High Court of Australia Barwick C.J. McTiernan, Menzies, Walsh and Gibbs JJ. Cox v Tomat [1972] HCA 10 ORDER Special leave granted. Appeal dismissed with costs. Cur. adv. vult. The following written judgments were delivered:— 1972, Feb. 24 Barwick C.J. Section 8 of the Road Maintenance (Contribution) Act, 1965 W.A. (the Act) provides that the owner of every commercial goods vehicle shall pay to the Commissioner of Transport a charge at a prescribed rate towards compensation for wear and tear caused to roads in the State. The charge is due at the time the vehicle uses a road in the State and is a civil debt due to the Commissioner recoverable in any court of competent jurisdiction. Section 9 of the Act requires the owner of a commercial goods vehicle to keep and retain for a period of six months a daily record in prescribed form of all journeys made by the vehicle along roads of the State. Section 10 requires the owner not later than the fourteenth day of each month to deliver to the Commissioner the record of such journeys made by the vehicle during the preceding month and of the amount of money remaining due in respect of such journeys. "Owner" is defined by the Act (s. 4) as follows: "Owner" in relation to a commercial goods vehicle includes— (a) a person who is the owner or joint owner or part owner thereof; (b) a person who has the use thereof under a hiring or hire-purchase agreement; and (c) a person in whose name the commercial goods vehicle is registered under the Traffic Act, 1919, or under any corresponding Act, Ordinance or legislation of any State or Territory of the Commonwealth, but does not include an unpaid vendor of the commercial goods vehicle under a hire-purchase agreement. Section 15 of the Act is in the following terms: 13. (1) In this section "director" includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act. (2) Where a corporation is the owner or one of the owners of a commercial goods vehicle, any reference in this Act to the owner of such a commercial goods vehicle shall be construed as including a reference to every person who is a director of that corporation. (3) Where any person has, by reason only of being director of a corporation, been required under this Act to discharge any obligation to pay any sum of money that the corporation was obliged to pay, whether pursuant to a judgment or order of a court or not, that person— (a) is entitled to recover from the corporation any amount so paid as a civil debt due to the person by the corporation; and (b) when any amount so paid cannot be recovered from the corporation, is entitled to recover contribution from any other director of the corporation who would have been liable in respect of the amount so paid except that the amount may be recovered by a director from any other director shall not exceed that proportion of the total amount that he has paid as one bears to the total number of directors of that corporation. (4) Where pursuant to the provisions of subsection (2) of this section more than one person is liable as owner of a commercial goods vehicle, any obligation imposed upon the owner by or under this section shall be deemed to have been discharged, if the obligation is performed by any one of those persons. (5) A certificate purporting to be signed by— (a) the Registrar of Companies appointed under the Companies Act, 1961; or (b) the officer holding the corresponding office under any corresponding Act or Ordinance for the time being in force in any State or Territory of the Commonwealth, stating that it appears from a return or returns lodged with him pursuant to the relevant law relating to companies that on any date, or during any period, any person specified therein was a director of a corporation specified in the certificate, is prima facie evidence of the matters specified in the certificate. (6) For the purposes of subsection (5) of this section, a person who appears from any return lodged as provided in that subsection, to be a director of a corporation, shall be deemed to continue as such until by a subsequent return so lodged it appears that he has ceased to be such a director. (7) Nothing in this section affects the liability of a corporation that is the owner or one of the owners of a commercial goods vehicle to pay any amount to the Commissioner in accordance with any of the provisions of this Act. Section 14 (1) (a) and (d) and (e) provide as follows: 14.(1)Any person who— (a) fails to keep any record as required by this Act or to retain a copy of that record or to make a copy thereof available for inspection as so required; (d) fails to deliver to the Commissioner as required by this Act any record so required to be kept by him; or (e) fails to pay to the Commissioner as required by this Act any charges payable in respect of any commercial goods vehicle, is guilty of an offence against this Act. The appellant laid a complaint under the Justices Act, 1902 W.A. before a Justice that on 15th May 1969 the respondent described as of an address in the State of New South Wales was guilty at Perth of an offence under s. 14 (1) (e) of the Act in that: being the owner of a motor vehicle which was at all material times a commercial goods vehicle he did fail to pay to the Commissioner of Road Transport as required by the Act charges payable in respect of mileage travelled along roads in Western Australia during the month of April. The appellant admitted that a company, Silver Transport Pty. Ltd. which was proved to be the registered owner under the Motor Traffic Act, 1909 N.S.W. of the vehicle in question, was incorporated in the State of New South Wales and not registered as a foreign company in the State of Western Australia. It was established that the company's registered office was in Hunter Street, Sydney. The appellant also admitted that the respondent was not in the State of Western Australia at any material time. The respondent admitted before the magistrate that he had signed the certified record of journeys of the vehicle in question for the month of April. This return made in the company's name was received in evidence. It bears the respondent's signature but no express description of the capacity in which he signed it. A certified copy of a return giving particulars appearing in the register of directors, managers etc. of the said company was also received in evidence. From this return it appeared that on 12th September 1968—and therefore at the date charged (see s. 15 (6) of the Act)—the respondent was both a director and a manager of the company. I shall refer to a company director who does not reside in Western Australia as an "out of State" director. That is what the respondent was in relation to the said company. The statute on its proper construction evidently intends to place an obligation upon the "out of State" director to make a return of the journeys performed in Western Australia of the company's vehicles and to pay the amount of road contribution appropriate to those journeys. It does not condition these obligations upon any relevant connexion of the director himself with the territory under the legislative control of the State or with the performance of the journeys within the State of the company's vehicle in respect of which the return and the payment is to be made. The several obligations to make the return and to make the payment are to attach merely because being a director of the owner company at the time the journeys are performed he is for the purposes of the Act the owner of the vehicle. In this connexion I assume that on its true construction the statute is limited in its purported operation to persons who are directors, as defined, at the date the vehicle makes the relevant journey upon a road or roads in Western Australia. The respondent was charged as the owner of the vehicle in question. That allegation was sought to be made out simply by proof or