|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of Australia Transcripts |
Sydney No S16 of 1997
B e t w e e n -
COMMONWEALTH OF AUSTRALIA
Appellant
and
SCI OPERATIONS PTY LIMITED
Respondent
Office of the Registry
Sydney No S17 of 1997
B e t w e e n -
COMMONWEALTH OF AUSTRALIA
Appellant
and
ACI OPERATIONS PTY LIMITED
Respondent
BRENNAN CJ
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 6 AUGUST 1997, AT 10.19 AM
Copyright in the High Court of Australia
MR A. ROBERTSON, SC: May it please the Court, I appear with MR J.E. GRIFFITHS for the respondents in each matter. (instructed by Blake Dawson Waldron)
BRENNAN CJ: Mr Gageler.
MR GAGELER: Your Honours, the resolution of these appeals turns mainly upon the proper construction of section 269N of the Customs Act 1987 . The relevant context is Part XVA of that Act and the relevant form of Part XVA is that contained in reprint No 8, copies of which have been supplied to the Court. Section 269N is at page 312 of the reprint.
GUMMOW J: Which reprint?
MR GAGELER: Reprint No 8, your Honour. Your Honours should have been provided with extracts from that reprint. It provides in subsection (1) that:
A concession order.....in respect of particular goods shall be deemed to have come into effect on such day before the making of the order as is specified in the order.
The central question arising in the appeals is how far that deeming provision in subsection (1) is to be taken or, putting the matter more precisely, deemed for what purpose. The majority in the Full Court in a critical passage at pages 143 to 144 of the appeal book - and I do not take your Honours to that passage now - appear to have treated the words as meaning deemed for all purposes or at least deemed for the purpose of creating a cause of action for the recovery of amounts previously lawfully paid and collected as customs duty and deemed for the purpose of giving a statutory right to interest under section 51A of the Federal Court of Australia Act.
The appellant submits that is too wide a construction and that, on its proper construction, the word "deemed" in the subsection means simply deemed for the purpose of creating a statutory entitlement to the repayment of customs duty, that entitlement arising only upon the making of a commercial tariff concession order and being enforceable exclusively under the refund provisions of section 163. Your Honours, to make - - -
KIRBY J: What is the alternative? The alternative view is that this gives rise to the right and the timing of the right to the concessional order and you have a separate right to interest if justice so provides, either under the statute or the by the rules of restitution.
MR GAGELER: Yes, that is the alternative view. But to make good my submission, your Honours, I propose to go to two things: one is to take the Court through the scheme of Part XVA of the Customs Act; the second is to say something of its legislative history; thirdly, I wish to take the Court to the Court's own analysis of relatively analogous provisions in the Royal Insurance Case.
KIRBY J: You are not going to mention the facts and the seven-year delay and the three applications to the Federal Court?
MR GAGELER: Yes, I am, your Honour, I have got quite a lot to say about that, but I want to save that until I get to the point where I say that I was denied natural justice in the Full Court, and I have got quite a lot to say about the facts at that stage. Your Honours, may I, before going to those three points that I had mentioned, say something about two relevant general principles of statutory interpretation which, in our submission, bear upon the proper construction of section 269N(1). The first is that a deeming provision - or at least one which has a fictional content - is to be read strictly and in the light of the statutory purposes for which it is employed. The authorities for that proposition are set out in footnote 35 of our written submissions. The second - - -
McHUGH J: Only one of those authorities really support the proposition that there - you cannot draw implications from them; they are to be read strictly, and that is Genex.
MR GAGELER: Yes. That is the clearest statement of the principle, your Honour. But the other authorities - - -
McHUGH J: I am not even sure it is clear. It cites the passage from Justice Fisher's judgement in Comber.
MR GAGELER: With approval, your Honour.
McHUGH J: I do not know whether that is approved or not. Well, it is not disapproved.
KIRBY J: What is the rationale for a strict rule? Why should there be a strict rule?
MR GAGELER: Well, your Honour, I stated the principle this way; that a fictional deeming provision should be read strictly and in the light of its statutory purpose. So, whenever a fictional deeming provision is employed, the question arises: deemed for what purpose?
GUMMOW J: Well, deemed in what sense? Deemed now with respect to the present and future when necessary to look to the past as that having been the past, or deemed now to have been so in the past? There is a judgment of Sir Frederick Jordan which draws the distinction.
MR GAGELER: Yes. But in all cases, your Honour, it is necessary to ask how far the deeming is to be taken.
GUMMOW J: Well, it has to construe the deeming provision.
MR GAGELER: Yes.
GUMMOW J: In my mind, it is futile to talk about strict or loose interpretations; you have got to interpret it.
MR GAGELER: Exactly, in the light of its statutory purpose.
GUMMOW J: Clearly, with an analytical bent of mind
McHUGH J: And that is all those other cases say. They say you have got to read it in the light of the purpose. It is only in Comber that you get this statement that it should be read strictly and you cannot draw implications from it, and that passage is cited in Genex's Case in this Court, without disapproval, but to answer an argument that relied on it.
MR GAGELER: Your Honour, it is the statutory purpose element of the proposition that I seize upon. The strictness I can live without. The second general proposition - which I hope is less controversial, your Honours - is the corollary to the rule in Maxwell v Murphy that a statute is generally not to be read as having retrospective operation, unless that can be seen to be clearly intended, and the corollary is that a statute having retrospective operation is not to be construed so as to have a greater retrospective operation than its language when it is necessary, and that proposition your Honours will find in the judgment of Lord Justice Lindley in Lauri v Renad (1892) 3 Ch 402, at 421.
GUMMOW J: What does "retrospective operation" mean? Unless we work that out, we are going to get nowhere in this.
MR GAGELER: Well, I am coming to that. The statutory context is where I start. Your Honours, the time frame, for present purposes, is the period between 1 September 1987 and March 1982. During that period, customs duty was imposed on goods imported into Australia by force of section 21 of the Customs Tariff Act. It was ordinarily imposed at the rates prescribed by section 22 and schedule 3 of that Act but, by operation of section 25, it was imposed at any lesser rate as may be applicable by reason of an item in schedule 4.
KIRBY J: Just two factual questions. When was the application for the CTCO made eventually?
MR GAGELER: On 29 September 1987.
KIRBY J: So that was only within a month of the importation, was it?
MR GAGELER: Your Honour, PET resin was imported by the respondents throughout the period and continues to be imported.
KIRBY J: I see.
MR GAGELER: The application for a CTCO was lodged on 29 September 1987 and when a CTCO was finally made it was backdated to 1 September 1987 in accordance with section 269N.
KIRBY J: Was there ever a finding of when the CTCO ought reasonably to have been provided? I think the statement of claim makes an averment about that.
MR GAGELER: Yes, that is really the matter that I propose to come to but may I deal with it - - -
KIRBY J: You will do it in your own time.
MR GAGELER: May I say there are some findings in the judgment of Mr Justice Foster in the last decision at first instance before the matter was dealt with by the Full Court.
KIRBY J: There were so many of them.
