PARTIES:	BILLABONG MANAGEMENT PTY LTD
V

TUMMINELLO HOLDINGS PTY LTD

. · TITLE OF COURT:	COURT OF APPEAL (NT) JURISDICTION:	APPEAL from SUPREME COURT
FILE NOS:	No. APll of 1990

DELIVERED:	Darwin 11 June 1992

HEARING DATES:	2 August 1991, 22 May 1992
5 and 11 June 1992

JUDGMENT OF:	Asche CJ, Kearney & Angel JJ

CATCHWORDS:

Liquor -	Licensing - Renewal of licence - Fee "payable for renewal11	-	Whether	fee	payable	in	respect	of	period before renewal, or after renewal
Liquor Act 1978-84 (NT), ss34, 35(1), 35(3) and 35(4A)
Ryan v Clayton (1920) 20 SR (NSW) 524, followed
Lykiardopoulos v Kennedy (1981) 42 ACTR 38, followed Dennis  Hotels	Pty  Ltd	v Victoria (1959-60) 104 CLR 529, applied			_
Philip   Morris	Ltd	v Commissioner	of	Business	Franchises (Viet.) (1989) 167 CLR 399, referred to
Secretary	of	Department	of	Health   v   Harvey	(unreported, Court of Appeal (NSW), 5 October 1990), followed
Statutes - Interpretation - Renewal of licence - Whether fee "payable	for	renewal II	is	a	fee	payable	in	respect	of period before renewal, or after renewal
Liquor Act 1978-84 (NT), ss34, 35(1), 35(3) and 35(4A)
Ryan v Clayton (1920) 20 SR (NSW) 524, followed
Lykiardopoulos v Kennedy (1981) 42 ACTR 38, followed Dennis  Hotels	Pty  Ltd	v Victoria (1959-60) 104 CLR 529, applied
Philip    Morris	Ltd	v Commissioner	of	Business	Franchises (Viet.)	(1989) 167 CLR 399, referred to
Secretary	of	Department	of	Health   v   Harvey	(unreported, Court of Appeal (NSW), 5 October 1990), followed

REPRESENTATION:
Counsel:

Appellants: Respondents:
Solicitors:
Appellants: Respondent:

P.J. Gabrynowicz
Hiley QC, C.R. McDonald

Mildrens Ward Keller

Judgment category classification:	CAT A Court Computer Code:

Judgment ID Number: Number of pages:

jasc92009
13

92009

IN THE  COURT OF APPEAL OF THE NORTHERN TERRITORY OF AUSTRALIA AT DARWIN
No. APll of 1990

ON APPEAL from Supreme Court of the Northern Territory No. 199 of 1989

BETWEEN:
BILLABONG MANAGEMENT PTY LTD
Appellant

AND:
TUMMINELLO HOLDINGS PTY LTD

Respondent

CORAM:	ASCHE CJ, KEARNEY and ANGEL JJ

REASONS FOR JUDGMENT
(Delivered 11 June 1992)

ASCHE CJ:	The question before the learned trial judge was stated by him in this way:

11 Whether before the amendment of the Liquor Act (NT) by Act No 67 of 1989 the fee payable by a licensee pursuant to ss34 and 35 of the Act prior to the renewal of the licence was a fee payable in respect of the period·of trading before the renewal or in respect of the period of trading after the renewal."

His Honour held for the latter contention and so
declared.

The appellant purchased a hotel from the respondent.
The contract was executed on 28 January 1986.		on settlement there was an adjustment for licensing fees.	For the  purpose of the contract the licensing fee payable was treated by both parties as payable on 31 January of each year.		The respondent had paid a fee in January 1985 or thereabouts and both parties considered that to be a fee for the period January 1985 to January 1986.	Hence, that was considered the respondent's responsibility.		The appellant then paid the fee of $135,000 for what both parties considered to be the period January 1986 to January 1987.		At about this time the Liquor Commission changed its policy.	It informed  the appellant that it regarded the fee of $135,000 which the appellant had paid as arrears, i.e., for the 1985-1986 period and that a further fee for 1986-1987 was payable.	The appellant not  surprisingly took the view that, if that was the case then, by the terms of the contract, the respondent was liable to pay the $135,000 which the appellant had paid and which was now characterised  by the Liquor Commission as arrears for the 1985-1986 period. It sued the respondent for that amount.

One's sympathies are obviously to both parties faced with a result which neither had contemplated.	It may well be that the Liquor Commission should have been joined as a party to this litigation; but that has not been done and the learned trial Judge was asked to determine the question already set out.