admission that he was at the relevant time a director of the owner company. The fact that the respondent was a manager of the company's business was not relied upon, even if it could have been, a matter on which I express no opinion. It is submitted that the Act thus purports to lay an obligation enforceable by penal sanctions upon a person who has no connexion with the State of Western Australia and no necessary connexion with the operation on the roads of Western Australia of the commercial goods vehicle in respect of which the obligations are sought to be imposed. Consequently, it is submitted that the Act in this respect exceeds the constitutional power of the legislature of Western Australia. That constitutional power is a power to make laws for the peace, order and good government of Western Australia. A statement of the extent of such a power is to be found in the reasons for judgment of Sir Owen Dixon in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [1] : The power to make laws for the peace, order and good government of a State does not enable the State Parliament to impose by reference to some act, matter or thing occurring outside the State a liability upon a person unconnected with the State whether by domicil, residence or otherwise. But it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. It is also within the competence of the legislature to base the imposition of liability on no more than the relation of the person to the territory. The relation may consist in presence within the territory, residence, domicil, carrying on business there, or even remoter connexions. If a connexion exists, it is for the legislature to decide how far it should go in the exercise of its powers. As in other matters of jurisdiction or authority courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised. No doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connexion or that it includes many cases that cannot have been foreseen. 1. (1937) 56 C.L.R. 337, at p. 375. The principles so expressed were affirmed by the Privy Council in Johnson v. Commissioner of Stamp Duties (N.S.W.) [1] and in Thompson v. Commissioner of Stamp Duties (N.S.W.) [2] . 1. [1956] A.C. 331, at p. 353. 2. [1969] 1 A.C. 320, at p. 337. In the present case the fact, circumstance, occurrence or thing in or connected with the territory which the legislature of Western Australia has made the occasion of the imposition of liability is the physical operation of the commercial goods vehicle on a Western Australian road. The person, who, for present purposes and upon the true construction of the Act, is the person upon whom the liability has been imposed, has himself no relation to the territory of Western Australia. It is that person's relationship to the owner company which the Act fastens upon as the occasion for imposing that liability upon him. But is he, as described in the Act, necessarily "concerned in" the physical operation of the vehicle in question—"concerned" in the sense in which that, perhaps, ambiguous word must be understood to have been used in the passage from Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [1] ? 1. (1937) 56 C.L.R. 337. There is no doubt that the State may validly impose liabilities of the kind here in question upon an actual owner of the vehicle which operates upon its road, and upon any other person who participates in or controls such a journey of the vehicle whether such person has or has not any other connexion with the State. The participation, or as is said in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [2] the "concern" of a person having no other relationship to the State relevant to the operation of the Act in question, in that event, i.e., the physical operation of the vehicle must be substantive and not tenuous or merely theoretical. It is not necessarily furnished, in my opinion, in such a case as the present by an interest, financial or otherwise, in the result of the vehicles' operations or in the outcome of the company's business. For, as I have said, it is the physical operation itself of the vehicle which forms the territorial basis for the power in this case to impose the liabilities at all upon persons not otherwise relevantly connected with the territory of the State. The stretch of the State's legislative power, founded on that territorial event does not reach, in my opinion, beyond those who are in a substantial sense participants in that event. Of course, the participation may be found in an ability to control the vehicle in relation to that event. It is that ability derived from actual ownership which warrants the imposition of such liabilities on the out-of-State owner, corporate or personal. 1. (1937) 56 C.L.R. 337. The question therefore in the case of this statute is whether a director as such has the ability to control the operations of the vehicle in Western Australia. That he may attend a board meeting and join in decisions of the board as to such operations does not establish that he may himself control them nor involve him in being relevantly concerned in those journeys of the company's vehicles. It is trite law that a director as such draws only such authority from the occupation of that office as the company by its articles or valid resolutions thereunder has given him. Usually articles of association give no individual authority to a director to act for the company or to direct or control the business of the company or the activities of any of its assets. He may of course be given such authority by the company through the resolutions of the board of directors where the articles of association of the company allow a delegation of authority to a single director. But there is no suggestion here that the articles of this company gave the directors individually any authority or that the board of the company had delegated any of its authority to the respondent. But, in any case, it is not a necessary consequence of directorship that the director has such authority as an individual director. I have spoken of the necessary consequence of the office of director because the Act does not—and in my opinion cannot be, so construed as to operate only on those directors who do participate by actual or potential control in the physical operation of the vehicle. The Act purports to operate with respect to all directors. Even if s. 3 were appropriate to permit a reduction in the operation of the Act to bring its terms within territorial competence, a matter I much doubt, it would be impossible, in my opinion, to construe it as operating only with respect to some directors, e.g. to directors who actually controlled or participated in the control of the operation of the vehicle. Consequently unless it could validly operate as to all directors, it seems to me it cannot validly operate as to any. Therefore the matter, in my opinion, must be tested by asking whether the fact that a person was a director of a company, established that he was a participant in the operation of the commercial goods vehicle in question. This is not, in my opinion, a proposition which can be maintained as a matter of law. Neither the interest of the director in the result of the company's business nor his undoubted duty to exercise his power as a member of the board of directors in the interest of the company, in my opinion, necessarily involves the director in participation in the physical operation of such assets of the company as the commercial goods vehicle in this case. In my opinion, no valid distinction can be found between a statute which attempts to impose what has been referred to as a primary liability upon an out-of-State director and one which seeks to impose a secondary liability upon such a director. In each case the territorial fact in respect of which the liability is sought to be imposed is the journey of the vehicle in the State. In each case the only connexion of the out-of-State director with that event is the mere fact that he is a director of the owner company. In neither case, in my opinion, is there any relevant connexion of the out-of-State director with the event which has taken place within the State. In my opinion, this case is governed by the decision in Welker v. Hewett [1] . 