MR GAGELER: There were quite a number but there is a relevant finding there to the effect that it was not unreasonable for the delegate of the Comptroller not to have made a concession order up to a point in 1992 and, indeed, that not making a concession order up to that time was attributable to the attitude adopted by the respondents.
Your Honour, when I am going to deal with that I am going to deal with it in the context that the argument was never put that way and, although your Honour quite rightly points out that those grounds were pleaded, those grounds were abandoned at the trial, were not available to the respondents on the appeal to the Full Court and are not available to the respondents although they appear to persist with them in their written submissions before this Court.
Your Honours, item 50 of Schedule 4 of the Customs Tariff Act 1987 provided that:
Goods that a Commercial Tariff Concession Order declares are goods to which this item applies -
were subject to a lesser rate of duty.
BRENNAN CJ: Where do we find that Schedule?
MR GAGELER: Your Honours would have the Customs Tariff Act 1987 as some of the materials on our list of authorities. The items appears at page 1733 of the Act in its original version.
KIRBY J: Page 1733?
MR GAGELER: Page 1733, yes. At about point 5 of the page.
KIRBY J: Just before you plunge into that, I thought you said there were three principles of construction you were relying on, but there were only two, were there?
MR GAGELER: No, your Honour. There were three arguments - - -
KIRBY J: One was deeming, which you seem to back away from.
MR GAGELER: No, I did not back away from it, your Honour. In the light of penetrating questions, I refined the proposition. I then made a second general proposition of statutory interpretation but then I sought to deal with the three matters that I mentioned. One was statutory context - that is what I am dealing with now. Secondly, I am going to go on to legislative history and then I am going to take the Court to Royal Insurance. They were the three points, your Honour. The two propositions were simply preliminary to that. Your Honours will notice that originally, the rate - - -
KIRBY J: This is Schedule 4 item 50, is that right?
MR GAGELER: Item 50 at page 1733, the rate being originally 2%, that item was amended by Act No. 27 of 1989 to make entry free after 1 July 1988. So until 1 July 1988, the rate was 2%; after 1 July 1988 the rate was free.
So that the effect of a commercial tariff concession order during the period was to confer first a partial exemption from customs duty otherwise payable - and here it would have been otherwise payable at 10 per cent and was so paid - and then a complete exemption from customs duty after 1 July 1988.
KIRBY J: Nothing turns on that because you refunded the correct amount of the customs duty?
MR GAGELER: We refunded the correct amount of the principal, yes. The making of commercial tariff concession orders was governed by Part XVA of the Customs Act 1901 . If I can ask your Honours to turn back a couple of pages in the reprint No 8 to page 306, your Honours will see that section 269C provided for the making of a commercial tariff concession order by the Comptroller-General of Customs in respect of particular goods, that expression being defined in section 269B(1) to include "goods included in a particular class or kind of goods". That was to be done after considering an application under section 269G and upon satisfaction of certain criteria, those criteria in paragraphs (a) and (b) being that goods serving similar functions were not produced in Australia and were not capable of being produced in Australia in the normal course of business.
So in broad terms a commercial tariff concession order could only be made in respect of goods which were seen not to compete with Australian goods. Section 269G then allowed for the making of applications for concession orders by any person. Section 269L required notice of the application to be published in the Gazette with an invitation for public submissions, and in paragraph - - -
KIRBY J: That was the notice that the Federal Court ultimately ordered the Comptroller-General to advertise?
MR GAGELER: Yes.
KIRBY J: That was on the third proceedings?
MR GAGELER: Your Honour, I am going to have a great deal to say about the facts. Paragraph (b) required the Comptroller to consider any submissions made.
Section 269E(1), your Honours will see, conferred a discretion on the Comptroller to refuse to make a commercial tariff concession order:
if, in his or her opinion, the making of the order would be likely to have a substantially adverse effect on the market for any goods produced in Australia.
Section 269(1C) allowed the Minister:
to determine that the making of the order is not in the national interest -
in which case the Comptroller was bound to refuse to make it. Section 269M required:
A concession order shall be published in the Gazette as soon as practicable after it is made.
In that context section 269N provided for the application of commercial tariff concession orders.
I have already taken the Court to subsection (1). Subsection (3) provided that the day to be specified for the purposes of subsection (1) was to be the day occurring 28 days before the making of the application. Subsection (2) provided the day:
concession order applies in relation to the particular goods to which it relates that are first entered for home consumption on or after the day on which it comes into effect.
Your Honours, it is important, for the purposes of my argument, that a commercial tariff concession order applied in relation to particular goods and not simply in relation to a particular person. It did not operate when made simply for the benefit of an applicant. It was a form of legislative instrument and it was a legislative instrument which conferred a statutory benefit in the form of an exemption from customs duty on the importation of goods meeting a particular description regardless of the identity of the importer. To the extent that the commercial tariff concession order was deemed by subsection (1) to operate retrospectively, it conferred that exemption retrospectively again regardless of the identity of the importer.
The legislative scheme then made provision for a refund of customs duty previously paid, not in Part XVA but in regulations made for the purposes of section 163. May I take your Honours to section 163, which is at page 165 of the reprint. It provides, in subsection (1), that:
Refunds.....may be made.....in respect of goods.....in such circumstances, and subject to such conditions and restrictions (if any), as are prescribed -
Your Honours, it uses the word "may" and is cast in the form of a discretion; however, like the discretion to make a refund in the Royal Insurance Case, it is one which the Collector is bound to exercise in accordance with the principles in Julius v The Bishop of Oxford, where it is necessary to give effect to an entitlement in the person applying for a refund. The authorities for that we have collected in footnote 45 of - - -
GUMMOW J: Of course, the Victorian Stamp Duties Act was definitely cast, but why is not "may" to be read as "must"? Why does this not create a specialty debt?
McHUGH J: Which, in the old days, would have been enforced by an action of covenant before the debt arised at assumpsit.
MR GAGELER: Your Honours, I am content for "may" to be read as "must". It does not affect my argument.
KIRBY J: You are conceding?
MR GAGELER: It is either "must" always, or "must" where it is necessary to give effect to an underlying entitlement.
McHUGH J: It is a debt due from the Crown, is it not?
MR GAGELER: No.
McHUGH J: It is a debt under a statute anyway.
MR GAGELER: It is an entitlement under a statute. Then the question arises, "What is the mechanism for enforcement of that entitlement? Is it to be enforced by action for debt on the statute, or is it to be enforced by other means provided by the statute?" In relation to that question, I propose to take your Honours to His Honour the Chief Justice's analysis in Peverill's Case, which is to the effect that where there is a statutory entitlement, one looks first to the statutory scheme to determine the means of enforcement of that entitlement. If there is a means of enforcement of the entitlement in the statutory scheme, then one does not go further and say that there is an action at common law, or otherwise, for the enforcement of a statutory debt.
GUMMOW J: Who makes the refund, from what funds? What is the appropriation?
