The Assistant Secretary, Department of the Treasury, has forwarded the following memorandum to me for advice:

• In your Opinion No. 20 of 19401 you advised that section 140 of the Harbour Boards Acts 1892–1928 (Queensland) does not apply to exempt Commonwealth goods from harbour dues when shipped through Queensland ports.

2. The advising on this case is dependent upon whether harbour dues are to be considered as a tax or a charge for services rendered, and the following observations are offered on this point.
3. Queensland harbour dues are levied at a specified rate per ton on all goods consigned inward or outward through Queensland ports. Where a Harbour Board has been constituted under a Special Act, moneys received by the Board as harbour dues are paid into its general fund to be used for the purposes specified in the Act. Where no Harbour Board has been constituted, harbour dues are paid into the Queensland Consolidated Revenue Fund and thence transferred to a Trust Fund created in respect of each harbour. The moneys in the Trust Fund are required to be applied for the management and improvement of the harbour in such manner as may be from time to time authorised by Parliament.
4. On the other hand wharfage rates are charges made by wharf owners for services rendered. Each Harbour Board is required to provide ‘proper servants and labourers ... for the use of the public in loading and unloading any goods ...’. Wharfage rates are intended, in theory at any rate, to be a reimbursement to the wharf owner for sorting, stacking and recording cargo, etc.
5. Queensland harbour dues appear to be similar to municipal rates. If that be so, the question as to whether charges for these dues on Commonwealth goods are a tax or a charge for services rendered appears to be covered by authority. In Municipal Council of Sydney v. the Commonwealth (1904) (1 C.L.R. 208) it was held that ‘to levy a municipal rate upon Commonwealth property is to impose a tax within the meaning of section 114 of the Constitution’. It is suggested that this case might be regarded as establishing that Queensland harbour dues are taxes within the meaning of section 114 and that the imposition of them upon Commonwealth goods is prohibited except with the consent of the Parliament of the Commonwealth.
6. It is considered that the Commonwealth should not accept any liability to pay harbour dues unless it is clearly liable to do so. It would be appreciated, therefore, if you would cause further consideration to be given to the question of the Commonwealth’s liability in respect of harbour dues in Queensland.

I am asked to advise whether harbour dues payable at Queensland ports in respect of goods the property of the Commonwealth are a ‘tax on property of any kind belonging to the Commonwealth’ within the meaning of section 114 of the Constitution of the Commonwealth.

The phrase quoted must be considered as a whole. The word ‘tax’ considered alone is, I think, capable of including harbour dues. The mere fact that the persons on whom the dues are imposed are those who avail themselves of an advantage which is not availed of by other members of the community does not, I think, remove the due from the category of taxation. On the other hand no one would regard, for example, freight payable on a government railway as a ‘tax’. However, a consideration of the phrase referred to as a whole renders it unnecessary, in my opinion, to express a view on the question whether the dues are a tax. In my opinion, for the reasons I am about to state, they are not a ‘tax on property’.

As early as 1904 the High Court, in the case of D’Emden v. Pedder, expressed the view that section 114 appears to refer to ‘taxation imposed upon property qua property’
(1 C.L.R. at p.108). It is true that almost all taxes, including property taxes, are imposed on a person or persons, and this dictum must be taken to include taxes imposed on persons in respect of property in its character as property.

In Attorney-General of New South Wales v. Collector of Customs for New South Wales (1908) 5 C.L.R. 818 (‘the Steel Rails Case’) the High Court decided that a customs duty imposed on (inter alia) goods imported by a State is not a ‘tax on property belonging to a State’ within the meaning of section 114.

Speaking of duties of customs, Griffith C.J. said (at p. 829):

Such duties are imposed in respect of ‘goods’ and in one sense, no doubt, ‘upon’ goods, which is only another way of saying that the word ‘upon’ is sometimes used as synonymous with ‘in respect of’. In the same way the word ‘upon’ or ‘on’ is used colloquially in speaking of stamp duties, succession on deeds, and other forms of indirect taxation, as taxes on deeds, &c., or on real and personal property. Yet it is recognized that these forms of taxation are not really taxation upon property but upon operations or movements of property.