1. (1969) 120 C.L.R. 503. Before parting with the matter I should add that, in my opinion, this Court by deciding Welker v. Hewett [1] in the terms in which the majority expressed themselves did overrule Ex parte Breen; Re Sneddon [2] , and did approve the decision of Lush J. in the unreported case of Baker v. Norris (Supreme Court of Victoria; 13th October 1967) of which a copy was considered by the Court in Welker v. Hewett [1] . I should also wish to say that for my own part I agree with the reasons for judgment of Sir Frank Kitto in that case [2] in which he deals with the constitutional power of a State and explains the sense of the words "concerned therein" as used in the passage I have quoted from Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [1] . Lastly, I would add that I agree with the reasons for judgment expressed by Wallace P. in Ex parte Breen; Re Sneddon [2] , in so far as the same relate to the constitutional power of the State and the position of individual directors. 1. (1969) 120 C.L.R. 503. 2. (1968) 70 S.R. (N.S.W.) 258; 88 W.N. (Pt 2) 204. 3. (1969) 120 C.L.R. 503. 4. (1969) 120 C.L.R., at pp. 512-513. 5. (1937) 56 C.L.R. 337, at p. 375. 6. (1968) 70 S.R. (N.S.W.) 258, at pp. 262-264; 88 W.N. (Pt 2) 204, at pp. 207-209. I would affirm the view I expressed in Welker v. Hewett [1] where I said [3] : The question in this matter is whether the mere circumstance that a person, otherwise unconnected in any respect with the State of New South Wales or with the transaction by virtue of which a company has become liable to pay to the government of that State a sum of money, happens to be a director of that company at the time the statute of that State if valid would impose liability upon him to pay the company's debt, provides a sufficient foundation for an extra-territorial operation of the statute so as to validly impose that liability. In my opinion, it does not. Though written in a case where the liability sought to be imposed on the director was not limited to directors who were in that office at the time the vehicle was used on the State's roads, it is equally applicable to the present case. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R., at p. 506. In my opinion, the appeal should be dismissed. McTiernan J. The question argued on this motion was whether s. 8 of the Road Maintenance (Contribution) Act, 1965 W.A., through the medium of s. 15 of the Act, imposed a charge on the respondent. He was at all material times a resident of New South Wales and a director of a company incorporated in that State which was the owner of a vehicle in respect of which a charge was payable under the Act. It is said that as director of the company there was no relation between the respondent and the territory in reference to which the legislature could impose a liability arising under s. 8 on the respondent. In my opinion, Welker v. Hewitt [1] is not a precedent which is decisive of the present case. The legislation which was considered in that case is different in principle from s. 15. The material provisions are sub-s. (1) and sub-s. (2). The scheme of s. 15 is to impose the charge arising under s. 8 on every person who is a director of a company on which a charge is imposed, at the same time as a charge is imposed on the company. In my opinion the board of directors have an interest and concern with respect to the activity of the company in respect of which s. 8 imposes a charge and every person who is a director of the company has a share in the interest and concern of the board. The interest and concern of the board of directors constitutes a relation between them and the territory in which a vehicle operates. In my opinion every member of the board of directors is as such involved in the relation. The broad criteria enunciated by the majority of the Court in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [1] for determining whether legislation is for the peace, order and good government of a State support s. 15 (2) against the challenge to its validity in these proceedings. 1. (1969) 120 C.L.R. 503. 2. (1937) 56 C.L.R. 337. I would grant special leave and allow the appeal. Menzies J. The law to be applied in this case is not in doubt; it is its application which causes difficulty. The relevant law was stated as follows by Kitto J. in Welker v. Hewett [2] with the concurrence of three other members of the Court. His Honour said: The question is whether the Parliament of New South Wales has power so to deal with a person who is not within its territory. It has the power, of course, if it so limits the application of the law as to base its operation upon some connexion that the absent director has with New South Wales, provided that the connexion is such as to make the enactment of the law relevant to the peace, welfare, and good government of New South Wales; but otherwise it has not, for the Parliament has no general power to make strangers to its territory liable in its courts to judgments or sentences by way of enforcing contributions to the revenue of the State As was said in a well-known passage in the judgment of Dixon J. in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [1] , which the Privy Council affirmed in Johnson v. Commissioner of Stamp Duties (N.S.W.) [1] , and recently reaffirmed in Thompson v. Commissioner of Stamp Duties (N.S.W.) [2] , "it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability". The words "concerned therein" are of the essence of this proposition, for what is being described is a connexion between the person upon whom the liability is imposed and the State—a connexion through the selected fact, circumstance, occurrence or thing and therefore a connexion one link of which is a concern, in the sense of a personal implication or involvement, in that fact, circumstance, occurrence or thing. This statement, which I accept without any qualification, I propose to apply here. 1. (1969) 120 C.L.R., at pp. 512-513. 2. (1937) 56 C.L.R. 337. 3. [1956] A.C. 331, at p. 353. 4. [1969] 1 A.C. 320, at p. 337. The application of the principles so stated was, in the earlier case, held to render s. 10A of the Road Maintenance (Contribution) Act, 1958-1965 N.S.W. inapplicable to a person charged thereunder. As Barwick C.J. said [1] : The question in this matter is whether the mere circumstance that a person, otherwise unconnected in any respect with the State of New South Wales or with the transaction by virtue of which a company has become liable to pay to the Government of that State a sum of money, happens to be a director of that company at the time the statute of that State if valid would impose liability upon him to pay the company's debt, provides a sufficient foundation for an extra-territorial operation of the statute so as to validly impose that liability. In my opinion, it does not. 1. (1969) 120 C.L.R., at p. 506. Accordingly, in that case the only connexion between New South Wales and the person to whom the law was sought to be applied was found to be that he happened to be a director of a South Australian company—which had previously operated the vehicle in New South Wales and incurred road charges thereby—at the time when he was served with a notice to pay the sum for which the company was liable by way of road charges. That was held, with my concurrence, to be an insufficient connexion with New South Wales to bring him validly within the operation of the New South Wales law. My opinion, now, is as it was then. If this case is governed by Welker v. Hewett [2] the appeal must, of course, be dismissed. If