MR GAGELER: Your Honour, from the consolidated fund, the appropriation being in a standing appropriation in section 37A of the Audit Act . The authority to pay out being in section 163(1) itself in circumstances prescribed by the regulations. I was about to take your Honours to the regulations. Your Honours have, I think - - -
BRENNAN CJ: Just before you proceed. Section 163(1)(b) confers a power to prescribe conditions and restrictions. Were any prescribed?
MR GAGELER: Yes, your Honour.
BRENNAN CJ: Where are they found?
MR GAGELER: In the Customs Regulations, regulations 127, 128 and 128A(4). Your Honours have the Customs Regulations Reprint No 4. That is at 31 July 1986. Relevantly, the provisions did not change between then and the making of the refund in this case in June 1994. At page 43 of the reprint, your Honours will find regulation 126(f) makes a prescribed circumstance for the purposes of section 163 where:
after duty has been paid on goods, a by-law or determination is made under Part XVI of the Act, or a Commercial Tariff Concession Order is made under Part XVA of the Act, the effect of which is that duty is not payable on those goods or duty is payable on those goods at a rate which is less than the rate which was applicable when the goods were entered for home consumption.
Regulation 127(1) then provided that:
A refund of duty shall not be made unless an application for the refund in accordance with regulation 128 is delivered in accordance with that regulation within the period within which that application may, by virtue of regulation 128A, be made.
BRENNAN CJ: What is that you just read?
MR GAGELER: 127(1).
BRENNAN CJ: 127(1), yes.
MR GAGELER: Regulation 128 then dealt with the application for a refund. That regulation did change through time but nothing turns on that and then regulation 128A(4), which remained constant throughout the period, provided that:
An application for a refund of duty in a circumstance specified in paragraph (f) of regulation 126 may be made within 12 months after the date on which the by-law, determination or Commercial Tariff Concession Order was made.
Your Honours, that is the statutory context. The historical background to Part XVA is set out in the judgment of Mr Justice Sackville at pages 175 to 178 of the appeal book. I do not take your Honours to that now. It is also set out to some extent in the extract from Mr Cooper's book which is behind tab 8 of the Commonwealth's materials. The Industries Assistance Commission report upon which Mr Justice Sackville drew is extracted in the Commonwealth's materials behind tab 2 and the second reading speech is also in those materials.
KIRBY J: What do you derive from - - -
MR GAGELER: I am about to say that, your Honour, without taking the Court through the tedium of it. What it shows is that Part XVA was introduced in 1983. It was introduced following a report of the Industries Assistance Commission in an attempt to introduce a more disciplined system to replace the conferral of exemptions on an ad hoc basis by means of by-laws made for the purposes of what had been item 19 of Schedule 2 to the Customs Tariff Act 1965 which is reproduced at page 177 of the appeal book and which was, at that time, item 19 of Schedule 4 to the Customs Tariff Act 1982.
Your Honours, by-laws could then, and may still be made, under section 271 of the Act with retrospective effect from the date specified in the by-law and without any limit being imposed on what that date might be. The same is true of ministerial determinations under section 273.
May I take your Honours briefly to the relevant provisions dealing with those matters which are in your Honours' reprint commencing at page 357. Section 271 deals with the making of by-laws by the Comptroller. Section 273 deals with the making of determinations by the Comptroller. Subsection (3) of that section makes it clear that those determinations may have retrospective effect. That is spelt out even more clearly in section 273B which provides that:
(1) A by-law made under this Part:
(a) shall be published in the Gazette, and.....
(b) shall, subject to this Part:
(i) take effect, or be deemed to have taken effect, from the date of publication, or from a date (whether before or after the date of publication) specified by or under the by-law; or
(ii) have effect or be deemed to have had effect, for such period (whether before or after the date of publication) as is specified by or under the by-law -
language very similar to the language employed in section 269N(1). Section 273C shows that retrospective by-laws and determinations are not to increase duty but obviously by implication may decrease duty. Again, your Honours, a refund in the case of the making of a by-law or a determination is available under section 163 by reason of the prescription of circumstances in the same paragraph of regulation 126 - that is paragraph 126(f) of the regulations.
Your Honours have been provided with some of the historical material in the form of an extract of some Acts of Parliament dating from 1952 which shows the evolution of the current by-law system and I wanted to take your Honours very briefly through that. The starting point was Act No 108 of 1952 which provided in section 19 for the introduction of section 271 into the Act to allow for the making of by-laws having retrospective effect and in precisely the same Act in section 13 made an amendment to section 163 which, in its then current form, set out in the statute the circumstances in which a refund was to be made.
Your Honours will see section 13 amended section 163 to insert a different subsection (1), which provided, in paragraph (d), that:
after duty has been paid on goods, a by-law is made the effect of which is to provide that duty is not payable on those goods or to apply to those goods a rate of duty which is less than the rate of duty which was applicable when the goods were entered for home consumption,
a refund, rebate or remission of duty, as the case requires, shall be made in the prescribed manner.
Then Act No 47 of 1953, in section 6, replaced section 271 and, also, introduced section 273, dealing with ministerial determinations, and included section 273B in substantially its current form. And, again, in the very Act which made provision for those by-laws and determinations, your Honours will find, in section 5, a further amendment to section 163(1), which provides, in paragraph (d) that where:
after duty has been paid on goods, a by-law -
or determination is made under Part XVI, et cetera -
a refund, rebate or remission of duty, as the case requires -
of the whole or a part of the duty may be made upon application being made in the prescribed manner, and within the prescribed time. Your Honours, that is where the change from "shall" to "may" was introduced in section 163. And in the respondents' materials, behind tab 2, your Honours will find the second reading speech for that 1952 Act, and I propose to take your Honours briefly to that.
KIRBY J: What turns on this given that, as I understood, you concede that "may", following Royal Insurance, means "must"?
MR GAGELER: Your Honour, there are two views. The distinction between those views does not matter for my purposes. One is that "may" means "must"; that was the view of Justice Dawson in Royal Insurance. The other is that "may" means "may" but in certain circumstances where there is an underlying entitlement "may" - - -
KIRBY J: But if you are not submitting that "may" means "may", then why are we being taken to this labyrinth?
MR GAGELER: Your Honours, what I am attempting to do is show the interconnection between the conferral of a statutory benefit in the form of a retrospective exemption from customs duty, whether it be by by-law, by determination or by commercial tariff concession order, and the legislative intention that the means of obtaining that statutory benefit are to lie in section 163. That is why I am taking your Honours to it, and I agree that it is tedious but it is something that is necessary.
Your Honours, behind tab 2 is the second reading speech. In the right-hand column, at about point 6, there is a passage beginning, "Another amendment":
Another amendment to section 163 is to make provision for the payment of refunds of duty in cases where the Minister has granted a Tariff concession under a by-law tariff item in the form of a ministerial determination as provided for, in clause 6 of this bill. Appropriate provision for the making of a consequential refund where applicable has been included in paragraph (d) of clause 5 of the bill.
Then the subsequent paragraph says that there is a change in the wording of section 163 but it is not intended to "alter the policy or practice in relation to" the making of refunds.
