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High Court of Australia |
GAZZO v. COMPTROLLER OF STAMPS (VICT.) [1981] HCA 73; (1981) 149 CLR 227
Constitutional Law (Cth)
High Court of Australia
Gibbs C.J.(1), Stephen(2), Mason(3), Murphy(4) and Aickin(5) JJ.
CATCHWORDS
Constitutional Law (Cth) - Powers of the Commonwealth Parliament - Divorce and matrimonial causes - Marriage - Law providing that maintenance agreement or instrument executed for purposes of such an agreement or in accordance with an order under Pt VIII of Family Law Act 1975 not to be subject to State duty or charge - Validity - The Constitution (63 & 64 Vict. c. 12), s. 51 (xxi), (xxii) - Family Law Act 1975 (Cth), ss. 4, 90.
HEARING
1980, October 7; 1981, December 24, 24:12:1981DECISION
1981, December 24.
2. Section 90 of the Family Law Act is in the following terms:
"A maintenance agreement, or a deed or other instrument executed by a
person for the purposes of such an agreement or for the
purposes of, or in
accordance with an order under, this Part, is not subject to any duty or
charge under any law of a State or Territory
or any law of the Commonwealth
that applies only to or in relation to a Territory."
The expression "maintenance agreement" is defined in s. 4 to mean "an
agreement in writing made, whether before or after the commencement
of this
Act, between the parties to a marriage, being
an agreement that makes
provision with respect to financial matters, whether
or not there are other
parties to the agreement and
whether or not it also makes provision with
respect to other matters, and includes
such an agreement that varies an
earlier maintenance
agreement". The term "financial matters" is defined by s.
4 as follows::
"financial matters', in relation to the parties to a marriage, means
matters with respect to -
(a) the maintenance of one of the parties;Section 90 appears in Pt VIII of the Family Law Act. There are a number of provisions of that Part of the Act for the purposes of which deeds or other instruments may be executed, or under which orders may be made in accordance with which deeds or other instruments may be executed. By ss. 72 and 73 an obligation is cast on a party to a marriage to maintain the other party in certain circumstances, and to maintain children under the age of 18. By ss. 74 and 77, the court may make orders for the provision of maintenance for a party to the marriage or for the children of the marriage. By s. 78 (1), in proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property, and, by s. 78 (2), where a court makes a declaration under sub-s. (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession. Section 79 (1) provides that in proceedings with respect to the property of the parties to a marriage or either of them, the court may make such order as it thinks fit altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the parties to make, for the benefit of either or both of the parties or a child of the marriage, such settlement or transfer of property as the court determines. In exercising its powers under Pt VIII, the court may (inter alia) order that any necessary deed or instrument be executed: s. 80 (d). (at p232)
(b) the property of those parties or of either of them; or
(c) the maintenance of children of the marriage."
3. In so far as s. 90 exempts instruments from a duty or charge under a law of a Territory or a law of the Commonwealth, it is clearly valid. However, in so far as it refers to a duty or charge under a law of a State, the section can only be sustained as valid if it is a law with respect to marriage (s. 51 (xxi) of the Constitution) or with respect to divorce and matrimonial causes (s. 51(xxii)) or with respect to matters incidental to the exercise of the powers vested by the Constitution in the Parliament or in the Federal Judicature (s. 51 (xxxix)). Before it is possible to consider whether s. 90 does answer any of those descriptions, it is necessary to consider its effect. The section applies to exempt from any duty or charge under any law of a State three classes of instruments - (1) maintenance agreements, (2) deeds or other instruments executed by a person for the purposes of a maintenance agreement and (3) deeds or other instruments executed by a person for the purposes of Pt VIII, or in accordance with an order under Pt VIII. The definition of "maintenance agreement" has already been mentioned. To be understood it must of course be read together with the definition of "financial matters". It is very wide in its scope, and includes many agreements that could not be described as "maintenance agreements" in the ordinary sense. Although an agreement will not fall within the definition unless it was made between the parties to a marriage (which includes a person who was a party to a marriage that has been dissolved or annulled: s. 4 (2)), such an agreement may have other parties as well. Although a maintenance agreement must make provision with respect to "financial matters", it may also make provision with respect to other matters. Even if the agreement is made only between parties to a marriage, and is made only with respect to "financial matters", it may not arise out of, or be concerned with, the matrimonial relationship. For example, one former spouse may agree to buy from the other property which was never matrimonial property, and such transaction may have been purely a business transaction which had nothing to do with any obligation on the part of one spouse to maintain the other. If the agreement, in so far as it is made between the spouses, does concern matters arising out of the matrimonial relationship, it may nevertheless include an agreement with some other person who has no connexion whatever with the marriage. For example, if the spouses agree to sell the matrimonial home and divide the proceeds equally, the agreement to that effect may be embodied in a document which contains also an agreement between the spouses and the purchaser of the property. The second class of instruments to which s. 90 applies - those executed for the purposes of a maintenance agreement - may have even less connexion with the matrimonial relationship. It is not necessary that a party to a marriage should be a party to such an instrument or that it should relate to "financial matters". If the spouses agreed that the husband should buy a home for the wife, the agreement between the husband and the vendor would fall within this description. The third category of instruments within s. 90 has two sub-classes - instruments executed for the purposes of Pt VIII, and those executed in accordance with an order under Pt VIII. The last mentioned sub-class comprises the only documents within s. 90 that are necessarily connected with a matrimonial cause. (at p233)
4. Before passing from the construction of the section, it should be observed that s. 90 exempts the instruments to which it applies not only from any duty, but also from any charge. The word "charge" is wide enough to include a price demanded for services, and the question may arise whether the exemption afforded by the section extends to fees for services provided in connexion with some dealings with the documents, as well as to imposts of the general nature of duties. However, in the present case we are concerned only with the attempted imposition of a stamp duty, and not with any attempt to enforce a charge. (at p233)
5. It is apparent from what has been said that the question stated for the opinion of the Full Court is wider than is necessary for the purpose of deciding the case. For present purposes, it is enough to decide whether s. 90 is a valid law of the Commonwealth to the extent that it provides that a deed or other instrument executed by a person in accordance with an order under Pt VIII of the Family Law Act is not subject to any duty under any law of a State. That in itself involves two questions - first, whether s. 90 would be valid if its operation were confined to exempt from duty any deed or instrument executed in accordance with an order under Pt VIII, and, secondly, whether it is possible to treat s. 90 as severable, so that the provision which exempts from duty a deed or instrument executed in accordance with an order under Pt VIII may be given effect notwithstanding that other parts of the section may be held to be beyond power. (at p233)
6. The first question then is whether the Commonwealth may validly enact that a deed or other instrument executed in accordance with an order made under Pt VIII is not subject to any duty under any law of a State. Would a law having that effect be a law with respect to marriage, or with respect to divorce and matrimonial causes, or with respect to matters incidental to the execution of any power vested by the Constitution in the Parliament or in the Federal Judicature? (at p234)
7. In Attorney-General (Vict.) v. The Commonwealth [1962] HCA 37; (1962) 107 CLR 529, at p
560 , Taylor J. said that the power
to make laws with
respect to marriage
"extends not only to laws prescribing
the form and requisites of a valid
marriage but also
to laws defining and
regulating the respective rights duties
and obligations
of the parties inter se." In Russell v. Russell [1976]
HCA 23; (1976) 134 CLR
495 , it was
accepted that this statement was correct, and that a law defining
the duty of one party to the
marriage
to support and maintain the
other, or to
support and maintain the children of the marriage, was a law with respect to
marriage.
That
case also decided that the
scope of par. (xxi) of s. 51 is not
limited by the concluding words of par. (xxii) and that the power of the
Parliament to make laws with respect to the rights
of the parties to a
marriage to the custody of a child of the marriage does not depend on the
existence of a matrimonial cause. In
Dowal v. Murray [1978] HCA 53; (1978) 143 CLR 410 and
Reg. v. Lambert; Ex parte Plummer [1980] HCA 52; (1980) 146 CLR 447 , it
was held that
legislation under
s. 51 (xxi) is not limited to the definition and enforcement
of rights as between the parties to the marriage; rights and duties which
arise from the marriage relationship may be enforced against other persons.
However, a law is not a law with respect to marriage
simply because it has
some operation with respect to married persons: see Reg. v. Lambert; Ex parte
Plummer (19), and Reg. v. Demack;
Ex parte Plummer [1977] HCA 37; (1977) 137 CLR 40, at p 46
. In Reg. v. Lambert; Ex parte Plummer, I said (1980) 146 CLR, at pp
456-457 :
"The crucial question, however, is whether the legislation creates,
defines or declares rights or duties that arise out of,
or have a close
connexion with, the marriage relationship. If not, the law cannot be said to
be one with respect to marriage . .
. . The question whether a law is one
with respect to marriage is one of degree. The answer to it depends on the
closeness of the
connexion between the law and the marriage relationship."
The question in each case is whether the connexion between the law and the
marriage relationship is sufficiently close to enable
it to be said that the
law is in truth one with respect to the relationship. It is not enough that
the law incidentally touches upon
marriage, or that the Parliament has seized
on the fact of marriage as a justification for the enactment of a law which
really deals
with some other topic. (at p235)
8. It is clear that a law that simply provided that a married person should not be liable to a State tax would not be a law with respect to marriage. Such a law would be concerned with the relationship which exists between citizens and the State, and would have no connexion with the marriage relationship except that it was rendered applicable to a married person - a connexion too slight and remote to give the law the character of a law with respect to marriage. Nor would such a law be with respect to matrimonial causes - it would have no necessary connexion with a legal proceeding arising out of the marriage. However, the provisions of s. 90 with which we are now concerned have some connexion both with marriage and with matrimonial causes - they exempt from State duty an instrument executed in accordance with an order made in a matrimonial cause in which Pt VIII is applied. Again the connexion is only a remote one, since the object of the section is to destroy a liability that would otherwise be owed by a person (albeit a married person) to a State, under a law which does not take as the criterion of the liability anything related to the marriage or the matrimonial cause. If such a provision is to be held valid, its validity must depend on the established principle that "every legislative power carries with it authority to legislate in relation to acts, matters and things the control of which is found necessary to effectuate its main purpose, and thus carries with it power to make laws governing or affecting many matters that are incidental or ancillary to the subject matter": Grannall v. Marrickville Margarine Pty. Ltd. [1955] HCA 6; (1955) 93 CLR 55, at p 77 ; see also Wragg v. New South Wales [1953] HCA 34; (1953) 88 CLR 353, at p 386 . In accordance with that principle, the power to make laws with respect to marriage, and with respect to matrimonial causes, "carries with it authority to make such provisions as are incidental to the effectuation of the purpose described by the express words of the power": Federated Ironworkers' Association of Australia v. The Commonwealth [1951] HCA 71; (1951) 84 CLR 265, at p 277 . Both the power given by par. (xxi), and that given by par. (xxii), enable the Parliament to legislate for the enforcement in legal proceedings of the rights which one party to a marriage has against the other, and which arise out of the matrimonial relationship. Obviously in such proceedings the court may proceed to make an order, and the power given by pars. (xxi) and (xxii) must carry with it authority to make any such order effective. Further, the Parliament may, as incidental to the subject matter of s. 51 (xxi) and (xxii), "provide against any impairment of the operation and practical efficacy" of orders made by the court in the exercise of the jurisdiction and powers conferred on it by legislation made under those paragraphs: cf. Australian Boot Trade Employees' Federation v. The Commonwealth [1954] HCA 9; (1954) 90 CLR 24, at p 43 . (at p236)
9. A distinction is traditionally drawn between the operation of the doctrine that everything which is incidental to the main purpose of a legislative power is contained within the grant itself and that of s. 51 (xxxix) which relates to matters incidental to the execution of a power. The distinction is said to be between a matter incidental to a subject to which the power is addressed and a matter which is incidental to the execution of a power, that is, something which attends or arises in its exercise: see Le Mesurier v. Connor [1929] HCA 41; (1929) 42 CLR 481, at pp 497-498 and Australian Coastal Shipping Commission v. O'Reilly [1962] HCA 8; (1962) 107 CLR 46, at p 54 . When s. 51 (xxxix) is sought to be given an application in relation to matters incidental to the execution of a legislative power, it is not at all clear what it adds to the principle that the grant of legislative power carries within it everything necessary to effectuate its main purpose. However, in this case it is enough to say, as was said in Burton v. Honan [1952] HCA 30; (1952) 86 CLR 169, at p 178 , that "the distinction is for present purposes immaterial because it produces the same result, namely, that the Parliament may in the exercise of any of the substantive powers given by s. 51 make all laws which are directed to the end of those powers and which are reasonably incidental to their complete fulfilment". The operation of s. 51 (xxxix) in relation to matters incidental to the execution of a power vested in the Federal Judicature is in some respects easier to understand. Assuming that the powers of the court under Pt VIII can be regarded as powers vested by the Constitution in the Federal Judicature within the meaning of s. 51 (xxxix), that paragraph gives the Parliament power to make laws incidental to the fulfilment of those powers. But again, in the circumstances of the present case, par. (xxxix) would give to the Parliament no relevant power that it would not already have under pars. (xxi) and (xxii). It is therefore convenient to speak of the operation of those paragraphs, rather than of par. (xxxix). (at p236)
10. It is then necessary to consider whether s. 90 can be regarded as a law
which renders effective orders made by a court under the powers given by Pt
VIII of the Family Law Act. If it can be so regarded, and is therefore
incidental to the subject matter of the power given by pars. (xxi)
and (xxii),
the fact
that it exempts from State tax instruments that would otherwise
attract it will not render it invalid. That
is shown by two decisions
of this
Court. In The Commonwealth v. Queensland [1920] HCA 79; (1920) 29 CLR 1 it was held that a
Commonwealth
law, which
provided that interest derived from stock or Treasury
bonds should not
be liable to income tax under a law of a State
unless it was
declared to be so liable by the prospectus relating to the loan on which
the
interest was payable, was a valid enactment
under s. 51 (iv) of the
Constitution. That paragraph empowers the Parliament to make laws with respect
to "borrowing money on the public credit of the Commonwealth",
and it was held
that it gave power to fix the conditions on which a borrowing was to be made,
including the condition that the interest
was to be tax free (1920) 29 CLR, at
pp 11, 21, 26 . Isaacs and Rich JJ. said (1920) 29 CLR, at p 21 :
"The loan is a transaction outside the jurisdiction of the States; the
interest is an income of the lender created by the Commonwealth.
