The Naval Secretary has forwarded the following memorandum for advice:

I am directed to request that advice may be given in regard to the following matter, viz. whether in view of section 114 of the Constitution Act, the State Governments can legally levy port dues or tonnage dues on (1) chartered transports, and on (2) detained enemy, or other, ships used by the Commonwealth for trading purposes.

These dues are charged by the Harbour Trusts at the various ports in Australia to meet the cost of general upkeep of the port. The rates of charge differ in the various States.

As regards chartered transports, these ships are not the property of the Commonwealth, but are hired for use as transports, the whole risk of ship being with the Commonwealth. As regards detained enemy ships, these are, for the time being, under the control of the Commonwealth, with the approval of the Imperial Government. 'Other ships' would include ships, other than ships of war, owned and controlled by the Commonwealth.

Section 114 of the Constitution provides (inter alia) that a State shall not impose any tax on property of any kind belonging to the Commonwealth.

Port and tonnage dues are not taxes on the ships of the Commonwealth as being property belonging to the Commonwealth, but are payments demanded from the Commonwealth for the use by the Commonwealth of the ports and wharves provided by the State.

Such payments are not, in my opinion, taxes within the meaning of section 114 of the Constitution.

The liability of the Commonwealth for payment of these dues depends upon the terms of the State Act imposing the dues. If the ships of His Majesty or of the Government are exempted from the payment of these dues under the State Acts, the Commonwealth would not, in my opinion, be liable to pay these dues.

[Vol. 14, p. 193]