Then, your Honours, the next Act is Act No 12 of 1971, which is the last page of the bundle of materials. Your Honours will see that section 4 of that Act amended section 163 so as to take the particular circumstances in which a refund was to be made out of the Act and to allow those circumstances to be prescribed by regulations. By subsection 2(2) of that Act - - -
BRENNAN CJ: Which tab are we looking at?
MR GAGELER: Your Honours, there is a small bundle of legislation. The last page of that bundle contains Act No 12 of 1971. The effect of section 4 was to take the prescribed circumstances out of the Act and allow them to be put into the regulations. Section 2(2) provided that:
this Act shall come into operation on a date to be fixed by Proclamation.
That date was fixed as 1 July 1974, and regulation 126(f) was inserted by Statutory Rules No 112 of 1974, which is behind tab 9 of the Commonwealth materials.
Your Honours, then Part XVA was inserted by section 5 of Act No 19 of 1983, which is behind tab 4 of the Commonwealth materials. It was proclaimed to commence from 1 July 1983 and reference in regulation 126(f) to a commercial tariff concession order was inserted by Statutory Rule No 92 of 1983, behind tab 10 in the Commonwealth materials, with effect from 29 June 1983.
What I seek to show by that, your Honours, is that at all times, whether it be by regulation or by specific provision in the Act, where there was a retrospective conferral of an exemption from customs duty, whether it be by by-law, ministerial determination or commercial tariff concession order, there was provision in or by section 163 for obtaining a refund. It would be surprising if Parliament intended, by allowing for the backdating of a commercial tariff concession order under section 269N in a scheme designed to replace and strengthen to some extent the old by-law system, for that to have different consequences from the backdating of a by-law or a ministerial determination.
KIRBY J: But Parliament may not have intended it within this realm but in its other realm providing for the right to provide interest. It may have intended it there. If that is so, we do not have to plunge into this labyrinth.
MR GAGELER: Your Honour, there is nothing in the history of the legislation in the Industry Assistance Commission report or in the second reading speech or any other explanatory materials that suggests that the Parliament in any way turned its mind to the question of interest. What I am seeking to suggest is that the reason that the Parliament did not turn its mind to the question of interest or to the availability of any other cause of action was that it intended that the means of giving effect to the statutory entitlement were to be found in the statutory scheme in section 163.
KIRBY J: It depends on how you define the statutory entitlement. If you define the statutory entitlement as the right to the refund of the duty, then so be it, but that does not touch the question of the right to interest, which is a separate issue.
BRENNAN CJ: I understand you to be dealing with the cause of action at this stage, is that right?
MR GAGELER: We are dealing with the cause of action which is a precondition for the operation of section 51A, your Honour, yes. What I seek to draw from the history and the context is the limited legislative purpose for section 269N(1) which was identified by Justice Sackville in his dissenting judgment in the Full Court. May I take your Honours to two passages. One is at page 209.
KIRBY J: By the way, is the Full Court decision reported now?
MR GAGELER: It is reported in the Australian Law Reports. I am not aware if it is reported in the - - -
GUMMOW J: 139 ALR 595.
MR GAGELER: Yes, your Honour. Also the judgment at first instance is reported in the Federal Court Reports. Again, the references are in our written submissions, your Honour. At page 209 Justice Sackville says at line 35:
The purpose underlying the enactment of s 269N(1) of the Customs Act 1901 in 1983 was simply to ensure that importers who had paid duty in respect of goods subsequently covered by a CTCO would be entitled to a refund of the duty paid by them at the time of importation.
At page 216 his Honour takes up that theme again. At line 6 there is a sentence in which his Honour basically repeats that earlier passage and then says at line 15:
The legislative intent was not to treat importers of such goods as being in the same position as, say, an importer unlawfully required to pay duty at the time of importation of the goods. The statutory scheme had to balance a number of competing considerations.
As noted in an earlier decision in the Full Federal Court:
the regime of customs duties, including CTCOs, involves "social, political and economic considerations affecting the whole Australian community". The statutory scheme had to take account of such matters as the fact that all importers of goods subject to a CTCO (and not merely the applicants) could claim a refund; that the "concession orders" were worth hundreds of millions of dollars annually; that not all importers would pass on the benefit of the concessions to customers; that ordinarily the lapse of time between an application and the making of a CTCO was relatively short; and that the scheme would involve administrative costs.
Section 269N(1) might have been expressed in more precise language had the draftsman adverted specifically to the question of interest. But the language used does not seem to me to evince an intention, not revealed in the IAC report or, for that matter the Parliamentary debates, to expose the Commonwealth to a liability to pay interest to each and every importer of goods under the concessional scheme. What was intended was that the making of the CTCO would create an entitlement of the importer of goods to recover any duty paid on those goods after the date of the application. The entitlement was not to arise unless and until a CTCO was made.
BRENNAN CJ: Do you accept those words "to recover"?
MR GAGELER: I accept almost everything in his Honour's judgment. His Honour did not need to decide whether the sole means of recovery were under section 163, or whether there was a right to sue for debt on the statute.
BRENNAN CJ: He did not need to decide that?
MR GAGELER: No.
BRENNAN CJ: Why did he not need to decide that?
MR GAGELER: Well, his Honour held in the Commonwealth's favour on the basis that any cause of action that did arise arose only on and from the making of the commercial tariff concession order and, because the principal amount was repaid on the very day that the commercial tariff concession order was made, there was no period in which interest was available under section 51A of the Federal Court Act, nor, indeed, any period from the time that any cause of action arose for any restitutionary right to arise at common law to interest.
BRENNAN CJ: Did his Honour anywhere define what the cause of action was, if any?
MR GAGELER: Justice Sackville?
BRENNAN CJ: Yes.
MR GAGELER: Yes, his Honour saw that if a cause of action arose, it arose by reason of section 269N itself. For example, at page 196 his Honour said, at line 41:
the exclusive source of the liability of the Commissioner -
his Honour meant Comptroller -
to refund duty is s.269N(1) of the Customs Act.
And his Honour says similar things at page 197, line 46 and following.
BRENNAN CJ: That is the liability of the Commissioner to refund. Did his Honour anywhere define any cause of action which might inhere in the present respondents to recover by action the amount that the Commissioner was liable to refund?
MR GAGELER: No, your Honour. At page 197, at about line 46 - this is after a discussion of Royal Insurance, which I will take your Honours to - at about line 46 his Honour says that:
the Comptroller's liability to refund the duty paid by the appellants in respect of PET resin, once the CTCO was made in June 1994, derived exclusively from a statutory source.
KIRBY J: You never contested the entitlement to recover the duty paid, did you? In fact, you paid it. You paid it on the day the writ was issued.
MR GAGELER: There is no doubt that it was accepted that there was an entitlement arising by virtue of the backdating of the commercial tariff concession order to repayment of the customs duty previously paid.
GUMMOW J: But that is a legally incomplete proposition. It is a layman's proposition, not a lawyer's proposition.
MR GAGELER: It was accepted, your Honours, that it was an entitlement arising by reason of section 269N.
BRENNAN CJ: And what was that entitlement?
MR GAGELER: It was an entitlement - such entitlement as derived from section 163 and the regulations made under that in total,your Honours.
