High Court of Australia Mason C.J. Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ. Air Caledonie International v Commonwealth [1988] HCA 61 ORDER Demurrer overruled with costs. Declare that s. 34A of the Migration Act 1958 Cth was invalid. Stand over the action for mention before a single Justice. Cur. adv. vult. The Court delivered the following written judgment:— Nov. 24 Mason C.J., Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ. Section 7 of the Migration Amendment Act 1987 Cth purported, as from 1 January 1988, to impose a liability to pay what was described as a "fee for immigration clearance" in respect of international airline passengers entering Australia. It did this by adding s. 34A to the Migration Act 1958 Cth. Putting to one side evidentiary provisions (sub-s.(5)), s. 34A was in the following terms: (1) Where a passenger, other than a prescribed passenger, travels to Australia on an overseas flight, the passenger shall pay the prescribed fee for immigration clearance of that passenger by an officer at the airport at which the passenger intends to enter Australia. (2) The fee shall be collected by the international air operator operating the flight. (3) The international air operator shall pay to the Commonwealth the amount of the fee payable by a passenger, whether or not the operator has collected that amount from the passenger. (4) An amount payable to the Commonwealth by an international air operator under subsection (3) is a debt due to the Commonwealth and may be recovered in a court of competent jurisdiction. (6) In this section: "international air operator" means a person, organisation or enterprise operating an overseas flight on which passengers are carried or, where that person, organisation or enterprise does not have an office or place of business in Australia, the Australian agent of that person, organisation or enterprise; "overseas flight" means a flight that commenced at, or during which the aircraft called at, a place outside Australia; "passenger" means a person (whether an Australian citizen or not) who travels to Australia as a passenger on an aircraft operated by an international air operator. By reg. 30a, which was inserted in the Migration Regulations on 21 December 1987, it was provided, for the purposes of s. 34A(1), that the "prescribed fee" was five dollars and by reg. 30b, inserted on the same day, that a person under twelve years of age was a "prescribed passenger". Each of the plaintiffs is an "international air operator" which was, if s. 34A was a valid enactment of the Commonwealth Parliament, liable to make payments to the Commonwealth pursuant to its terms. By statement of claim filed in the original jurisdiction of the Court and naming the Commonwealth as defendant, the plaintiffs sought a declaration that the provisions of the section were invalid. The Commonwealth filed a defence and counterclaim. It also demurred to the statement of claim alleging the validity of s. 34A. It is that demurrer which is now before the Court for determination. It should be mentioned that, after the institution of the proceedings by the plaintiffs, the provisions of s. 34A were repealed as from 1 July 1988 by s. 5 of the Migration Amendment Act 1988 Cth. The repeal of the section did not, however, have the effect that the question whether the section was invalid became merely of academic interest. The Commonwealth maintains, and the plaintiffs dispute, that the plaintiffs are liable to make payments to it in respect of passengers (other than prescribed passengers) carried by them to Australia during the six months of the purported operation of the section. There is a degree of obscurity about some aspects of the legislative scheme which was embodied in s. 34A. In particular, sub-ss.(1) and (2) are imprecise about the legal relationship (with respect to the "fee") between the passenger on the one hand and the Commonwealth and the air operator on the other. The overall purport of that legislative scheme was, however, clear enough. An obligation to pay a "fee for immigration clearance" in whatever amount might be prescribed by regulation was imposed on airline passengers arriving from overseas who had not been exempted (as a "prescribed passenger") by regulation. The fee was to be collected ("shall be collected") by the relevant "international airline operator" which was made liable to pay the amount of the fee to the Commonwealth regardless of whether the fee had been or could be actually collected from the passenger. The amount was recoverable from the operator as "a debt due to the Commonwealth". Apart from describing the fee as "the prescribed fee for immigration clearance of that passenger by an officer at the airport at which the passenger intends to enter Australia" (s. 34A(1)), the Parliament did not indicate the criteria by reference to which the Executive was to fix the amount of the fee. Nor did it identify the considerations to which the Executive should have regard in prescribing what, if any, passengers arriving from overseas should be exempted from incurring or attracting liability to pay it. The plaintiffs' attack on the validity of s. 34A took the form of two broad submissions. Logically, they must be seen as advanced in the alternative. The first was to the effect that the provisions of the section could not properly be characterized, for constitutional purposes, as a law with respect to any of the designated heads of Commonwealth legislative power. In answer to that submission, the Commonwealth relied upon the legislative powers conferred by sub-ss. (xxvii) ("Immigration and emigration"), (xix) ("Naturalization and aliens"), (i) ("Trade and commerce ") and (xxxix) ("Matters incidental ") of s. 51 of the Constitution. The plaintiffs' other broad submission was to