And, being
created by the Commonwealth for its own purpose, it may be surrounded with
such characteristics as to secure to the Commonwealth
the full benefit it
desires to obtain. If States could tax Commonwealth bonds in the hands of
the holder or the interest he receives,
notwithstanding Commonwealth
legislation to the contrary, the financial operations of the whole nation
might be frustrated by the
action, and possibly divergent action, of
portions of the nation."
In Australian Coastal Shipping Commission v. O'Reilly (1962) 107 CLR 46 the
court upheld the validity of s. 36 (1)
of the Australian
Coastal Shipping
Commission Act 1956 (Cth). That Act, which set up the
Australian Coastal
Shipping Commission,
by s. 36 (1) provided
that the Commission is not subject
to taxation under a law of a State
to which the Commonwealth is not subject.
Dixon C.J. pointed
out that the Commission which the Act created was a
corporation "established
for the purposes of the Crown in
right of the
Commonwealth"
and that the Parliament was entitled to exclude the activities
of a government
agency of that kind from
State taxation (1962) 107
CLR, at pp
55-57 . These cases establish that under a legislative power of the
Commonwealth the operation
of State taxing laws can
be directly and expressly
excluded. Of course they do not deal with the situation
that would arise if
the
Commonwealth legislation
so impaired the power of a State to impose
taxation that the very existence of the
State was threatened;
that question,
upon which
I touched in Victoria v. The Commonwealth (the Pay-roll Tax Case)
[1971] HCA 16; (1971) 122 CLR 353 ,
does not arise in the present case. However,
these cases
do not throw any light on the question whether the
provisions of s. 90 can
be
regarded as incidental to the subject matter
of the power given by pars. (xxi)
and (xxii); the reasons
for the decisions, to which
reference has been made,
show that they are
quite distinguishable from the present case. (at p238)
11. An order made under Pt VIII is none the less effective because an instrument executed in accordance with its commands is subject to stamp duty under the general law. The liability to pay the duty does not prevent or impede the person to whom the order is directed from complying with it, or the person in whose favour it is made from enforcing it, nor does it affect the operation of the order. The purpose of such an order can be fully achieved whether or not duty is payable on an instrument made in accordance with it. It is true that if the person bound by the order is liable to pay the duty, the order may be more burdensome to him financially. Exoneration from the duty will ease his burden and to that extent make it easier for him to comply with the order. Similarly, an order for the payment of maintenance, or the making of a settlement of property, might be more easily complied with by a party who was relieved of his liability to pay costs to the solicitor who was acting for him, or for that matter of his liability to pay for his medical care or his groceries, but a law exempting a party to a marriage from liabilities of that kind would not be within the power of the Parliament. The question whether a law is reasonably incidental to the subject matter of the power is always one of degree, and it depends to some extent on the nature of the power. Thus the Parliament might, under the defence power, exempt soldiers travelling on duty from the necessity of complying with the traffic regulations of a State, but it could not validly grant a similar exemption in favour of a married person travelling to avail himself or herself of an order for access made under the Family Law Act. Although the power given by pars. (xxi) and (xxii) enables the Parliament to legislate for the creation, variation and enforcement of rights to property which one party to a marriage has against the other, that does not mean that the Parliament can, as incidental to that power, legislate with regard to the law of property generally in its application to married persons. If the Parliament empowers the court to order a transfer of property to be effected, and the court acting under that power makes such an order, and the transfer is intended to take effect within the system of State law, it must comply with the requirements of that system. For these reasons, although the provisions of s. 90 which exempt an instrument from the duty which it would attract under the general law have some connexion with the subject matter of the power granted by pars. (xxi) and (xxii) when the instrument exempted is one executed in accordance with an order of a court under the Family Law Act, those provisions cannot in my opinion be said to be necessary to render the order effective or to be reasonably incidental to the power. The position might well be different if the State law constituted a practical barrier to the execution of instruments in accordance with such an order, for example if the amount of the impost equalled or exceeded the value of the property transferred by the instrument, but that is not the present case. (at p239)
12. The conclusion at which I have arrived is reinforced by two decisions of
this Court. In The Commonwealth v. New South Wales
(the Royal Metals Case)
[1923] HCA 34; (1923) 33 CLR 1 the court held invalid s. 20 of the Lands Acquisition Act 1906
(Cth) which
provided that
if a copy of a notification
of acquisition of land,
duly gazetted, was lodged with the Registrar-General of the State
he should
register
it in the register and
deal with it and give it effect as if it were
a grant or conveyance or memorandum or instrument
of transfer
of the land duly
executed
under the laws in force in the State. The majority of the Court held
that this provision was
not incidental
to the complete exercise
of the power
of acquisition, and ultra vires. Knox C.J. and Starke J. said (1923) 33 CLR,
at pp 27-28 :
"Effective acquisition of (inter alia) land by the Commonwealth is the
object to be attained, and the power is completely exercised
by enabling the
Commonwealth to vest absolutely in itself the land which it desires to
acquire. The object is attained by the method
of provided by sec. 16 of the
Act, namely, that upon the publication of a notification of acquisition of
land described therein shall
'by force of this Act be vested in the
Commonwealth'.
. . .insist upon the State registration of its title to the land acquired unless upon compliance by the Commonwealth with the conditions imposed by State law. The provisions of the Real Property Act 1900 which stand in the way of the Commonwealth in this case in no way prevent or interfere with the acquisition by the Commonwealth of any land in New South Wales: they do no more than prescribe the conditions on which the State will permit the registration of title to land; and in our opinion the Commonwealth, if it desires to obtain registration of its title under the Real Property Act, must comply with the conditions imposed by that Act. As our brothers Isaacs and Rich said, in Commonwealth v. New South Wales [1918] HCA 44; (1918) 25 CLR 325, at p 340 , 'if it' (i.e., the Commonwealth) 'seeks to obtain the registration provided by the statute, it must take it on the terms of the Act which it invokes'."
But it does not follow that the Commonwealth Parliament is entitled to
13. For these reasons in my opinion the relevant provisions of s. 90 were beyond the power of the Commonwealth Parliament to enact. It therefore becomes unnecessary to consider whether those provisions, had they been valid, could have been treated as severable from the remaining provisions which clearly go far beyond power. (at p240)
14. For these reasons I would answer the question submitted for our opinion as follows: Section 90 of the Family Law Act 1975, in its attempted application to any duty or charge under any law of a State, is not a valid law of the Commonwealth. I would remit the matter to the Supreme Court of Victoria but in accordance with the agreement reached between the parties would make no order as to costs. (at p240)
STEPHEN J. In this case the question is whether the reach of the
Commonwealth's legislative power extends to the enactment of s.
90 of the
Family Law Act. That section reads:
"A maintenance agreement, or a deed or other instrument executed by a
person for the purposes of such an agreement or for the
purposes of, or in
accordance with an order under, this Part, is not subject to any duty or
charge under any law of a State or Territory
or any law of the Commonwealth
that applies only to or in relation to a Territory." (at p241)
2. The only sources of legislative power relied upon as supporting the
validity of s. 90 are the marriage power - s. 51 (21) and
the divorce and
matrimonial causes power - s. 51 (22), including their penumbras of incidental
powers, supplemented as may be necessary
by the incidental power - s. 51 (39).
(at p241)
3. When the validity of s. 90 is sought to be supported by reference to these heads of power what becomes immediately apparent is its slender nexus with them. The concern of s. 90 is to exempt certain instruments from State and Territorial duties and charges. To describe s. 90 no more fully than this reveals no close connexion with these two heads of power than with any other head of Commonwealth legislative power. Any fuller description of the section can only be derived from the character of the instruments it exempts from duty, maintenance agreements and instruments associated with them or with orders made under Pt VIII of the Family Law Act. Only when such a fuller description is given does the possibility of any connexion with these two heads of power emerge. The question, then, is whether the additional characteristics of s. 90 which this fuller description reveals, that the documents which it exempts from duties and charges are of a kind associated with Pt VIII of the Family Law Act, is enough to bring it within power. (at p241)
4. Section 90 has no direct concern with the marriage relationship itself nor with relations between spouses, nor with children of the marriage. Its function is to exclude the operations of certain State laws, being laws which impose duties or charges on instruments. These laws are of their nature wholly remote from the heads of power conferred by s. 51 (xxi) and (xxii). Only when such laws, in the course of laying imposts upon the generality of instruments falling within their reach, happen to encounter, quite randomly, a particular document which is in some way related to marriage or to divorce and matrimonial causes will there occur any connexion with those subject matters. (at p241)
5. It might be very different were s. 90 directed to the exclusion of the application of discriminatory State taxing laws, discriminatory in the sense of imposing some special impost upon some aspect or manifestation of marriage or of divorce or matrimonial causes: as, for example, a tax upon marriage certificates. Were s. 90 so restricted it might readily enough be seen to be within power as incidental to the marriage power. But s. 90 is instead expressed quite at large and operates upon any State Stamps Act the perfectly general provisions of which happen to attract liability for duty to any of the particular instruments which it describes. (at p242)
6. It was in Australian Coastal Shipping Commission v. O'Reilly [1962] HCA 8; (1962) 107 CLR 46 that this Court encountered a provision in some respects analogous to s. 90. A section of the Commission's constituting enactment subjected the Commission to taxation under the laws of the Commonwealth but exempted it from taxation under State and Territory laws to which the Commonwealth itself was not subject. That section was held valid, Dixon C.J., with whose judgment Kitto and Taylor JJ. agreed, squarely basing himself upon the one feature in the circumstances of that case which immediately distinguished it from the present; namely that what was thus protected from State taxes was the very entity which the Common wealth had created, the Commission itself, which his Honour described as a corporate agency of the Crown, acting "in the interests of the Crown in right of the Commonwealth" (1962) 107 CLR, at p 54 , and as a "federal governmental corporation" (1962) 107 CLR, at p 56 . Because of that circumstance his Honour did not doubt the Commonwealth's ability "to protect the Commonwealth Government body" (the Commission) "from what may be considered the embarrassment of taxation by the various States" (1962) 107 CLR, at p 55 . The ambit of the grant of legislative power under which the Commission was created was ample both to create it and, when created, to permit Parliament to decide that its creation should not be exposed to State taxes. (at p242)
7. Of the other members of the Court it was only Menzies J. who found it
necessary to consider the validity of the exemption from
State duties without
regard to the special character of the Commission which the legislation had
created. He approached the question
of validity by reference only to the ambit
of the Commonwealth's particular grant of legislative power, which he
described as being
in that case power "with respect to or incidental to what
can compendiously be described as overseas, inter-State or territorial
trade"
(1962) 107 CLR, at p 62 . On that approach his Honour's first task was to
determine "whether a law protecting the Commission
from all taxation laws of
the State is, having regard to the Commission's functions, a law with respect
to overseas, inter-State
and territorial trade" (1962) 107 CLR, at p 55 . His
Honour accordingly posed the question whether the obvious advantage which
exemption
from State exactions conferred upon the Commission was enough of
itself to bring the law within power as a law with respect to trade.
His
Honour's answer (1962) 107 CLR, at p 63 was in these terms:
". . . it must of course be conceded that a Commonwealth law exempting the
Commission from State taxation would tend, by reducing
its outgoings, to
make its business more profitable. The immunity is therefore an advantage.