BRENNAN CJ: In other words, there was a right to the exercise of the power under 163?
MR GAGELER: Yes.
BRENNAN CJ: Is that as far as you have taken or do you concede anything further beyond?
MR GAGELER: No. Your Honours, that is my primary position. If, however, there was a restitutionary cause of action arising on the statute - - -
GUMMOW J: Why is it restitution?
MR GAGELER: Well, your Honour, it would be a statutory cause of action.
GUMMOW J: Yes.
MR GAGELER: If there is such a cause of action then it is a cause of action which arose only upon the making of the commercial tariff concession order. That second way of dealing with it is the way that Justice Sackville dealt with it and did not need, then, in his Honour's view, to deal with it the first way. It is the way in which Justice Wilcox dealt with it at first instance. I was about to take your Honours to - - -
KIRBY J: Do I understand that that is not your preferred position?
MR GAGELER: It is not my preferred position.
KIRBY J: It does not really matter.
MR GAGELER: My preferred position is that there is no cause of action enforceable at law arising on the statute. May I take your Honours - - -
GUMMOW J: Well, preferred or unpreferred, do you resist the other proposition?
MR GAGELER: Yes, I do. Yes. Your Honours, Royal Insurance - - -
BRENNAN CJ: Would we not be advantaged by consideration of the cases which indicate that when a statutory right is conferred one looks to a statute to see the mode of enforcement?
MR GAGELER: Definitely, your Honours, and your Honours will see the leading case referred to in our written submissions at paragraph 35, which is the principle in Josephson v Walke,r and there is a footnote for your Honours' judgment in Peverill's Case and I propose to take your Honours to that after Royal Insurance. Perhaps I should do it now, your Honours.
Peverill's Case [1994] HCA 8; 179 CLR 226, the relevant passage appearing at page 242 in the judgment of Your Honour Justice Brennan. There is nothing in any of the other judgments which is inconsistent with what Your Honour said. Your Honour was the only member of the Court to perform this precise analysis. At page 242, Your Honour is speaking of medicare payments payable under the provisions of the Health Insurance Act and at about point 6 Your Honour says:
Once it is appreciated that the right conferred by the Principal Act upon an assignee practitioner is to be discharged by a statutory authority when certain statutory criteria are fulfilled, it is clear that that Act does not create a debt enforceable by action. The Principal Act is a code prescribing the benefits to be paid and the manner of paying them. The only way in which a medicare benefit can be paid to a claimant is by acceptance of a claim made within time followed by a payment by the Commission in an amount prescribed by the statutory Tables.....
The money thus to be paid is the only money appropriated for the purpose of paying medical benefits. The principle is stated by Isaacs J in Josephson v Walker:
"Prima facie, where the same statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme. To that extent the enactment is a code."
It is upon that proposition which is further supported by the authorities that Your Honour the Chief Justice goes on to deal with at page 243 that I rely for the first and primary way in which I put the case.
GUMMOW J: Do you say there is no appropriation?
MR GAGELER: No, there is an appropriation.
MR GAGELER: No, there is an appropriation.
GUMMOW J: No, just a minute. There is no appropriation for this alleged right of interest.
MR GAGELER: Yes, your Honour.
GUMMOW J: But the scheme did not contemplate that.
MR GAGELER: Yes, your Honour.
GUMMOW J: It was limited.
MR GAGELER: Yes.
KIRBY J: But if you engaged the jurisdiction of the Federal Court, and if the Parliament has provided for the judge to have the power to make an order for interest, presumably it has contemplated that there must be an appropriation out of which that interest is to be paid where the party, the subject of such an order, is a public body.
MR GAGELER: Your Honour, in those circumstances, the provisions, I think, of sections 65 and 66 of the Judiciary Act would come into play, and an appropriation would be found to meet a judgment of the Court.
KIRBY J: You mentioned an appropriation provision of the Customs Act earlier. Is that pertinent here or not?
MR GAGELER: Yes, your Honour. I said that the appropriation provision relevant to section 163 was to be found - - -
KIRBY J: That is for the substantive sum. I am thinking of the interest. That would have to be found in the Judiciary Act.
MR GAGELER: For section 163 of the Customs Act the appropriation is to be found in section 37A of the Audit Act. To engage the jurisdiction of the Federal Court to award interest under section 51A, a number of conditions have to be satisfied but the first is that there needs to be cause of action. What I am seeking to show, your Honour, is that there is no cause of action, certainly not the cause of action pleaded here, that is available for the recovery of customs duty previously paid lawfully, and then sought to be recovered as a consequence of the making of a commercial tariff concession order, which has a backdating effect. But, your Honour, if there was a judgment of the Court, then the provisions of section 65 and 66 of the Judiciary Act 1987 concerning the method of payment of the judgment would come into play. Your Honours, may I go from there to Royal Insurance - - -
McHUGH J: Just before you do. Does your submission involve the proposition that there is no debt at all?
MR GAGELER: Yes.
McHUGH J: It does. It was merely a - - -
MR GAGELER: May I say there is a statutory entitlement but "debt" in a technical sense, no, not a debt enforceable by action.
BRENNAN CJ: But you must say a statutory entitlement to claim it by the Commissioner.
MR GAGELER: Correct. Statutory entitlement to payment by the Comptroller will collect it.
BRENNAN CJ: Without those latter words, the statement is equivocal.
MR GAGELER: Yes, your Honour. May I take the Court to the way your Honour dealt with it?
BRENNAN CJ: It is the question though of which way you wish to put your submission on this statute.
MR GAGELER: Your Honour, the statutory entitlement to payment by the Comptroller or a collector under section 163.
GUMMOW J: Enforceable by what means?
MR GAGELER: Mandamus or mandatory order under section 16 of the Administrative Decisions (Judicial Review) Act.
GUMMOW J: Well, the AD(JR) Act can always be amended. So, enforcement under section 75(v) of the Constitution, is that position?
MR GAGELER: Yes, or 39B of the Judiciary Act, yes.
GUMMOW J: Well, that can be changed, too. But section 75(v) of the Constitution, that is how you have to found it.
MR GAGELER: Yes. I do not know if I have to found it that way, your Honour. I am dealing here with a statutory entitlement. It is a question of the statutory means of giving effect to that entitlement. But I do invoke section 75(v) as well.
GUMMOW J: Well, you say dependent upon other statutes. You say its enforcement is dependent upon the continued existence of other statutes.
MR GAGELER: No, your Honour has pointed out that it is not necessarily dependent because of 75(v) looming above it in any event.
BRENNAN CJ: So long as this statute remains in this form, 75(v) is available?
MR GAGELER: Yes. Your Honours, Royal Insurance [1994] HCA 61; 182 CLR, 51 - - -
McHUGH J: Just before you leave this point, how do you distinguish this case from, say, the Railway Cases in the last century, where it was held that the statute provided a shareholder would be liable for calls and, when the call was made by the company, pursuant to that statutory power, it was held that it was a specialty debt.
