislation (relevant to the applicability issue) and to the meaning and operation of the Constitution (relevant to the validity issue). In the task of construction it is permissible to have regard to any applicable principles of international human rights law that throw light upon the point in controversy. To do this is not to introduce into the interpretation, by the backdoor, provisions in international human rights treaties to which Australia is a party but which have not been incorporated as part of this country's domestic law. [330] cf Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 288 . That would be an impermissible course. Instead, it involves a different, and permissible course. Faced with a choice between competing concepts of the common law or ambiguous Australian statutes, a decision-maker may take into account, as relevant, the consideration that one interpretation will conform to the international law of human rights and another will not. [331] cf Mabo v Queensland [ No 2] (1992) 175 CLR 1 at 42 . See also Dietrich v R (1992) 177 CLR 292 at 305-306, 360-361, 373 ; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [ 69] .

253. The international law of human rights represents a large and growing body of jurisprudence, developed by courts and expert bodies throughout the world, based upon the texts of international instruments that have come into force. It provides a legal resource of great utility from which this country is not disconnected. It is at least as useful in considering questions of basic legal principle concerning the content of Australian law to have regard to this source as it is to examine the non-binding expositions of the law appearing in English cases of centuries ago, often dealing with problems in a context quite different from that of the contemporary world. [332] cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 132-133 [ 297]- [ 298] .

254. Australia is a party to the International Covenant on Civil and Political Rights (``the ICCPR''). [333] Done at New York on 19 December 1966, ATS 1980 No 23. It is also a signatory to the First Optional Protocol to the ICCPR. That Protocol renders the law of Australia (including as expounded by this Court) accountable to the treaty body established under the ICCPR for dealing with communications alleging derogations from that Covenant's requirements.

255. The ICCPR provides that ``everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law''. [334] Art 14.1; cf Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [ 69] . These tripartite characteristics of courts and tribunals are fundamental rights belonging not to the judges

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or other members of such bodies, as such, but to all persons in society. The entitlement to a manifestly competent, independent and impartial decision-maker in a court or tribunal established by law, is the clear requirement of international human rights law. [335] Karttunen v Finland, United Nations Human Rights Committee , 23 October 1992 extracted in Martin et al, International Human Rights Law and Practice , (1997), vol 1 at 527. The more general proposition of judicial independence is also supported by Australian domestic law. [336] Johnson, BG v Johnson, K (No 3) (2000) FLC ¶ 93-041 ; (2000) 201 CLR 488 ; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 . It may be implied in the Australian Constitution, including in the case of State courts. [337] Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 ; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363-364 [ 83]- [ 84] per Gaudron J; 372-373 [ 115]- [ 116] of my own reasons; cf Roberts v Bass (2002) 194 ALR 161 at 199-200 [ 145] .

256. So far as the interpretation of the Constitution by reference to developments of international law, it is to be noted that the approach that I have mentioned, often favoured by judges of other Commonwealth countries, [338] eg Tavita v Minister of Immigration [ 1994] 2 NZLR 257 at 266 ; R v Oakes [ 1986] 1 SCR 103 at 120-121 ; Claydon, ``International Human Rights Law and the Interpretation of the Canadian Charter of Rights and Freedoms'', (1982) 4 Supreme Court Law Review 287. has recently gathered some support in the Supreme Court of the United States. In ruling that the carrying into effect of a sentence of death upon a prisoner who was severely mentally handicapped would constitute ``cruel and unusual punishment'', contrary to that country's Constitution, Stevens J, for the majority of the Court, called in aid opinions concerning the requirements of international human rights law. [339] Atkins v Virginia 70 USLW 4585 at 4589, fn 21 (2002) per Stevens J, with whom O'Connor, Kennedy, Souter, Ginsburg and Breyer JJ joined. That approach produced a strong dissent from Rehnquist CJ at 4591 and Scalia J at 4598 (with whom Thomas J joined).

257. For reasons that I have expressed in other decisions, [340] eg Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657- 659 ; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 417-419 [ 166]- [ 167] ; cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 130-131 [ 292]- [ 293] . it is my view that this Court may also interpret the Australian Constitution so as to ensure that the development of constitutional doctrine, relating to matters of fundamental principle, conforms, so far as the text and other considerations allow, to the principles of the law of universal human rights. In the present case, this includes the right of access to judges who are competent, independent and impartial in the full sense of those words. Many international statements concerning the features essential to the judicial branch of government recognise the importance of providing adequate remuneration for the judiciary and protection of such remuneration against its effective reduction whilst in office. [341] United Nations, Basic Principles on the Independence of the Judiciary, endorsed by the General Assembly, A/Res/40/32, 29 November 1985, A/Res/40/146, 13 December 1985 at par 11; Draft Principles on the Independence of the Judiciary (``Siracusa Principles''); International Association of Judges, The Universal Charter of the Judge (2000), at Art 13 (``The judge must receive sufficient remuneration to secure true economic independence''). Where there is an ambiguity in the applicable legislation or an uncertainty in the meaning and application of the Constitution, I will prefer the construction that upholds these basic principles and applies them to the problem in hand in preference to a construction that does not. I take such notions to be inherent in the type of judiciary for which the Australian Constitution provides or which it recognises.

Construction arguments

258. Application to the first plaintiff : The construction arguments advanced by the first plaintiff are described in the joint reasons. [342] Joint reasons at [ 92]- [ 110]. For the reasons there stated, each of the arguments fails. Nothing in the interpretative principles to which I have referred assists the first plaintiff on the applicability issue. The plain meaning and purposive principles stand against his arguments. There is no relevant uncertainty or ambiguity in the legislation. The construction arguments must be rejected in his case. This conclusion requires consideration of the first plaintiff's objections to the constitutional validity of the federal law that, in its terms, applies to him.

259. Application to the second plaintiff : The case of the second plaintiff is more difficult. The issue is whether, before the applicable date, 7 December 1997, the second plaintiff was a ``judge of a court of a State'' for the purposes of the Protected Funds Assessment Act. There is no definition of the word ``judge'' in that Act. Therefore, the issue becomes, what does that phrase ``judge of a court of a State'' mean in the context of that Act?

260. Upon one view, the second plaintiff is not a ``judge''. She is not so designated by title. Within the judiciary and legal profession she would not ordinarily be described as a ``judge''. In this regard, her position is different from that of a Master in the State of South Australia where a Master of the Supreme Court is designated a judge because so commissioned in the District Court of that State. [343] Supreme Court Act 1935 (SA), s 7(4). In the case of the second plaintiff, the same position did not obtain when she was appointed to her present office. It did not exist on 7 December 1997. Nor has it existed at any time since.

261. It is not to be supposed that the Federal Parliament was ignorant of the distinction, observed in most Australian States, between judges and Masters. The precise functions performed by Masters in the several States differ. Although this is also true of judicial officers designated as ``judges'', the differentiation there is less marked. One view of the legislation, in effect exempting serving State ``judges'' from the new federal surcharge, is that the exemption was an exceptional measure, arguably unnecessary by the Constitution but conformable to an established convention, which the Government proposing the Bill, and the Parliament enacting it, felt should be confined to ``judges'' strictly so described.

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262. The Commonwealth conceded that, in particular cases, a differentiation between judges and Masters might put some Masters in an anomalous position. However, it submitted that the adoption of a functional analysis would introduce other and still more difficult problems caused by any departure from observing the plain meaning of the word used by the Parliament. Thus, judicial registrars of the Federal Court of Australia [344] Federal Court of Australia Act 1976 (Cth), ss 18AA-18AM; Federal Court Rules O 78 r 38. and of the Family Court of Australia [345] Family Law Act 1975 (Cth), s 26B; Family Law Rules O 36A. perform functions that are in some ways similar to the functions of judges and Masters. However, they are not exempted by federal law from the application of the surcharge. The Commonwealth argued that it would be surprising if a federal law, using the word ``judge'', were to be construed as covering officers such as Masters only because of functional similarity of their work to the work of judges. If that were the case, questions could arise as to how ``magistrates, registrars or people with the status of a judge'' could be so distinguished.

263. There is much force in these submissions. They accord with the common sense and ordinary meaning of the word ``Master'', as distinct from ``judge''. Upon one view, that distinction is reinforced by the Victorian Constitution, which states that both judges and Masters are part of the Supreme Court of that State. [346] s 75(2). The joint reasons invoke this provision as support for their conclusion that ``a judge of a court of a state'' includes Masters in the case of that Court. [347] Joint reasons at [ 76]. However, it is equally arguable that the distinction is antagonistic to that conclusion. On this view, it only adds force to the understanding of the word ``judge'', as ordinarily excluding a Master. The phrase in the Protected Funds Assessment Act does not refer to the Supreme Court and its members, but only to ``judges''.

264. The joint reasons refer to the fact that the Supreme Court Act 1986 (Vic) is one of the Acts listed in Sched 14 of the Income Tax Regulations 1936, which establishes the ``protected'' funds. They reason that, as the Masters' fund is the only ``fund'' established by that Victorian Act, it must have been intended that Masters would be considered ``judges'' for the purpose of s 7, or else listing that Act in Sched 14 would have no function. [348] Joint reasons at [ 56], [ 77]. However, this possible anomaly is no different in kind from that produced by also listing the Coal Mines (Pension) Act 1958 (Vic) and the Mint Act 1958 (Vic), to which the legislation has no operation. The joint reasons suggest that this ``incongruity'' was created by the direct transfer of the contents of Sched 14 from its position in earlier legislation. [349] Joint reasons at [ 96]. If such explanation can be used for those Acts, the question is posed why not for the Victorian Supreme Court Act ?