Such an advantage, if given to a private
trader, would also undoubtedly
constitute an encouragement to trade and I am prepared to assume - although
it is probably not the
case - that this could also be true of the
Commission. But every law which gives a trader an advantage, and even such
an advantage
as encourages trade, is not a law with respect to trade. This
can, I think, be made to appear without going beyond immunities of
the kind
conferred upon the Commission by s. 36 (1). If, for instance, the State law
to be considered were to be one imposing income
tax, notwithstanding that
immunity from its exaction could properly be said to be an encouragement to
trade, a law providing an immunity
to traders carrying on business within
Commonwealth power would not seem to me to be a law with respect to the
various trades producing
income. The same would be true of freedom from
State land tax or municipal rates. A law imposing income tax is not to be
regarded
as a law with respect to the variety of activities which produce
income and a law imposing tax or rates upon land, whether or not
it is land
used for the purposes of trade, does not seem to me to be a law with respect
to the various trades that are in fact carried
on upon some of the land in
respect of which tax is imposed."
The analogy to the present case is close. The very respect in which s. 90 may
be seen to have some nexus with the heads of power
said to support its
validity is the exemption from State duties which it confers upon those
engaged in effecting a proper redistribution
of property as between the
parties to a marriage or in providing maintenance for a spouse or children of
a marriage. Yet, as his
Honour points out, a law which provides such an
advantageous immunity is not a law with respect to what is rendered immune. In
the
present case it is not a law with respect to such property redistributions
or maintenance as Pt VIII of the Act contemplates; and
this despite the fact
that such immunity may to some extent increase the amount of property or
income available for disposition or
payment by making available to that end
moneys which would otherwise be spent on stamp duty. Just as his Honour said
(1962) 107 CLR,
at p 64 that it was going too far to say "that a Commonwealth
power over trade authorizes a law protecting a trade from State tax
imposed by
a law which does not take anything to do with trading as the criterion of tax
liability", so here it goes too far to say
that Commonwealth powers conferred
by s. 51 (xxi) or (xxii) authorize a law protecting those concerned with
marriage or with divorce
and matrimonial causes from State tax imposed by a
law which does not have anything to do with marriage or with divorce and
matrimonial
causes as the criterion of tax liability. (at p244)
8. The extent of implied incidental power will depend upon the particular head of power which is in question; matters of history and of long usage play their part in the case of some powers, as with the forfeiture and seizure provisions of customs legislation - Burton v. Honan [1952] HCA 30; (1952) 86 CLR 169, at p 179 , per Dixon C.J. But, as the Chief Justice remarked in that case, the extent of an incidental power is a matter of degree (1952) 86 CLR, at p 178 . A reasonable connexion must be shown before a law can be sustained as incidental to the relevant power (48). Here there is, in my view, no such connexion. Apart from all else, the fact that s. 90 operates, at best, as between a party to the marriage and a third party, being the State revenue authorities, itself serves to distance it from the relevant heads of power. I say, "at best" because it may be that the person liable to duty will not himself be any party to a marriage or to the divorce proceedings or other matrimonial cause. (at p244)
9. Again, the fact that the operation of s. 90 "reaches into the exercise of the constitutional powers of the States" - Victoria v. The Commonwealth [1957] HCA 54; (1957) 99 CLR 575, at p 614 , per Dixon C.J. is of itself sufficient to require that its validity be carefully scrutinized, as Menzies J. pointed out in the Australian Coastal Shipping Commission Case (1962) 107 CLR, at p 67 . In my view s. 90 does not survive that scrutiny. I regard it, on the contrary, as an instance of Commonwealth legislation upon a matter, the incidence of stamp duty upon instruments, which is "prima facie within the province of the States upon grounds of a connection with Federal affairs that is only tenuous . . . or remote" - per Dixon J. in R. v. Sharkey [1949] HCA 46; (1949) 79 CLR 121, at p 151 . (at p244)
10. The question referred to the Full Court was "Is s. 90 of the Family Law Act 1975 a valid law of the Commonwealth?". I would give the answer that, in its purported application to any duty or charge under any law of a State, it is not a valid law. (at p245)
MASON J. On 26 May 1977 the marriage of the applicant and Antonio Pietro Gazzo was dissolved by the Victorian Supreme Court under the Family Law Act 1975 (Cth), as amended, ("the Act") and the husband was ordered, inter alia, to transfer his interest in certain land to the applicant as trustee for the three children of the marriage as tenants in common in equal shares. The husband executed an instrument of transfer, expressed to be in consideration of the order of the Victorian Supreme Court. The Comptroller of Stamps assessed the instrument to duty in accordance with s. 32 of the Stamps Act 1958 (Vict.), as amended. The Comptroller disallowed the applicant's objection that the instrument was exempt from duty under s. 90 of the Act. (at p245)
2. The applicant's appeal was then removed into this Court from the Supreme Court pursuant to s. 40 (1) of the Judiciary Act 1903, as amended. The following question was referred to the Full Court: "Is section 90 of the Family Law Act 1975 a valid law of the Commonwealth?" (at p245)
3. Section 90 reads:
"A maintenance agreement, or a deed or other instrument executed by a
person for the purposes of such an agreement or for the
purposes of, or in
accordance with an order under, this Part, is not subject to any duty or
charge under any law of a State or Territory
or any law of the Commonwealth
that applies only to or in relation to a Territory." (at p245)
4. We are here concerned only with a duty or charge under the law of a State.
Section 90 purports to exempt from State duties a
wide range of written
instruments. So much appears from the definitions of "maintenance agreement"
and "financial matters" in s.
4 (1). The relevant definitions, which are
expressed to be subject to any contrary intention, are:
"'maintenance agreement' means an agreement in writing made, whether
before or after the commencement of this Act, between
the parties to a
marriage, being an agreement that makes provision with respect to
financial matters, whether or not there
are other parties to the agreement
and whether or not it also makes provision with respect to other matters,
and includes such
an agreement that varies an earlier maintenance
agreement; "
"'financial matters', in relation to the parties to a marriage, means
matters with respect to -
(a) the maintenance of one of the parties;
(b) the property of those parties or of either of them; or
(c) the maintenance of children of the marriage;" (at p246)
5. Section 90 operates to exempt three main types of instrument: (a) a
maintenance agreement; (b) a deed or other instrument executed
by a person for
the purposes of a maintenance agreement; (c) a deed or other instrument
executed by a person for the purposes of,
or in accordance with an order made
under Pt VIII of the Act. The instrument of transfer was executed in
accordance with an order
made under Pt VIII. (at p246)
6. It would be a task of great complexity to decide whether s. 90 is valid in all its possible applications. In this case it will be sufficient if we decide in the first instance whether s. 90 can validly apply to the situation in hand. If it can, the question of severability from its invalid or potentially invalid operation must be considered. (at p246)
7. To be valid, s. 90 must be a law "with respect to" "Marriage" (s. 51 (xxi) of the Constitution); "Divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants" (s. 51 (xxii)); or "Matters incidental to the execution of any power vested by this Constitution . . . in the Federal Judicature . . . " (s. 51 (xxxix)). (at p246)
8. In Reg. v. Lambert; Ex parte Plummer [1980] HCA 52; (1980) 146 CLR 447 I reaffirmed what a majority of the Court held in Russell v. Russell [1976] HCA 23; (1976) 134 CLR 495, at pp 539-540 (Mason J. with whom Stephen J. agreed, and Jacobs J.) (1976) 134 CLR, at p 550 : the scope of the marriage power is in no way diminished by the existence of s. 51 (xxii) in its reference to "and in relation thereto, parental rights, and the custody and guardianship of infants". Gibbs J., who was in the minority in Russell, after noting that it was there "held that the power given by s. 51 (xxi) . . . is not limited by s. 51 (xxii)", indicated "powerful reasons of policy" against overruling Russell and was not prepared to reconsider that decision. (at p246)
9. There are no compelling reasons here to reject the normal principle that an individual grant of power under the Constitution should be accorded a full operation according to its terms. Therefore, in considering whether the removal of obligations achieved by s. 90 is within the marriage power of Parliament there is no occasion for restricting the scope of the power by drawing restrictive implications from the existence of s. 51 (xxii) of the Constitution. (at p246)
10. A central submission of the Solicitor-General for Victoria was that a law governing the relationship of married persons with third parties cannot be a law with respect to marriage. To fall within the marriage power, a law can only deal with the mutual rights and obligations of the parties to a marriage, including children of the marriage. If the marriage power were not so confined, so it was said, there would be virtually no limit as to laws which the Commonwealth could make affecting the relationship of married persons with third parties. It was argued "one can give the husband rights against the wife and the wife rights against the husband but what one cannot do, at least on the basis of the marriage power, is to give either rights against someone else". (at p247)
11. This submission is misconceived. I accept that the legislative power with respect to "marriage" is not a power with respect to "married persons" and that the Commonwealth cannot remove disabilities or impose obligations not in any way arising out of the marriage relationship merely by applying laws to married persons. Even so, the argument of the learned Solicitor-General for Victoria allows no scope for exercise of the legislative power on what is incidental to the subject matter of the grant. The mutual rights and obligations of parties to a marriage do not mark the outer limits of the subject matter of the power; they coincide with what is central to that subject matter. If we were to assume that the mutual rights and obligations of the parties mark the outer limits of what is central to the power, the power extends to that which is incidental. Accordingly, a law may define the rights of one party to the marriage against a third party, if to do so is incidental to, or is reasonably necessary for, dealing with the mutual rights and obligations of the parties to the marriage. There is therefore no a priori rule that, because a law deals with the rights or obligations of one party to a marriage as against a person not a party to the marriage, it cannot be supported under s. 51 (xxi). Nor is there any absolute rule that it cannot be reasonably incidental to the main head of a power for Commonwealth legislation to provide relief from State duties or charges (see in other areas The Commonwealth v. Queensland [1920] HCA 79; (1920) 29 CLR 1 ; Australian Coastal Shipping Commission v. O'Reilly [1962] HCA 8; (1962) 107 CLR 46 ). (at p247)
12. In Plummer, Gibbs J. after having rejected the argument that the marriage
power extends only to the definition and enforcement
of mutual rights and
duties between the parties to the marriage (including children) and does not
permit laws providing for the definition
or enforcement of rights as against
other members of the community (particularly State authorities) as "too narrow
a view", said
(1980) 146 CLR, at p 456 :
"The crucial question, however, is whether the legislation creates,
defines or declares rights or duties that arise out of,
or have a close
connexion with, the marriage relationship. If not, the law cannot be said to
be one with respect to marriage." (at
p248)
13. For my part, I should have thought that the word "sufficient" more
accurately expresses the degree of connexion with the subject
of the power
which constitutional principle requires. The word "close" is perhaps too
limiting, suggesting too strict a nexus. (at
p248)
14. There will necessarily be differences of view as to what is incidental to the subject matter of the power or has a sufficient connexion with the marriage relationship. So much, if nothing else, emerges from Plummer. However, so long as the Court continues to accept and apply the settled standards in determining what is incidental and whether the law has a sufficient connexion with the topic, the marriage power will not give Parliament unlimited scope to affect the relationship of married persons with third parties. (at p248)
15. By way of illustration of what has been said, a law which defines the rights of the parties to a marriage with respect to property so as to relate those rights to the marriage relationship, for example, community or joint property laws or even individual property laws, would be a valid exercise of the marriage power. It would not cease to be an exercise of the power if it went on to provide that a transfer of property by one spouse to the two spouses jointly or a transfer by one to the other should be free from all duties whether Commonwealth or State. Such a law would then be, if not a law on what is central to the subject matter of the power, a law which is incidental to the topic. (at p248)
16. The same comment may be made of a law which provides that an instrument executed by a party pursuant to a court order shall be free from all duties. If the making of the court order for the transfer of the property by the husband to the applicant constitutes a valid exercise of the marriage power or is authorized by a legislative provision which itself is within the power, I find it difficult to perceive why the power does not extend to freeing the transfer from duty. To say that the execution of a transfer in compliance with a court order adjusting the rights of the parties to the marriage relationship shall not be made the occasion for the imposition of duties is to legislate on a matter which has, not only sufficient, but also a very close, connexion with the marriage relationship. (at p249)
17. The application of s. 90 to the situation here can also be justified as
an exercise of the s. 51 (xxii) power. The order requiring the husband to
transfer his interest in the land upon dissolution of the marriage was clearly
made
in relation to a "matrimonial cause" within par. (ca) of the definition
in s. 4(1) of the Act:
"proceedings between the parties to a marriage with respect to the
property of the parties to the marriage or of either of
them, being
proceedings in relation to concurrent, pending or completed proceedings
for principal relief between those parties
. . . "
It could not have been suggested in the light of Russell that this paragraph
was beyond the ambit of s. 51 (xxii). The order and
instrument of transfer
executed in accordance with it were incidental to resolving this "matrimonial
cause". (at p249)
18. Section 51 (xxii) at least enables Parliament to authorize courts to make orders for property settlement and maintenance which are ancillary to some form of principal relief (Lansell v. Lansell [1964] HCA 42; (1964) 110 CLR 353 ). In my view it also authorizes a law exempting an instrument executed for the purposes of, or in accordance with, such an order from State stamp duties otherwise applicable. The reasons already given for the conclusion that a provision exempting the court-ordered transfer from stamp duty is a valid exercise of the marriage power support the conclusion that such a provision is a valid exercise of the matrimonial causes power as well. (at p249)
19. Further, it may be said that s. 90 facilitates compliance with the order to transfer property by making the transfer simpler and cheaper. There are situations in which the liability to pay stamp duty on the transfer of, for example, a matrimonial home, may impede the completion of court-ordered transfers and decrease the capacity of a party to discharge his obligation to maintain another party to the marriage (including a child). The section therefore has a sufficient connexion with proceedings for principal relief between the parties to a marriage and the settlement of property and maintenance in relation to that principal relief. (at p249)