it is not so governed I think it should be allowed. I say this because I consider that a director of a company is sufficiently responsible for the business operations of the company, while he is a director, to enable the Parliament of a State to impose on him obligations arising out of the company's operations in that State, notwithstanding that the company is incorporated in another State and the director has no connexion with the State whose laws the company has infringed other than that the company infringed those laws in carrying on business there. So, for instance, if a money-lending company incorporated in New South Wales were to carry on money-lending business in Western Australia, the Parliament of that State could, in my opinion, impose liabilities upon the New South Wales directors then in control of the company, and each of them, for breaches of Western Australian laws committed by the company in carrying on its business in that State. Again, individual directors of a company publishing a newspaper in Western Australia could, if they could be reached, be punished for the publication in the company's newspaper in Western Australia of matter in contempt of the Supreme Court of Western Australia. Where business operations are controlled from afar by out-of-State corporate bodies and their directors, I find no reason to deny to the State in which business is carried on, power over individual directors, wherever they may happen to be, for the way in which the business of the company is carried on in that State. To put the point shortly, I would say, using the language of Kitto J. already cited [1] , that an individual director is inevitably concerned with the way in which the business of his company is being carried on while he is a director. That concern provides the requisite connexion for the exercise of legislative power. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R., at pp. 512-513. Here it is established that a vehicle, with a carrying capacity of over seventeen tons, belonging to Silver Transport Pty. Ltd., a company incorporated in New South Wales, operated as a commercial vehicle over 2,820 miles of the roadways of Western Australia during the month of April 1969 and that an extra load permit had been applied for and issued for this vehicle. The defendant was, in April, a director of and the manager of the company. He signed the company's certified record of journeys for April made to the Western Australian Commissioner on 14th May 1969. The company did not pay the road charges incurred by reason of the journeys. The Road Maintenance (Contribution) Act, 1965 W.A., s. 15 (2), provides: Where a corporation is the owner or one of the owners of a commercial goods vehicle, any reference in this Act to the owner of such a commercial goods vehicle shall be construed as including a reference to every person who is a director of that corporation. It is an offence for the owner of a commercial goods vehicle with a load capacity in excess of eight tons to fail to keep the prescribed records, to fail to deliver the records to the Commissioner and to fail to pay the charges due. Failure in each instance renders the owner liable to prosecution summarily in a court of petty sessions, and, upon conviction, to a fine and an order for the payment of any charges which, upon the evidence, should have been paid but have not been paid to the Commissioner (ss. 14, 16 and 17). It appears that the prosecution of the respondent was a test case to determine the fate of thirty charges arising from operations during the years 1969 and 1970 during which seven vehicles, owned by the company, had operated in Western Australia and an aggregate $2,860.08 became owing as road charges. The charge was dismissed in the Court of Petty Sessions and an appeal to the Full Court of the Supreme Court of Western Australia [1] was dismissed upon the authority of Welker v. Hewett [2] . 1. [1972] W.A.R. 17. 2. (1969) 120 C.L.R. 503. I turn now to examine the judgment of Kitto J. in that case to ascertain why the law as stated in the passage already cited was applied as it was. As I have already indicated, the only connexion that was there found to exist between the defendant and the State of New South Wales was that he happened to be a director at the time when the law would, if valid, have imposed upon him a liability for a debt of the South Australian company incurred by reason of the earlier operations of its vehicles in the State of New South Wales. Kitto J. expressed this by saying that it was sought to base liability "upon the bare fact that, at the time the Commissioner serves him with a notice to pay the amount owing by his company for charges under the Act, he is a director of the company" [1] . His Honour also emphasized that the attempt to impose civil and criminal liability upon the director was "certainly not upon his having been a director at the time when the company incurred its liability for charges under the Act by reason of the travelling of the vehicle on the public streets of New South Wales" [2] . 1. (1969) 120 C.L.R., at p. 510. 2. (1969) 120 C.L.R., at p. 513. In relation to the non-payment of the charges, as distinct from the operation of the vehicle in New South Wales, his Honour said: it is impossible to infer from the bare fact that A is a director that he was a participant in, or could have prevented, the company's failure to pay a debt which it should have paid but has not. He could not authorize the payment; he had no wider or other power with respect to the debt than to cast a vote at a board meeting in favour of its being paid, and he may have been prevented by illness or distance or some other compelling circumstance from doing even that. To say, therefore that the company has failed to pay the debt and that he is a director is not to say that he is or has been concerned in the non-payment. He may even have moved that the debt be paid, done all he could to persuade the board to agree, and voted accordingly. The most that can legitimately be said is that he may or may not have been concerned in the failure to pay; and to say that is to say that he, as an individual, may or may not have had such a connexion with New South Wales as would support the enactment of s. 10A. [1] These observations relate to a once and for all decision not to pay a debt and can have little relation to responsibility for carrying on business over a period of time. A person who is, and remains, the director of a company over a period during which the company is carrying on business is, in the ordinary course of affairs, responsible in some degree for operations in the course of that business. 1. (1969) 120 C.L.R., at pp. 513-514. It is not, however, necessary, in order to distinguish Welker v. Hewett [2] , to show that nothing of what was said is applicable here. The question for me is whether the decision is distinguishable. It is, in my opinion, distinguishable, if, to dismiss this appeal, the Court would have to go beyond the ratio decidendi of Welker v. Hewett [2] . Here, as is apparent, there is present the very element, the absence of which was, in the earlier case, stressed, and, I think, regarded of decisive importance, namely that the respondent was a director of the company during the time when it incurred the liability in question by reason of the operation of its vehicle in Western Australia in the course of its business there. The basis of liability adopted by s. 15 (2) of the Western Australian Act is entirely different from that adopted by s. 10A of the New South Wales Act. What Kitto J. described as "the bare fact", and what Barwick C.J. described as "the mere circumstance" is a "fact" or "circumstance" to which the Western Australian Act makes no reference. It proceeds upon the entirely different, but very understandable, basis that a director of a company, at the time it operates a vehicle in Western Australia in the course of its business, has sufficient connexion with Western Australia to warrant imposing liability upon him in connexion with that operation of the vehicle. In my opinion Welker v. Hewett [2] is clearly distinguishable and ought to be distinguished. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R. 503. 3. (1969) 120 C.L.R. 503. In my opinion, for the reasons stated, s. 15 (2) of the Road Maintenance (Contribution) Act validly applied to the respondent and I would therefore grant special leave and allow the appeal. Walsh J. The respondent was charged with an offence against the Road Maintenance (Contribution) Act, 1965 W.A. (the Act). By s. 8 (1) of the Act the "owner" of every commercial goods vehicle is made liable to pay a charge as provided by the Act towards compensation for wear and tear caused by the vehicle to roads in the State of Western Australia. The charge becomes due at the time of the use of any road by the vehicle and it is a civil debt due to the Commissioner by the owner: s. 8 (2) and (3). By s. 14 (1) (e) it is provided that any person who fails to pay to the Commissioner as required by the Act any charges payable in respect of any commercial goods vehicle is guilty of an offence against the Act. Section 15 (2) provides that where a corporation is the owner or one of the owners of a commercial goods vehicle any reference in the Act to the owner of such a vehicle shall be construed as including a reference to every person who is a director of that corporation. Section 15 (3) provides for the recovery, by a director who has been as such required under the Act to discharge any obligation to pay any sum of money that the corporation was obliged to pay, of any amounts so paid from the corporation or of a contribution from any other director of the corporation. The respondent was charged with being guilty of an offence under s. 14 (1) (e) of the Act, in that being the owner of a commercial goods vehicle he did fail to pay to the Commissioner charges which were payable in respect of that vehicle. It is clear that the basis upon which he was charged as "owner" was that he was a director of a company called Silver Transport Pty. Ltd. which was registered in New South Wales as the owner, under the Motor Traffic Act, 1909, of that State. The company was incorporated in New South Wales. It was not registered in Western Australia as a foreign company. It had three directors of whom one was the respondent. It was admitted that he had not been in Western Australia at any material time. There was some evidence that he was the manager of the company but this was not admitted at the hearing of the charge and I think that it has no bearing upon the question which this Court has to decide. My reasons for that opinion will appear later. The magistrate who heard the charge held that if s. 15 (2) were intended to apply to a director who was outside the State of Western Australia it was invalid in so far as it related to such a director. The charge was dismissed. Upon the return of an order nisi to review the decision of the Court of Petty Sessions, the Full Court of the Supreme Court of Western Australia held that the order nisi should be discharged [1] . Burt J. delivered a judgment with which the other members of the Court (Hale and Lavan JJ.) agreed. Burt J. held that as a matter of construction s. 15 (2) of the Act was intended to apply to and to impose a liability upon an "absent director", that is, a director of an owner corporation who was at all material times outside the State and had no connexion with it or with the events giving rise to the liability, other than his position as a director of the corporation which owned a commercial goods vehicle which used the roads of the State. Burt J. held also that so construed the provision was beyond legislative power and was invalid. This is an application for special leave to appeal against that decision. On the hearing of the application we heard argument upon the questions which would arise in the appeal if special leave should be granted. 1. [1972] W.A.R. 17. It is desirable to state at this point that in my opinion we are not required in dealing with this application to come to any definite conclusion on the questions, (1) whether the word "director" in s. 15 (2) should be construed as limited in its meaning so as to apply only to a director who is in Western Australia at the material time and (2) whether the operation of s. 15 (2) and the consequential operation of the provisions of the Act which apply to "owners" of commercial goods vehicles may be confined, because of s. 3 of the Act, so as to apply only to those persons and circumstances to whom and to which the legislative power of the State extends, if it should appear that in the full extent of their intended operation they would be in excess of that power. The first of those questions does not arise in this case because it is only upon the footing that s. 15 (2) is intended to apply to directors who are not at the material time present in Western Australia that the applicant can contend that the Supreme Court was wrong in discharging the order nisi to review the magistrate's decision. If the provision upon its proper construction has no application to such directors, then it had no application to the respondent and plainly the charge against him was rightly dismissed. It should be added that counsel for the respondent in this Court did not submit that as a matter of construction the Act was not intended to apply to a director outside the State. We may proceed, therefore, upon the assumption (which is, in my opinion, correct) that it is intended to apply to such a director. The second question to which I have referred need not be decided, because whatever view may be taken of the operation of s. 3 of the Act, which is a provision requiring the Act to be read and construed so as not to exceed the legislative power of the State, that provision can have no effect upon the result of the proceedings in the present case. Section 15 (2) purports to apply to every person who is a director. If it be supposed that the operation of the Act is confined by the use of s. 3 so that it applies only to a director (not being present in the State) who is proved to have had vested in him at the relevant time power to control the company's activities and to have exercised that power or to a director who has been personally active in directing the relevant operations of the company or to a director who has been proved to have had in some other special way "a personal implication or involvement" in those operations (see Welker v. Hewett [1] ), then in the present case the respondent was not charged on the basis that he was a director in whom such power was vested or who had engaged personally in the relevant activities of the company and findings were not made at the hearing that would render him liable on any such basis. 