265. The task of construing legislation is not a mechanical one. In deriving meaning courts will be guided by the apparent purpose which the chosen language was enacted to perform. In the present case, part of that purpose was to protect the pensions of the specified persons already in judicial office in certain courts and to do so out of respect for the convention long observed in relation to the remuneration of judges of superior courts. It is questionable whether, without express provision, Masters are members of the courts to which that convention applies. In such a finely balanced issue, the second plaintiff's arguments receive some support from the interpretive principle based on international human rights law. Thus, with some hesitation, I have concluded that it would not be stretching the definition of ``judge'' too far in this instance to include within its ambit appointed Masters of the Supreme Court of Victoria for the purpose of s 7 of the Protected Funds Assessment Act. I will not press the hesitation that I feel in embracing this conclusion to a dissent from the opinion of the other members of this Court on the issue of construction. A larger difference lies between us involving the Constitution.

266. I agree with the joint reasons [350] Joint reasons at [ 79]. that the position of Masters in other Australian Supreme Courts depends upon an analysis of the legislation (and functions) applicable in their cases. My conclusion of the construction issue in favour of the second plaintiff would not necessarily require the same outcome in the case of Masters in other States, appointed under relevantly different legislation.

267. Conclusions : The result is therefore that the construction question in respect of the first plaintiff must be answered ``yes''. In respect of the second plaintiff the answer must be ``no''. It follows that, in respect of the second plaintiff, the issue of constitutional validity does not arise. However, that issue must be addressed in the case of the first plaintiff.

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Unavailing constitutional arguments

268. A number of arguments were advanced, contesting the constitutional validity of the federal laws subjecting the first plaintiff to the surcharge. I can dispose briefly of most of those arguments because I agree with the joint reasons that they should be rejected. [351] Joint reasons at [ 175]- [ 201]. Specifically, I agree with what is stated in the joint reasons in respect of the submissions that the legislation constituted an arbitrary exaction, not taxation; [352] Joint reasons at [ 182]- [ 183]. involved an abdication of legislative authority; [353] Joint reasons at [ 184]- [ 186]; cf Gould v Brown (1998) 16 ACLC 316 at 382-383; (1998) 193 CLR 346 at 485-487 [ 284]- [ 287] ; Byrnes v R (1999) 199 CLR 1 at 10-11 [ 4] ; R v Hughes (2000) 18 ACLC 394 at 412; (2000) 202 CLR 535 at 574-575 [ 94] . and constituted a breach of s 55 of the Constitution which mandates but one subject matter in laws imposing taxation. [354] Joint reasons at [ 187]- [ 201]; cf Luton v Lessels & Anor 2002 ATC 4311 at 4331; (2002) 76 ALJR 635 at 655 [ 122]; 187 ALR 529 at 558 .

269. I also agree with what is said in the joint reasons concerning the alleged invalidity of the suggested conscription of State officers and institutions (including State Government Actuaries) to perform functions in the calculation of the ``notional surchargeable contributions factor'', as contemplated by the federal legislation. [355] See joint reasons at [ 177]- [ 181] referring to the requirements of the Protected Funds Assessment Act, s 9(5) and Regulations thereunder.

270. The joint reasons do not finally resolve this last-mentioned objection. [356] Joint reasons at [ 181]. However, to reach my answers, I must do so. In my view, nothing in the applicable federal law subjects the State Actuary (or a fund manager) to duties that are constitutionally impermissible. It is not uncommon for federal laws, in their operation, to have consequences for State officials. Thus, the constitutional power to vest federal jurisdiction in State courts [357] Constitution, s 77(iii); cf Solomons v District Court of New South Wales (2002) 76 ALJR 1601 at 1625 [ 132]; 192 ALR 217 at 250 . The vesting of federal jurisdiction in State courts is a special case because of the constitutional power to do so without State agreement or authority. However, the point of incidental obligations inherent in obedience to valid federal law remains true in other cases: Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 425, 440-441 . necessarily has many consequences for State officials, quite apart from State judicial officers. For example, such consequences affect the duties of court reporters, sheriffs' officers, registry staff, administrative personnel of the State Attorney- General's office and so on. If there be federal power (as in this case is propounded by reference to the power to make laws with respect to taxation) incidental duties will commonly be cast on many persons, including State public servants. What is impermissible, under the implication derived from the Constitution, is interference in: [358] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 232 ; cf SGH Ltd v FC of T 2002 ATC 4366 at 4376; (2002) 76 ALJR 780 at 790 [ 51]; 188 ALR 241 at 255 .

``the [ State] government's right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds.''

271. In relation to the ``higher levels of government'', the Federal Parliament may not interfere with the State's capacity to determine the persons it employs, their terms and conditions of employment and the normal duties they are required to perform. [359] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233 . However, these principles have no application to the limited burden imposed on the State as a notional ``superannuation provider'' [360] In the case of the first plaintiff, the Attorney-General's Department of New South Wales. to provide information essential to the accurate calculation of a federal tax (if so it proves) applicable to the State judge concerned.

272. A similar objection might be voiced in relation to the duty of State government departments, agencies and officeholders to provide details for present income tax laws of the income paid to State officials, including those, like judges, in the ``higher levels of government'' of the State. Yet for decades ``employers'' (including State government ``employers'') have been obliged by federal law to provide such information. [361] cf Income Tax Assessment Act 1936 (Cth), ss 221C, 221EAA (but see s 221DA). Such duties obviously impose burdens on the State and on its employees and officers. They involve costs to the State. But they are relatively minor and strictly incidental to the operation of valid federal taxation laws. The claim that the imposition of the duty provided in this case is constitutionally impermissible, as an invasion of the employment autonomy of a State as a constituent part of the Commonwealth, is unconvincing. So is the contention that susceptibility to federal judicial review (if such be the case) would be impermissible without express consent of State law in the case of a State officeholder such as the State Government Actuary. [362] cf Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 117 at 128 .

273. In Re Australian Education Union; Ex parte Victoria , [363] (1995) 184 CLR 188. this Court emphasised the need to respect the integrity and autonomy of the States in the context of the operation of s 109 of the Constitution. [364] (1995) 184 CLR 188 at 229-230. See also R v Hughes (2000) 18 ACLC 394 at 401 [ 31], 413 [ 101]; (2000) 202 CLR 535 at 553 [ 31], 577 [ 101] . That section presents difficulties for the attempted imposition on federal officers of duties imposed by State law without the express and valid agreement of a law of the Federal Parliament. However, the same problem is not presented by the incidental imposition upon State officers of relatively limited obligations inherent in the carrying into effect of valid federal laws. The extreme argument of autonomy advanced for the first plaintiff would deny the integrated character of the Australian federation. [365] R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560 ; R v Hughes (2000) 18 ACLC 394 at 407-408 [ 67-73]; (2000) 202 CLR 535 at 566-568 [ 67]- [ 73] . It would forbid the Federal Parliament not only from enacting laws

ATC 4096

obliging the States to provide information on the remuneration paid to State employees. It would also forbid the imposition of obligations to deduct, and remit, taxation at source. Yet for decades, these have been accepted and sensible features of the Australian taxation system. They are laws of broad application, affecting employees and high officeholders of the States alike. I am unconvinced that the imposition of such incidental burdens on State officials is constitutionally forbidden. [366] cf Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 601 [ 190]- [ 191] . See also R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560, 563, 589 ; cf The Commonwealth v New South Wales (1923) 33 CLR 1 at 27-28, 53-56 . It falls far short of the ``conscription'' of State officials that (except perhaps in wartime or like emergency under the defence power) would be forbidden to federal law. [367] cf Printz v United States 521 US 898 (1997) ; Reno v Condon 528 US 141 (2000) .

274. It follows that the objections [368] Chiefly advanced by the Attorneys-General for South Australia and Western Australia, intervening. to the statutory duty to perform actuarial calculations do not avail the first plaintiff. Even if those arguments were made good, they would at most be a reason for severing the offending provisions, leaving the remainder of the legislation in tact. The Commissioner of Taxation would simply have to obtain the necessary raw information from the State [369] Protected Funds Assessment Act, s 33(1). and perform the calculation for himself. In all other respects I agree with what is said in the joint reasons concerning the heads of challenge mentioned above. This conclusion confines the point of divergence in my reasons to the last remaining argument about constitutional validity. It involves the claimed infringement of the implied limitation on the legislative powers of the Commonwealth, derived from the character of a State as an organ of government and the federal character of the Constitution. [370] Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 .

The implied federal limitation

275. The federalism limitation : The joint reasons express the opinion that the first plaintiff succeeds upon the remaining constitutional argument. This involves the contention that the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Protected Funds Assessment Act are invalid wholly, or at least in respect of their application to the first plaintiff, because they infringe limitations on the legislative power of the Federal Parliament arising from ``the very frame of the Constitution'' as stated in Melbourne Corporation v The Commonwealth (`` Melbourne Corporation ''). [371] (1947) 74 CLR 31 at 83 per Dixon J. That decision represented something of a retreat from the high water mark of this Court's approach to the exposition of the scope of federal legislative powers following the Engineers' Case . [372] (1920) 28 CLR 129; cf Hill, ``Revisiting Wakim and Hughes: The Distinct Demands of Federalism'', (2002) 13 Public Law Review 205 at 227 citing Sawer, ``Implication and the Constitution'', (1948) 4 Res Judicatae 15 and 85. Although, in the end, I have reached a conclusion on this argument different from that stated in the joint reasons, I agree with much of the analysis appearing there.