20. Accepting under s. 51 (xxi) and (xxii) that s. 90 can apply here, its
many other possible applications necessitate consideration
of severability of
invalid or possibly invalid operations of s. 90 from its operation in this
situation. As noted, s. 90 seeks to
exempt three distinct classes of written
instrument. If we were considering either (a) maintenance agreements or (b)
deeds or other
instruments executed for the purposes of a maintenance
agreement there would be real questions as to whether the marriage power would
authorize s. 90 in its application to the whole range of such instruments. For
example, the definition of "maintenance agreement"
in s. 4(1) of the Act is
far wider than an agreement which can be related to a "matrimonial cause"
under par. (d) of its definition
in s. 4(1) -
"proceedings between the parties to a marriage for the approval by a court
of a maintenance agreement or for the revocation of
such an approval or for
the registration of a maintenance agreement"
which was held to be a valid exercise of the marriage power in Russell [1976] HCA 23; (1976)
134 CLR 495 . (at p250)
21. Such a case for severability purposes would be an example of the second type of provision referred to by Dixon J. in R. v. Poole; Ex parte Henry (No. 2) [1939] HCA 19; (1939) 61 CLR 634, at p 652 and s. 15A of the Acts Interpretation Act 1901 (Cth), as amended, would only apply if "the legislature intended the provision to have a distributive operation or effect". (at p250)
22. There may possibly be difficulties applying s. 15A, where a reading down of the phrase "matrimonial cause" may be done by reference to either the marriage or matrimonial causes power, should the Court continue to follow the approach which commended itself to the majority in Strickland v. Rocla Concrete Pipes Ltd. [1971] HCA 40; (1971) 124 CLR 468 . (at p250)
23. However, these difficulties do not apply to a reading down of the phrase to the third class of instrument - deeds or other instruments executed by a person for the purposes of, or, if need be, in accordance with, an order made under Pt VIII of the Act - which s. 90 can exempt from State stamp duties under both the marriage and matrimonial causes powers. (at p250)
24. If the operation of s. 90 on the first two classes of instrument be beyond power those instruments are the "subject of distinct or separate expression" as against the instrument being considered here. For severability purposes this can be viewed as the first type of provision which Dixon J. indicated may be saved by s. 15A (Ex parte Henry (No. 2) (1939) 61 CLR, at p 652 ). Applying the appropriate test, "whether the operation or effect of the remainder of the Act upon the person or things to which it would apply would be changed", if s. 90 could only operate on the third class of instrument it is clear that there would be no change in the operation of the rest of the Act. The effect of s. 90, if so read down, upon a deed or other instrument executed by a person for the purposes of, or in accordance with, an order made under Pt VIII of the Act would be no different from its effect if s. 90 were valid in all its possible applications. (at p251)
25. There is also a question whether, having read down s. 90 to this third class of instrument, the possible width of the exemption in s. 90 from "any duty or charge under any law of a State . . . " requires a further consideration of severance. (at p251)
26. A duty under any law of a State in this context refers to a tax or financial imposition required by a State law to be made to the public revenue. Examples are impositions levied on the import, export, manufacture or sale of commodities (such as customs, excise and some licensing fees) as well as impositions following the execution of documents, for example, contracts of sale (stamp duties, etc.). A charge in a general sense is a financial obligation or liability which here would be one imposed by a State law and should be understood as payable to the State or a public authority. Although the terms substantially overlap, the meaning of "charge" is somewhat wider, including a fee payable in response to a service provided by the State or a public authority. Examples are fees payable to a Registrar-General for registering an instrument of transfer or to a Corporate Affairs Commission for things such as incorporating a company or issuing shares. (at p251)
27. While s. 90 would thus exempt this third class of instrument from a wide range of financial imposts, its scope is not unlimited. For example, it does not purport to exempt transferees of licences from approval requirements under State licensing laws, nor to exempt transferees of shares from any requirement to be approved by some State body or company board. Whether this could be done need not concern us here. Section 90 would not prevent a Registrar-General from refusing to register a transfer for failure to satisfy criteria provided by State laws, except those relating to the non-payment of duties or charges such as stamp duties or registration fees. (at p251)
28. When s. 90 is read down to instruments executed for the purposes of, or in accordance with, an order made under Pt VIII of the Act my view is that it can validly exempt all duties and charges under any law of a State. The reasons given above for holding that it is within the marriage and matrimonial causes powers to exempt an instrument of transfer from stamp duties apply equally to the other range of duties or charges which may be payable to public authorities under State laws in effectuating the transfer made. Therefore it is not necessary to consider the operation of s. 15A on the phrase "any duty or charge under any law of a State...". (at p251)
29. In the result, to answer the question stated: Section 90 is a valid law of the Commonwealth in its application, read down if necessary, to instruments executed by a person for the purposes of, or in accordance with, an order under Pt VIII of the Family Law Act. The parties have agreed that there should be no order as to costs as between them irrespective of the outcome. (at p252)
MURPHY J. The marriage of Mr. and Mrs. Gazzo was dissolved on 26 May 1977 under the Family Law Act 1975, (the Act) by the Supreme Court of Victoria which ordered Mr. Gazzo to transfer his interest in the former matrimonial home to Mrs. Gazzo as trustee for the three children of the marriage. Mr. Gazzo was also ordered to pay all legal costs and registration fees in respect of the transfer. (at p252)
2. Mr. Gazzo executed a transfer to Mrs. Gazzo which was presented for
registration. The Victorian Commissioner for Stamp Duties
claimed payment of
$616.00 (stamp duty, penalty and interest) from Mrs. Gazzo on the ground that
the transfer document is liable
to duty as an
"instrument . . . whether voluntary or upon any good or valuable
consideration other than a bona fide adequate pecuniary consideration
. . .
whereby any property is settled . . . in any manner whatsoever . . . "
(Stamps Act 1958 (Vict.), Third Schedule, par. IX).
(at p252)
3. However s. 90 of the Act states:
"A maintenance agreement, or a deed or other instrument executed by a
person for the purposes of such an agreement or for
the purposes of, or in
accordance with an order under, this Part, is not subject to any duty or
charge under any law of a State or
Territory or any law of the Commonwealth
that applies only to or in relation to a Territory." (at p252)
4. Proceedings in the Supreme Court of Victoria to determine whether the duty
is payable have resulted in the question referred
to this Court whether s. 90
of the Act is valid. (at p252)
5. The case concerns only an instrument executed in accordance with an order
under Pt 8 of the Act. Therefore, it is enough to decide
whether s. 90 is
valid in its application to an instrument executed in accordance with such an
order. (at p252)
Presumption of Validity. (at p252)
6. Acts are presumed to be valid, at least where the challenge is not based on a claimed infringement of a constitutional guarantee or prohibition. The presumption of validity holds until it is demonstrated beyond reasonable doubt that the legislation exceeds the limit set by the Constitution. This presumption is applied in other common law countries and in most other systems of law. I have several times referred to its applicability in Australia (see Queensland v. The Commonwealth [1977] HCA 60; (1978) 139 CLR 585, at pp 610-611 ; Attorney-General (W.A.) v. Australian National Airlines Commission [1976] HCA 66; (1976) 138 CLR 492, at pp 528-529 . (at p253)
7. In Federal Commissioner of Taxation v. Munro [1926] HCA 58; (1926) 38 CLR 153, at p 180 ,
Isaacs J. stated:
"It is always a serious and responsible duty to declare invalid,
regardless of consequences, what the national Parliament,
representing the
whole people of Australia, has considered necessary or desirable for the
public welfare. The Court charged with
the guardianship of the fundamental
law of the Constitution may find that duty inescapable. Approaching the
challenged legislation with a mind judicially clear of any doubt as to its
propriety
or expediency - as we must, in order that we may not ourselves
transgress the Constitution or obscure the issue before us - the question
is: Has Parliament, on the true construction of the enactment, misunderstood
and gone
beyond its constitutional powers? . . . Nullification of enactments
and confusion of public business are not lightly to be introduced.
Unless,
therefore, it becomes clear beyond reasonable doubt that the legislation in
question transgresses the limits laid down by
the organic law of the
Constitution, it must be allowed to stand as the true expression of the
national will."
On appeal the Privy Council specifically expressed its agreement with Isaacs
J. that unless it is clear beyond reasonable doubt that
challenged legislation
transgresses the limits in the Constitution, it must be allowed to stand
(Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation [1930] UKPCHCA 1; (1930) 44 CLR
530,
at p 545 ). (at
p253)
8. In Attorney-General (Vict.) (Ex rel. Dale) v. The Commonwealth [1945] HCA 30; (1945) 71
CLR 237, at p 267 Dixon J. said:
"In discharging our duty of passing upon the validity of an enactment, we
should make every reasonable intendment in its favour.
We should give to the
powers conferred upon the Parliament as ample an application as the
expressed intention and the recognized
implications of the Constitution will
allow."
It seems to me that, recently, the presumption of validity has been ignored,
and, particularly in family law cases, replaced in practice
by a presumption
of invalidity. The history of judicial hostility to remedial social
legislation is well documented. (See Robert
Stevens, Law and Politics, The
House of Lords as a Judicial Body, 1800- 1976, London (1979); Robert H.
Jackson, The Struggle for
Judicial Supremacy, a Study of a Crisis in American
Power Politics, New York (1979); G. Edward White, The American Judicial
Tradition,
Profiles of Leading American Judges, New York (1976), esp. Ch. 9.)
The word hostility may appear over-strong, but history here and
overseas shows
that it is not. Legislative policies are often defeated by judicial policies
which are rationalized as constitutional
requirements. In his work Robert H.
Jackson (former United States Solicitor-General and later United States
Supreme Court Justice)
wrote of the Supreme Court (pp. 315-316):
"This conservative institution is under every pressure and temptation to
throw its weight against novel programs and untried
policies which win
popular elections. Its plain duty to enforce explicit constitutional
provisions even in opposition to the majority
is easily rationalized into
enforcing its own views of good policy. To the extent that it does so, it
defeats government by representative
democracy." (at p254)
9. As the United States experience shows, the cure will come when the other
branches of government and the public understand the
real, as distinct from
the apparent, role of the judiciary. (at p254)
Relevance of challenged law to legislative power. (at p254)
10. Parliament is authorized by s. 51 of the Constitution to make laws for the peace, order and good government of the Commonwealth "with respect to" specified subjects including marriage and divorce. The legislative powers of the Parliament are stated in broad and liberal terms. They are plenary, to be construed with all the generality allowed by the words used. The broad nature of the laws authorized by s. 51 is extended by the opening words of the section. The phrase "with respect to" requires only "a relevance to or connexion with the subject assigned to the Commonwealth Parliament" (Grannall v. Marrickville Margarine Pty. Ltd. [1955] HCA 6; (1955) 93 CLR 55, at p 77 ; see also Kitto J. in Herald and Weekly Times Ltd. v. The Commonwealth [1966] HCA 78; (1966) 115 CLR 418, at p 436 ). In Bank of New South Wales v. The Commonwealth [1948] HCA 7; (1948) 76 CLR 1, at p 186 Latham C.J. stated "No form of words has been suggested which would give a wider power" than the form "with respect to". (at p254)
11. From time to time, observations have been made which would in effect remove the words "with respect to" from the Constitution and replace them with words significantly different which would severely restrict the Parliament's legislative powers. Thus in Worthing v. Rowell and Muston Pty. Ltd. [1970] HCA 19; (1970) 123 CLR 89, at p 136 , Walsh J. referred to "a direct and substantial connexion". In Reg. v. Lambert; Ex parte Plummer [1980] HCA 52; (1981) 146 CLR 447 Gibbs J. stated that a "close connexion" must be shown between a challenged law and the legislative power. In my opinion, a "close connexion" is not required by the Constitution. A recent example where no close connexion was required between the challenged law and the legislative power is Reg. v. Bowen; Ex parte Amalgamated Metal Workers' and Shipwrights' Union (1980) 144 CLR 462 where provisions which were incidental to what was itself incidental to the legislative power were held valid. Another is Storey v. Lane [1981] HCA 47; (1981) 147 CLR 549 . A classic older example is Jumbunna Coal Mine, N. L. v. Victorian Coal Miners' Association (1908) 6 CLR 309 . See also O'Sullivan v. Noarlunga Meat Ltd. (1954) 92 CLR 565; (1956) 95 CLR 177 . (at p255)
12. The phrase "with respect to" not only applies to marriage and divorce but
to all the other powers in s. 51. There is no justification for singling out
marriage and divorce for special adverse treatment. But if the requirement of
a close
connexion is applied to all, this will mean a cutting back of what
until recently have been understood to be the powers of the national
Parliament. (at p255)
Reserved Powers of States. (at p255)
13. The once-discredited doctrine of reserved powers of the States, is having a triumphant, if unacknowledged, resurgence, at least in the areas of marriage and divorce (see Plummer's Case), and emerged in this case. (at p255)
14. Every federal law requiring or authorizing acts or transactions in Australia outside Commonwealth places and territories enters areas of State law. The Constitution s. 109 provides for resolution of any conflict. The notion that federal law must end where State law begins or that some areas of law are reserved to the State is erroneous. That notion was advanced early this century and decisively rejected in Amalgamated Society of Engineers v. Adelaide Steamship Co. Ltd. [1920] HCA 54; (1920) 28 CLR 129 . However it persists. I leave aside the special case where the claim is that the federal law if valid would undermine the existence of a State; it is of no relevance here. It would be absurd to suggest that a federal Act exempting from State tax transfer of property interests on divorce threatened the existence of the State. (at p255)
15. The only question is whether the challenged law is one with respect to
the subject of federal power. Victoria contends that
simply because a law
applies to married persons or bankrupts, that does not make it in the
constitutional sense a law with respect
to marriage or bankruptcy. That is
correct. The familiar and acceptable example is of a federal law which
exempted all married persons
or all bankrupts from the observance of the State
traffic laws. Such a law would have no real connexion with marriage or
bankruptcy
and would be beyond power. However the national Parliament may for
federal purposes exempt persons or transactions from the operation
of State
laws (R. v. Brisbane Licensing Court; Ex parte Daniell [1920] HCA 24; (1920) 28 CLR 23 ; The
Commonwealth v. Queensland
[1920] HCA 79; (1920) 29 CLR 1
; Pirrie v. McFarlane [1925] HCA 30; (1925) 36 CLR
170 ; West v. Commissioner of Taxation (N.S.W.)