The appellant originally sought leave to appeal but it is conceded by the respondent, and accepted by this court that leave is not required since his Honour's declaration was a final determination of the issue between the parties.	The appeal proceeds on this footing.	This case depends upon the interpretation of ss34 and 35 of the Liquor Act of 1985 as it applied on 28 January 1986, the date of the contract between the parties.	The Liquor Act was amended in 1989 and the term "licence period" was defined as meaning "each period commencing on the first day of January, April, July and October and ending on the last day in March, June, September and December, respectively, in each year".	S35(5).	No such definition appears in the 1985 Act although s113 of that Act does provide for returns of purchases of liquor to be lodged at 3 monthly intervals and s30 provides that a licence shall be in force for:

"(a)		a period commencing on the date on which the licence is issued and expiring  on 31 July next following that date: or

such other period as may be determined by the Commission.·"

S34 of the 1985 Act was repealed by the 1989 Act and that 1989-Act does not provide for applications for renewal.
Furthermore s30 of 1985 Act is drastically altered by the 1989 Act which provides that, "A licence shall remain in force until
surrendered under s39
suspended under s66, or

cancelled under s47(5) or 72.11

Under the 1989 Act the fee is calculated in respect of the "licence periods" set out in s35(5) which I have already set out.	The scheme of the 1989 Act is substantially different from the scheme of the 1985 Act in these respects.

There seems, therefore, little to be gained by any comparison of the 1985 legislation with the 1989 legislation particularly since the latter abolishes any procedure for renewal which is the gravamen of this appeal.	The 1989 legislation is really of no assistance in clarifying any ambiguities of s34 of the earlier Act.	This position was accepted by both counsel.	See generally: Maxwell - Interpretation of Statutes - 12th Edition pp69-70.	I therefore make no further reference to the 1989 Act.	The sections hereafter referred to come from the 1985 Act.

The key section is s34.	That reads as follows:

"S34	APPLICATION FOR RENEWAL
An application for the renewal of a licence shall be lodged with the Registrar, before the date of expiry of the licence, in a form approved by the Commission and accompanied by such returns, not previously lodged, referred to in section 113 that are necessary to calculate the fee payable for renewal.
Subject to this Act the Registrar shall renew a licence where an application is lodged in accordance with subsection (1) upon payment of the fee payable for renewal."

Sll3(1) reads:

"	(1)	Subject to the conditions of his licence, a licensee shall, within 28 days of the last day of March, June, September and December during the period of his licence, lodge with the Registrar a return, in a form approved by the Commission, showing details of all purchases of liquor for disposal in pursuance to his licence made by the licensee in the 3 months preceding the last day of that March, June, September or December, as the case requires."

The contention of the appellant is that the term "fee payable for renewal" in both s34 and s35 should in the context be read as "fee payable on renewal".

S35 sets out the method of calculating the fee payable or, as s35(1) calls it, the "prescribed fee".	The "prescribed fee" can be found in the Schedule to the regulations and is calculated by reference to "costs into store" which is defined in s35(5) as substantially the gross price of all liquor purchased or procured during a twelve month period.	The "prescribed fee" is a set proportion of these costs.

Mr Gabrynowicz's submission for the appellant is that these costs can only be calculated from the returns required by sll3.	That must involve a retrospective calculation and since the fee is necessarily based on this calculation the fee is necessarily retrospective.

Mr Hiley however submits that this is not conclusive.	As he puts it, the legislature had to find some way of calculating the fee and the only way was from the trading figures.	That however does not mean that the fee is necessarily retrospective.	He relies upon Ryan v Clayton (1920) 20 SR (NSW) 524.	The headnote to that case reads:

"An	agreement for the sale by the plaintiff to the defendant of the lease and licence of a hotel provided that all rates and taxes should be adjusted and allowed for up to the date of the transfer of the licence.

Held that the compensation fee paid by the plaintiff as licensee under s32 of the Liquor Amendment Act 1919 was a tax within the meaning of the agreement and capable of apportionment between the parties thereto for the year following the first of January in which such fee was paid."