276. Ample federal legislative power : The Commonwealth supported the constitutional validity of its legislation on the basis of the Federal Parliament's constitutional power to make laws with respect to taxation. That power is conferred in very large terms. The only relevant express restriction, stated in the grant, forbids discrimination ``between States or parts of States''. That restriction is not applicable in this case. The mere fact that, because a federal law has differential consequences for different States, as a result of factual or legal distinctions between them, is not sufficient to infringe the express constitutional limitation. [373] See joint reasons at [ 117]- [ 118]. An example of this form of difference would be that created by the contributory judicial pension in Tasmania compared to the other States' schemes being non- contributory.

277. The first plaintiff did not contest that employees or officers of a State are normally subject to federal taxation law. He did not argue for a restoration of the strict notion of intergovernmental immunity. It may be accepted that the express limitation stated in s 51(ii) itself, or the restriction expressed in s 114 of the Constitution, do not constitute an exhaustive statement of the restrictions on the federal legislative power with respect to taxation as that power impinges on the States. So far as s 114 is concerned, the relatively narrow approach of this Court to the institutions that may be viewed as the ``State'' for the purposes of that section, [374] SGH Ltd v FC of T 2002 ATC 4366 ; (2002) 76 ALJR 780 ; 188 ALR 241 . suggests that it falls short of expressing the entire zone of immunity of the property and activities of the State envisaged by the Constitution. [375] cf joint reasons at [ 142].

278. In the light of experience and governmental realities, it is wrong to take at face value the mantra that ``the power to tax involves the power to destroy''. [376] Joint reasons at [ 140] citing McCulloch v Maryland 17 US 159 at 210 (1819) ; cf joint reasons at [ 133]. Nevertheless, it remains true that the federal power over taxation, as interpreted over many decades, affords a substantial explanation of the growth of the legislative and economic powers of the Commonwealth, often at the expense of the States. The mere fact that a taxation measure may have purposes beyond the raising of revenue and that it may impose on the States various burdens and disadvantages is not a reason for holding a law to be beyond the Federal Parliament's power with respect to taxation or contrary to implied federal

ATC 4097

limitations upon that power. [377] Joint reasons at [ 139]. For invalidity, much more is required.

279. In this way I arrive at the implied limitation expressed in Melbourne Corporation . Defining the implied federal limitation in precise terms presents a difficulty that has been acknowledged by this Court in many cases. [378] Joint reasons at [ 145]- [ 146]. Everyone may accept the existence of some such limitation and the need to discover its operation by reference to matters of substance rather than form. [379] cf joint reasons at [ 124]. Everyone may agree that a federal law on taxation, or anything else, that threatens the continued existence of the States as separate governmental entities would be constitutionally invalid. Yet, in the nature of things, it is unlikely that a frontal attack upon the existence of the States would arise in the form of federal law. In the world of practicalities, the problems are typically ones of degree, presented at the margins of constitutional power.

280. So far, this Court has identified two features of laws that are impermissible in this respect. The first is a law that ``involves the placing on the States of special burdens or disabilities''. [380] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 217 ; cf Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 507 . Such a discriminatory law is ``directed against'', ``singles out'', or is ``aimed at'' the restriction or control of the States. [381] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 206, 217 ; joint reasons at [ 119]. The second is a generally applicable law that operates to reduce the capacity of the States to function as governments within the federation established by the Constitution. In the latter case, although there is no ``discrimination'' and although the law is one of general application, it may be invalid if it diminishes, to an impermissible degree, the capacity of the States to function as the Constitution contemplates. [382] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 217 .

281. In so far as a difference has emerged in this case between the joint reasons and the reasons of McHugh J, I agree with the former that the two aspects of the implied limitation upon federal legislative power, noted in past decisions, are essentially manifestations of the one constitutional implication. Both are referable to the underlying conception concerning the nature of the Australian federation. I share the view that each identified defect is to be determined by reference to the effect of the impugned legislation on the continuing existence of the States, and whether there is an impermissible degree of impairment of the State's constitutional functions. The presence of discrimination against a State may be an indication of an attempted impairment of its functions as the Constitution envisaged them. But any discrimination against States must be measured against that underlying criterion. It affords the touchstone of the implied limitation explained in the Court's decision in Melbourne Corporation . It has been described as the ``firm ground'' upon which the reasoning in that case stands. [383] Victoria v The Commonwealth (1971) 122 CLR 353 at 402 .

282. Impairment of State polities : This said, it is not any impairment that is sufficient to establish invalidity of a federal statute. [384] cf Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 228- 229 . This Court should resist arguments that represent a disguised attempt to resuscitate the implied immunities doctrine whereby any encroachment upon a State, its instrumentalities, officers or employees is considered impermissible for federal legislation. [385] The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employ é s Association (1906) 4 CLR 488 . Federalism in Australia, as it has been given shape by statute law and decisions of this Court, has evolved into a high degree of cooperation and of federal leadership in matters lying within the powers of the Commonwealth. That is not to deny that a tension exists between the Federal and State Parliaments, especially in a setting such as the present, where the general power of the Federal Parliament over taxation effectively gives the Commonwealth primary access to large economic resources. However, the mere encroachment of legislation, fiscal or otherwise, upon a State, does not amount to an impermissible impairment sufficient to render the federal legislation invalid. Were it so, a vast amount of federal legislation upheld by this Court, having direct and indirect consequences for the States, their functions and officeholders, would have to be struck down as invalid to the great damage of the integrated features of the Australian Commonwealth.

283. In every case in which the Melbourne Corporation implication is invoked the issue for decision is one of degree. There is no exact formula to determine the extent to which legislation must burden a State before it will be found invalid. However, some guidance may be sought from earlier statements of members of this Court. For example, as Windeyer J put it, a federal law will be invalid where the subject State is ``sterilized'' or ``its status and essential capacities'' are ``impaired in a substantial degree''. [386] Victoria v The Commonwealth (1971) 122 CLR 353 at 398 , citing Attorney- General for Ontario v Israel Winner [ 1954] AC 541 at 578 . The language of ``control'' [387] eg Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 163-164, 241 . and ``impact'' are unhelpful. It is the capacity of a State to function, rather than the mere ease with which its constitutional functions can be

ATC 4098

exercised, that is determinative. [388] The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 139-140 ; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 481 ; cf joint reasons at [ 146]. In order to come to a conclusion on this issue, it is the operation and effect of the federal legislation that must be analysed.

284. The protection of the continuing existence of the States as political entities is not an abstract notion. It is a concept that addresses the sum of the executive, legislative and judicial arms of government that together constitute the State as a polity. It is unnecessary in this case to consider the outer limits of what represents ``the State'' [389] cf Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 218 per Mason J. for the purposes of the constitutional implication. The agency in question in the first plaintiff's case is the Supreme Court of New South Wales. It was not contested that such a court represents an essential branch of the government of the State. [390] Joint reasons at [ 147]. It follows that a substantial impairment of the functions of the Supreme Court or the ability of the State to determine its composition would certainly constitute an impermissible encroachment by the Federal Parliament upon an essential component part of the government of a State. Such an impairment would render invalid any such federal legislation.

285. The issue in these proceedings therefore becomes whether such an impermissible encroachment has been demonstrated. The difference between my reasoning and that of the majority involves my analysis of the effect of the surcharge legislation upon the State and its judicial institution. In my opinion, there is no encroachment by the federal law such as attracts the implied constitutional prohibition.

286. Selection and retention of State judges : To ensure the integrity of the judicial arm of a State and the autonomy of the State more generally, the State must have power over the selection and retention of the members of its courts, especially the Supreme Court. [391] Joint reasons at [ 165]; cf reasons of Gleeson CJ at [ 28]. This assertion can be supported by earlier statements of this Court, holding that the States must have control over the terms and conditions of the employment of its officeholders, especially those in ``high'' office, of which judicial office is clearly one. [392] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233 ; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 498 . Specifically in relation to judges, this power is necessary to ensure the continued recruitment to, and retention within, State courts of competent persons with an ``independence of mind and spirit''. [393] Joint reasons at [ 160] citing United States v Hatter 532 US 557 at 568 (2001) . This is how the level of remuneration of State judges is functionally relevant to the implied constitutional limitation which the first plaintiff invokes in this Court. Remuneration is not pertinent because it is important to the comfort and lifestyle of the judge and the judge's family. Its governmental importance lies in its function in attracting and retaining as judges officeholders worthy of that name. This means officeholders in the government of the State who exhibit the characteristics essential for the judicial office that the Australian Constitution contemplates for the States - most importantly competence, independence and impartiality. In this sense, the independence of the State judiciary, although not a separate ground of attack on the validity of the impugned federal laws, lies at the heart of the first plaintiff's contentions that the impact of the challenged surcharge on the State judicial institution undermines its essential governmental features.

287. I do not agree with Brennan J's statements in Re Australian Education Union; Ex parte Victoria , [394] (1995) 184 CLR 188 at 233; cf joint reasons at [ 166]. in dissent, so far as they imply that any burden on the ``emoluments'' provided by the State to its judicial officers constitutes an impermissible burden, rendering the legislation invalid. Were this the test, federal taxes upon such State ``judges'' would be prohibited. This is not the law and has not been so in this country since at least 1920.