MR GAGELER: I fully accept the proposition that a statutory entitlement may, in some context, give rise to a debt enforceable at law. Your Honours, it is the matter of - - -
McHUGH J: It has important consequences for limitation periods, for a start.
MR GAGELER: Yes, I fully accept that that can occur. The question is one of interpreting the particular provisions of the statute, and the principle in Josephson v Walker says that where the statute both provides for an entitlement, and provides for the means of enforcement of the entitlement, that those means are to be treated, at least prima facie, as constituting a code, to the exclusion of any right of action which would otherwise arise. So, it is not inconsistent with those cases, your Honour; it is a question of looking at the particular statutes in question.
GUMMOW J: But the statutory debt becomes part of the code, does it not, in an appropriate case?
MR GAGELER: In an appropriate case, yes. If there were no means of enforcement by administrative measures provided for under the Act, that may well be so. Your Honours, Royal Insurance [1994] HCA 61; 182 CLR, 51, was a case in which it was held that mandamus was available to compel the Victorian Commissioner of State Revenue to make refunds of stamp duty found to be overpaid where there was an underlying legal obligation to do so. The relevant refund provision is reproduced in the beginning of the headnote at page 51, section 111(1).
There were a number of categories of overpayment involved in that case, and the one which is relevant for present purposes your Honours will see referred to at page 83 in the judgment of Mr Justice Brennan, as he then was. The category of overpayment is referred to as item (ii)(a), which arose as a result of a 1987 amendment to the taxing legislation. Your Honours will see reference to that amendment at the end of the paragraph at the top of page 83, about point 3 of the page, where his Honour said:
The 1987 amendment exempted from charge premiums on cost plus policies received after 30 June 1985 in respect of liabilities incurred before 1 October 1985. The 1987 amendment commenced on 12 November 1987 but, by s 2(4) of the Taxation Acts Amendment Act, it was "deemed to have come into operation on 30 June 1985".
So a retrospective deeming provision conferring an exemption from taxation. At about point 7 of the page, your Honour says:
The payments in item (ii)(a) were due and owing when paid but, by retrospective operation of the 1987 amendment, were deemed not to have been due and owing.
His Honour the then Chief Justice, at page 67 of the report, saw the retrospective operation of the exemption as enabling one to say that the payments previously lawfully paid and collected were paid under a mistake of law at the time. That analysis, at page 67, was rejected by the other members of the Court. In your Honour the present Chief Justice's judgment, at page 89, the matter is taken up at about point 5, Justices Toohey and McHugh agreed with your Honour's judgment. At about point 5 your Honour says:
However, there was no mistake affecting the payment of the amount in item (ii)(a). When paid, the Comptroller was entitled - indeed, she was bound - to retain it. But, by force of the operation attributed to the 1987 amendment, the Commissioner is retrospectively disentitled to retain what was paid as stamp duty under the Act as it had stood before the 1987 amendment commenced. What effect in law does the 1987 amendment have? If the 1987 amendment is to be effective retrospectively, the rights and liabilities of the Commissioner and those who overpaid money must be so altered as to place them in the same position as they would have been in had the Act not imposed the stamp duty abolished by the 1987 amendment during the period of the retrospective operation of the 1987 amendment.
The respondents cease upon those words in this case; however, what is meant by that is then explained by your Honour:
In other words, the Commissioner is bound to refund the amount paid by way of stamp duty exigible under the Act during the period of the retrospective operation of the 1987 amendment. It is only by creating a right to a refund of stamp duty already paid that retrospective effect can be given to the 1987 amendment. The Commissioner's liability thus arises directly from the provisions of the Taxation Acts Amendment Act. I see no reason to treat the Commissioner's liability to refund the amount in item (ii)(a) as other than statutory. There is no occasion to invoke notions of common law restitution in order to discover a cause of action entitling a payer to a refund.
And your Honour has a footnote saying that the case is different in principle from Air Canada and Woolwich, those being cases where tax was unlawfully collected at the time. Your Honour says:
It follows that, prima facie, all of the amounts claimed by Royal are recoverable. The Commissioner's liability to refund would have been enforceable by action if it were not for s 111(1) but, as that provision is clearly intended to prescribe the means by which the Commissioner's liabilities should be discharged, mandamus is the appropriate remedy to compel the Commissioner to refund overpayments which she is legally liable to refund.
In my submission, what your Honour is doing there is, without referring to it, applying the principle in Josephson v Walker. Justice Dawson, in a separate judgment, took up the matter at page 82.
BRENNAN CJ: 92?
MR GAGELER: I am sorry, your Honour, it is page 100, more correctly. At about point 7 of the page, dealing with the same amount, his Honour says:
That amount of duty was payable according to law at the time it was paid and only became an overpayment when the legislation was retrospectively amended. It does not seem to me that the retrospective amendment converted the payments of duty making up the amount of $1,370,000 into payments made under a mistake of law, however much the amendment retrospectively removed the Comptroller's entitlement or authority to receive those payments.
His Honour then quotes from Justice Deane's judgment in Metwally and adds:
It need hardly be added that the legislation in question did not deem the payments made by Royal to have been made under a mistake of fact or law.
KIRBY J: The factual situation was that the legislation was amended with retrospective effect and the payment had been made at a time when the payment was lawfully due, is that correct?
MR GAGELER: That is correct, your Honour. There is a direct analogy in this case because at the time the payments were made in this case - - -
KIRBY J: It is pretty hard to say it was paid under a mistake of law or fact when, at the time, it was paid pursuant to a statutory provision which was then in force.
MR GAGELER: Yes. The respondents were obliged to pay it and the Comptroller and collectors were obliged to collect it and retain it. Indeed, it was paid into consolidated revenue as required by section 81 of the Constitution.
KIRBY J: Mistake of fact and law do not feature in this case.
MR GAGELER: It depends, your Honour, on what effect is to be given to the deeming provision. Those members in the Full Court in the majority who saw a cause of action arising did not specify what sort of action they had in mind but, in my submission, the deeming provision here, like the deeming provision in Royal Insurance, does not deem that which was lawful and correct in the past to have been unlawful or mistaken.
GUMMOW J: But the system in the Customs Act 1987 does not operate upon any finding, as there was a finding by the Comptroller of Stamps which triggered 111.
MR GAGELER: Your Honour is talking about the refund provision in section 163?
GUMMOW J: Yes, 163 plus 269 and so forth. It just operates by force of the statute. I know it uses the word - - -
MR GAGELER: There are a great number of considerations to be taken into account by the Comptroller in making a commercial tariff concession order.
GUMMOW J: Yes, but once made it operates.
MR GAGELER: But once made it simply operates retrospectively, as did the 1987 amendment in Royal Insurance. For the purposes of - - -
GUMMOW J: But the stamp duty section operated in respect of the refund only upon a finding by the Comptroller.
MR GAGELER: Yes. Well, this case is stronger because it simply operates under section 163, where the prescribed circumstances are fulfilled.
GUMMOW J: Yes.