the effect that the purported exaction of the immigration clearance fee was "taxation" for the purposes of s. 55 of the Constitution and that the requirements of that section, in relation to laws imposing taxation, precluded the insertion of s. 34A in the Migration Act which deals with many matters other than the imposition of taxation. In answer to that submission, the Commonwealth argued that the immigration clearance fee was not "taxation" for the purposes of s. 55; it was, so it was said, a "fee for services". Since the question of characterization raised by the plaintiffs' first broad submission was postulated upon the assumption that s. 34A is not, for constitutional purposes, a law with respect to "Taxation" (Constitution, s. 51(ii)), it is appropriate to turn initially to the question whether the exaction of the immigration clearance fee would, for relevant purposes, be taxation. In Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Ltd. [1] , the Privy Council identified three features which sufficed to impart to the levies involved in that case the character of a "tax". Those features were that the levies: were compulsory; were for public purposes; and were enforceable by law. In Matthews v. Chicory Marketing Board (Vict.) [2] , Latham C.J. adopted those three features as the basis of what has subsequently been recognized in this Court as an acceptable general statement of positive and negative attributes which, if they all be present, will suffice to stamp an exaction of money with the character of a tax: "a compulsory exaction of money by a public authority for public purposes, enforceable by law, and not a payment for services rendered" (see, e.g., Browns Transport Pty. Ltd. v. Kropp [3] ). More recently this Court has drawn attention to other criteria, namely, that a tax is not by way of penalty and that it is not arbitrary (see MacCormick v. Federal Commissioner of Taxation [4] ; Deputy Federal Commissioner of Taxation v. Truhold Benefit Pty. Ltd. [5] ). 1. [1933] A.C. 168, at p. 175. 2. (1938) 60 C.L.R. 263, at p. 276. 3. (1958) 100 C.L.R. 117, at p. 129. 4. (1984) 158 C.L.R. 622, at p. 639. 5. (1985) 158 C.L.R. 678, at p. 684. There are three comments which should be made in relation to the above general statement of Latham C.J. The first is that it should not be seen as providing an exhaustive definition of a tax. Thus, there is no reason in principle why a tax should not take a form other than the exaction of money or why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public. The second is that, in Logan Downs Pty. Ltd. v. Queensland [6] , Gibbs J. made explicit what was implicit in the reference by Latham C.J. to "a payment for services rendered", namely, that the services be "rendered to" — or (we would add) at the direction or request of — "the person required" to make the payment. The third is that the negative attribute — "not a payment for services rendered" — should be seen as intended to be but an example of various special types of exaction which may not be taxes even though the positive attributes mentioned by Latham C.J. are all present. Thus, a charge for the acquisition or use of property, a fee for a privilege and a fine or penalty imposed for criminal conduct or breach of statutory obligation are other examples of special types of exactions of money which are unlikely to be properly characterized as a tax notwithstanding that they exhibit those positive attributes. On the other hand, a compulsory and enforceable exaction of money by a public authority for public purposes will not necessarily be precluded from being properly seen as a tax merely because it is described as a "fee for services". If the person required to pay the exaction is given no choice about whether or not he acquires the services and the amount of the exaction has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be seen as a tax. 1. (1977) 137 C.L.R. 59, at p. 63. Section 53 of the Constitution imposes limitations upon the powers of the Senate in relation to proposed laws "appropriating revenue or moneys" or "imposing taxation": such proposed laws may not originate in or be amended by the Senate. The section does not define what constitutes, for its purposes, a law "appropriating revenue or moneys" or a law "imposing taxation". It does, however, provide that: a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law. Section 54 of the Constitution provides: The proposed law which appropriates revenue or moneys for the ordinary annual services of the Government shall deal only with such appropriation. The first paragraph of s. 55 provides: Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect. Sections 53, 54 and 55 of the Constitution must be read together. When the sections are so read, it is apparent that references in ss. 53 and 55 to a law or laws "imposing taxation" must be given a constant meaning. That being so, the provision in s. 53 that "a proposed law shall not be taken to impose taxation, by reason only of its containing provisions for the demand or payment of fees for services under the law" must be treated as indirectly applicable to confine the content of the references to "[l]aws imposing taxation" and the "imposition of taxation" in the first paragraph of s. 55. It is clear that the "fee" purportedly exacted by s. 34A possessed all of the positive attributes which have been accepted in this Court as prima facie sufficient to stamp an exaction of money with the character of a tax: it was compulsory; it was exacted by a public authority (the Commonwealth itself) for public purposes (consolidated revenue: see Constitution, s. 81); it (or its "amount") was enforceable by law. It is therefore necessary to consider whether there was something special about the fee (e.g. a "fee for services") or