[1937] HCA 26; (1937) 56 CLR 657, at p 670 ;
Australian Coastal
Shipping Commission v. O'Reilly [1962] HCA 8; (1962) 107 CLR 46
. A
federal Act to exempt members of the defence forces or federal police from
traffic laws where necessary or
desirable for the
carrying out of their duties
would be valid. In Pirrie v. MacFarlane an army driver
was held subject to
State traffic
laws, there
being no federal law exempting him. In that case,
Knox C.J. said (1925) 36 CLR, at
p 183 :
"The Commonwealth Parliament has, in my opinion, undoubted power, by
legislation with respect to a subject which is within the
ambit of its
legislative powers, to override the provisions of any State law, but in the
absence of any such enactment the State
law must be given its full effect."
The Bankruptcy Act 1966, s. 60 validly provides for setting aside of orders
for imprisonment of debtors under State law (see Storey
v. Lane (1981) 147 CLR
549 ). Ambassadors and officers of the United Nations Organisation may be
exempted from criminal
proceedings
and taxes (see Diplomatic Privileges and
Immunities Act 1967 particularly ss. 6 and 7 and Art. 34 of the Schedule). (at
p256)
16. The argument that a federal law protecting a transaction arising under federal law (or particularly under a federal judicial order) may prevail against a State law directed specifically to transactions under the federal law, but not against a State law of general application which "randomly" affects the transaction, is fallacious. It is the approach condemned in the Engineers' Case. If laws of two States impose a tax on such transfers pursuant to Family Courts' orders, how can the validity of the federal law depend on the fact that the law of one State does, but the other does not, affect other transactions unrelated to federal law? The State traffic laws in Pirrie v. McFarlane, and the State laws in Storey v. Lane were of general application. It would rarely be otherwise. The focus must be on the federal law, not on the State law, if the reserved powers trap is to be avoided. (at p257)
17. In The Commonwealth v. New South Wales [1923] HCA 34; (1923) 33 CLR 1 (the "Royal Metals
Case") the Court held that the land
transfer laws
of the States are immune
from interference
by federal law. In my opinion that is incorrect. The s. 84
of the Act interferes
with
and overrides the State Acts in an important
respect. Under it, the Family Court may appoint an officer or other person to
execute
a deed or other instrument in the name of a
person who has neglected
or refused the Court's direction to execute it, and that execution
has the
same force and validity as if
it had been executed by the person directed to
execute it. This section interferes with the
operation of State Acts including
the
land transfer and registration Acts. Yet it is clearly valid, as a law
with respect to marriage,
and in its application to divorce,
as a law with
respect to divorce. (at p257)
The property aspects of the marriage and divorce powers. (at p257)
18. It is elementary that marriage is an economic as well as a social institution (see for example, Westermarck, The History of Human Marriage, pp. 26-27; Lucy Mair Marriage, New York (1971); Bohanan, Social Anthropology, New York (1970), Ch. 5, 6; Krupinski and Stoller (ed.), The Family in Australia, Sydney (1974); I.W.P. McCall, Dissolving The Economic Partnership of Marriage, paper delivered to Queensland Family Law Practitioners Association Conference on Family Law, Queenstown, New Zealand, July 1980; A. Kiralfy (ed.), Comparative Law of Matrimonial Property, Leiden (1972)). There is a wealth of anthropological and legal material establishing that in virtually every society, ancient or modern, primitive or civilized, law on property of the parties is an integral part of the law of marriage. (at p257)
19. Australian marriage and divorce laws were, until recently, closely based on English law. The common law (as well as the civil law) system made extensive provision for bringing together of real and personal property at the commencement of the marriage; the administration of property during the marriage; a division or allocation of property at the end of marriage; and generally, the financial obligations of each party towards the other during and after the termination of the marriage. In general, the common law provided that a husband has the ownership and control of his wife's property (as well as his own) during marriage. This was qualified by emergence of legal and equitable doctrines of ante-nuptial and post-nuptial settlements and restraints upon anticipation. The statutory modifications of the common law have been directed towards ameliorating the subordinate position of the wife. These included abolition of the law of dower (finally abolished in the U.K. in 1925); the Married Women's Property Acts; Testators' Family Maintenance and Guardianship of Infants Act. The fact that in modern times the law has developed in the direction of separate property of the spouses controlled separately, does not mean that laws about property are not central to marriage. (at p258)
20. Whatever the merits, the establishment of a community property law or other regime for the administration of property of spouses during marriage and for distribution on termination of marriage by death or dissolution would be a law with respect to marriage. Equally, a law for distribution of the property of the spouses on or in anticipation of divorce, would be a law with respect to "divorce" in the Constitution s. 51 par. (xxii). If the law provided for such distribution by judicial process, it would also be a law with respect to "matrimonial causes" in the same paragraph of s. 51. An example from the previous law is the Court's power to order settlements of property including property dealt with by ante-nuptial or post-nuptial settlements and to make orders to apply the property for the benefit of parties to the marriage or either of them or the children (Matrimonial Causes Act 1959, s. 86). (at p258)
21. The development of Australian and English law relating to the settlement and transfer of property on divorce recognizes that when the economic unit formed by the marriage partners and children (if any) is broken, the property may and often does, need to be redistributed. Parliament is entitled to act on the view that marriage and divorce law cannot be neutral in the break-up of marriage. Because divorce converts one economic unit into two economic units, such a redistribution is almost invariably a necessary consequence of divorce, whether by direct legislative provision, judicial order, or agreement. Changes in legal title and equitable interests in property are part of the process of divorce (see Lansell v. Lansell [1964] HCA 42; (1964) 110 CLR 353 ). The power to regulate the ownership or division of matrimonial property on divorce or during marriage is thus at the heart of the legislative powers to make laws with relation to marriage, divorce and matrimonial causes. Parliament may authorize judicial orders for maintenance and transfer of property interests and as part of this prevent extraneous financial impediments such as State taxes on the implementation of the orders. Section 90 of the Act is thus relevant to the marriage and divorce powers; the connexion is real not fanciful. Parliament, in passing the proposed law without dissent, on this aspect, considered that the provision was desirable, if not necessary, for the carrying out of the legislative policies in relation to marriage and divorce. (at p259)
22. The high cost of divorce was one of the mischiefs at which the Family Law Act 1975 was aimed. Section 90 tends to promote the legislative policy directly. It also facilitates the exercise of the Family Court's powers, by enabling the Family Court to make orders free of concern about the impact of duties or taxes on the conveyances or other instruments which may be necessary or desirable for implementing the Court's order in respect of property or maintenance. It also facilitates the operation of s. 81 of the Act which imposes a duty on the Court as far as is practicable to make "such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them". (at p259)
23. Imposition of State taxes upon real estate (which amount now to about 2 per cent of the value of property affected) may present a heavy burden. For many families the only property of substance is the matrimonial home. In Sydney for example transfer of a typical suburban home from one spouse to the other may unless exempt, attract State stamp duty of $1,000 or more. This would be equivalent to more than one month's after-tax earnings for many wage earners. It would be equivalent to more than six months maintenance for one child under a typical order. If such sums had to be paid to implement a judicial order it would often be a severe burden on the resources already strained to meet the needs of two economic units instead of one. The hardship which might be caused by payment of such sums is demonstrated by the fact that numerous applicants for relief under the Act each year seek and are granted exemption from paying the filing fee of $100 on the grounds of substantial hardship and many more seek and are granted legal assistance although the conditions are stringent (see reg. 34A; Family Law Council, Third Annual Report 1979, pp. 38- 40; Fourth Annual Report 1980, pp. 29-31). (at p259)
24. If Family Courts, faced with often critical financial problems of the parties, see that implementation of their proposed orders will attract burdensome State taxes, it is likely and almost inevitable that they will be under pressure to devise arrangements which may be less convenient or less suitable to the circumstances than those which they would order if there were no incidence of State or other taxes. This will tend to frustrate the implementation of federal policies reflected in the Act. (at p259)
25. This case illustrates the problems facing courts administering the Act. Apparently if the judicial order had been simply to transfer the property, no stamp duty would have been imposed even if s. 90 were invalid (see Family Law Council, Third Annual Report 1979, pp. 28-32; Nygh and Turner's Family Law Service, pp. 2246; "Victorian Stamp Duty and the Family Law Act", I.C. Kennedy, Law Institute Journal, vol. 51 (1977), pp. 578-587). The practice has been to treat simple transfers pursuant to any judicial orders as outside the net of the Stamps Act. But because the Court ordered the transfer to the wife in trust for the children, the Commissioner considered that it was an instrument whereby property is settled, (and liable to duty under paragraph 1 of Heading IX of the 3rd Schedule to the Stamps Act). (at p260)
26. It seems to be accepted that the Parliament could prevent imposition of
heavy State taxes approaching the value of the property
ordered to be
transferred. If Parliament can do that, it is difficult to see why it can not
prevent the imposition of lesser taxes,
in the same circumstances. The
argument for invalidity asserted that the imposition of the State taxes would
not impair the operation
of the federal policies intended to be promoted by
the Act. Obviously the Family Law Council (see Fourth Annual Report 1980, p.
21)
and the national Parliament think otherwise. At most, the question of the
effect of State taxes upon Family Court orders and upon
the implementation of
legitimate federal policy is debatable, and therefore one on which the
Parliament is entitled to form a legislative
judgment.
"Where the constitutional validity of a statute depends upon the existence
of facts, courts must be cautious about reaching a
conclusion respecting
them contrary to that reached by the legislature; and if the question of
what the facts establish be a fairly
debatable one, it is not permissible
for the judge to set up his opinion in respect of it against the opinion of
the lawmaker." (Radice
v. New York [1924] USSC 60; (1923) 264 US 292, at p 294 [1924] USSC 60; (68 L Ed 690,
at p 694) .)
Denial of federal power to exclude State taxes in respect of transactions
relating to marriage or divorce may have curious consequences.
