Matthews v. Chicory Marketing Board (Victoria)

60 CLR 263

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(Judgment by: RICH J)

Between: MATTHEWS
And: CHICORY MARKETING BOARD (VICTORIA)

Court:

Judges: Latham CJ

Rich JStarke J
Dixon J
McTiernan J

Subject References:
Constitutional Law
Duties of excise
Freedom of inter-State trade
State marketing legislation

Legislative References:
Constitution (Cth) - s 90; s 92
Marketing of Primary Products Act 1935 (Vic) No 4337 - s 4; s 6; s 7; s 16; s 19; s 26; s 32

Hearing date: MELBOURNE 10 May 1938; 11 May 1938
Judgment date: 9 August 1938

SYDNEY

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Judgment by:
RICH J

In the argument of this case many matters were touched on which did not appear to me to be entirely relevant to the question whether the appellant was liable to the levy imposed upon him. He is a defendant to a complaint for a civil debt, and his liability is the matter in issue. The marketing board says he is liable because he is the producer of chicory and under their levy every producer of chicory is liable to pay them one pound for every half acre planted by him with chicory during the year. The ground the appellant stood upon to attack this levy was that he could not be liable except at the cost of an infringement of s. 92 of the Constitution by the State legislation. My mind failed to grasp the intrinsic connection between the payment of a levy on the plantation and production of chicory and trade, commerce and intercourse between the States. No doubt you cannot trade in chicory unless it has been grown, but I imagine you may readily grow it without engaging in inter-State trade. I could understand the contention if it were based on the view that the main purpose of the statute involves an interference with inter-State trade and the levy was only an incident to the main purpose so that the statute collapsed as a whole. But so far from attempting to interfere with inter-State trade the statute on its face exhibits an earnest desire of the draftsman to walk warily along paths which never lead to inter-State trade.

The levy is imposed upon the producer as a producer and not a trader and is computed upon acreage planted and not upon chicory sold. My failure to grasp the bearing of s. 92 upon the appellant's case continues. However, under encouragement from the Bench the appellant was induced to take further ground from the vantage of which he has, in my opinion, succeeded in relieving himself of the liability of which he complained. He turned back from s. 92 to s. 90 of the Constitution and contended that the levy was a duty of excise and, therefore, within the exclusive power of the Federal Parliament. The question what is a duty of excise has engaged the attention of this court in Peterswald v Bartley, ^[F22] to some extent in R. v Barger, ^[F23] in The Commonwealth and Commonwealth Oil Refineries Ltd v South Australia, ^[F24] in John Fairfax & Sons Ltd and Smith's Newspapers Ltd v New South Wales, ^[F25] Vacuum Oil Co Pty Ltd v Queensland, ^[F26] Crothers v Sheil ^[F27] and Attorney-General (N.S.W.) v Homebush Flour Mills Ltd. ^[F28] In none of these cases, however, has the class of question arisen upon which this case depends. In the present case the levy is clearly a tax (See Lower Mainland Dairy Products Sales Adjustment Committee v Crystal Dairy Ltd ^[F29] ). The reason for saying that the tax is not an excise is found in the peculiar circumstances by which it is governed. These circumstances are that it is imposed by a board which does not represent the Crown in order to raise a fund for the administration of a compulsory pool for marketing the commodity and for other connected purposes, and the tax is levied on the basis of the acreage planted and not the quantity of chicory produced. I do not think that any of these circumstances deprives the tax of the character of an excise. To take the last first, planting chicory is an essential step in its production. If you tax according to planting you affect or influence an operation upon which the extent of attempted production depends. The fact that some producers may have to pay the tax although their attempt fails is merely one of the chances and accidents which attend all the pursuits of man and makes it no less true that the tax is aimed at production. As to the circumstance that the revenue obtained is for the purposes of the board and not for the Treasury, the board is carrying on an operation under statute on the public behalf and the tax is levied in connection with all chicory throughout the State. As to the fact that it is to be applied to meet the expenses of a marketing scheme and for purposes connected with chicory growing, the statute treats these as public purposes to be undertaken by a public body in the public interest. If the State authorizes a levy upon a commodity which in other respects is an excise, I think it is difficult to see how the purpose for which the money is obtained can affect the question whether it comes within an excise.

The appeal should be allowed and the order of the magistrate set aside.