By section 20 of the Land Tax Assessment Act as amended assessments of Land Tax are to be made in respect of triennial periods. The current triennial period will expire on June 30th 1942, and unless the present statutory provisions are altered a fresh assessment will have to be made for the triennial period beginning on July 1st 1942. The Commonwealth Government wants to peg the valuation of land so that the values for financial years beginning on and after July 1st 1942 will be the same as those ruling for the current triennial period which began on 1st July 1939 and which expires on 30th June 1942. Our opinion is desired whether this pegging of valuations to a period which began three years ago can be effectuated by Regulation under the National Security Act 1939–1940 or whether it will have to be done by statutory amendment.

To answer this question it will be necessary to consider the terms of the National Security Act as amended.

By Section 5(1) of that Act it was enacted as follows:

Subject to this section the Governor-General may make regulations for securing the public safety and the defence of the Commonwealth and the Territories of the Commonwealth and in particular:

(then followed 10 subclauses a–j enumerating particular matters in relation to which regulations might be made).

Section 5(1) concluded as follows:

and for prescribing all matters which by this Act are required or permitted to be prescribed or which are necessary or convenient to be prescribed for the more effectual prosecution of any war in which His Majesty may be engaged.

The scope of the application of this section 5 was quite recently considered by the Full Bench of the High Court in the Apple and Pear Board Case, Andrews v. Howell 1941 Argus Law Reports at p. 185.⁽¹⁾ In that case regulations had been made for dealing with the position brought about in the Apple and Pear Industry by the cessation of oversea transport for the Australian crops. The object of the Apple and Pear Acquisition Regulation was expressly stated in Regulation 2 which was as follows:

The purpose of these regulations is to minimise the disorganization in the marketing of apples and pears likely to result from the impracticability of exporting sufficient quantities of apples and pears because of the effects upon shipping of the present war and these regulations shall be administered accordingly.

It was held by a majority of three Justices to one (Starke J. dissenting) that the purposes stated in regulation 2 were sufficient to bring such regulations within the defence power and within the ambit of the regulation making power in section 5(1) of the National Security Acts (see per Dixon J. 1941 Argus Reports at p. 194). In their judgments the Justices gave different reasons for their conclusions:

1. The Acting Chief Justice adopted a statement from the reasons of Isaacs J. in Farey v. Burvett.⁽²⁾ ‘If the measure (regulation) questioned may conceivably in such circumstances (war circumstances) even incidentally aid the effectuation of the power of defence the Court must hold its hand’ p. 187.⁽³⁾
2. Per Starke J. ‘It is not for this Court to determine whether the regulations secure or aid in securing the public safety and defence of the Commonwealth and its Territories’. ‘It is sufficient if the regulations are capable of securing or aiding or tend to secure or aid the defence of the Commonwealth and the States’ p. 190.⁽⁴⁾
3. Per Dixon J. ‘The operation of wide general powers conferred upon the executive by the Parliament in the exercise of the defence power is affected by changing facts. The existence and character of hostilities or a threat of hostilities against the Commonwealth are facts which will determine the extent of the operation of the power. Whether it will suffice to authorise a given measure will depend upon the nature and dimensions of the conflict that calls it forth, upon the actual and apprehended dangers, exigencies and course of the war and upon the matters that are incidents thereto’ p. 193.⁽⁵⁾

In our opinion the test supplied in the reasons given by Dixon J. is more helpful than the more general statements in the other judgments, and it amounts to this, that in determining whether given regulations are to be considered as regulations for the public safety or defence of the Commonwealth or for the more effectual prosecution of the war, it is largely a matter of fact and necessary to consider all the surrounding circumstances including in particular the dangers, exigencies or other matters which are the occasion for the promulgation of any regulations particularly in question.

With these preliminary observations upon the facts and the statute and the cases, we now proceed to address ourselves directly to the matter submitted to us for our opinion:

If a regulation were to be promulgated under the National Security Act pegging Land Values and reciting no reasons for such pegging than the whole matter would be up in the air and the reasons for the promulgation of the regulations would be mere matter of guess or conjecture.