1. (1969) 120 C.L.R., at p. 513. I am of opinion, therefore, that the only question which calls for our attention is whether or not it is within the power of the Parliament of Western Australia to place a liability to pay the charges, imposed by the Act by reason of the use by the vehicle of roads in Western Australia, upon a person whose only connexion with the fact or event giving rise to the charge, namely, the use by a commercial goods vehicle of the roads of that State, is that he is one of the directors of a company which owns a vehicle which is driven on those roads. In my opinion, the Supreme Court was correct in concluding that the reasoning of the majority of this Court in Welker v. Hewett [2] , has a direct application to that question and leads to the result that it should be answered in the negative. Counsel for the applicant relied upon the difference between the manner in which liability is imposed by the Act upon the directors of a corporation which owns a vehicle the use of which attracts the charges and the manner in which liability is imposed upon such directors by the Road Maintenance (Contribution) Act, 1958-1965 N.S.W. with which the Court was concerned in Welker v. Hewett [2] . Counsel submitted that because of that difference that case is distinguishable from the present one. The difference is that s. 15 (2), by providing that where a corporation is an owner of a vehicle any reference in the Act to the owner shall be construed as including a reference to every person who is a director, imposes an immediate concurrent obligation upon each director to pay the charges payable under the Act by the owner, whereas the New South Wales Act imposes upon a director a secondary liability, which arises if the company fails to pay the charges and a notice is served upon a director requiring him to pay and he does not comply with that notice. It is true that in his reasons for judgment in Welker v. Hewett [1] , Kitto J., with whose judgment three other members of the Court agreed, drew attention to the circumstance that s. 10A of the New South Wales Act bases the liability of a director "upon the bare fact that, at the time the Commissioner serves him with a notice to pay the amount owing by his company for charges under the Act, he is a director of the company". He added, "Whether he was a director when the charges were incurred by the company is not regarded". I am prepared to assume that under the Western Australian Act a director becomes liable only if he is a director when the charges are incurred. On that assumption that part of the reasons of Kitto J. to which I have just referred would have no application to this case. But immediately after the statement quoted, Kitto J. went on to say [2] : Whether, under the company's articles of association, he has any power in the company's affairs other than the power to cast a vote at a board meeting is likewise disregarded. Whether in fact he was present at any board meeting where business concerning the use of the vehicle in New South Wales was or could have been considered; whether, if absent from such a meeting he was absent from choice or of necessity; whether, if present, he voted for or against the causing or permitting of any use of the truck in New South Wales; all these are treated as immaterial. All those considerations were clearly regarded by his Honour as pointing to the conclusion that there was no sufficient connexion between the holding of the office of director of a company and the use in New South Wales of a vehicle owned by the company, to provide a basis for an enactment making a director liable for a charge where the fact or occurrence within the territory of the State selected as the occasion of the charge was the use of roads in that State. But if the arguments presented in support of the present application be accepted, it appears to follow that none of the considerations to which Kitto J. referred in the passage last cited from his judgment could affect the matter at all. Upon that view the sole reason for denying the territorial competence of the Parliament of New South Wales to enact the provisions of the Act then under consideration would be that the liability was imposed by the New South Wales Act, not upon each person who was at the time of the use of the roads by the vehicle a director of the company that owned it, but upon each person who was at the time of a service of a notice upon him a director of the company. But upon a consideration of the whole of the judgment I cannot read it as depending simply upon that feature of the New South Wales Act. It is true that that was a feature to which his Honour attached some importance. That appears from the following passage in his judgment [1] : But upon what connexion between the State and a director who is and always has been out of the State does s. 10A base its attempt to impose a civil and criminal liability upon the director? Certainly not upon his having been a director at the time when the company incurred its liability for charges under the Act by reason of the travelling of the vehicle on the public streets of New South Wales. The service of the notice is within the authority of s. 10A if the recipient is at that time a director. The reason is obvious. The intention is not that the travelling of the vehicle shall give rise to a primary liability in the company and a secondary liability in the directors in office at that time; it is that the failure of the company to pay the charge is to be treated as a failure for which each director who is in office while the failure continues may be made individually responsible by the means which s. 10A provides. But nevertheless I am of opinion that it would not be in conformity with the reasoning of the majority of the Court in Welker v. Hewett [2] to hold that, in addition to the power which the Parliament of a State was held in O'Sullivan v. Dejneko [1] , to have to impose liability upon an owner outside the State, there is power to impose the same obligations upon a person outside the State merely because he is a director of an owner company at the time when the roads are used. Such an enactment treats as immaterial all the facts which the judgment of Kitto J. described in a passage already quoted as being disregarded in the enactment of s. 10A. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R. 503. 3. (1969) 120 C.L.R., at p. 510. 4. (1969) 120 C.L.R., at pp. 510-511. 5. (1969) 120 C.L.R., at p. 513. 6. (1969) 120 C.L.R. 503. 7. (1964) 110 C.L.R. 498. It is to be observed that Kitto J. expressed the opinion that if the operation of the enactment in respect of a director had been limited to the case of a director who had been "actually concerned" in the travelling of the company's vehicles on the streets of New South Wales on the journey that gave rise to the company's liability or in the failure to pay the charges, it might well be that this would have been within the constitutional power of the State. But he indicated that the "concern" of the director must be a "personal implication or involvement" in the fact, circumstance, occurrence or thing selected as the occasion of the imposition of the liability. Then, in an elaboration of what is meant in this context by the words "concern" and "concerned" and in explanation of his conclusion that the director who was given notice requiring him to pay the charge was not necessarily "concerned" in that sense, his Honour said this [1] : The board of directors is here being regarded as a body the acts and omissions of which are the acts and omissions of each member, so that each member is, in the relevant sense, "concerned in" those acts and omissions. In the case of a company such as Jupiter Transport Pty. Ltd., where no one director has any power by himself to make a decision binding upon the company, it is impossible to infer from the bare fact that A is a director that he was a participant in, or could have prevented, the company's failure to pay a debt which it should have paid but has not. He could not authorize the payment; he had no wider or other power with respect to the debt than to cast a vote at a board meeting in favour of its being paid, and he may have been prevented by illness or distance or some other compelling circumstance from doing even that. To say, therefore, that the company has failed to pay the debt and that he is a director is not to say that he is or has been concerned in the non-payment. He may even have moved that the debt be paid, done all he could to persuade the board to agree, and voted accordingly. The most that can legitimately be said is that he may or may not have been concerned in the failure to pay; and to say that is to say that he, as an individual, may or may not have had such a connexion with New South Wales as would support the enactment of s. 10A. In my opinion that passage is applicable, with appropriate verbal changes, to the question whether a director of the company whose vehicle made the journeys upon which the charges in the present case were based was, as such, "concerned in" the making by the vehicle of those journeys. 