MR GAGELER: Your Honours, by direct analogy, we get from Royal Insurance support for the proposition that the entitlement of an importer to recover duty following the making of a commercial tariff concession order is an entitlement that arises from the terms of section 269N, being a statutory entitlement - being exclusively a statutory entitlement - and that the means of enforcement of that statutory entitlement are to be found within the statutory scheme itself.
Your Honours, in paragraph 37 of our submissions we make reference to section 167(4) of the Customs Act. We say that our conclusion is reinforced, but not dependent, upon that section. It is not dependent upon that section because the effect of section 167(4), on our preferred construction, would be to take away, or eliminate, any cause of action which would otherwise exist, whether at common law or by reason of the statute. Here we do not get to the point of needing to invoke section 167(4), because we have an exclusively statutory entitlement, the means of enforcement of which are exclusively statutory. We, therefore, do not get to the point of an action possibly lying which would be extinguished, or taken away, by section 167(4).
GUMMOW J: Well, would 167(4) take away an action for recovery of moneys paid under mistake? General law.
MR GAGELER: In our submission, yes, it is unequivocal. The history of the section - - -
GUMMOW J: But it would preserve a colore officii type claim.
MR GAGELER: Yes, provided it was brought in accordance with the terms of the section.
GUMMOW J: Yes.
MR GAGELER: Your Honours, having dealt at great length on - - -
BRENNAN CJ: Well, we do not have to worry about the validity of 167(4), do we?
MR GAGELER: No. At least I hope not, your Honour. It is a provision that has been there before any cause of action could otherwise have arisen, so I think the answer is no. I am certainly not raising it. Section 51A of the Federal Court of Australia Act is set out in sufficient terms at page 71 of the appeal book. Your Honours will recall from the facts that three things happened, all on the same day, 3 June 1994: the commercial tariff concession order was made; the proceedings were commenced, and the principal amounts were repaid. As Justice Sackville said, "a busy day". And it has been agreed, for the purposes of these proceedings, that those three events happened in that order.
KIRBY J: There is a prescribed rate of interest, is there not, in the Federal Court?
MR GAGELER: No. It is customary to use Schedule J of the Supreme Court Act in New South Wales.
KIRBY J: Of the State in which the Federal Court is making the order, is that how it operates?
MR GAGELER: That is the approach in New South Wales. I am not sure about the approach of the Federal Court in other States.
KIRBY J: And the rate that was paid pursuant to the undertaking is the rate that the respondents claimed here, which is the said Schedule J rate?
MR GAGELER: Yes.
KIRBY J: I follow.
MR GAGELER: Your Honour, in our submission, section 51A conferred no power to award interest in the circumstances of the case for three reasons. The first is that the respondents did not have, at any time, a cause of action for the recovery of any money within the meaning of the section. The second reason is the reason accepted by Justice Wilcox at first instance, and Justice Sackville in his dissenting judgment in the Full Court; that is that if the respondents had a cause of action, then it arose only upon the making of the commercial tariff concession order. The respondents were repaid on the same day and there was, consequently, no period after the cause of action arose in which the respondents were kept out of their money.
The third, and your Honours might think least attractive reason, is that repayment of the principal sum after the commencement of proceedings meant that there was nothing which could be included in the sum for which interest is given within the meaning of the section. In other words, as a matter of construction, the section does not authorise an award of interest on monies repaid before judgment.
KIRBY J: You are still running that point, are you?
MR GAGELER: We are still there. It is right at the end, Your Honour.
KIRBY J: Justice Sackville did not deal with that?
MR GAGELER: No. He dealt with it as a commissioner in the Law Reform Commission on an earlier occasion. Your Honour, I will deal with those points very briefly and as briefly as I can and in that order. The first point that there was no cause of action, in our submission, follows directly from the arguments presented about the operation of section 269N, section 163 and, perhaps section 167(4) of the Customs Act. What the respondents had was a statutory entitlement. The means of enforcement of the statutory entitlement were exclusively to be found within the statutory scheme. The statutory scheme left no room for the existence of a restitutionary cause of action.
Your Honours, we say here that the existence of a cause of action was excluded by the statutory scheme itself, and to anticipate a point that will be made by the respondents, it is beside the point whether the procedures set out in the statutory scheme were followed in the circumstances of the particular case.
Regulation 127, as I pointed out, required that there be no payment unless an application was made. Here, no application was made, and I accept that, but it does not make any difference to the argument.
Your Honours, the second reason why section 51A is inapplicable involves two propositions. One is that section 51A does not authorise an award of interest for a period before a cause of action arises and the second is that if there was a cause of action in the circumstances of this case, then it arose only on and from the making of a commercial tariff concession order.
GUMMOW J: Now why is that so? Why does not the phrase "between the date when the cause of action arose" pick up the situation which is required throughout federal law, at any rate, by the Customs Act operating the so-called deeming provision. It is not treating something as having happened in the past that did not happen in the past. It is not that sense of retrospectivity. It is just saying, looking at it now, if you ask one's selves now, for the purpose of assessing this liability, now to make this order today, you are to be required to treat the cause of actions having arose at an earlier time.
MR GAGELER: Your Honour, here we assume - - -
GUMMOW J: It has got a violent use of retrospectivity.
MR GAGELER: We assume here that there is a cause of action but the question then arose - - -
KIRBY J: You acted on the basis that there was a cause of action? You did not apply to have the writ struck out? You paid the principal debt.
MR GAGELER: Your Honour, we did not apply to have the writ struck out but the matter was dealt with on its merits at a final hearing.
KIRBY J: I am sorry to have cut across your answer to Justice Gummow.
MR GAGELER: Your Honours, here we assume that there is a cause of action contrary to my first submission.
GUMMOW J: Yes, of course.
MR GAGELER: But the question is, when does the cause of action arise leaving aside any deeming operation.
GUMMOW J: How could you leave it aside, that is the question?
MR GAGELER: May I deal with it in stages? The cause of action arises where all of the facts necessary for a plaintiff to prove have come into existence. Even on the way the plaintiff presented its case - the respondents presented their case here, they needed to prove the existence of a commercial tariff concession order before anything could happen, any deeming effect or otherwise. So that is the simplest way in which I put the case. Before there can be any deeming at all, there must be the making of a commercial tariff concession order and it was made on a particular date, that was the day that the cause of action arose.
Now, beyond that, your Honour, there is another answer and that is to treat the Customs Act deeming provision as being a deeming provision for purposes other than the scheme of the Customs Act itself, in my submission, is impermissible. A deeming provision, if it need not be read strictly, then needs to be read subject to the statutory purpose for which it is employed, and there is nothing - - -
GUMMOW J: That does not fully answer it, though, because the question is, what is picked up by this ambulatory provision in section 51A(a)? It is designed to operate across a whole spectrum of legal relationships, I suppose. Why does it not pick up this statute with all its particular characteristics but pick it up and treat it as having that operation for this purpose of section 51A?
MR GAGELER: Your Honour, it is really a question - - -
GUMMOW J: It is a "chicken and egg" argument - - -
MR GAGELER: Yes. I think I have given your Honour two answers and I do not know if I can take it any further than that. Your Honours, that deals with really the second proposition. The first proposition was that - - -
GAUDRON J: One possibility on Justice Gummow's approach might be that actions get statute barred before, in fact, the CTCO is made, if there are delays of the order of seven days as there were in this case.
