The Secretary, Prime Minister’s Department, has forwarded me the following letter for advice as to the interpretation of section 110 of the Melbourne Harbor Trust Act 1915:

I have to acknowledge receipt of your letter of 15th instant relative to Customs Duty on Secondhand Dredging Plant and to convey the thanks of the Commissioners for your personal attention to this matter.

While they appreciate the view expressed in your letter, they feel that there should be some way of making an adjustment of accounts between the Commonwealth Government and the Trust, and would therefore be pleased if you can fix a time and date for a short interview on this question.

Since writing their letter to you of 11th inst., the Commissioners have received Counsel’s opinion as to the proper interpretation of section 110 of the Melbourne Harbor Trust Act 1915, and the liability of the Commonwealth to pay wharfage upon goods belonging to it landed at the Port of Melbourne. It appears from the opinion that the interpretation, hitherto acted upon, of the exception in that section in favor of ‘goods belonging to His Majesty’s Government’ as applying to goods belonging to His Majesty’s Commonwealth Government, is erroneous. It therefore appears that the Commonwealth is really indebted to the Commissioners in the sum of £28,896 in respect of services rendered since the appointment of the present Commissioners.

This fact puts a different complexion upon the Commissioners’ suggestion that a set off should be arranged of part of this debt against the claim at present pending against the Commissioners in respect of duty, which claim is for £28,000, but upon a proper valuation should be reduced to about £20,000.

I am afraid that my letter of the 11th inst. was not sufficiently clear, as from your reply of 15th inst. it appears that you are under the impression that my application was for reimbursement of a payment of duty made. The fact is that no duty has been paid, so that the difficulty felt as to obtaining a Parliamentary appropriation for reimbursement of duty does not exist.

The other difficulty suggested as to creating a precedent of a concession does not apply to this case either, as there is a pending claim by the Comptroller for duty, which, as framed, is not strictly recoverable from the Commissioners, as they are advised. On the other hand it is claimed that there is a liability of the Commonwealth to the Commissioners of upwards of £28,896 for wharfage.

The Commissioners are anxious to avoid friction with the Commonwealth, but wish rather to adjust the substantial rights in a fair and amicable arrangement, and they feel sure that if you will accede to their request for a short interview, a fair set off should be readily arrived at.

As to wharfage generally, the Commissioners desire that you will be good enough at your convenience to communicate to the different Departments under the control of your Government the decision of the Commissioners to act upon the opinion they have received as to the proper interpretation of their Act, as they are legally bound to do, and to collect wharfage according to the rates prescribed upon all goods belonging to the Commonwealth that are landed at the Port of Melbourne.

The question of the liability of the Commonwealth to pay wharfage rates on its goods imported into the Port of Melbourne involves also the question of the Commonwealth’s liability to such charges in other States.

Advice on the question has previously been given from time to time. That advice has, generally speaking, been to the effect that where the State Act exempts goods belonging to the Crown or His Majesty, the Commonwealth has the benefit of that exemption and is free of wharfage charges accordingly.

In view of more recent decisions of the High Court, it would appear that references to the Crown in State Acts refers only to the Crown as part of the State Government, and does not include the Commonwealth. The charges under consideration are for services rendered and do not, in my opinion, constitute a tax within the meaning of section 114 of the Constitution.

I am of opinion that the Commonwealth cannot invoke the exemption contained in section 110 of the Melbourne Harbor Trust Act 1915.

[Vol. 22, p. 745]