1. If a regulation were to be made under the National Security Act pegging land values as at the values in June 1939 simpliciter and without any preamble reciting reasons or grounds for its promulgation, we do not see how the Court would be in a position to decide that a regulation in those terms was a regulation for the public safety and defence of the Commonwealth or a regulation necessary or convenient for the more effectual prosecution of the war. We think it was the acceptance of the purpose as recited in regulation 2 of the Apple and Pear Board Regulations which enabled the Court in Andrews v. Howell to reach the conclusion as a matter of fact that the regulations there in question were reasonably capable of being held to be necessary to remedy the chaos and repair the damage to the economic integrity of the Commonwealth resulting from the war diversion of shipping. See per Dixon J., p. 193⁽⁶⁾ and per McTiernan J., p. 197.⁽⁷⁾
2. If reasons were recited as the occasion for the promulgation of the regulations, then such reasons might be challenged. See Per McTiernan J., p. 197.⁽⁸⁾ But if reasons were to be recited, what reasons could be recited which could be counted upon as being acceptable to the Court? In our instructions mention is made of two matters. In the first place it is hinted that there may have been a drop in land values recently. If this hint means that the regulation might keep land values at a higher level and so facilitate the raising of more revenue than would be possible if the Land Tax Act were allowed to remain as it is now framed, then other considerations arise. In the first place, except for the purposes expressly mentioned in section 5(1)(j), there is nothing in the National Security Act section 5 or elsewhere which on the face of such Acts authorises regulations to be made for the purpose either directly or indirectly of raising revenue or directly or indirectly placing increased charges or burdens on the people.

The raising of finance for the general purposes of the Commonwealth or for the special purposes of the war has not, we think, been entrusted to the Executive Government acting under Regulations made under the National Security Act.

Indeed, under the Constitution section 53 it appears that the Executive could not under the National Security Act make laws or regulations imposing taxation which in the ordinary course have to originate in the House of Representatives. No doubt Parliament under an Act properly drawn can delegate power to impose taxation, but in our opinion the National Security Act does not either expressly or by implication confer power to impose taxation.

It is true that the Land Tax Assessment Act is not by itself an Act imposing taxation, but by its incorporation in the Land Tax Acts it is part of an Act imposing taxation, and not merely a machinery part but a substantive part for it defines and fixes the land and the value of the land upon which the rates operated. The proposed pegging of land values as at 30th June 1939 would we think involve vital changes in the Land Tax Act itself because it would change the definition of Land Tax and so would change section 3 of the Land Tax Act. By definition in the incorporated Assessment Act, Land Tax is defined to mean ‘the land tax imposed as such by any Act as assessed under this Act’. Notwithstanding section 18 of the National Security Act we are not prepared to say that the definition of Land Tax in an Act imposing taxation could be altered by a regulation under the National Security Act.

Moreover the pegging of land values as at 30th June 1939 would not necessarily make more revenue available for the purposes of the war. Whatever revenue were collected under the new assessments would simply go into Consolidated Revenue to be appropriated by Parliament for the purposes of the Commonwealth.

Thus as just stated the pegging of land values for the purposes of the Land Tax Assessment Acts would in itself accomplish nothing in the way of raising new revenue. If the pegging were intended to be of such a character as to make appeals incompetent, then it is possible that other consequential alterations might have to be made in other sections of the Assessment Act. Whether more revenue would or would not be raised is also a matter of conjecture. The taking away of the right of appeal in respect of pegged valuations is a matter which does not appear to be very closely related to the public safety and defence of the Commonwealth or to the more effectual prosecution of the war.

It is also suggested in our instructions that revaluations for the purposes of new assessments could not be done in time because of the absence of expert valuers on War Service. We would point out, however, that under sections 17 and 18 of the Land Tax Assessment Act it is not necessary for the Commissioner to be possessed of valuations of his own prior to receipt of returns or otherwise and we think that the possible inconvenience to the Commissioner is a matter too remote from the security of Australia to justify a regulation antedating assessments to 1939 as being a regulation for the public safety and defence of the Commonwealth.

For these reasons our opinion is that the Courts would hold that the pegging desired cannot be effectuated by regulation under the National Security Act and will have to be done, if at all, by Statutory Amendment, or putting the matter on perhaps a lower level we would say that in our opinion the strong probabilities are that the Courts would so hold.

[Vol. 34, p. 332]

(1) (1941) 65 CLR 255.

(2) (1916) 21 CLR 433.

(3) 65 CLR 255 at 263.

(4) 65 CLR 255 at 271.

(5) 65 CLR 255 at 278.

(6) 65 CLR 255 at 278–279.

(7) 65 CLR 255 at 286–287.

(8) 65 CLR 255 at 286.

(9) Sir Bernard Sugerman. Born 5 July 1904, Rockdale, NSW; died 3 November 1976, Bellevue Hill, NSW. Admitted NSW Bar 1926. Founder and first editor, Australian Law Journal 1927–1946. Editor in Chief, Australian Digest 1934–1939. Appointed KC 1943. Justice, Commonwealth Court of Conciliation and Arbitration 1946–1947; Supreme Court of NSW 1947–1972. Appointed President, NSW Court of Appeal 1970. Appointed KBE 1970. Awarded LLD, University of Sydney 1976.