Dennis Hotels Pty Ltd v Victoria

Dennis Hotels Pty Ltd v Victoria
Dennis Hotels Pty Ltd v Victoria
Court	High Court of Australia
Decided	26 February 1960
Citation(s)	[1960] HCA 10, (1960) 104 CLR 529
Case history
Appealed to	Privy Council [1961] UKPC 26, [1962] AC 25;; [1961] UKPCHCA 1, (1961) 104 CLR 621
Case opinions
	(4:3) The fee for the renewal of a liquor retailer's licence was held not to be an excise (per Fullagar, Kitto, Menzies & Taylor JJ)Contents Background ; Decision ; Criticism ; See also ; References ; (4:3) The fee for the temporary licence was held to be an excise (per Dixon CJ, McTiernan, Menzies & Windeyer JJ)
Court membership
Judge(s) sitting	Dixon CJ, McTiernan, Fullagar, Kitto, Taylor, Menzies and Windeyer JJ

Last updated March 24, 2019

Dennis Hotels Pty Ltd v Victoria,^[1] is a High Court of Australia case that deals with section 90 of the Australian Constitution, which prohibits States from levying customs or excise duties. Although some of the judges used the now-discredited criterion of liability approach, this case remains authority for cases that are factually similar to it.

The High Court of Australia is the supreme court in the Australian court hierarchy and the final court of appeal in Australia. It has both original and appellate jurisdiction, the power of judicial review over laws passed by the Parliament of Australia and the parliaments of the states, and the ability to interpret the Constitution of Australia and thereby shape the development of federalism in Australia.

Section 90 of the Constitution of Australia prohibits the States from imposing customs duties and of excise. The section bars the States from imposing any tax that would be considered to be of a customs or excise nature. While customs duties are easy to determine, the status of excise, as summarised in Ha v New South Wales, is that it consists of "taxes on the production, manufacture, sale or distribution of goods, whether of foreign or domestic origin." This effectively means that States are unable to impose sales taxes.

The Constitution of Australia is the supreme law under which the government of the Commonwealth of Australia operates, including its relationship to the States of Australia. It consists of several documents. The most important is the Constitution of the Commonwealth of Australia, which is referred to as the "Constitution" in the remainder of this article. The Constitution was approved in a series of referendums held over 1898–1900 by the people of the Australian colonies, and the approved draft was enacted as a section of the Commonwealth of Australia Constitution Act 1900 (Imp), an Act of the Parliament of the United Kingdom.

Background

The Licensing Act 1958 (Vic) contained two sections of contention. Section 19(1)(a) imposed fees for the grant or renewal of liquor licences, and the fee was calculated as 6 percent of the value of liquor purchased during the 12 months up to June 30 of the previous year. Section 19(1)(b) imposed fees for temporary licences, and the fee would be 1 pound per year together with 6 percent of the value of liquor purchased.

The Australian pound was the currency of Australia from 1910 until 14 February 1966, when it was replaced by the Australian dollar. As with other £sd currencies, it was subdivided into 20 shillings, each of 12 pence.

Decision

Three judges, Fullagar, Kitto and Taylor JJ, used the highly formalistic criterion of liability approach (which has since been discredited) to decide this case. In this approach, the fees were not viewed as excise duties because the criterion of liability does not fall in a step between the production of the good and the receipt of the good by the consumer due to the backdating (per Kitto J). The payment of the fee is seen as occurring as part of business generally; also, because the fee is not payable at the time of the purchase of the liquor, and because the retailer may choose not to renew his licence, the fee does not necessarily become an indirect cost for the consumer. The distinction, therefore, is that the fees were imposed not on goods, but on licences, and thus not an excise duty. These three judges held that the fees were not excise duties and hence were not invalid.

However, three judges, Dixon CJ, McTiernan and Windeyer JJ, held that the fees were excise duties. Dixon CJ asserted that it is a tax upon goods, because it is a cost that is bound to be recovered by the person paying the tax. The provisions of the Act, when taken together, burdened liquor as a commodity, regardless of the channel through which the tax flowed. Dixon CJ disregarded the argument that licensees may not renew their licences and hence not fall within the ambit of the provisions, by stating that the provisions "deal with the distribution of liquor in Victoria as a continuous operation and impose the tax accordingly"; it is immaterial that the tax on the goods is paid at a later date. These three judges held that the fees were excise duties and hence invalid by virtue of section 90.

Menzies J was the decisive judgment, although he followed the narrow approach to excise duty. His Honour found that the backdated fee was not a tax on production or manufacture, and was therefore not a duty of excise, applying the minority judgment in Parton v Milk Board (Vic) .^[2] However, in deciding the character of the fee for the temporary licence, he felt constrained by Parton, and held that it was an excise duty.

Parton v Milk Board (Vic), is a High Court of Australia case that dealt with the meaning of excise in relation to section 90 of the Australian Constitution.

An appeal to the Privy Council was dismissed as incompetent as the High Court had not issued a certificate under section 74 of the Constitution.^[3]

The Judicial Committee of the Privy Council (JCPC) is the highest court of appeal for certain British territories and Commonwealth countries. Established on 13 August 1833 to hear appeals formerly heard by the King-in-Council, the Privy Council formerly acted as the court of last resort for the entire British Empire, and continues to act as the highest court of appeal for several independent Commonwealth nations, the Crown Dependencies, and the British Overseas Territories.