288. It could not be disputed that the judicial pension entitlements of the first plaintiff constitute an important part of his ``remuneration''. Obviously, there is a close relationship between the aggregate benefits of salary, allowances and pension rights. [395] Joint reasons at [ 155]. Nor could it be disputed that such pension rights amount to an attractive entitlement of office, playing a part in the recruitment to judicial office, whether from private legal practice, or elsewhere. Such entitlements would also represent an inducement relevant to the retention in office of judges of appropriate skill and experience. [396] Joint reasons at [ 159].

289. The majority in this Court has concluded that the imposition of federal taxation in the form of the surcharge upon judges based on the notional contributions for pension entitlements and the mechanisms provided for its collection, infringe the States' control over the terms and conditions of the engagement of judges, impairing the ability of the States to recruit, and retain, appropriate officers in their judiciary and in this way infringe the implied federal limitation invoked by the first plaintiff. I disagree.

ATC 4099

290. I contest the proposition that imposition of such a tax has a significant and detrimental effect on the power of a State to determine the terms and conditions affecting the remuneration of its judges. This Court has repeatedly upheld the broad power of the Federal Parliament to make laws with respect to taxation in the most ample terms. A wide power is essential for the effective discharge by the Commonwealth of all of its national responsibilities, as envisaged by the Constitution. [397] cf Luton v Lessels & Anor 2000 ATC 4311 at 4330; (2002) 76 ALJR 635 at 654 [ 117]; 187 ALR 529 at 557 citing United States v Butler 297 US 1 at 61 (1936) . Self-evidently, taxation laws of general application have long had important consequences for the States, their instrumentalities, employees and officers, including those holding high positions in the government of the States such as judges. Yet this Court has repeatedly resisted attempts by the States to narrow the federal taxation power, or to secure immunity from federal taxes, by reference to implied limitations on the Commonwealth's law-making capacity to affect the States. It did so most recently in the challenges to the federal payroll tax [398] Victoria v The Commonwealth (1971) 122 CLR 353 . and to the fringe benefits tax. [399] State Chamber of Commerce and Industry & Ors v The Commonwealth (The Second Fringe Benefits Tax Case) 87 ATC 4745 ; (1987) 163 CLR 329 ; cf State of Queensland v The Commonwealth (The First Fringe Benefits Tax Case) 87 ATC 4029 ; (1987) 162 CLR 74 . As a matter of constitutional principle, no different approach should be adopted with respect to the laws here in question.

291. Nor does the evidence support the argument of the first plaintiff that ``not many Judges should be prepared to continue to serve after the first opportunity for retirement''. A review, conducted by the New South Wales Government Actuary's Office on the judges' pension scheme of that State, [400] New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW) , Actuarial Review as at 30 June 2001. received without objection, noted that `` [ j]udges who retire at older ages have always received a lower value of benefit since payments will on average be paid for shorter periods''. Whilst commenting, fairly, that `` [ t]he effect of the surcharge is that in future [ judges] will also receive lower amounts of pension payments, which is a perverse outcome for longer service'', the data produced suggests that, despite financial disincentives, many judges in the past have continued to serve until the statutory retiring age: [401] New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW) , Actuarial Review as at 30 June 2001 at 7.

``Seven judges, who had completed 10 years service, retired within 12 months of reaching age 60, twelve judges who completed 10 years after attaining age 60 retired within 3 months of qualifying for a pension, and seventeen judges retired at or near age 72.''

The evidence before this Court does not establish the proposition - nor is it open to reasonable inference - that the established pattern of judicial service would alter significantly following the introduction of the surcharge. There is every reason to believe that it would not.

292. Despite financial disadvantages, appropriate appointees will continue to be attracted to, and elect to remain within, judicial office, federal and State. They will do so because of the non-financial features of judicial office. The submission that the new federal surcharge would alter this, in ways seriously damaging to the government of the States, is speculative, hypothetical and unproved. It should be rejected. Whatever arguments exist for improving the general level of judicial remuneration in Australia, having regard to its relative decline in recent decades, [402] cf Atkins v United States 556 F 2d 1028 (1977) . they have no bearing upon the constitutional validity of the federal law challenged in this case.

293. I would infer that some potential appointees, suitable for appointment as State judges, might now reject the offer of judicial appointment because of the comparative decline of the financial rewards in consequence of the surcharge. Yet given the general applicability of the surcharge in some form upon high income earners, most potential appointees would be likely to face a decline in post-retirement income even if they were to remain in their alternative employment. Some , who are appointed, might now elect to leave office earlier than they otherwise would have done. But there have always been injustices and anomalies in laws imposing taxation, as in the judicial pension scheme itself. The surcharge has now been in operation for five years whilst this case was being conceived, argued and decided. I would reject any suggestion that, in that time, there has been a fall off in the number and quality of judicial appointments, State or federal, in this country. In the future, as in the past, most persons attracted to judicial office are unlikely to nominate remuneration as one of the chief attractions of appointment. The inducements typically lie elsewhere - in the interest and responsibility of the work; the status and public respect for the judicial office; the opportunity for a change of direction involving broader public service; and the respite from the intense pressures of other legal employment. Such inducements remain unchanged.

ATC 4100

294. Unfairness and discrimination : The first plaintiff argued that the mechanism by which the surcharge was imposed, upon the superannuation member rather than the provider, constituted an impermissible discrimination against State judges, rendering the legislation invalid. However, mere discrimination does not amount to impermissible interference by the Federal Parliament in the basic constitutional functions of a State. As the joint reasons point out, discrimination does not have an independent operation in this context. [403] Joint reasons at [ 123]. It is only if the discrimination has the effect of impairing the constitutional functions of the State that the federal prohibition implied from the Constitution is enlivened.

295. Various incidents of the surcharge upon judicial incomes were cited by the first plaintiff to establish the financial burden that the surcharge will impose upon the first plaintiff and the disincentive that it may occasion to his continuing to serve in judicial office after the first moment at which he becomes entitled to retire on a pension. [404] Joint reasons at [ 169]. From such features of the operation of such laws, the other members of this Court reach the conclusion that they constitute an impermissible disability or burden imposed upon the operations and activities of the State which, for that reason, are constitutionally invalid. I do not agree.

296. The legislation may indeed be viewed as unfair to those in the position of the first plaintiff. Indeed, he argued that its operation was ``grossly unfair and irrational''. Other recipients of superannuation benefits do not become personally liable for the surcharge amount, unless the superannuation provider ``passes on'' that liability to them. However, this Court has repeatedly recognised that it is for the Parliament to select the subjects of taxation. It is not the role of this Court to invalidate a new federal tax simply because it regards some aspects of the tax unfair, [405] Cape Brandy Syndicate v Inland Revenue Commissioners [ 1921] 1 KB 64 at 71 where Rowlatt J pointed out `` [ t]here is no equity about a tax''. unwise, oppressive, discriminatory as between taxpayers or based upon disputable fictions. By the Constitution, such considerations are reserved to the Parliament accountable to the electors - not to this Court. The fact that the first plaintiff is a judicial officer whose complaints of unfairness may resonate in judicial ears is no reason to depart from the limited role enjoyed by this Court under the Constitution.

297. Many tax laws (especially when new) may be subject to criticisms similar to those voiced by the first plaintiff. Many provisions of existing tax law are founded on fictional hypotheses and some on contestable administrative calculations. Yet if the constitutional power exists for the legislation, it is not lost because the tax imposed is inconvenient to the States or even arguably unfair to some of their senior employees and officeholders. Much more is required to demonstrate a loss of the federal power with respect to taxation.

298. The law reports are full of cases, and not only in wartime, [406] The State of South Australia & Anor v The Commonwealth & Anor (1942) 7 ATD 1 ; (1942) 65 CLR 373 ; cf The State of Victoria & Anor v The Commonwealth (1957) 11 ATD 317 ; (1957) 99 CLR 575 . in which this Court has upheld the constitutional validity of federal taxing statutes imposing extremely burdensome obligations upon the taxpayer. The introduction of liability to provisional tax, [407] Income Tax and Social Services Contribution Assessment Act 1936-1956 (Cth), ss 221YA. obliging advance payment of taxation in respect of a future year's income at the same time as paying the taxes levied in the current year, is a clear case in point. In particular circumstances such a tax might be much more onerous on a taxpayer than the legislation whose constitutionality is attacked in this case. Yet after the overthrow of the doctrine of implied immunities, [408] cf The Municipal Council of Sydney v The Commonwealth (1904) 1 CLR 208 at 232 . this Court has consistently upheld the validity of such measures. [409] Moore v The Commonwealth (1951) 9 ATD 283 ; (1951) 82 CLR 547 ; FC of T v Clyne (1958) 11 ATD 428 ; (1958) 100 CLR 246 . cf Wynes, Legislative, Executive and Judicial Powers in Australia , 5th ed (1976) at 181-184. It has eschewed the temptation to turn criticism of the burdens of the mechanics of collecting the tax into defects of constitutional validity. Once begun, in respect of a burden upon judges, there is no way of knowing where such legal alchemy might finish in response to the complaints of other taxpayers.