It would be
within the Commonwealth Parliament's power over marriage, to introduce a
community property regime which would on marriage
require transfer into joint
names of certain property of the parties. If a State could impose a tax on
such transfer (despite a federal
Act prohibiting it) it would mean that
immediately on marriage the parties would face a bill for State tax. If the
marriage certificate
were the instrument evidencing the entitlement, a State
tax on instruments would be a tax upon the marriage certificate myself. In
my
opinion, Parliament can prevent such a financial impediment on or interference
with the carrying out of its policies. (at p261)
27. Victoria contended that in respect of carrying out of agreements in relation to maintenance s. 90 could be misused to provide exemption for transactions which were related only indirectly or slightly to the marriage relationship. Of course, there must be a rational connexion between the law and the subject matter of legislative power; provided this exists the validity of the law is not affected by an indirect operation. If the connexion between the law and the legislative power is extremely slight and indirect the law will fall outside the scope of the power and be invalid. Also if the connexion between a particular transaction and the legislative power is only slight and indirect, that transaction will fall outside the scope of the law. These problems do not affect the present case. (at p261)
28. When s. 90 in its application to judicial orders only is considered, its validity may be sustained on a narrow basis. The Parliament is entitled to protect from State taxation the implementation of valid orders made in the exercise of the judicial power of the Commonwealth. (at p261)
29. Further, although the question was not argued, in my opinion, s. 90 comes within the power in s. 51 par. (ii) to make laws with respect to taxation. In the circumstances, it is inappropriate to develop this. (at p261)
30. This Court's decision to invalidate s. 90 is attributable to what can fairly be described as a revival of the States' reserved powers doctrine. I believe that the revival will be transient and that the doctrine will be re-interred. Regrettably, in the meantime there will be hardship to many thousands of Australians, including children, involved in the breakup of marriage. Against the national will, as enacted by the national Parliament without a single dissentient on this provision, they will be exposed to substantial State taxes during a critical period of their lives. (at p261)
31. The answer should be Yes, s. 90 of the Family Law Act in its application to stamp duties imposed under the Stamps Act 1958 (Vict.) on transfers of land executed by a person in accordance with an order under Pt VIII of the Family Law Act is a valid law of the Commonwealth. (at p261)
AICKIN J. This matter was removed into this Court upon application on behalf of the Attorney-General for the State of Victoria under s. 40(1) of the Judiciary Act 1903 (Cth) and it was ordered that there be referred to the Full Court the following question: "Is section 90 of the Family Law Act 1975 a valid law of the Commonwealth?" (at p262)
2. The question arises from the dissolution of the marriage of Filippina Gazzo ("the wife") and Antonio Pietro Gazzo ("the husband") by an order of the Supreme Court of Victoria made under the Family Law Act 1975 (Cth) on 26 May 1977. By a further order of the Supreme Court of Victoria made on that day it was ordered that the husband transfer his interest in certain land in Victoria to the wife as trustee for Santo Francesco Gazzo, Maria Carmela Gazzo and Giovanni Sebastian Gazzo, the children of the marriage. The order further provided that the Petitioner (the husband) should pay all legal costs and registration fees in respect of the transfer. The husband and wife executed an instrument of transfer of the land pursuant to that order and that instrument was submitted to the Comptroller of Stamps for his opinion under s. 32 (1) of the Stamps Act 1958 (Vict.). The Comptroller of Stamps assessed the transfer for stamp duty under that Act. The wife objected to the assessment of duty on the ground that the transfer was exempt from duty by virtue of s. 90 of the Family Law Act but the Comptroller disallowed that objection. On 31st August 1979 the wife, pursuant to s. 33B of the Stamps Act, requested the Comptroller to treat the objection as an appeal and to cause it to be set down for hearing in the Supreme Court. (at p262)
3. Section 90 of the Family Law Act is as follows:
"A maintenance agreement, or a deed or other instrument executed by a
person for the purposes of such an agreement or for the
purposes of, or in
accordance with an order under, this Part, is not subject to any duty or
charge under any law of a State or Territory
or any law of the Commonwealth
that applies only to or in relation to a Territory."
The term "maintenance agreement" used in s. 90 is defined in s. 4 (1) of that
Act and the term "financial matters" used in the definition
of "maintenance
agreement" is likewise defined in s. 4 (1).
Those definitions are as follows:
"'maintenance agreement' means an agreement in writing made, whether
before or after the commencement of this Act, between
the parties to a
marriage, being an agreement that makes provision with respect to
financial matters, whether or not there
are other parties to the agreement
and whether or not it also makes provision with respect to other matters,
and includes such
an agreement that varies an earlier maintenance
agreement;"
"'financial matters', in relation to the parties to a marriage, means
matters with respect to -
(a) the maintenance of one of the parties;
(b) the property of those parties or of either of them; or
(c) the maintenance of children of the marriage; " (at p262)
4. It will be noted that the term "maintenance agreement" is not limited to
agreements made between the parties to a marriage but
includes agreements to
which there are other parties and agreements which also make provision for
matters other than financial matters.
Section 90 itself operates in respect
not only of maintenance agreements as defined but also in respect of deeds or
other instruments
executed by a person for the purposes of such an agreement
or of Pt VIII of the Family Law Act or in accordance with an order made
under
that Part. (at p263)
5. An examination of the interaction of those two definitions demonstrates that the prima facie operation of the expression "maintenance agreement" is extremely wide and goes far beyond what would be the ordinary meaning of the term "maintenance agreement" as between the parties to a marriage, whether in respect to a period when the marriage was still on foot or in respect to a period after the marriage had been dissolved. Although the question referred to the Full Court is expressed in very general terms and relates to the whole of the operation of s. 90, it does not appear to me to be desirable that the Court should examine all the possible situations in which the section might operate within the whole reach of the definitions of "maintenance agreement" and of "financial matters" unless it is necessary to do so in order to decide whether it validly applies to the instrument of transfer in the present case. The case before us is concerned with an instrument of transfer of land executed in accordance with or pursuant to an order of a court exercising jurisidiction under the Family Law Act. (at p263)
6. It was however submitted by the Solicitor-General for the State of Victoria that the section was wholly invalid and that there was no occasion for consideration whether any part of it might none the less be valid. As I have said it seems that it is undesirable that the Court should attempt to deal with the validity of all possible applications of s. 90. An examination of that section and the definitions demonstrates clearly that the application of s. 15A of the Acts Interpretation Act 1901 (Cth) would enable the question of the validity of the section to be determined in respect of its operation on an instrument of transfer of land under the Transfer of Land Act 1958 (Vict.) "executed by a person . . . for the purposes of, or in accordance with an order under, this Part" without necessarily having to consider the validity of the section in relation to maintenance agreements as defined. The former provision might be valid and the latter invalid, or vice versa, and in each case the invalid provision would be severable. (at p263)
7. The question so narrowed is whether such a legislative provision is to be regarded as a law with respect to marriage within s. 51 (xxi) of the Constitution, or a law with respect to divorce and matrimonial causes and in relation thereto parental rights and the custody and guardianship of infants within s. 51 (xxii) or as coming within s. 51 (xxxix). (at p264)
8. It was submitted by the Solicitor-General for the State of Victoria that the power to make laws with respect to marriage must be concerned with laws which govern the relationship of married people as between themselves and with their children and that it did not authorize the making of a law which concerned the relationship between the parties to a marriage or one of them and third persons. This proposition is in my opinion too general. (at p264)
9. Differing views have been expressed as to the extent of the power with
respect to marriage but in my opinion the formulation
to be preferred is that
contained in the judgment of Gibbs J. in Reg. v. Lambert; Ex parte Plummer
(1980) 146 CLR, at pp 456-457
where he said:
"The crucial question, however, is whether the legislation creates,
defines or declares rights or duties that arise out of,
or have a close
connexion with, the marriage relationship. If not, the law cannot be said to
be one with respect to marriage. This
was, I think, recognized by the
majority of the Court in Russell v. Russell (1976) 134 CLR, at pp 524, 538,
552-553 . Similarly in
Dowal v. Murray, the judgments emphasized that the
right defined by s. 61 (4) arose out, of or was intimately concerned with,
the marriage relation: see per Stephen J. (1978) 143 CLR, at p 423 per
Jacobs
J. (1978) 143 CLR, at pp 426-427 and in my own judgment (1978) 143
CLR, at p 417 ."
He then said:
"I adhere to the view that I expressed in Reg. v. Demack; Ex parte
Plummer (1977) 137 CLR, at p 46 , that an enactment
is not a law with
respect to marriage simply because it has some operation with respect to
the custody of a child of the
marriage, or, I would add, with respect to
married persons."
He concluded by saying:
"The question whether a law is one with respect to marriage is one of
degree. The answer to it depends on the closeness of
the connexion between
the law and the marriage relationship."
Barwick C.J. (1980) 146 CLR, at pp 450-451 agreed generally with Gibbs J.'s
reasons but added that he was of the view that the decsion
in Russell v.
Russell [1976] HCA 23; (1976) 134 CLR 495 should be strictly confined and not used as a base
for any extension of
what is comprised
within the concept
of a law with
respect to marriage. Wilson J. was of a similar view. He said (1980) 146 CLR,
at p 487 that the
decision in Russell
v. Russell demonstrated "the necessity
of a close relationship between the law and the marriage
relationship"
for
such a law to be
within s. 51 (xxi). In my opinion the observations of Gibbs
J. which I have quoted above appear to be equally applicable to the divorce
power.
(at p265)
10. Taking the formulation proposed by Gibbs J. the "crucial question" in
this case is whether s. 90 creates, defines or declares rights or duties that
arise out of, or have a close connexion with, marriage or divorce or
matrimonial
causes. The rights and duties in question are primarily but not
exclusively those as between the parties to a marriage, including
rights and
duties in respect of the children of a marriage. The extent to which the two
legislative powers extend to the relationship
of the parties or their children
with third parties has been the subject of some discussion in cases to which
Gibbs J. referred in
his judgment in Ascot Investments Pty. Ltd. v. Harper
[1981] HCA 1; (1981) 148 CLR 337 . He there referred to two cases which arose
under the
Matrimonial
Causes Act 1959 (Cth), viz. Sanders v. Sanders
[1967] HCA 33; (1967) 116 CLR 366
and Antonarkis v. Delly (1976)
51 ALJR 21 . I do not need to quote
in full his
discussion of those cases but
he concluded that discussion by saying (1981)
148 CLR,
at p 351 :
"It is apparent that neither of these decisions provides authority for
the view that any right or interest of a third party
may be adversely
affected by an order made in the exercise of matrimonial jurisdiction,
although Antonarkis v. Delly suggests
that a court in the exercise of that
jurisdiction may treat as null a pretended claim of right made by a third
party in collusion
with one spouse for the purpose of defeating matrimonial
proceedings brought by the other spouse."
Gibbs J. then referred to Reg. v. Ross-Jones; Ex parte Beaumont [1979] HCA 5; (1979) 141 CLR
504 as to which he said "it appears
from the judgments
that the majority of
the Court considered that the Family
Court, in making orders with respect to
the interests
of the parties to
a marriage in partnership property could not
affect the interests
of third parties". (at p265)
11. He concluded his review of those cases by saying (1981) 148 CLR, at p 354
:
"The authorities to which I have referred establish that in some
circumstances the Family Court has power to make an order
or injunction
which is directed to a third party or which will indirectly affect the
position of a third party. They do not establish
that any such order may be
made if its effect will be to deprive a third party of an existing right or
to impose on a third party
a duty which the party would not otherwise be
liable to perform. The general words of s. 80 and 114 must be understood in
the context
of the Act, which confers jurisdiction on the Family Court in
matrimonial causes and associated matters, and in that context it would
be
unreasonable to impute to the Parliament an intention to give power to the
Family Court to extinguish the rights, and enlarge
the obligations, of third
parties, in the absence of clear and unambiguous words. It can safely be
assumed that the Parliament intended
that the powers of the Family Court
should be wide enough to prevent either of the parties to a marriage from
evading his or her
obligations to the other party, but it does not follow
that the Parliament intended that the legitimate interests of third parties
should be subordinated to the interests of a party to a marriage, or that
the Family Court should be able to make orders that would
operate to the
detriment of third parties. There is nothing in the words of the sections
that suggests that the Family Court is intended
to have power to defeat or
prejudice the rights, or nullify the powers, of third parties, or to require
them to perform duties which
they were not previously liable to perform. It
is one thing to order a party to a marriage to do whatever is within his
power to
comply with an order of the court, even if what he does may have
some effect on the position of third parties, but it is quite another
to
order third parties to do what they are not legally bound to do. If the
sections had been intended to prejudice the interests
of third parties in
this way, it would Have been necessary to consider their constitutional
validity."