O’Connor J. said (at pp. 843–4) :

In the interpretation of sec. 114 I base my judgment on this ground. In the widest sense of the word no doubt a Customs duty is a tax, but in the circumstances under consideration it is in its nature and essence more properly a charge made in respect of the landing of the goods in Australia. But, used in relation to property and in the expression ‘tax on property’, there is a narrower meaning of the word well known and recognized. A tax on property in the strict and narrower meaning is an exaction made in respect of the holding or ownership of property. That meaning would not include Customs duty on goods imported. Whether the word ‘tax’, being a general word and capable of the wider or of the narrower meaning, is to be interpreted in its wider or in its narrower sense, is a question to be determined as in all other cases where a legislature has used ambiguous expression, namely, by a consideration of the context, of the other sections of the Constitution, and of its whole scope and purpose. On that view I have come to the conclusion that to construe the expression ‘tax on property’ in the wider sense as including Customs duties would be to restrict, in the manner I explained in the earlier part of my judgment, the effective exercise of the power clearly given to the Commonwealth of the exclusive control of all importation into Australia.

His Honour appears to have held that the term ‘tax on property’ should be interpreted as having ‘the strict and narrower meaning’ referred to by him.

Higgins J. referring to sec. 114, said (at p. 854):

... the phraseology is such as to point to taxation of property as property as being the subject of this express prohibition. ‘A State shall not, without the consent of the Parliament or the Commonwealth, ... impose any tax on property of any kind belonging to the Commonwealth, nor shall the Commonwealth impose any tax on property of any kind belonging to a State’. But is a Customs tax a tax on properly as such? The Customs Tariff 1902 speaks of ‘duties ...on ... goods’, and the expression is roughly accurate, although, probably, if fully expressed it would be a tax on persons in respect of the importation of goods; just as a property tax is usually, though not necessarily, a tax on persons in respect of their property. A Customs tax is a tax, not on property as such, but on persons in respect of the act of importation. There is a fundamental difference between taxing men for having property, and taxing men for moving property–and, in particular, for moving property into the country from over seas. A turnpike toll, or an octroi tax, is not, property speaking, taxation ‘imposed on property,’ although the person who moves the animals or goods through the gate or into the city has to make a payment based on the number or character or value of the things which enter. Unless they enter, there is no tax; if they enter, there is a tax–which has to be paid by the person who brings them in, whether he is the owner or not. In other words, it is not a ‘property tax.’

Isaacs, J. alone thought that, if a duty of customs was a ‘tax’ within the meaning of section 114, (which, in his opinion, it was not) it was a ‘tax on property’ within the meaning of the section.

The decision in ‘the Steel Rails Case’ was explained by Higgins, J. in Huddart, Parker and Co. Pty. Ltd. v. Moorehead, (1909) 8 C.L.R. at p. 413, in the following words:

In the Steel Rails Case (Attorney-General of New South Wales v. Collector of Customs for New South Wales) section 114 of the Constitution came under discussion. It forbids the Commonwealth to ‘impose any tax on property of any kind belonging to a State.’ Certain steel rails had been bought by the Government of New South Wales, and imported; and it was held that the import duty was payable, because duty was imposed, not on property as property, but on the act of importation, the movement of property.

This view of the case was also accepted by the dissenting Judge, Isaacs, J., when he said, in Attorney-General for Queensland v. Attorney-General for the Commonwealth (1915) 20 C.L.R. at p.174 that the case ‘decided that “property” within the meaning of section 114, meant merely the physical substance of the thing possessed.’

In my opinion the reasoning of the High Court quoted above in regard to duties of customs is equally applicable to the harbour dues under consideration. They may possibly be regarded as taxes, and they are imposed ‘on’ goods in the sense that they are measured by reference to the goods, are payable by the owner of the goods, and may be recovered by action against the goods–but all these things are true also of duties of customs. The dues are not, however, payable because of the ownership of goods, but because goods are brought into, taken out of, or trans-shipped in, a harbour. There is not a levy on property qua property, but in respect of benefits enjoyed in connexion with the movement of property. (Municipal rates, on the other hand, are imposed in respect of property qua property). I am therefore of opinion that the imposition of the harbour dues in respect of goods belonging to the Commonwealth is not forbidden by section 114 of the Constitution.

[Vol. 33, p. 280]

(1) Opinion [Vol. 33, p. 93] not published.