Pring J. with whom the other judges agreed on this, point said:

"This part of the Act did not come into force until the 1st January of this year.	Payment under the Act is to be made year by year _for the period of three years.	The fact that the· assessment is computed upon the amount paid or payable for liquor delivered or purchased during the twelve months preceding this year does not, in my opinion, show that the amount is payable for or in respect of the year 1919.		The Legislature had to find some basis for computing the amount of the assessment, and they adopted one similar to that which is provided under the Income Tax Acts; that is to say, they took the year preceding the year of taxation as the year for computation of the amount of the assessment.	It appears to me that the amount was payable for the year 1920, although there is no express enactment in the Act to that effect."

These comments were followed by Kelly Jin Lykiardopoulos v Kennedy (1981) 42 ACTR 38.	The facts in that case seem similar to the present case.

The plaintiff's purchased a supermarket business from the defendants.	The business had the benefit of an off licence under the Australian Capital Territory Liquor Ordinance.		The contract contained a clause that any outgoing expenses of a periodic nature should be adjusted between the parties.	The contract was completed on 2 June 1980.	on
25 May 1981 the plaintiffs paid to the Liquor Licensing Board
an instalment in respect of the period 1 December 1980 to
30 November 1981.	The amount of the fee was calculated by reference to the sale of liquor by the business during the financial year 1 July 1979 to 30 June 1980.	The  plaintiffs sued to recover from the defendants that instalment.	Kelly J. held that the defendants were not liable to indemnify the plaintiffs in respect of that instalment.	The legislation of the Australian Capital Territory seems to have been substantially similar to the Northe n Territory legislation.

His Honour said at 42:

11 The plaintiffs contend that in these circumstances the payment of a renewal fee is a payment of an outgoing or expense in respect of or arising out of the financial year by reference to which the amount of the renewal fee is calculated or, alternatively, that it is a payment of an outgoing or an expense of a periodic nature again, as I would understand the submission, arising out of or in respect of that particular financial year.	It is submitted on their behalf that that interpretation must be so, since the scheme of sl0lA ensures that they may become

liable for a licence fee payable in respect of the financial year next preceding the licence year when they have no benefit from the purchases made by the previous owner but in respect of which they are required to pay the renewal of the licence.11

That is basically what the appellants say here.	His Honour, however, referred to Ryan v Clayton and in particular to the observation of Pring J. already quoted.	His Honour concluded at 44:

11 In my opinion, the instalment was not a charge or expense or outgoing arising out of or in respect of the defendants' period of ownership.	It is, I think, a charge, expense or outgoing in respect of the year from purchases made during the financial year ending on 30 June 1980 and hence by reference to a period during the defendants' period of ownership, but is not in respect of or arising out of that period.11	•

Similarly in Dennis Hotels Pty Ltd v Victoria (1960-
61) 104 CLR 529 at 591, Menzies J dealing with the provisions of the Victorian Licensing Act said:

" ... it is not, however, a sales or a purchase tax because, as I have already stated, a dealing with the goods does not expose the licensed victualler to liability for tax; the tax is upon the person seeking a licence to sell liquor upon particular premises in the future, not upon the liquor already purchased for sale at those premises although it is calculated upon such purposes''· (Emphasis added).

Referring to this case their Honours Mason CJ and Deane J said in Philip Morris Ltd v Commissioner of Business Franchises (1988-89) 167 CLR 399 at 440:

11 The preferable approach is to accept Dennis Hotels and Dickerson's Arcade as authority for the proposition that, in the special fields of licences to sell alcohol and tobacco, a licence fee which would otherwise be regarded as a duty of excise will not be so regarded if it can properly be characterized as a fee for carrying on business and if it is calculated by reference to sales made during a period other than the period of the licence."

It seems to me therefore the submission of
Mr Gabrynowicz based on the method of calculation of the fee does not mean that the fee is retrospective but rather, in light of the authorities, that the fee is prospective.

Ultimately however this case is answered in the way Mr Hiley puts it in his opening argument and which I think is conclusive.		Both in s34 and s35 the expressions are "Application for renewal" (s34) and "fee payable for the renewal of a licence".	Mr Gabrynowicz has valiantly tried to convert the preposition "for" into the preposition "on" but I can see no basis for this.	Mr Hiley puts it simply that the word "for" must be prospective in operation and I must agree with him.	He refers us to various dictionary definitions but even without that support it would seem plain.	Nor does there seem any ambiguity or contradiction in the use of the word.
The licence is granted or renewed on the basis that the recipient gets the right to trade in the future, just as a person who pays for a driving licence gets the right to drive for an ascertainable future time.	It is immaterial that what is received is a licence or a renewal of a licence.	What is purchased is the right to do something for a specified time in

the future, a prospective right.