1. (1969) 120 C.L.R., at pp. 513-514. The reasoning of Kitto J. in the passage last cited is very similar to that of Wallace P. in Ex parte Breen; Re Sneddon [2] , and to that of Lush J. in Baker v. Norris [1] in relation to Victorian legislation which was in relevant respects the same as that of Western Australia. Wallace P. [2] expressed his agreement with the decision of Lush J. Being similar to the reasoning of Wallace P. and of Lush J., the reasoning of Kitto J. was in my opinion directly opposed to the opinions stated in Ex parte Breen; Re Sneddon [1] by Sugerman J.A., with whose reasons I agreed and to my own additional observations in that case [2] . In Welker v. Hewett [1] , McTiernan J. in his dissenting judgment quoted with approval a passage from the judgment in Ex parte Breen; Re Sneddon [2] of Sugerman J.A. which contained the substance of his Honour's decision on this point. That is the passage which, as I have stated, is in my opinion quite contrary to the reasons of Kitto J. contained in the passage set out in the last citation made by me from his Honour's judgment. It should be added that in Ex parte Breen; Re Sneddon [3] , none of the members of the Court treated as the critical circumstance upon which the decision of the case depended the circumstance upon which learned counsel for the applicant relies in the present case, namely, that the liability upon the directors under the New South Wales Act attaches at a time subsequent to the time when the journeys have been made out of which the charges have arisen. 1. (1968) 70 S.R. (N.S.W.), at pp. 262-264; 88 W.N. (Pt 2), at pp. 207-209. 2. Unreported. (Supreme Court of Victoria, 13th October 1967). 3. (1968) 70 S.R. (N.S.W.), at p. 263; 88 W.N. (Pt 2), at pp. 207-208. 4. (1968) 70 S.R. (N.S.W.), at p. 268; 88 W.N. (Pt 2), at p. 213. 5. (1968) 70 S.R. (N.S.W.), at pp. 272-273; 88 W.N. (Pt 2), at pp. 217-218. 6. (1969) 120 C.L.R. 503, at p. 507. 7. (1968) 70 S.R. (N.S.W.), at pp. 268-269; 88 W.N. (Pt 2), at pp. 207-209. 8. (1968) 70 S.R. (N.S.W.) 258; 88 W.N. (Pt 2) 204. In this application it has not been submitted that this Court should reconsider the correctness of the decision or of the reasons of the majority of the Court in Welker v. Hewett [4] . For the reasons I have stated, I am of opinion that the reasons in that case are applicable to the question raised in the present case. 1. (1969) 120 C.L.R. 503. In my opinion the decision of the Supreme Court in this case was correct. I am of opinion that special leave to appeal should be granted and that the appeal should be dismissed. Gibbs J. The obligation created by s. 8 of the Road Maintenance (Contribution) Act, 1965 W.A. (as amended) ("the Act") to pay the charge referred to in that section is imposed on the "owner" of every commercial goods vehicle which uses any road in the State of Western Australia. Paragraph (c) of the definition of owner in s. 4 of the Act, and the evidentiary provisions of s. 18 (1) (e) of the Act, show that the legislature intended that the obligation should extend to any person in whose name the commercial goods vehicle is registered under any State or Territorial law which corresponds to the Traffic Act, 1919 W.A.. The intention of the legislature therefore was that the Act should apply to such a person, notwithstanding that he was never at any material time in Western Australia (cf. O'Sullivan v. Dejneko [1] ). In any Act passed by the Parliament of Western Australia, unless the contrary intention appears, the word "person" includes a body corporate (Interpretation Act, 1918 (as amended) W.A., s. 4). No contrary intention appears in the Act which is, therefore, intended to render a body corporate, although incorporated outside Western Australia, liable to pay any charges payable in respect of a commercial goods vehicle registered in its name at the time it used the roads in Western Australia. Further it is clear that the provisions of s. 15 of the Act are intended to apply, in some circumstances at least, to the directors of a company incorporated outside Western Australia if that company is the owner of a commercial goods vehicle which uses the roads of Western Australia. If this were not so the provisions of s. 15 (5) (b) of the Act would be otiose. It does not necessarily follow, although it was accepted by both parties before us as being the case, that s. 15 is intended to apply to all such directors, i.e. not only to a director found within Western Australia but also to a director who was not at any material time in the State ("an out-of-State director"). The question whether the provisions of s. 15, on their proper construction, apply to out-of-State directors depends to some extent on the further question whether, if they did so apply, they would be a valid exercise of the power of the Parliament of Western Australia, and it is convenient to postpone consideration of the former question until the latter has been discussed. 1. (1964) 110 C.L.R., at pp. 507-508. In relation to both questions it is necessary to decide whether the present case is distinguishable from Welker v. Hewett [2] , which was a decision on the Road Maintenance (Contribution) Act, 1958-1965 N.S.W.. That statute required the owner of a commercial goods vehicle which used the roads of the State to pay charges, and by s. 10A went on to provide, to state the matter briefly, that if the owner, being a company, failed to pay any amount payable by it as charges the Commissioner might by notice in writing served on any director of the company require such director to pay such amount to the Commissioner within a specified period and that upon the expiration of the period specified the director should be liable to pay such amount to the Commissioner; if the amount were not paid the director was both civilly and criminally liable. It was held by a majority of this Court that this section did not on its proper construction impose a liability on a director who was not within New South Wales when the notice was served and further that if the section were intended to impose such a liability it would be beyond the constitutional power of the State legislature because there would be lacking a sufficient territorial connexion between the subject matter of the legislation and the territory of New South Wales. In relation to the question of constitutional power, the majority, whose views were expressed by Kitto J. [1] , referred to the well-known passage from the judgment of Dixon J. in Broken Hill South Ltd. v. Commissioner of Taxation (N.S.W.) [2] in the course of which it was said that: it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. Kitto J. added [1] : The words "concerned therein" are of the essence of this proposition, for what is being described is a connexion between the person upon whom the liability is imposed and the State—a connexion through the selected fact, circumstance, occurrence or thing and therefore a connexion one link of which is a concern, in the sense of a personal implication or involvement, in that fact, circumstance, occurrence or thing. Applying these principles to the case before him Kitto J. held that s. 10A, assuming that it was intended to apply to an out-of-State director, was not confined to such a director who had been concerned either in the use by the company's vehicle of the roads of the State or in the failure of the company to pay the charges and on that assumption was invalid. One reason why the section was not confined to the case of a director who had been concerned in the use made by the company's vehicle of the roads of the State was that the section