299. In my view, the effect [410] Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 214 per Brennan J, where his Honour stated that the consideration which determines the invalidity is ``the actual operation'' of the legislative measures. of the federal legislation impugned in these proceedings does not even come close to jeopardising the selection and retention of State Supreme Court judges. It falls far short of impairing, in a substantial degree, the State's capacity to function as an independent constitutional entity. The decision of this Court to the contrary pushes the implied constitutional prohibition to a new and radical application that has no foundation in the Constitution. Since the impugned federal laws were enacted, the New South Wales Parliament has demonstrated the capacity of that State to adapt the pension arrangements for its judges, including the first plaintiff, to the new federal legislation, in order to ameliorate any hardships to retired judges or other beneficiaries under the judicial pension

ATC 4101

scheme. [411] Judges' Pensions Amendment Act 1998 (NSW). See the joint reasons [ 172]- [ 173]. No doubt similar or other provisions could be implemented by the States if they really felt that their court system or the judicial office were endangered by the federal law. Such measures contradict the suggestion of a relevant constitutional impairment.

300. The surcharge, applying as it does directly to judges in the position of the first plaintiff, imposes a financial burden upon them. That is true. But it is a burden that is imposed by a valid federal taxation law, and, as such, has to be borne by those subject to it. Compared with some other lawyers and certain other income earners, judicial officers in Australia may not be particularly well remunerated. Yet, compared to the great mass of the population - including many of those subject to the superannuation contributions surcharge, they are very well remunerated indeed. It is unconvincing to suggest that the burden exacted by the impugned law could affect the proper discharge of the judicial role of persons such as the first plaintiff, their determination of matters coming before them in their judicial capacity or their integrity in carrying out their respective functions. In these circumstances I am unconvinced by the argument that the State judicial institution is damaged or weakened in a way that substantially impairs the capacity of the States to function as the Constitution envisaged that they would. The invocation of the implied constitutional limitation, defensive of the capacity of the State to function as such, fails.

Approaches in other jurisdictions

301. Final courts and judicial remuneration : I turn finally to a number of overseas decisions to which some reference was made by the parties during argument. In particular, these were decisions from Canada and the United States in which issues relating to the liability of judges to pay various taxes on different aspects of their remuneration (including pensions) were considered. Care must be taken in making a comparison with overseas decisions because of differences in the constitutional provisions and in the development of constitutional doctrine. However, in my view the principles upon which those decisions were based support the Commonwealth's submissions and the conclusions that I have reached.

302. Canadian cases : In Canada, until 1975, the judges of federally appointed superior courts were, like judges in most parts of Australia, entitled to non-contributory pensions under the Judges Act 1970 (Can). [412] R v Beauregard [ 1986] 2 SCR 56 at 62-63 . See also Valente v R [ 1985] 2 SCR 673 . By the Statute Law (Superannuation) Amendment Act 1975 (Can), it was provided that judges appointed before a specified date in 1975 would contribute 1.5% of their salary towards the cost of their pensions (intended to be a contribution towards improved pensions for spouses and children of judges). Judges appointed after that date would contribute 6% of their salaries towards the cost of pensions, with a provision for further contribution for future inflation. This legislation was later followed by a significant increase in the salaries and pensions of all such judges.

303. In R v Beauregard , [413] [ 1986] 2 SCR 56. a superior court judge challenged the constitutional validity and application of the amending law. It is unnecessary to notice the detail of his arguments. The Supreme Court of Canada dismissed his challenge. The majority held that there was no relevant ``federalism'' limitation on the power of the Canadian Parliament to legislate for the impugned contributions by superior court judges'. [414] [ 1986] 2 SCR 56 at 80-81. This was despite the shared responsibilities for the administration of superior provincial courts between the federal and provincial polities. Section 92 of the Canadian Constitution gives the provincial parliaments legislative power with respect to the administration of justice and the constitution, maintenance and organisation of provincial courts. [415] [ 1986] 2 SCR 56 at 79-80. Critically, however, s 100 of that Constitution assigns to the federal parliament the power to enact provisions for the remuneration (including pensions) of such judges.

304. Dickson CJ, writing for the majority, noted that, like other citizens, judges were obliged to ``bear their fair share of the financial burden of administering the country''. [416] With whom Estey and Lamer JJ agreed: [ 1986] 2 SCR 56 at 76. They were liable to pay the ``general taxes of the land''. [417] [ 1986] 2 SCR 56 at 76 applying Judges v Attorney-General of Saskatchewan [ 1937] 2 DLR 209 (PC). The Court made it clear that Parliament's powers were not unlimited. If it had been shown that the impugned federal law was enacted for ``improper or colourable'' purposes, or if there were discriminatory treatment of judges when compared to other citizens, [418] [ 1986] 2 SCR 56 at 77. issues might arise that could demand a conclusion that the law was beyond power as contrary to the Canadian Constitution. [419] s 100. See [ 1986] 2 SCR 56 at 83. A challenge by reference to the Canadian Bill of Rights was also rejected.

ATC 4102

305. Addressing the arguments pointing to the fact that the measures and mechanisms applied specially and differentially only to judges, Dickson CJ [420] [ 1986] 2 SCR 56 at 61. acknowledged that this was so. However, he went on: [421] [ 1986] 2 SCR 56 at 77.

``Conceding the factual difference that s 29.1 of the Judges Act is directed only at judges, I fail to see that this difference translates into any legal consequence.... At the end of the day, all s 29.1 of the Judges Act does, pursuant to the constitutional obligation imposed by s 100 of the Constitution Act, 1867 , is treat judges in accordance with standard, widely used and generally accepted pension schemes in Canada.''

306. To the same effect are the later remarks of the Supreme Court of Canada in Re Provincial Court Judges . [422] [ 1997] 3 SCR 3. That case involved four appeals raising common issues concerning whether provincial governments and legislatures in Canada could reduce the salaries of already appointed provincial court judges (as part of budget tightening measures aimed at reducing salaries in the public sector). Lamer CJ, for the majority, made it plain that Beauregard stood for the proposition that the Canadian Parliament could effectively reduce the salaries of superior court judges to the extent of imposing new income tax and other financial burdens on them. [423] [ 1997] 3 SCR 3 at 95-96 [ 150]. He pointed out that ``the contributory pension scheme for superior court judges at issue [ in Beauregard ] was not part of a scheme for the public at large, and in this sense had discriminated against the judiciary vis- à -vis other citizens''. Yet that fact had not been regarded as ``constitutionally significant''. [424] [ 1997] 3 SCR 3 at 97 [ 153]. Likewise, a salary cut for judges in company with other public employees and officeholders did not involve singling them out for differential treatment. [425] [ 1997] 3 SCR 3 at 97-98 [ 154]. On the other hand, ``if superior court judges alone had their salaries reduced, one could conclude that Parliament was somehow meting out punishment against the judiciary for adjudicating cases in a particular way''. [426] [ 1997] 3 SCR 3 at 99 [ 156].

307. It is unnecessary to consider the applicability of these conclusions in an Australian context. Australian doctrine, derived from the implications within Ch III of the Constitution concerning the integrated Judicature and from the ``very frame of the Constitution'' and the nature of federation it creates, is more elaborate than that so far expounded in Canada. However, it is sufficient to notice the extent to which the Canadian Supreme Court treated as permissible in a federal context measures that have the practical purpose and effect of assimilating judges with other citizens (or only those receiving remuneration from the public purse) so far as laws involving taxation upon their remuneration (including pensions) are concerned.

308. United States cases : In the United States, the Supreme Court has adopted a similar approach. Despite the Compensation Clause, federal judges in that country have gradually lost the immunity from universal taxation laws. This has been so although such laws necessarily have the effect of reducing a judge's take-home pay. [427] cf United States v Hatter 532 US 557 at 583-585 (2001) per Scalia J. State judges have also lost that immunity. [428] See these reasons at [ 247].

309. In United States v Hatter , [429] 532 US 557 (2001). the majority of the Supreme Court [430] Rehnquist CJ, Kennedy, Souter, Ginsburg and Breyer JJ; Scalia and Thomas JJ dissenting in part. concluded that there was no offence to the Compensation Clause in the extension of generally applicable Medicare taxes to current as well as newly appointed federal judges together with federal employees. The Compensation Clause of the US Constitution was held to prohibit taxation that singled out judges for especially unfavourable treatment. According to the Supreme Court majority, it did not forbid Congress enacting a law imposing non- discriminatory taxes (including an increase in rates or a change in conditions) upon judges, as on other taxpayers. [431] 532 US 557 at 567 (2001).

310. The majority in Hatter [432] 532 US 557 at 570 (2001). endorsed the opinion of Holmes J (with whom Brandeis J had agreed), dissenting in Evans v Gore , [433] 253 US 245 at 265 (1920). to the effect that the Compensation Clause offers

``no reason for exonerating [ a judge] from the ordinary duties of a citizen, which he shares with all others. To require a man to pay the taxes that all other men have to pay cannot possibly be made an instrument to attack his independence as a judge.''

In like language in Hatter , Breyer J, for the majority, remarked: [434] 532 US 557 at 571 (2001).

``There is no good reason why a judge should not share the tax burdens borne by all citizens.''

His Honour went on to say that even the constitutional judicial compensation guarantee could not justify a ``special judicial exemption from a commonly shared tax''. [435] 532 US 557 at 571 (2001).