Mr Gabrynowicz refers to s35(4A).	That subsection
reads:

" (4A)	If a licence is issued for a period of less than 12 months, a proportionate amount only of the licence fee for renewal of the licence shall be payable."

Mr Gabrynowicz submits that this subsection clearly relates back.	I do not agree.	I am prepared to adopt
Mr Hiley's submission that the subsection really refers to the issue of a licence for a future time less than twelve months and the payment therefor of a lesser fee.	Again one must note the expression "fee for renewal".	The learned trial Judge indeed took the view that subsection 35(4A) strongly favoured the plaintiff (respondent).

"Such a restriction of the amount of the fee would be reasonable only if the fee, insofar as it is a tax upon trading, is referable to the future term of the licence of less than 12_ months."

Mr Gabrynowicz also refers to s35(3) which provides that where an application for renewal of a licence is not lodged or is refused the fee which would have been payable by the licensee or former licensee shall be payable forthwith.
That must, he submits, only be retrospective.	With some
hesitation and on the basis that that interpretation is inconsistent with the overall policy of the Act as I see it, I

feel that argument must be rejected.	I adopt Mr Hiley's submission that this is a "catchall" provision inserted to prevent exploitation of the Act by a person who pays the initial $200 fee for the licence which enables him to trade in the future but does not renew in twelve months.		Without this provision he may escape paying a proper fee and the subsection is there to see that he does.	As Mr Hiley says it is a provision of fairness so that one cannot escape an obligation to pay a fee based on purchases simply by surrendering a licence at the end of the year.	The matter is not free from difficulty and I note that the learned trial Judge also had some trouble with the subsection.		His comment was that it was "just possible that the Parliament suffered a lapse of concentration and did not consider the consequences of the subsection on the general scheme of the Act".	I am somewhat of the same mind as his Honour but in the end I take the firm view that if the subsection can be seen as supporting the argument for retrospectivity it stands alone and very much against the general intent of the Act in this area.	To accept it as concluding the argument would be to run contrary to the meaning and intent as I perceive them of various other parts of ss34 and 35.	overwhelmingly the relevant sections of the
Act support the views and conclusions of the learned trial judge.

I would dismiss the appeal.

KEARNEY J:	The Chief Justice has set out the facts which enliven the question of statutory interpretation before the court.	Subject to the observations below, I respectfully agree with his Honour's reasons.

S35(1) is clearly designed, in my opinion, to link the amount of the licence fee to liquor sold, without running any possible risk of the minefield in s90 of the Constitution, by following closely the approach upheld in Dennis Hotels Pty Ltd v Victoria (supra).	(Whether or not s90 of the Constitution has any application to a Territory will shortly be decided; the possibility that it might, no doubt encouraged some subtle legislative drafting.)	Dennis Hotels establishes that a tax imposed by way of a licence fee for the privilege of conducting a business, directly related to the value of liquor sold in an earlier period than the licence period, is not an excise duty.	S35(1) is, perhaps, a taxing contrivance but, if so, it is of its essence that the licence period is not the same as the (earlier) period with reference to which the fee for the licence period is to be calculated.

S35(1) involves a fee for renewal of a licence.
S35(3) requires the payment of a fee although no licence is granted.	Such a fee is not a fee for carrying on a business franchise, such as the s35(1) fee.	It falls outside the category of legitimate business franchise fees - that is, those not caught by s90 of the Constitution -	referred to in Philip Morris (supra) at 440.	As a fee for which no licence

is granted, it is simply a tax payable to the Territory on the· occurrence of any of the four stated events and calculated by reference to liquor sold in a preceding period.	It involves the compulsory exaction of money by a public authority, enforceable by law, and is not a fee for the privilege of carrying on a business.	So s35(1) involves a fee for a business franchise while s35(3) involves the imposition of a mere tax.	The two provisions serve different purposes.
Accepting that there is no rigid dichotomy between a licence fee and a tax,	nevertheless I do not consider that s35(3) has any bearing on the interpretation to be placed on the words "the fee payable for the renewal of a licence" in s35(1).	As to the meaning of those words, I would adapt with respect the words of Meagher JA in Secretary of Department of Health v Harvey (unreported, Court of Appeal (NSW), 5 October 1990):-

"This case is a simple one. [The word "for" in s35(1)] means what it says, and, what is more important, it does not mean what it does not say."

I agree that the appeal should be dismissed.

ANGEL J:	I agree with the learned Chief Justice.