Victorian Bills Explanatory Memoranda Victorian Bills Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
Limitation of Actions (Amendment) Bill
Victorian Legislation and Parliamentary Documents
Circulation Print
EXPLANATORY MEMORANDUM
Clause Notes
Clause 1 states that the main purpose of the Bill is to amend the
Limitations of Actions Act 1958--
· in relation to the application of section 20A of that Act;
and
· to prevent the recovery of windfall gains in proceedings
for the recovery of a tax or an amount attributable to a
tax.
Clause 2 provides for the commencement of the Bill. The Bill is deemed
to come into operation on 4 March 2004.
Clause 3 amends section 20A of the Limitations of Actions Act 1958 in
three ways by ensuring that--
· the section operates in relevant proceedings between
parties of any kind; and
· a payment made under colour of authority (otherwise
known as colore officii) is covered by section 20A(1);
and
· section 20A(2) operates in relation to all mechanisms by
which a tax is exacted, including subordinate legislation
(such as regulations) as well as other instruments which
are applied as a law of Victoria or are enforceable under
such applied law.
1
551163 BILL LA CIRCULATION 5/3/2004
In particular--
· clause 3(1)(a), clause 3(2)(a) and clause 3(4)(c) ensure
Victorian Legislation and Parliamentary Documents
that section 20A operates in proceedings between
private parties for the recovery of amounts that
represent a payment of tax or purported tax.
Proceedings between private parties are generally for
the recovery of amounts that are attributable to a tax or
purported tax, rather than for the recovery of a payment
of tax or purported tax itself. For example, a wholesaler
may be liable for and pay a tax to revenue authorities
but incorporate an amount as representing that payment
in an invoice to a retailer. If the retailer sought to
recover that amount from the wholesaler, then that
amount would be "attributable to the payment of tax"
(see, eg Roxborough v Rothmans of Pall Mall Australia
Ltd (2001) 208 CLR 516). That retailer might, in turn,
attribute, as part of the purchase price to customers, an
amount representing the amount paid by the retailer to
the wholesaler as representing the payment of tax.
This amendment will ensure that all such payments are
covered by the section;
· clause 3(1)(b) ensures that section 20A(1) also applies
to proceedings for the recovery of money brought on the
ground of payment made under colour of authority.
Proceedings which are brought under the current
grounds of mistake of law or fact are also sometimes
brought on the ground of payment made under colour of
authority. This amendment will ensure that claimants
will not be able to avoid the operation of the section by
the technical way in which they plead their case;
· clause 3(2)(b), clause 3(4)(a),(b) and (d) and clause 3(5)
substitute the word "law" for "Act" and introduce a
definition of "law". These amendments ensure that the
limitation period in section 20A(2) operates in relation
to subordinate instruments and other instruments which
apply as a law of Victoria or are made enforceable by
such an applied law;
· clause 3(3) ensures, for the avoidance of doubt, that the
limitation periods in section 20A(1) and (2) apply to
proceedings for the recovery of a tax or an amount
attributable to a tax brought by parties of any kind.
2
Clause 4 inserts an anti-windfall provision as a new section 20B in the
Limitations of Actions Act 1958.
Victorian Legislation and Parliamentary Documents
In particular--
· the new section 20B(1) provides that a proceeding for
the recovery of money paid by way of a tax or an
amount attributable to a tax is only maintainable to the
extent that the proceeding will not result in a windfall
gain to the claimant. The onus is on the claimant to
satisfy the court that the claimant will not receive a
windfall gain. If the claimant satisfies the court that the
recovery of part of money paid will not result in a
windfall gain, the claimant may maintain a proceeding
in respect of that part of the money paid;
· the new section 20B(2) provides that the claimant will
not benefit from a windfall gain if the claimant
demonstrates the windfall amount has not and will not
be passed on to any other person. To establish that a
windfall amount has not been passed on, it will not be
sufficient for the claimant to establish that an amount in
respect of the windfall amount has not been separately
itemised or identified in any invoices or other
documents issued by the claimant. Where an amount
has not been separately itemised, the claimant will still
have to satisfy the court that an amount in respect of the
windfall amount has not been incorporated in, for
example, the price of goods or services. If the claimant
has passed on the windfall amount, the claimant can still
establish that the proceeding will not result in a windfall
gain if the claimant demonstrates that the windfall
amount has been paid back to the persons to whom it
was passed or that the claimant has entered into an
unconditional and enforceable agreement to pay the
money back to those persons;
· the new section 20B(3) describes the kinds of
proceedings in which the new anti-windfall provision
will apply;
· the new section 20B(4) defines certain words for the
purposes of section 20B.
3
Clause 5 inserts a new section 38B in the Limitations of Actions Act
1958 which provides that it is the intention of section 20A as
amended by the Limitations of Actions (Amendment) Act 2004
Victorian Legislation and Parliamentary Documents
and the new section 20B to alter or vary section 85 of the
Constitution Act 1975 which confers upon the Supreme Court
unlimited jurisdiction.
The amended section 20A restricts the capacity of the Supreme
Court to entertain proceedings brought after the expiry of the
limitation periods referred to in that section.
The new section 20B restricts the capacity of the Supreme Court
to entertain proceedings where a claimant could benefit from a
windfall gain.
Clause 6 inserts a new section 39A in the Limitations of Actions Act
1958 which states that the amendments made by the Limitations
of Actions (Amendment) Act 2004 apply to and in relation to
money paid before, on or after 4 March 2004, but not to a
proceeding commenced before that date.
4