applied to a person who was a director at the time when the notice was served, even though he had not been a director at the time when the roads were used and the charges were incurred. A second reason was that the section applied to a director even if his only power to control the company's activities was to cast a vote at a board meeting and then even if he had not voted at all or had voted against the use of the vehicle in New South Wales. So far it may be said that Welker v. Hewett [2] may be distinguished on the ground that the Act under consideration in the present case imposes liability only on a director who held that office at the time of the use of the road by the company's vehicle and that since there is an element of degree involved in questions of this kind a case decided on one statute cannot be treated as binding in relation to another unless all the considerations regarded as relevant in the one case apply also in the other. The same cannot however be said of the Court's decision in Welker v. Hewett [1] that the operation of s. 10A was not limited to directors who were concerned in the failure of the company to pay the statutory charges. To be liable under s. 10A, a director must have held office while the company's failure continued. It could not be said, in relation to this point, that the legislation disregarded the question whether the director sought to be made liable was in office at the time of the company's failure to pay. The reason why a director, although in office, was not necessarily concerned in a failure by the company to pay its debt was stated by Kitto J. as follows [2] : In the case of a company such as Jupiter Transport Pty. Ltd., where no one director has any power by himself to make a decision binding upon the company, it is impossible to infer from the bare fact that A is a director that he was a participant in, or could have prevented, the company's failure to pay a debt which it should have paid but has not. He could not authorize the payment; he had no wider or other power with respect to the debt than to cast a vote at a board meeting in favour of its being paid, and he may have been prevented by illness or distance or some other compelling circumstance from doing even that. To say, therefore that the company has failed to pay the debt and that he is a director is not to say that he is or has been concerned in the non-payment. He may even have moved that the debt be paid, done all he could to persuade the board to agree, and voted accordingly. The most that can legitimately be said is that he may or may not have been concerned in the failure to pay; and to say that is to say that he, as an individual, may or may not have had such a connexion with New South Wales as would support the enactment of s. 10A. In my opinion this judgment involves a rejection of the view, taken by the majority in Ex parte Breen; Re Sneddon [1] , that since the directors of a company normally control its affairs it is legitimate to regard any director, by virtue of the office which he holds, as "concerned" in anything which the company does or fails to do while he is a director. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R., at p. 512. 3. (1937) 56 C.L.R., at p. 375. 4. (1969) 120 C.L.R., at pp. 512-513. 5. (1969) 120 C.L.R. 503. 6. (1969) 120 C.L.R. 503. 7. (1969) 120 C.L.R., at pp. 513-514. 8. (1968) 70 S.R. (N.S.W.) 258; 88 W.N. (Pt 2) 204. There are some points of difference between the statutory provisions considered in Welker v. Hewett [1] and those now under consideration. In the New South Wales statute the liability imposed on a director was a secondary liability which did not arise until the service of the notice. Under the Western Australian Act the liability to pay the charges is imposed directly on the director and arises when the vehicle uses the roads. However, these differences do not render the reasoning in Welker v. Hewett [1] inapplicable to the present case. The question is whether s. 15, assuming that it applies to out-of-State directors, imposes liability only on a director concerned with the use by the company's vehicle of the roads of Western Australia which is the only relevant fact, circumstance, occurrence or thing in or connected with the territory referred to in the Act. That question can only be answered in the affirmative if it can be said that when a company's vehicle uses the roads every director of that company in office at the time is concerned in the user, but so to hold would be contrary to Welker v. Hewett [1] . In my opinion, we are bound by Welker v. Hewett [1] to hold that if the Act applies to out-of-State directors it lacks sufficient territorial connexion to give it validity. 1. (1969) 120 C.L.R. 503. 2. (1969) 120 C.L.R. 503. 3. (1969) 120 C.L.R. 503. 4. (1969) 120 C.L.R. 503. It then becomes unnecessary to decide the question of construction already mentioned. In Welker v. Hewett [1] Kitto J., in holding that s. 10A did not extend to a director who was not within the State at the time when the notice was served, applied the prima facie presumption that the operation of legislation is territorial, reinforced as that presumption was by the principle that statutes should be construed ut res magis valeat quam pereat. The Western Australian Act, as I have said, contains clear indications of its intention to apply to companies incorporated outside Western Australia but it contains no express indication that the provisions of s. 15 are intended to include those directors of such a company who are not within Western Australia. If, in these circumstances, it is possible to give to the general words of s. 15 a construction which would limit them to directors within Western Australia, and thus save the section from complete invalidity, the section, thus limited, would not apply to the facts of the present case. 1. (1969) 120 C.L.R. 503. It follows from what I have already said that it would have been within the power of the Western Australian legislature to extend the provisions of the Act to such out-of-State directors as were in some way concerned, in the sense of being personally implicated or involved, in the use of the roads of the State by a vehicle of the company. Section 3 of the Act provides, inter alia, that the Act shall be read and construed so as not to exceed the legislative power of the State to the intent that where any provision of the Act, or the application thereof to any person or circumstance, is held invalid, the remainder of the Act and the application of that provision to other persons or circumstances shall not be affected. If as a matter of construction s. 15 applies only to directors within Western Australia there is no room for the operation of s. 3. If, contrary to this view, s. 15 applies to out-of-State directors, it is not necessary in the present case, where it has not been sought to charge the respondent on the footing that he was actually concerned, in some other way than by merely holding the office of director, in the use by the company's vehicle of the roads of the the State, to decide whether s. 3 would require the provisions of s. 15 to be given a valid application to out-of-State directors who were actually concerned in the use of the company's vehicle, or to discuss what action or inaction on the part of a director could be regarded as implicating or involving him in an activity of his company. The appellant must fail, whether the correct view is that s. 15 is completely invalid, or whether the section, being valid, applies as a matter of construction only to directors within Western Australia or to directors who were concerned in the use by the company's vehicle of the roads of the State, for on either construction the section would not apply to the present case. I would grant special leave to appeal because of the importance and difficulty of the matter, but would dismiss the appeal.