ATC 4103

311. Whilst other taxing provisions were struck down in Hatter , as involving discrimination against judges, this was done on the basis that the statute did not ``equalize with any precision'' judges and other federal employees to which the impugned Social Security tax was extended. [436] 532 US 557 at 574 (2001). It was held that the statutory amendments discriminated against the judges. They were said to single out sitting federal judges for unfavourable treatment because the law, as it applied, had effectively imposed upon them a new financial obligation which was not imposed on other federal employees. [437] 532 US 557 at 572 (2001). It seems clear that, in the United States, as in Canada, the discriminatory and unfavourable treatment of judges has been treated as the critical criterion for the constitutional validity of taxing laws having an impact upon judicial remuneration.

312. Applicability to the present case : Before this Court the first plaintiff did not submit that the new federal laws were a direct attack by the Commonwealth on the independence of the State judiciary. As I have pointed out, it is not clear that such an argument would have succeeded given the absence of an explicit provision in our Constitution covering State judges, as well as the limited application of the legislation to newly appointed judges only. Instead, the first plaintiff submitted that the legislation ``undermines the judicial pension arrangements... enacted by the States which have as their object the recruitment of appropriately qualified candidates for judicial office and ensuring the independence of the judiciary'' and thus ``would detract from the integrity and independence'' of the State judicature.

313. The very nature of a federal system of government imposes a special role on the judiciary. This makes the preservation of the competence, independence and impartiality of the judiciary a consideration important for the protection of the governmental functions of the component parts of the federation, including the States. At least in a federation such as Australia, where the State judiciary may be, and commonly is, vested with federal jurisdiction, it can be said that these features of the integrated judicature are part of the federal hypothesis which the Melbourne Corporation doctrine defends. Similar criteria have been expressed in relation to the implied federal limitation upon the taxation power as it impinges upon the States. The issue is thus whether the tax impermissibly singles out the States and their high government officeholders for special discriminatory treatment. [438] Payroll Tax Case (1971) 122 CLR 353; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 ; cf joint reasons at [ 119]- [ 122].

314. In the present case it could not be suggested that judges of the States had been singled out for unfavourable attention, in the form of the surcharge, in order to punish or disadvantage them for the performance of their judicial duties. Any such suggestion would be fanciful. Upon my analysis of the federal law impugned in the first plaintiff's case, there is no significant impairment of the States in the carrying out of their governmental functions. Nor is there any relevant discrimination against the judges of the States. Unequal treatment of judges in a like position is not established. In so far as there are particular laws that fall differentially upon the judges of the States when compared to other taxpayers they can be explained as they were in Beauregard . They are referable to the different nature of the post- retirement income arrangements of judges compared to other taxpayers, as well as the excessive caution on the part of the Commonwealth regarding the requirements of s 114 of the Constitution. [439] cf reasons of Gleeson CJ at [ 16]. I share the Chief Justice's doubts on this point. The differentiation can be justified either as specifically favourable to the judges (as in the exclusion from the new tax of State judges already appointed) or as within the scope of the measures open to the Parliament to treat the notional value of entitlements derived from a non-contributory, unfunded pension as equivalent to contributory superannuation.

315. I see no reason why this Court should now adopt an approach to the constitutional validity of a federal taxation law that is more protective of newly appointed judges in Australia than the approach followed by the Supreme Courts of Canada and the United States when confronted with taxing provisions having an impact on judicial remuneration. Nothing in the text of the Australian Constitution justifies a different approach. The decisional history in this Court suggests a contrary conclusion. The notion that the judges themselves would regard their offices as compromised by the surcharge is unpersuasive. The idea that reasonable members of the Australian public might come to such a conclusion, on the basis of the new federal surcharge on the superannuation entitlements or their equivalents in the case of high income

ATC 4104

earners, including judges, must be rejected. The public and the judges themselves, as La Forest J of the Supreme Court of Canada said, regard the judiciary as made of sturdier stuff. [440] Re Provincial Court Judges [ 1997] 3 SCR 3 at 192 [ 337] . See also at 197 [ 346].

Conclusions and disposition

316. It is therefore ``far too long a stretch'' [441] R v Beauregard [ 1986] 2 SCR 56 at 77 per Dickson CJ. to hold that the imposition of a federal tax, payable by persons such as the first plaintiff on notional contributions for their pensions, imperils the State judicial institution. I do not accept that the federal taxing laws challenged in these proceedings affect the selection and retention of State judicial officers to such a degree that the State judiciary is placed in jeopardy of not fulfilling its constitutional functions. Only if that were shown would the essential governmental activities of a State be impaired and the continued existence and integrity of a State threatened, contrary to the constitutional implication invoked by the first plaintiff.

317. The evidence in this case falls far short of such a gloomy estimate of the resilience of State governmental institutions in Australia - and the State judiciary in particular. The tax neither impedes the functioning of the States nor the independence of the judicature implicit in the Constitution. Other taxpayers cannot escape the burden of the surcharge. Their complaints of unfairness, if any, must be addressed to the Parliament and the Government, not the courts. In the past, Australian judges have shared equally prospective taxes of general application imposed on them without relevant discrimination. This case represents the first departure from that principle. In my view the departure has no constitutional or other legal validity. It appears to be contrary to the approaches taken by the final courts of Canada and the United States in analogous circumstances.

318. I do not deny the premise that the Constitution is based on certain assumptions and contains implications. [442] Lange v Australian Broadcasting Corporation (1997) Aust Torts Reports ¶ 81-434 ; (1997) 189 CLR 520 ; Roberts v Bass (2002) 194 ALR 161 at 199-200 [ 145]- [ 146] . But, with all respect, I find the invocation of the federal implication in this case unconvincing. When expressly stated constitutional guarantees, [443] eg under s 80 of the Constitution: Re Colina; Ex parte Torney (1999) FLC ¶ 92-872 ; (1999) 200 CLR 386 ; Cheng v R (2000) 203 CLR 248 ; Brownlee v R (2001) 207 CLR 278 . and particular words in the Australian Constitution, [444] eg the word ``appeals'' in s 73 of the Constitution: Eastman v R (2000) 203 CLR 1 at 79-89 [ 240]- [ 266] ; Crampton v R (2000) 206 CLR 161 at 203-204 [ 114] . are read in ways that confine the rights of individuals, and when implied constitutional rights of persons arguably more vulnerable and needy are rejected, [445] eg the claims of Aboriginal plaintiffs to a constitutional implication of equality before the law: Kruger v The Commonwealth (1997) 190 CLR 1 at 45, 63-68, 142-144, 153-157 . See also Leeth v The Commonwealth (1992) 174 CLR 455 at 466-470, 476-479; cf 483-489 . it is singularly unconvincing to say that an unwritten implication can be invoked to protect from a federal taxing law the value of judicial pensions. Such an implication is unconvincing when virtually all other Australian taxpayers in receipt of equivalent remuneration have been subjected to a surcharge upon that element of their receipts. Least of all is such a conclusion convincing when the legal foundation of the implication is said to arise from the suggestion that the tax impairs, in a substantial degree, the very capacity of the States to operate as the Constitution envisaged for them. I would reject all of the first plaintiff's constitutional challenges.

319. I agree in the conclusions and answers proposed in the joint reasons in respect of questions 1(a) and (b).

320. In relation to question 2, the question should be answered by stating that the federal legislation is valid.

321. The first plaintiff should pay the costs of the Commonwealth. The Commonwealth should pay the costs of the second plaintiff.

ORDER

Answer questions in Stated Case as follows:

Question 1

On their true construction, do the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997 (Cth) and the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth):

Answer

Question 2

If so, are the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Imposition Act 1997

ATC 4105

(Cth) and/or the Superannuation Contributions Tax (Members of Constitutionally Protected Superannuation Funds) Assessment and Collection Act 1997 (Cth) invalid in their application to the First Plaintiff and/or the Second Plaintiff:

Answer

Question 3

Save for those otherwise dealt with by order, who should pay the costs of the Stated Case and of the hearing of the Stated Case before the Full High Court?

Answer

The defendant should pay the costs of the plaintiffs.