What Gibbs J. there said is expressed in terms of the proper construction of
the Family Law Act but the constitutional problems of
any wider construction
are obvious. (at p266)
12. In Reg. v. Lambert; Ex parte Plummer [1980] HCA 52; (1980) 146 CLR 447 is a case in which the majority of the Court held that it was beyond constitutional power to empower the Family Court to make orders for custody which would override the provisions of the Children's Services Act of 1965 (Q.) giving the Director certain powers and duties with respect to the care and protection of children. (at p266)
13. Section 90 of the Family Law Act, so far as presently material, purports to ensure that certain instruments executed by married or divorced persons pursuant to an order of the Family Court shall be exempt from duties imposed upon them by State or Territorial laws. Section 122 of the Constitution leaves no doubt as to the validity of that provision so far as laws of the Territories are concerned but in relation to the laws of the States its validity must be based on the marriage or divorce powers, or the two in combination. It does not however create, define or declare rights or duties in the relevant sense at all. It purports to destroy an obligation placed by State law on persons seeking to register transfers of land executed by them pursuant to an order of the Family Court and in that sense to destroy rights in a "third party", i.e. the State of Victoria, having no connexion with the marriage or the divorce. That is not to create, define or declare rights or duties arising out of the marriage or the divorce. In the present case there is obviously some connexion between s. 90 and marriage and divorce in that the existence of a marriage or of the dissolution of a marriage is an essential prerequisite to its operation, but that is neither a close nor a sufficient connexion with either of those powers. If it were, it would make them equivalent to powers to make laws with respect to married persons or divorced persons, a view of s. 51 (xxi) and (xxii) which is not tenable. (at p267)
14. It was argued for the wife that s. 90 is authorized by s. 51 (xxi) and/or s. 51 (xxii) and by what has come to be called, somewhat inaptly, the "implied incidental power". I say inaptly because that expression suggests that there is some additional power over and above that given by the paragraphs of s. 51. It is of the nature of all the heads of power in s. 51 that there is granted by the words describing the power itself everything which is incidental to its main purpose - see per Knox C.J., Rich and Dixon JJ. in Le Mesurier v. Connor [1929] HCA 41; (1929) 42 CLR 481, at pp 497-498 and per Dixon C.J. in Burton v. Honan (1952) 86 CLR 167, at pp 177-178 . It is necessary to draw attention to this because of the tendency to regard, or at least to speak of, that which is incidental to a head of power as though it were something separate from and additional to the power itself. Such a tendency is calculated to mislead in that it is sometimes the basis for a search for something beyond the head of power itself. This is not to say that the heads of power in s. 51 are to be read narrowly; the whole course of authority, at least since 1920, is to the contrary. Moreover the concept of that which is incidental being already embraced within a head of power points to a wide rather than a narrow construction. (at p267)
15. It was also argued that s. 90 was authorized by s. 51 (xxxix). This power is concerned with matters incidental to the execution of a power, not with matters incidental to its subject matter. It cannot be used to expand the subject matter of any of the enumerated legislative powers. Illustrations of the operation of par. (xxxix) are not numerous but it is necessary to consider whether the section now in question can be supported on this basis. (at p267)
16. The argument for the wife was that the legislative powers given by pars. (xxi) and (xxii) were wide and plenary. No doubt this is so but the question remains whether they are wide enough to support the specific provision in s. 90 now in question. The passages which I have quoted above from the judgment of Gibbs J. in In re Lambert; Ex parte Plummer demonstrate both the positive and the negative aspects of the extent of the power with respect to marriage, the former requiring the close connexion with the marriage relationship and the latter demonstrating that it is not enough that the law has some operation on children of a marriage or on married persons. The present section seems to me to have no close or relevant connexion with marriage. I have already given my reasons for rejecting the contention that there is a sufficient connexion by reason of its being a prerequisite to the operation of s. 90. The present case is one of divorce. The power to make orders altering the property interests of the parties is given by sub-s. (1) of s. 79. That power arises only in "proceedings with respect to the property of the parties to a marriage or either of them". Proceedings in this context refers to proceedings in which the Family Court is exercising jurisdiction under s. 39 which itself requires that there be a "matrimonial cause" as defined (see the definitions of "proceedings" and "court" in s. 4 (1)). The relevant parts of that definition are pars. (c) and (ca). After Russell v. Russell [1976] HCA 23; (1976) 134 CLR 495 it is clear that par. (c) is restricted in its operation to proceedings of the type there mentioned which are ancillary to proceedings for principal relief, that is, relief within pars. (a) and (b) of the definition of "matrimonial cause". Paragraph (ca) by its express words is similarly restricted. Compare the position under s. 86 of the Matrimonial Causes Act as explained by Kitto J. in Lansell v. Lansell (1964) 110 CLR 353, at p 359-360 where he treats that section as an exercise of the divorce power; see also per Taylor J. (1964) 110 CLR, at p 365 who suggests that it may also be supported under the marriage power; and also per Mason J. in Russell v. Russell (1976) 134 CLR, at pp 538-542 . In both the Matrimonial Causes Act and in the Family Law Act the power to alter property interests was limited to proceedings in which there was a claim for "principal relief". Thus the divorce power requires examination. There is no doubt power in the Family Court upon the dissolution of a marriage to order alterations to the property interests of the parties. However the question is whether the divorce power goes beyond giving the Family Court jurisdiction to order one party to transfer property, or an interest in property, to the other (Lansell v. Lansell and Russell v. Russell). (at p269)
17. It was said, partly in reliance on a combination of pars. (xxii) and
(xxxix) of s. 51, that the material part of s. 90 was valid
because it gives
effect to a law providing for dissolution and settlement of property rights.
The connexion was said to
be in facilitating
transfers by making them cheaper
and easier. In my opinion it cannot be said to make transfers easier except in
the sense that they
would be cheaper if no stamp duty were payable. It does
not appear to me that relieving the parties from part
of the costs of
transferring
property pursuant to a Family Court order has a close
relationship to divorce, any more than prohibiting
the charging of fees by
practitioners for appearing in the Family Court would be within the divorce
power. The latter may have a
connexion with divorce but
not one which is close
enough. Proceedings for dissolution are of course a condition precedent but as
I have already said that is
not a sufficient basis to provide power to enact
this section. It is not in my opinion possible to regard
s. 90 as incidental
to
the execution of the legislative power under par. (xxii). No doubt orders
for the transfer of property may be enforced
by appropriate
orders against a
party or by instituting contempt proceedings; legislation on such matters may
be incidental to the
execution of
the legislative power, though they would
seem more appropriately to fall within the ordinary meaning of the power
itself
as being
"incident" thereto. However as Dixon C.J. said in Burton v.
Honan (1952) 86 CLR, at p 178 :
"But this distinction is for present purposes immaterial because it
produces the same result, namely, that the Parliament may
in the exercise of
any of the substantive powers given by s. 51 make all laws which are
directed to the end of those powers and which
are reasonably incidental to
their complete fulfilment."
Moreover no satisfactory basis was suggested for regarding s. 90 as incidental
to the execution of the legislative power with respect
to divorce, however
widely one views that power. (at p269)
18. Counsel for the wife also sought to support the validity of s. 90 on the basis of s. 51 (xxxix) as being "incidental to the execution of any power vested by this Constitution . . . in the Federal Judicature". It was argued that the expression "the Federal Judicature" included the Family Court as being one of "such other federal courts as the Parliament creates" within the meaning of s. 71 of the Constitution. In the alternative it was argued that judicial power is vested in the Family Court by ss. 31 and 39 of the Family Law Act and s. 90 is incidental to the execution of the power so vested. Against these submissions, the Solicitor-General for the State of Victoria submitted that s. 71 says nothing about the content of the jurisdiction which it empowers the Parliament to vest in federal courts; that content must be filled out by another law which itself must fall within the legislative competence of the Parliament. On that view s. 51 (xxxix), if it has any relevance at all, it can only be in relation to the powers in s. 51 (xxi) or (xxii). (at p270)
19. It is clear that the Constitution vests neither power nor jurisdiction in
the Family Court so that the power to make orders within Part VIII is not a
power vested in the Family Court by the Constitution. However that of itself
does not determine the question for it remains open whether the words "vested
by this Constitution" in s. 51 (xxxix) apply to matters incidental to the
execution of judicial power conferred by legislation. It is unnecessary for me
to attempt
a resolution of that problem for I consider that the observations
of Dixon and Evatt JJ. in R. v. Federal Court of Bankruptcy; Ex
parte
Lowenstein [1938] HCA 10; (1938) 59 CLR 556 apply to this case. They said (1938) 59 CLR, at p
587 :
"But, assuming that it" (s. 51 (xxxix)) "does apply to Federal and State
courts exercising jurisdiction in bankruptcy in respect of offences against
the bankruptcy
laws, it would not authorize the Parliament to make a
provision which departed from or was at variance with the purpose of the
main
power, the power vested in the Federal judicature. In other words, a
law with respect to a matter incidental to the execution of
judicial power,
must, in order to answer that description, deal with something arising in
the course of exercising judicial power,
something attendant upon or
incidental to the fulfilment of powers truly belonging to the judicature."
It cannot be said, in my opinion, that s. 90 of the Family Law Act is in any
way incidental to the fulfilment or exercise of the
powers vested in the
Family Court. It says nothing as to the fulfilment
of the powers of the Family
Court to make orders as to transfers
of property between parties. Those orders
stand complete and operative
in themselves to bind the parties to do that
which has been
ordered and which, when done, will operate under State law.
Section 90 however is directed to the obligations of the parties under
State
law governing (in this case) transfers of land from one to another.
In my
opinion it cannot be regarded as incidental to the
execution of judicial
power. Perhaps procedures for enforcement of the orders
of the Family Court
could properly be regarded as "incidental
to the fulfilment of powers truly
belonging to the judicature". The
judicial power is however spent upon the
making of an order (including
an order as to costs) and its enforcement. I do
not exclude
from the judicial power the reopening of some matters, e.g.
maintenance.
(at p271)
20. Some reliance was placed on the decision of this Court in Australian
Coastal Shipping Commission v. O'Reilly
[1962] HCA 8; (1962) 107 CLR
46 . In that case the
Australian Coastal Shipping Commission Act 1956 provided in s. 36 (1) that the
Commission (which
was a body
corporate established under that Act) was to be
subject to taxation under the laws of the Commonwealth but was "not subject
to
taxation
under laws of a State . . . to which the Commonwealth is not
subject". By virtue of s. 114 of the Constitution a State may not, without the
consent of the Parliament of the Commonwealth, impose any tax on property of
any kind belonging to the
Commonwealth. It was held that the section was
within the powers of the Parliament and that the Commission was therefore not
liable
under the Stamps Act 1946 (Vict.) to stamp receipts given by it in the
course of its trading activities. The basis of the decision
appears from the
judgment of Dixon C.J. (with whom Kitto, Taylor and Owen JJ. agreed) when he
said (1962) 107 CLR, at p 56 :
"The fact that a government agency is set up at all brings under
consideration the question whether its operations should or
should not be
exposed to State taxes. How that question should be decided is a matter of
policy. But the legislative power under
which, ex hypothesi, the agency is
validly set up must surely be enough to enable the legislature to decide it.
The various taxes
of the six States the liability for which might otherwise
be incurred in the course of the activities of what is called the National
Shipping Line may have been considered something to which it is desirable
that the Commonwealth Line should not be exposed. Once
that view is taken it
appears to be sufficiently clear that the legislative power must extend to
excluding the imposition upon the
activities of the Commonwealth Line of
such taxation."
It is however one thing to legislate so as to exempt an instrumentality of the
Commonwealth from the incidence of a State tax conditioned
upon the doing by
that instrumentality of something which it is set up to do or which is an
ordinary or necessary incident of that
which it is set up to do. It is quite
another thing for the Commonwealth to legislate to exempt transactions between
citizens from
the incidence of State taxation upon transfers of land. The fact
that the transfer is one directed by a federal court in the exercise
of
jurisdiction to provide for the maintenance of spouses or children is not a
sufficient basis for such an enactment. Such a transfer
is no doubt
consequential on the order but it is an instrument to which only State law can
give effect. The connexion with marriage
or divorce is too remote to support
the legislation. In my opinion no assistance can be obtained by the wife or
the Commonwealth
from that decision. (at p272)
21. The operation of the laws of the States with respect to the nature, incidents and mode of transfer of property appear to me to stand outside the range of the legislation which may be enacted pursuant to s.51 (xxi), (xxii) or (xxxix) notwithstanding that such laws apply to married persons and divorced persons and transfers of property between them, whether beneficially in favour of a transferee or to a transferee upon trust for children of a marriage, and whether by voluntary transfer or by transfer pursuant to orders of the Family Court. The same is true of State laws with respect to taxation save that, as suggested in argument, a State tax on marriage certificates might perhaps be excluded by a section such as s. 90. It is plain that a law is not one with respect to marriage or divorce merely because it applies to married or divorced persons and in my opinion the relevant part of s. 90 has no other link with the marriage or the divorce power. If s. 90 on its proper construction purports to extend to the fees payable under the Transfer of Land Act for the registration of dealings, the connexion with marriage or divorce would be equally remote. This view of the operation of s. 90 was however urged by counsel for the wife, though not supported by the Solicitor-General for the Commonwealth. In my opinion such an operation could not validly be given to s. 90 and if that is its proper construction it is pro tanto invalid. (at p272)
22. The same conclusion follows from a somewhat different approach which requires first some short examination of both the Stamps Act and the Transfer of Land Act. (at p272)
23. Section 37 of the Stamps Act provides that unstamped instruments shall
not be received by any person under a duty to enrol,
enter or receive any
original instrument. Sub-sections (1) and (2) are as follows:
"(1) Where a person is under a duty to receive enrol enter or record any
original instrument or a copy of any original instrument
he shall not if the
original instrument is chargeable with duty under this Act or would be
chargeable with duty under this Act if
it were in Victoria receive register
enrol enter or record any such original instrument or copy unless he is
satisfied that the original
instrument has been duly stamped or is deemed to
have been duly stamped.