Criticism

This case caused a great deal of criticism in the academic community due to the split in the Court and the uncertainty it created. The Zelman Cowen Professor of Law at the University of Melbourne, Professor Michael Crommelin AO , remarked that the decision "was one of the worst in the Court's history" and "certainly not its finest hour". According to Professor Crommelin, this was due to the "utter confusion" and "complete absence of reasoning" in the various judgments.

Related Research Articles

Sir Owen Dixon was an Australian judge and diplomat who served as the sixth Chief Justice of Australia. A judge of the High Court for thirty-five years, Dixon was one of the leading jurists in the English-speaking world and is widely regarded as Australia's greatest-ever jurist.

The reserved powers doctrine was a principle used by the inaugural High Court of Australia in the interpretation of the Constitution of Australia, that emphasised the context of the Constitution, drawing on principles of federalism, what the Court saw as the compact between the newly formed Commonwealth and the former colonies, particularly the compromises that informed the text of the constitution. The doctrine involved a restrictive approach to the interpretation of the specific powers of the Federal Parliament to preserve the powers that were intended to be left to the States. The doctrine was challenged by the new appointments to the Court in 1906 and was ultimately abandoned by the High Court in 1920 in the Engineers' Case, replaced by an approach to interpretation that emphasised the text rather than the context of the Constitution.

The constitutional basis of taxation in Australia is predominantly found in sections 51(ii), 90, 53, 55, and 96, of the Constitution of Australia. Their interpretation by the High Court of Australia has been integral to the functioning and evolution of federalism in Australia.

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Bath v Alston Holdings Pty Ltd, is a High Court of Australia case that discusses the application of the freedom of interstate trade, as specified in Section 92 of the Constitution of Australia. This case followed the unanimous decision of Cole v Whitfield, regarding the interpretation of section 92 as about free trade as opposed to individual rights.

Peterswald v Bartley is an early High Court of Australia case that dealt with section 90 of the Australian Constitution, which prohibits States from levying excise.

Bolton v Madsen, is a High Court of Australia case that dealt with section 90 of the Australian Constitution, which prohibits States from levying excise duty.

Anderson's Pty Ltd v Victoria, is a High Court of Australia case that dealt with Section 90 of the Constitution of Australia. In this case, following on from such cases as Dennis Hotels Pty Ltd v Victoria, Barwick CJ accepted the broad approach to the definition of an excise, but rejected the formalistic criterion of liability approach for determining if the excise falls at the relevant step. He adopted the substance over form approach, or the substantial effects doctrine, in that there are many factors to be considered, for example, the indirectness of the tax, its effect on the cost of goods and its proximity to the production or distribution of the goods.

Dickenson's Arcade Pty Ltd v Tasmania, also known as the Tobacco Tax case is a High Court of Australia case that dealt with section 90 of the Australian Constitution.

Hematite Petroleum Pty Ltd v Victoria, is a High Court of Australia case that deals with section 90 of the Australian Constitution.

Ha v New South Wales is a High Court of Australia case that dealt with section 90 of the Australian Constitution, which prohibits States from levying excise.

R v Barger is a High Court of Australia case where the majority held that the taxation power could not be used by the Australian Parliament to indirectly regulate the working conditions of workers. In this case, an excise tariff was imposed on manufacturers, with an exemption being available for those who paid "fair and reasonable" wages to their employees.

Victoria v Commonwealth, is a High Court of Australia case that affirmed the Commonwealth government's ability to impose a scheme of uniform income tax, adding to Australia's vertical fiscal imbalance in the spending requirements and taxing abilities of the various levels of government.

Roxborough v Rothmans of Pall Mall Australia Ltd is an Australian unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.

Section 99 of the Constitution of Australia, is one of several important non-discrimination provisions that govern actions of the Commonwealth and the various States.

References

↑ Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 , (1960) 104 CLR 529(26 February 1960), High Court.
↑ Parton v Milk Board (Vic) [1949] HCA 67 , (1949) 80 CLR 229 (21 December 1949), High Court.
↑ Dennis Hotels Pty Ltd v Victoria [1961] UKPC 26 , [1962] AC 25; [1961] UKPCHCA 1 , (1961) 104 CLR 621(14 June 1961), Privy Council (on appeal fromAustralia)

Winterton, G. et al. Australian federal constitutional law: commentary and materials, 1999. LBC Information Services, Sydney.

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[Dennis_HCA-1] Dennis Hotels Pty Ltd v Victoria [1960] HCA 10 , (1960) 104 CLR 529(26 February 1960), High Court.

[Parton_v_Milk_Board-2] Parton v Milk Board (Vic) [1949] HCA 67 , (1949) 80 CLR 229 (21 December 1949), High Court.

[3] Dennis Hotels Pty Ltd v Victoria [1961] UKPC 26 , [1962] AC 25; [1961] UKPCHCA 1 , (1961) 104 CLR 621(14 June 1961), Privy Council (on appeal fromAustralia)