Footnotes

[287] The case was stated by Hayne J pursuant to the Judiciary Act 1903 (Cth), s 18.
[288] See the joint reasons at [ 38]- [ 39].
[289] Joint reasons at [ 49]- [ 69].
[290] Attorney-General (Cth) v Breckler (1999) 197 CLR 83 .
[291] Re Provincial Court Judges [ 1997] 3 SCR 3 at 176 [ 305] ; see also Lederman, ``The Independence of the Judiciary'', (1956) 34 Canadian Bar Review 769.
[292] 12 and 13 Will 3 c 2.
[293] 1 Geo 1 c 4.
[294] s 3. See Re Provincial Court Judges [ 1997] 3 SCR 3 at 177 [ 306] .
[295] 1 Geo 3 c 23.
[296] cf Re Provincial Court Judges [ 1997] 3 SCR 3 at 177 [ 306] .
[297] § 11. See United States v Hatter 532 US 557 at 568 (2001) .
[298] Art III s 1.
[299] New South Wales Constitution Act 1853, s 59 (17 Vict No 41); Victoria Constitution Act 1855, Sched 1 cl 49 (18 & 19 Vict c 55).
[300] Judges' Pensions Act of 1859 (NSW) (23 Vict No 2) and Supreme Court and Circuit Courts Act 1900 (NSW).
[301] eg Judges Retirement Act 1918 (NSW) and Supreme Court (Judges Retirement) Act 1936 (Vic). The present source of the judicial pension for judges and Masters of the Supreme Court of New South Wales is the Judges' Pensions Act 1953 (NSW). The present source of the judicial pension for Masters of the Supreme Court of Victoria is the Supreme Court Act 1986 (Vic), Pt 7. See the joint reasons at [ 46].
[302] Australia, House of Representatives, Parliamentary Debates (Hansard), 18 March 1902 at 10976.
[303] Chief Justice's Pension Act 1918 (Cth).
[304] Judiciary Act 1926 (Cth). This was later amended by the Judges' Pensions Act 1948 (Cth). The present source of judicial pensions for federal judges is the Judges' Pensions Act 1968 (Cth).
[305] Queensland: Supreme Court Constitution Amendment Act of 1861 (Q), s 8 (25 Vict No 13); Tasmania: Supreme Court Judges' Retiring Allowances Act 1880 (Tas) (44 Vict No 28); Western Australia: Judges' Pensions Act 1896 (WA) (60 Vict No 24).
[306] Queensland: Judges' Retirement Act 1921 (Q) (12 Geo 5 No 14). Pensions were reintroduced by the Judges' Pensions Act of 1957 (Q) (6 Eliz 2 No 38). South Australia: An Act to repeal an Act No 186 of 1880 1886 (SA) (49 & 50 Vict No 381). Pensions were reintroduced by the Supreme Court Act Amendment Act 1944 (SA).
[307] Supreme Court Act Amendment Act 1944 (SA).
[308] Judges' Pensions Act 1971 (SA).
[309] Taxation Act 1884 (SA) (47 & 48 Vict No 323).
[310] Land and Income Tax Assessment Act of 1895 (NSW) (59 Vict No 15) and Income Tax Act 1895 (NSW) (59 Vict No 17); Income Tax Act 1895 (Vic) (58 Vict No 1374).
[311] Income Tax Act 1894 (Tas) (58 Vict No 16); Income Tax Act of 1902 (Q) (2 Edw VII No 10); Land Tax and Income Tax Act 1907 (WA) (7 Edw 7 No 16).
[312] Income Tax Act 1915 (Cth).
[313] Webb v Outrim [ 1907] AC 81 .
[314] See D'Emden v Pedder (1904) 1 CLR 91 at 111 . (emphasis added) Affirmed in Deakin v Webb (1904) 1 CLR 585 .
[315] Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087 at 1132-1133 .
[316] The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employ é s Association (1906) 4 CLR 488 .
[317] (1920) 28 CLR 129. See the reasons of McHugh J at [ 212] and the remarks of Chief Justice Sir Garfield Barwick on his retirement (1981) 148 CLR v at ix-x; cf SGH Ltd v FC of T 2002 ATC 4366 at 4376-4376, 4381; (2002) 76 ALJR 780 at 790 [ 50], 797 [ 85]; 188 ALR 241 at 255, 264 .
[318] Constitution, s 51(ii).
[319] United States Constitution, Art I s 8.
[320] Collector v Day 78 US 113 (1870) ; cf Pollock v Farmers' Loan and Trust Company 157 US 429 (1895) .
[321] Evans v Gore 253 US 245 (1920) . See also Miles v Graham 268 US 501 at 509 (1925) . During the Civil War an attempt by federal law to impose income tax on the Justices of the Supreme Court led to a communication to the Government by Taney CJ on behalf of the Court and to a subsequent refund to the Justices of the tax paid by them ``under protest''. See Miller, Lectures on the Constitution of the United States , (1893) at 247-248 cited in Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 at 1316 per Griffith CJ.
[322] O'Malley v Woodrough 307 US 277 (1939); cf United States v Hatter 532 US 577 (2001).
[323] Judges v Attorney-General of Saskatchewan [ 1937] 2 DLR 209 (PC) .
[324] Cooper v Commissioner of Income Tax for the State of Queensland (1907) 4 CLR 1304 .
[325] eg Constitution Act 1975 (Vic), s 82(6B).
[326] cf Kingston & Anor v Keprose Pty Ltd (1988) 6 ACLC 226 at 241; (1987) 11 NSWLR 404 at 423-424 per McHugh JA.
[327] s 15AA.
[328] See eg Bropho v Western Australia (1990) 171 CLR 1 at 16-17 ; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [ 69]- [ 70] .
[329] Cooper Brookes (Wollongong) Pty Ltd v FC of T 81 ATC 4292 at 4297 per Gibbs CJ, 4299 and 4301 per Stephen J, 4307 per Mason and Wilson JJ; (1980-1981) 147 CLR 297 at 307 per Gibbs CJ, 310 and 313 per Stephen J, 323 per Mason and Wilson JJ ; cf joint reasons in this case at [ 102]. See also Newton & Ors v FC of T (1958) 11 ATD 442 at 445-446; (1958) 98 CLR 1 at 7-9; [ 1958] AC 450 at 465-466 .
[330] cf Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 288 .
[331] cf Mabo v Queensland [ No 2] (1992) 175 CLR 1 at 42 . See also Dietrich v R (1992) 177 CLR 292 at 305-306, 360-361, 373 ; Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [ 69] .
[332] cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 132-133 [ 297]- [ 298] .
[333] Done at New York on 19 December 1966, ATS 1980 No 23.
[334] Art 14.1; cf Re Minister for Immigration and Multicultural Affairs; Ex parte Epeabaka (2001) 206 CLR 128 at 151-152 [ 69] .
[335] Karttunen v Finland, United Nations Human Rights Committee , 23 October 1992 extracted in Martin et al, International Human Rights Law and Practice , (1997), vol 1 at 527.
[336] Johnson, BG v Johnson, K (No 3) (2000) FLC ¶ 93-041 ; (2000) 201 CLR 488 ; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 .
[337] Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 ; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 363-364 [ 83]- [ 84] per Gaudron J; 372-373 [ 115]- [ 116] of my own reasons; cf Roberts v Bass (2002) 194 ALR 161 at 199-200 [ 145] .
[338] eg Tavita v Minister of Immigration [ 1994] 2 NZLR 257 at 266 ; R v Oakes [ 1986] 1 SCR 103 at 120-121 ; Claydon, ``International Human Rights Law and the Interpretation of the Canadian Charter of Rights and Freedoms'', (1982) 4 Supreme Court Law Review 287.
[339] Atkins v Virginia 70 USLW 4585 at 4589, fn 21 (2002) per Stevens J, with whom O'Connor, Kennedy, Souter, Ginsburg and Breyer JJ joined. That approach produced a strong dissent from Rehnquist CJ at 4591 and Scalia J at 4598 (with whom Thomas J joined).
[340] eg Newcrest Mining (WA) Ltd v The Commonwealth (1997) 190 CLR 513 at 657- 659 ; Kartinyeri v The Commonwealth (1998) 195 CLR 337 at 417-419 [ 166]- [ 167] ; cf Commonwealth v Yarmirr (2001) 208 CLR 1 at 130-131 [ 292]- [ 293] .
[341] United Nations, Basic Principles on the Independence of the Judiciary, endorsed by the General Assembly, A/Res/40/32, 29 November 1985, A/Res/40/146, 13 December 1985 at par 11; Draft Principles on the Independence of the Judiciary (``Siracusa Principles''); International Association of Judges, The Universal Charter of the Judge (2000), at Art 13 (``The judge must receive sufficient remuneration to secure true economic independence'').
[342] Joint reasons at [ 92]- [ 110].
[343] Supreme Court Act 1935 (SA), s 7(4).
[344] Federal Court of Australia Act 1976 (Cth), ss 18AA-18AM; Federal Court Rules O 78 r 38.
[345] Family Law Act 1975 (Cth), s 26B; Family Law Rules O 36A.
[346] s 75(2).
[347] Joint reasons at [ 76].
[348] Joint reasons at [ 56], [ 77].
[349] Joint reasons at [ 96].
[350] Joint reasons at [ 79].
[351] Joint reasons at [ 175]- [ 201].
[352] Joint reasons at [ 182]- [ 183].
[353] Joint reasons at [ 184]- [ 186]; cf Gould v Brown (1998) 16 ACLC 316 at 382-383; (1998) 193 CLR 346 at 485-487 [ 284]- [ 287] ; Byrnes v R (1999) 199 CLR 1 at 10-11 [ 4] ; R v Hughes (2000) 18 ACLC 394 at 412; (2000) 202 CLR 535 at 574-575 [ 94] .
[354] Joint reasons at [ 187]- [ 201]; cf Luton v Lessels & Anor 2002 ATC 4311 at 4331; (2002) 76 ALJR 635 at 655 [ 122]; 187 ALR 529 at 558 .
[355] See joint reasons at [ 177]- [ 181] referring to the requirements of the Protected Funds Assessment Act, s 9(5) and Regulations thereunder.
[356] Joint reasons at [ 181].