the circumstances in which it was purportedly exacted (e.g. as a penalty for an offence) which, notwithstanding the presence of those positive attributes, might preclude its characterization as "taxation". If the fee had been exacted only in those cases where the arriving passenger was not an Australian citizen, it would have been arguable that, regardless of whether it was a "fee for services", it was not a tax. In that event, and notwithstanding the countervailing analogy of a customs duty which is clearly a tax, there might have been some force in an argument to the effect that it was to be seen as a charge imposed upon the passenger for the privilege of entering Australia or as a licence fee and that the requirement that the airline operator collect the fee (and pay the amount of it to the Commonwealth if not collected from the passenger) could not convert it into a tax. However, as has been seen, the fee was payable by, and in respect of, both citizens and non-citizens arriving on an international airline flight. The only exemption was of those whom the Executive might see fit to prescribe by regulation. The right of the Australian citizen to enter the country is not qualified by any law imposing a need to obtain a licence or "clearance" from the Executive. In the case of such a returning citizen, the impost could not be regarded as a charge for the privilege of entry. It has not been, and it could not sensibly be, suggested that the provisions of s. 34A could be transformed, by any acceptable process of severance or reading down, from provisions imposing clearance "fees" upon, or with respect to, arriving airline passengers generally into provisions discriminating against visiting non-citizens or non-nationals by imposing a form of entry fee only in relation to them. Accordingly, the question whether the provisions of s. 34A are properly to be characterized as a law "imposing taxation" must be answered on the basis that they applied indifferently with respect to returning citizens and visiting non-citizens. That being so, s. 34A was a law "imposing taxation" if the fee which it purported to exact from, or with respect to, returning citizens was, for relevant purposes, properly to be characterized as a tax. The only basis upon which it has been suggested that the fee which the section purported to impose for "the clearance of" a returning citizen was not taxation was that it represented a fee "for services". In one sense, all taxes exacted by a national government and paid into national revenue can be described as "fees for services". They are the fees which the resident or visitor is required to pay as the quid pro quo for the totality of benefits and services which he receives from governmental sources. It is, however, clear that the phrase "fees for services" in s. 53 of the Constitution cannot be read in that general impersonal sense. Read in context, the reference to "fees for services" in s. 53 should, like the reference to "payment for services rendered" in the above-quoted extract from the judgment of Latham C.J. in Matthews v. Chicory Marketing Board [7] , be read as referring to a fee or charge exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment. 1. (1938) 60 C.L.R. 263,at p. 276. At least in a case of the ordinary Australian citizen returning by air from overseas, the description of the purported impost (see s. 34A(1)) as a "fee for immigration clearance of that passenger" did not suffice to make the impost a "fee for services" in any relevant sense. As has been said, such a citizen had, under the law, the right to re-enter the country, without need of any Executive fiat or "clearance", for so long as he retained his citizenship. The subjection of such a citizen to administrative procedures at the point of entry (see Migration Regulations, reg. 4) may be necessary, in the public interest, to enable the entry of non-citizens to be prevented or controlled and to enable proper administrative records and procedures to be kept or followed in relation to the arrival and departure of citizens and non-citizens alike. A requirement that a returning citizen submit, in the public interest, to the inconvenience of such administrative procedures at the end of a journey cannot, however, properly be seen as the provision or rendering of "services" to, or at the request or direction of, the citizen concerned. Nor is it possible to find in s. 34A (or in any other provision of the Act) any identification of particular services provided or rendered to the individual passenger for which the impost could relevantly be regarded as a fee or quid pro quo. As has been seen, the section neither fixed the amount of the fee nor indicated the considerations to which the Executive was required to pay regard in prescribing it. In these respects, the impost which s. 34A purported to exact is to be contrasted with the nominated statutory fee of ten dollars (no other having been prescribed) for the processing of a particular individual's application to become an approved pathologist which was held not to be a tax in General Practitioners Society v. The Commonwealth [8] . Indeed, one need do no more than refer to the second reading speech of the responsible Minister, to which both sides referred the Court, to confirm that the moneys intended to be raised by the purported impost were not related to particular services to be supplied to particular passengers but were intended to provide, when paid into consolidated revenue, a general off-setting of the administrative costs of certain areas of the relevant Commonwealth Department, including, for example, the administrative costs involved in maintaining facilities for the issue of visas in overseas countries and "general administrative overheads". Therefore, the fee which s. 34A purported to exact was, at least in so far as it related to passengers who were Australian citizens, a tax and the provisions of the section were, for relevant purposes, a law "imposing taxation". We turn to consider the effect on the validity of the amending Act of that conclusion. 