(2) Any such person may refer any question as to the dutiability of an
original instrument or copy to the Comptroller of Stamps."
Similar provisions are to be found in equivalent legislation in each of the
States. (at p273)
24. By s. 17 of the Stamps Act it is provided that "there shall be charged for the use of Her Majesty upon the several instruments specified in the said (Third) Schedule the several duties and additional duties therein specified." (at p273)
25. The Stamps Act imposes an ad valorem stamp duty on every conveyance or transfer of land (s. 70 (3)) and provides that the consideration for such transfer shall be stated "fully and truly" therein (s. 70 (5)). Section 70 (6) provides that in the case of a sale of real property the burden of the duty is to be borne by the purchaser and that any contract or agreement by which he seeks to relieve himself from that liability or to impose that liability upon any other person or any obligation to indemnify him in respect thereof shall be ineffective. (at p273)
26. The Third Schedule provides that "there shall be charged and paid for the use of Her Majesty upon and for the several instruments hereinafter specified the several stamp duties hereinafter specified . . . " Heading VI(B) provides for the rate of duty payable on "LAND TRANSFER - Under the Transfer of Land Act 1958" upon (inter alia) "every transfer of land on a sale thereof" a specified rate of ad valorem stamp duty. Heading VI(A) deals in a similar way with conveyances under the general law. (at p273)
27. The transfer of land with which these proceedings are concerned is not a
transfer on a sale, and therefore the provisions to
which I have referred have
no application. The Comptroller of Stamps took the view that the transfer
constituted a "deed of settlement"
within Heading IX of the Third Schedule
which deals with deeds of settlement or gifts and assessed it to stamp duty
accordingly.
It imposes an ad valorem duty on:
"Any instrument, other than a will or codicil, whether voluntary or upon
any good or valuable consideration other than a bona
fide adequate pecuniary
consideration and whether revocable or not whereby any property is settled
or agreed to be settled in any
manner whatsoever or is given or agreed to be
given or directed to be given in any manner whatsoever."
The Stamps Act provides that stamp duty on a deed of gift is to be payable by
the donee and on a deed of settlement by the settlor.
Whether the Comptroller
was right or wrong in that view is not material to the question before this
Court. We are concerned only
with the validity of s. 90 of the Family Law Act.
(at p273)
28. The Transfer of Land Act is the legislation which embodies the Torrens
system of registration of title (or of title by registration)
in Victoria. It
does
not differ materially from the Real Property Act 1900 (N.S.W.) or from
corresponding legislation in other States of the Commonwealth. The relevant
sections of the Victorian Act are:
"40. (1) Subject to this Act no instrument until registered as in this
Act provided shall be effectual to create vary extinguish
or pass any
estate or interest or encumbrance in on or over any land under the
operation of this Act, but upon registration
the estate or interest or
encumbrance shall be created varied extinguished or pass in the manner and
subject to the covenants
and conditions specified in the instrument or by
this Act prescribed or declared to be implied in instruments of a like
nature.
(2) Every instrument when registered shall be of the same efficacy as if
under seal and shall be as valid and effectual to
all intents and purposes
as a deed duly executed and acknowledged or other the appropriate form of
document.
41. No Crown grant or certificate of title under this Act shall be
impeached or defeasible by reason or on account of any informality
or
irregularity in any application or instrument or in any proceedings previous
to the registration of the certificate; and every
Crown grant or certificate
of title registered under this Act shall be received in all courts as
evidence of the particulars therein
and of the entry thereof in the Register
Book, and shall be conclusive evidence that the person named in such grant
or certificate
as the proprietor of or having any estate or interest in or
power to appoint or dispose of the land therein described is seised or
possessed of such estate or interest or has such power.
. . .land by an instrument in or to the effect of the appropriate form in the Sixth Schedule.
45. (1) A registered proprietor may transfer his estate or interest in
29. Thus real property in Victoria which is governed by the Torrens system (as is the land now in question) is capable of transfer only by an instrument in the form required by the Act but the instrument alone does not effect the transfer of title. This is effected only by and upon registration of the instrument and the making of appropriate entries in the Register. This is of the essence of the Torrens system and it governs not merely the mode of transfer but also the nature of an interest in registered land. Accordingly it is a characteristic of land, the title to which is registered under the Transfer of Land Act, that the legal estate therein is transferable only by an instrument of transfer in accordance with that Act. Such a transfer must under s. 37 of the Stamps Act bear the appropriate duty stamp or be denoted non-dutiable before it can be registered, and that too is a characteristic of the property itself. It is of course otherwise with equitable interests, but we are not here concerned with such interests. (at p275)
30. The approach to which I referred above is to be found in two earlier
decisions of this Court, one a very recent decision and
the other by no means
recent. The first is Ascot Investments Pty. Ltd. v. Harper [1981] HCA 1; (1981) 148 CLR 337
to which I have
already referred.
That was a case in which the Family Court
purported to order a proprietary
company to register a transfer of shares
notwithstanding
the absence of approval by the directors as required by its
articles of
association. That restriction complied with
s. 15 of the
Companies
Act 1961 (Vict.) which requires that the memorandum or the articles
of
association of a proprietary company
must place
a restriction on the transfer
of shares in such a company. In that case Barwick
C.J. said (1981) 148 CLR, at
p 344 :
"In my opinion, the appellant and its directors could not be ordered to
do something in relation to the shareholding which
the husband by dint of
his shareholding could not compel the appellant or its directors to do.
Nor could the court alter
the nature, incidents or extent of the property
which the court could command the husband to transfer. It could only
require
him to deal with, that is, to transfer, what in point of property
he had. To conclude otherwise would be unauthorizedly to
enlarge the
rights inherent in the shareholding.
It is said by counsel for the wife that until registration, the transfer
signed and delivered by the husband was ineffective.
But this clearly is not
so. The transfer was effective to create equitable rights. No doubt
registration would convert the equitable
title into a legal title: and the
absence of a right to compel registration of a transfer reduced the ambit of
the equitable interest
in the shares. In truth, the transfer already signed
on behalf of the husband and delivered to his wife is as effective a
transfer
of the property in the shares as the husband as a matter of right
could make."
Gibbs J. said (1981) 148 CLR, at pp 348-350 :
"But the question for our decision is whether the Family Court had power
to order Ascot Investments to register the transfer
from the husband to the
wife of the 7,000 "A" class shares. The restrictions contained in cl. 4 (a)
of the Memorandum and art. 143
of the Articles, which satisfy the
requirements of s. 15 (1) (a) of the Companies Act 1961 (Vict.), as amended,
confer on the directors
of the company a wide discretion to refuse to
register a transfer. The directors are bound to exercise their discretion
bona fide
in what they consider to be in the interests of the company, and
not for any collateral purpose, but subject to that qualification
their
discretion is absolute and uncontrolled: In re Smith & Fawcett Ltd. (1942)
Ch 304, at pp 306-308 ; Charles Forte Investments
Ltd. v. Amanda (1964) Ch
240, at pp 252-254, 260-261 ; Australian Metropolitan Life Assurance Co.
Ltd. v. Ure [1923] HCA 29; (1923)
33 CLR 199,
at pp 205-206, 217-220, 223 . This rule is an
application of the general principles governing the exercise by
directors
of
their
powers; those principles are discussed in Ngurli Ltd. v. McCann [1953] HCA 39; (1953)
90 CLR 425, at pp 438-440 . The cases
cited establish that
the onus of
proving that the directors in refusing registration
did not act in good
faith in what they considered
to be the interests
of the company lies on
those who challenge their decision.
In the present case it was not proved that the directors of Ascot
Investments acted in bad faith or for an ulterior purpose;
indeed the
transfers of the shares have not been submitted for registration and the
directors have not been called upon to exercise
their discretion to register
or decline to register them. . . .
It may be accepted that the orders fall within the literal words of s.
80 and s. 114 (3), and that they were made in aid
of the jurisdiction of
the Family Court. The question that then arises is whether the powers
conferred by those sections,
wide as they admittedly are, extend to enable
the Family Court to make an order which will impose new duties on persons
who are
not parties to the marriage (third parties)."
He then referred to Sanders v. Sanders [1967] HCA 33; (1967) 116 CLR 366 ; Antonarkis v.
Delly (1976) 51 ALJR 21 ; Reg. v. Dovey;
Ex parte Ross
[1979] HCA 14; (1979) 141 CLR 526 and
Reg. v. Ross-Jones; Ex parte Beaumont [1979] HCA 5; (1979) 141 CLR 504 . He
then said (1981)
148 CLR, at p 355 :
"Except in the case of shams, and companies that are mere puppets of a
party to a marriage, the Family Court must take the
property of a party to
the marriage as it finds it. The Family Court cannot ignore the interests of
third parties in the property,
nor the existence of conditions or covenants
that limit the rights of the party who owns it. To take two obvious
examples, the Family
Court could not compel a husband to assign to his wife
a lease without obtaining the necessary consent of the lessor, and could not
order the transfer to a wife of land owned by a husband free of mortgage,
when in fact the land was mortgaged to a third party. Thus,
in the present
case, the Court must deal with the husband's shares in Ascot Investments as
they in fact are, that is, as shares in
a company whose Memorandum and
Articles contain a restriction on transfer." (at p277)
31. Stephen J., Wilson J. and I agreed with Gibbs J. Mason J. said that,
assuming without deciding, that the Family Court was empowered
to make orders
of the kind sought the facts did not disclose appropriate circumstances for
the making of such orders. Murphy J. took
a contrary view. (at p277)
32. In Ascot Investments the question of the constitutional validity of a provision of the Family Law Act did not directly arise but none the less the scope of the marriage power and of the divorce power was involved. The order made by the Family Court in that case was invalid and inoperative because no power existed to authorize such an order on the proper reading of the provisions of the Family Law Act. Any specific legislative provision for such a purpose would in my opinion have been invalid. The nature and incidents of the property of a party to a marriage, including the means of transfer of such property, are governed by State law and there is no power in the Family Court or in the Parliament of the Commonwealth under s. 51 (xxi), (xxii) or (xxxix) to alter such nature and incidents. (at p277)
33. The earlier decision of this Court to which I referred was The
Commonwealth v. New South Wales [1923] HCA 34; (1923) 33 CLR
1 ("the Royal Metals
Case").
That case dealt with a number of matters, only one of which is presently
material. The
relevant matter
was the validity of
s. 20 of the Lands
Acquisition Act 1906. That Act provided for compulsory acquisition of land
by
the Commonwealth
and the term "land"
was defined to include "Crown land",
which in its turn was defined as meaning "any land the
property of a State,
whether reserved
or dedicated for any public purpose or not". The process of
acquisition provided for in s.
15 was that the Governor-General
might
direct
that land be acquired by the Commonwealth from the owner by compulsory
process. It
provided that the Governor-General
might
"by notification
published in the Gazette, declare that the land has been acquired under
this
Act for the public purpose therein
expressed". Section 16 provided that:
"(1). Upon the publication of the notification in the Gazette, the land
described therein shall, by force of this Act -
(a) be vested in the Commonwealth; andinterests, contracts, licences, charges, rates, and easements,
(b) be freed and discharged from all trusts, obligations, estates,
34. That case did not directly involve any question as to the incidence of stamp duty on the documents which had been brought into existence or on those which, according to the decision, would be necessary to enable the Commonwealth's title to be registered under the Real Property Act. (at p280)
35. In my opinion if the Commonwealth empowers the Family Court to order compulsory transfers of land registered under State systems of registered title, or for that matter, of land not brought under the Torrens system, then it must take each of those systems as they stand. The price of the advantage of having the rights and the protection accorded by registered title under State law is compliance with the requirements of that law, by the owners and transferees, whether married or single or divorced or the children of the married or divorced parents. In my opinion the present case is not distinguishable from that part of the Royal Metals Case which deals with the registration of the title of the Commonwealth in respect of lands compulsorily acquired from the States. (at p280)
36. I would therefore answer the question in the Case Stated as follows: No, so far as it relates to stamp duties on transfers of land under the Transfer of Land Act 1958 (Vict.) executed pursuant to an order of the Family Court exercising jurisdiction under Pt VIII of the Family Law Act 1975, and fees payable on the registration thereof in accordance with the Twentieth Schedule of the Transfer of Land Act. (at p280)
ORDER
The question submitted to the Court is answered as follows:Section 90 of the Family Law Act 1975 (Cth), in its attempted application to stamp duties imposed under the Stamps Act 1958 (Vict.) on transfers of land executed by a person in accordance with an order under Pt VIII of the Family Law Act 1975 is not a valid law of the Commonwealth.
Remit the matter to the Supreme Court of Victoria.
No order as to costs.
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