[357] Constitution, s 77(iii); cf Solomons v District Court of New South Wales (2002) 76 ALJR 1601 at 1625 [ 132]; 192 ALR 217 at 250 . The vesting of federal jurisdiction in State courts is a special case because of the constitutional power to do so without State agreement or authority. However, the point of incidental obligations inherent in obedience to valid federal law remains true in other cases: Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 425, 440-441 .
[358] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 232 ; cf SGH Ltd v FC of T 2002 ATC 4366 at 4376; (2002) 76 ALJR 780 at 790 [ 51]; 188 ALR 241 at 255 .
[359] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233 .
[360] In the case of the first plaintiff, the Attorney-General's Department of New South Wales.
[361] cf Income Tax Assessment Act 1936 (Cth), ss 221C, 221EAA (but see s 221DA).
[362] cf Re Cram; Ex parte NSW Colliery Proprietors' Association Ltd (1987) 163 CLR 117 at 128 .
[363] (1995) 184 CLR 188.
[364] (1995) 184 CLR 188 at 229-230. See also R v Hughes (2000) 18 ACLC 394 at 401 [ 31], 413 [ 101]; (2000) 202 CLR 535 at 553 [ 31], 577 [ 101] .
[365] R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560 ; R v Hughes (2000) 18 ACLC 394 at 407-408 [ 67-73]; (2000) 202 CLR 535 at 566-568 [ 67]- [ 73] .
[366] cf Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 601 [ 190]- [ 191] . See also R v Duncan; Ex parte Australian Iron and Steel Pty Ltd (1983) 158 CLR 535 at 560, 563, 589 ; cf The Commonwealth v New South Wales (1923) 33 CLR 1 at 27-28, 53-56 .
[367] cf Printz v United States 521 US 898 (1997) ; Reno v Condon 528 US 141 (2000) .
[368] Chiefly advanced by the Attorneys-General for South Australia and Western Australia, intervening.
[369] Protected Funds Assessment Act, s 33(1).
[370] Melbourne Corporation v The Commonwealth (1947) 74 CLR 31 .
[371] (1947) 74 CLR 31 at 83 per Dixon J.
[372] (1920) 28 CLR 129; cf Hill, ``Revisiting Wakim and Hughes: The Distinct Demands of Federalism'', (2002) 13 Public Law Review 205 at 227 citing Sawer, ``Implication and the Constitution'', (1948) 4 Res Judicatae 15 and 85.
[373] See joint reasons at [ 117]- [ 118]. An example of this form of difference would be that created by the contributory judicial pension in Tasmania compared to the other States' schemes being non- contributory.
[374] SGH Ltd v FC of T 2002 ATC 4366 ; (2002) 76 ALJR 780 ; 188 ALR 241 .
[375] cf joint reasons at [ 142].
[376] Joint reasons at [ 140] citing McCulloch v Maryland 17 US 159 at 210 (1819) ; cf joint reasons at [ 133].
[377] Joint reasons at [ 139].
[378] Joint reasons at [ 145]- [ 146].
[379] cf joint reasons at [ 124].
[380] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 217 ; cf Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority (1997) 190 CLR 410 at 507 .
[381] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 206, 217 ; joint reasons at [ 119].
[382] Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 217 .
[383] Victoria v The Commonwealth (1971) 122 CLR 353 at 402 .
[384] cf Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 228- 229 .
[385] The Federated Amalgamated Government Railway and Tramway Service Association v The New South Wales Railway Traffic Employ é s Association (1906) 4 CLR 488 .
[386] Victoria v The Commonwealth (1971) 122 CLR 353 at 398 , citing Attorney- General for Ontario v Israel Winner [ 1954] AC 541 at 578 .
[387] eg Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 163-164, 241 .
[388] The Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 139-140 ; Western Australia v The Commonwealth (Native Title Act Case) (1995) 183 CLR 373 at 481 ; cf joint reasons at [ 146].
[389] cf Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 at 218 per Mason J.
[390] Joint reasons at [ 147].
[391] Joint reasons at [ 165]; cf reasons of Gleeson CJ at [ 28].
[392] Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 233 ; Victoria v The Commonwealth (Industrial Relations Act Case) (1996) 187 CLR 416 at 498 .
[393] Joint reasons at [ 160] citing United States v Hatter 532 US 557 at 568 (2001) .
[394] (1995) 184 CLR 188 at 233; cf joint reasons at [ 166].
[395] Joint reasons at [ 155].
[396] Joint reasons at [ 159].
[397] cf Luton v Lessels & Anor 2000 ATC 4311 at 4330; (2002) 76 ALJR 635 at 654 [ 117]; 187 ALR 529 at 557 citing United States v Butler 297 US 1 at 61 (1936) .
[398] Victoria v The Commonwealth (1971) 122 CLR 353 .
[399] State Chamber of Commerce and Industry & Ors v The Commonwealth (The Second Fringe Benefits Tax Case) 87 ATC 4745 ; (1987) 163 CLR 329 ; cf State of Queensland v The Commonwealth (The First Fringe Benefits Tax Case) 87 ATC 4029 ; (1987) 162 CLR 74 .
[400] New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW) , Actuarial Review as at 30 June 2001.
[401] New South Wales Government Actuary's Office, Judges' Pension Scheme (NSW) , Actuarial Review as at 30 June 2001 at 7.
[402] cf Atkins v United States 556 F 2d 1028 (1977) .
[403] Joint reasons at [ 123].
[404] Joint reasons at [ 169].
[405] Cape Brandy Syndicate v Inland Revenue Commissioners [ 1921] 1 KB 64 at 71 where Rowlatt J pointed out `` [ t]here is no equity about a tax''.
[406] The State of South Australia & Anor v The Commonwealth & Anor (1942) 7 ATD 1 ; (1942) 65 CLR 373 ; cf The State of Victoria & Anor v The Commonwealth (1957) 11 ATD 317 ; (1957) 99 CLR 575 .
[407] Income Tax and Social Services Contribution Assessment Act 1936-1956 (Cth), ss 221YA.
[408] cf The Municipal Council of Sydney v The Commonwealth (1904) 1 CLR 208 at 232 .
[409] Moore v The Commonwealth (1951) 9 ATD 283 ; (1951) 82 CLR 547 ; FC of T v Clyne (1958) 11 ATD 428 ; (1958) 100 CLR 246 . cf Wynes, Legislative, Executive and Judicial Powers in Australia , 5th ed (1976) at 181-184.
[410] Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1 at 214 per Brennan J, where his Honour stated that the consideration which determines the invalidity is ``the actual operation'' of the legislative measures.
[411] Judges' Pensions Amendment Act 1998 (NSW). See the joint reasons [ 172]- [ 173].
[412] R v Beauregard [ 1986] 2 SCR 56 at 62-63 . See also Valente v R [ 1985] 2 SCR 673 .
[413] [ 1986] 2 SCR 56.
[414] [ 1986] 2 SCR 56 at 80-81.
[415] [ 1986] 2 SCR 56 at 79-80.
[416] With whom Estey and Lamer JJ agreed: [ 1986] 2 SCR 56 at 76.
[417] [ 1986] 2 SCR 56 at 76 applying Judges v Attorney-General of Saskatchewan [ 1937] 2 DLR 209 (PC).
[418] [ 1986] 2 SCR 56 at 77.
[419] s 100. See [ 1986] 2 SCR 56 at 83.
[420] [ 1986] 2 SCR 56 at 61.
[421] [ 1986] 2 SCR 56 at 77.
[422] [ 1997] 3 SCR 3.
[423] [ 1997] 3 SCR 3 at 95-96 [ 150].
[424] [ 1997] 3 SCR 3 at 97 [ 153].
[425] [ 1997] 3 SCR 3 at 97-98 [ 154].
[426] [ 1997] 3 SCR 3 at 99 [ 156].
[427] cf United States v Hatter 532 US 557 at 583-585 (2001) per Scalia J.
[428] See these reasons at [ 247].
[429] 532 US 557 (2001).
[430] Rehnquist CJ, Kennedy, Souter, Ginsburg and Breyer JJ; Scalia and Thomas JJ dissenting in part.
[431] 532 US 557 at 567 (2001).
[432] 532 US 557 at 570 (2001).
[433] 253 US 245 at 265 (1920).
[434] 532 US 557 at 571 (2001).
[435] 532 US 557 at 571 (2001).
[436] 532 US 557 at 574 (2001).
[437] 532 US 557 at 572 (2001).
[438] Payroll Tax Case (1971) 122 CLR 353; Queensland Electricity Commission v The Commonwealth (1985) 159 CLR 192 ; cf joint reasons at [ 119]- [ 122].
[439] cf reasons of Gleeson CJ at [ 16]. I share the Chief Justice's doubts on this point.
[440] Re Provincial Court Judges [ 1997] 3 SCR 3 at 192 [ 337] . See also at 197 [ 346].
[441] R v Beauregard [ 1986] 2 SCR 56 at 77 per Dickson CJ.
[442] Lange v Australian Broadcasting Corporation (1997) Aust Torts Reports ¶ 81-434 ; (1997) 189 CLR 520 ; Roberts v Bass (2002) 194 ALR 161 at 199-200 [ 145]- [ 146] .
[443] eg under s 80 of the Constitution: Re Colina; Ex parte Torney (1999) FLC ¶ 92-872 ; (1999) 200 CLR 386 ; Cheng v R (2000) 203 CLR 248 ; Brownlee v R (2001) 207 CLR 278 .
[444] eg the word ``appeals'' in s 73 of the Constitution: Eastman v R (2000) 203 CLR 1 at 79-89 [ 240]- [ 266] ; Crampton v R (2000) 206 CLR 161 at 203-204 [ 114] .
[445] eg the claims of Aboriginal plaintiffs to a constitutional implication of equality before the law: Kruger v The Commonwealth (1997) 190 CLR 1 at 45, 63-68, 142-144, 153-157 . See also Leeth v The Commonwealth (1992) 174 CLR 455 at 466-470, 476-479; cf 483-489 .

 

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