1. (1980) 145 C.L.R. 532. The first paragraph of s. 55 of the Constitution contains two distinct limbs. The first limb consists of the mandatory injunction that laws imposing taxation deal only with the imposition of taxation. The second limb is the specification of the consequences of breach of the first limb, namely, that any provision in such laws dealing with any matter other than the imposition of taxation shall be of no effect. In a case where a law, as enacted, purports both to impose taxation and to deal with other matters, the application of the two limbs of the paragraph to confine validity to so much of the law as deals with the imposition of taxation will ordinarily be straightforward. The position is, however, more complicated in a case such as the present where the impugned law is a provision imposing taxation which an amending Act seeks to insert in an existing Act which deals only with matters other than the imposition of taxation and the validity of which is not in issue. An obvious purpose of the constitutional requirement that a law imposing taxation deal only with the imposition of taxation was to confine the impact of the limitations upon the Senate's powers with respect to proposed taxing laws to provisions actually dealing with the imposition of taxation, that is to say, to prevent "tacking". That being so, there is something to be said for the view that, in a case where an amending Act inserts a taxing provision in an existing Act, all that s. 55 requires is that the amending Act itself deal only with the imposition of taxation. On balance, however, it seems to us that the requirement of s. 55 should be construed as extending to laws in the form in which they stand from time to time after enactment, that is to say, as extending to Acts of the Parliament on the statute book. That construction gives full effect to the ordinary meaning of the words of the section. It is also supported both by the contrast between the reference to "laws" in s. 55 and the references to "proposed laws" and a "proposed law" in ss. 53 and 54 and by considerations relating to the nature of an amending Act which is ordinarily to be construed as part of the principal Act (see, e.g., Acts Interpretation Act 1901 Cth, s. 15) and is commonly treated as "exhausted" upon commencement and incorporation of the amendments which it effects in the principal Act. Indeed, no submission disputing that construction was advanced on behalf of the Commonwealth. On that construction, s. 55 requires that both an amending Act imposing taxation and the amended principal Act deal only with the imposition of taxation. If an amending Act purports to insert a provision imposing taxation in an existing valid Act which contains provisions dealing only with other matters, it seeks to bring about something which the Constitution directly and in terms forbids and which is not within the competence of the Parliament to achieve: cf. Attorney-General (N.S.W.); Ex rel. McKellar v. The Commonwealth [9] , per Gibbs J., [10] per Stephen J. with whom Mason J. agreed. In such a case, one cannot disregard the barrier of the constitutional injunction against a law dealing both with the imposition of taxation and other matters on the basis that, once the result which that injunction forbids has been achieved, the second limb will rectify the breach by invalidating all the other provisions of the principal Act. The injunction of the first limb constitutes a restriction on legislative power. Its effect in the present case is to invalidate the relevant provisions of the amending Act and one never reaches the situation where the second limb operates to strike down all of the provisions of the principal Act dealing with matters other than the imposition of taxation. 1. (1977) 139 C.L.R. 527, at p. 550. 2. (1977) 139 C.L.R., at p. 560. It follows that the effect of the conclusion that s. 34A was a law imposing taxation is that s. 7 of the Migration Amendment Act 1987 was ineffective to amend the Migration Act by adding s. 34A to its provisions. It is unnecessary to consider the plaintiffs' alternative argument that the provisions of s. 34A did not fall within the ambit of any head of Commonwealth legislative power other than that conferred by s. 51(ii) with respect to taxation. It is also unnecessary to pursue the question whether, even if the fee purportedly exacted by s. 34A could properly have been regarded, from the point of view of the actual passenger, as a fee for services, the obligation which s. 34A(3) and (4) purported to impose upon international air operators to pay "the amount" of the fee, regardless of whether the fee had been or could be collected from the passenger, could be seen as the imposition of an obligation to pay a fee for services in the relevant sense in circumstances where it is not suggested that the impost or its equivalent "amount" was exacted for services rendered to, or at the request or direction of, the particular international air operator. The Commonwealth's demurrer to the plaintiffs' statement of claim must be overruled and it should be declared that s. 34A was invalid. It would also seem to follow from what has been said above that the plaintiffs are entitled to judgment in the action and that the Commonwealth's first counterclaim, which was based on s. 34A, should be dismissed, leaving for determination the alternative counterclaim in which the Commonwealth seeks to recover, as moneys had and received, the amounts actually collected by the plaintiffs.