MR GAGELER: It is quite possible, your Honour, which would be a grave injustice, no doubt, and a reason for not adopting that interpretation.
McHUGH J: What is the limitation on specialty debts, do you recollect? Twenty years?
MR GAGELER: No, I do not recollect, your Honour.
GUMMOW J: It is 14, is it not, in New South Wales?
MR GAGELER: I think in New South Wales and probably different in other jurisdictions. Your Honours, here, because of the way in which the majority in the Full Court approached the construction of section 51A, it is necessary to deal separately with of subsection (1)(a) and paragraph (b) of - - -
KIRBY J: It is suggested somewhere that paragraph (b) was not argued by Dr Griffiths at first instance.
MR GAGELER: Yes.
KIRBY J: You do not take any point on that; it is purely a legal issue?
MR GAGELER: No, I do take a point on that and I will come to it very quickly, your Honour. This is the point where I wish to say something about the facts in the case as well. So far as paragraph (a) is concerned, your Honours, it authorises an award of interest only from the date when the cause of action arose. That is clear enough on its face. We have collected some cases in footnote 52 of our written submissions to support that and there are other cases to the same effect in footnote 88 of the extract from Mason and Carter's book which is included in the respondents' materials.
The majority went on in a very lengthy discussion from pages 144 to 164 of the appeal book to say that section 51A(1)(b) gave the court a discretion to make an order for lump sum interest in respect of a period before a cause of action arose and that the discretion was to be exercised in what was described as "the exceptional circumstances of this case". This is something we have dealt with in our written submissions at paragraphs 44 and 45 and Justice Sackville dealt with in a postscript to his judgment at pages 218 to 221. In our submission, the separate reliance by the majority on paragraph (b) was wrong both as a matter of procedure and as a matter of construction.
Can I deal with the procedural point first. As Justice Sackville pointed out, the separate application of paragraph (b) was not argued before the Full Court and it was not argued at first instance. That would not matter much if it were purely a question of law, but the majority assumed facts adverse to the Commonwealth, which were not explored in evidence, which had no basis in the material properly before the Court, and which were not relevant on the issues tendered by the parties. If I can give your Honours some examples of that. At page 148, line 16, their Honours say:
But in the present context, the position of the Crown itself, especially given its default in failing to make the CTCO, should also be taken into account. Otherwise the Crown would be taking, or be seen to be taking, advantage of its own default -
and so on. At page 149, line 16:
A decision excessively delayed is a bad decision. The fact that nearly seven years passed here before the CTCO was (properly) made is a material factor to be taken into account in considering whether, in fairness, the taxpayers should receive some compensation in the form of an appropriate allowance for interest -
Page 150, line 6, your Honours refer to the "right to apply for a CTCO" will be "illusory" unless it is dealt with within a reasonable time. Whereas here, despite the continuing best efforts of the appellants over a period substantially in excess of a reasonable time, the respondent neglected to make the CTCO and so on. To similar effect is a passage at page 163 at line 1. Your Honours, the allegation of excessive delay in making a commercial tariff concession order was made in the statement of claim.
Your Honours will see that at page 3 of the appeal book. It was denied in the defence, page 6 of the appeal book, paragraph 7. It was abandoned by the respondents at trial, and your Honours will see that in the judgment of Justice Wilcox at pages 69 and 70 of the appeal book, and it was not sought to be revived by the respondents as appellants to the Full Court, either in their notice of appeal or in their argument. The matter of fault or delay on the part of the Comptroller in making the CTCO was raised for the first time during my submissions as a respondent in the Full Court and it was raised by the Bench. Your Honours, there is an extract from the transcript before the Full Court, which relevantly begins at page 95 of the appeal book. The discussion goes on and on, with me saying basically the same thing again and again; but may I pick out highlights. At page 95, about line 12, Justice Beaumont says:
BEAUMONT J: So the Crown could take advantage of its own default.
MR GAGELER: I do not know what your Honour means by that.
BEAUMONT J: In a hypothetical situation, if a CTCO ought to have been made but was not made.
MR GAGELER: That was not the way the case was put.
Then the discussion goes on and on but at page 96, line 25:
BEAUMONT J: Well, that is an impermissible inquiry now, is it?
MR GAGELER: Yes.
At page 100, line 32, I say:
MR GAGELER: Your Honour, may I just repeat, unless there is any misunderstanding. It is not being put in any way before this court or before Wilcox J that the history of the matter is in any way relevant - using matter in the broadest sense of the dealings between the parties - relating to the making of this particular commercial tariff concession order is in any way relevant to the issue to be resolved.
In the course of that lengthy discussion I made reference to needing to call some evidence if it were to be raised and at page 101, for example, at line 27, again I said:
It is not said that these applicants are in some special position because of the history of the dealings between the parties, and if that were to be said, your Honour, I would want to go back to basics and lead some evidence and deal with it properly.
KIRBY J: Where is that, I am sorry? I have lost that.
MR GAGELER: 101, about line 27. Your Honours, the relevant principles governing the scope of the issues that can be properly raised by a party before an intermediate appellate court are fully discussed in the Court's decision in Coulton v Holcombe, which is referred to in footnote 58 of our written submissions. I do not propose to address on those principles. If a party is so bound, then obviously, in our submission, so is the court itself. The injustice - and I use that word broadly and not pejoratively - of the assumption made by the majority is demonstrated - if your Honours would go to the decision of Justice Foster at first instance in [1993] FCA 500; 118 ALR 114.
KIRBY J: It is so long ago, it is 118, is it?
MR GAGELER: There are a lot of Australian Law Reports, your Honour. This was the judgment of Justice Foster at first instance, which was then taken on appeal, as a consequence of which the Full Court made mandatory orders giving rise to the making of the commercial tariff concession order. The original application for a commercial tariff concession order - that is, the application made in September 1987 - was not for the order that was ultimately made. The original application was in respect of goods described as "PET resin". That is the stuff that is used to make, amongst other things, soft drink bottles, but it is used to make other things as well.
The order as originally required to be made by the Full Court was for a narrower class of goods. It was for PET resin in respect of - used for the purpose of making containers for carbonated beverages; that is, the soft drink bottle PET resin. At page 137 of Justice Foster's judgment, at about line 38, his Honour says:
So far as application NG 735 of 1992 is concerned, ACI seeks a finding that the first and second respondent "erred in law in failing to grant a Commercial Tariff Concession Order in respect of `PET' resin for use in the production of plastic bottles for the packaging of carbonated beverages being a narrower class of goods".
ACI bases its claim in this regard upon the fact that, as I have found, the respondents had power to make this order. It is quite clear, however, that ACI in its initial application in 1987 did not seek any such order. Indeed, it sought a wider order and it continued to do so notwithstanding that it was made quite clear by its competitors in the market that they would be willing for a CTCO of the narrower class to be made by the first respondent. So far as I can see from the material placed before me there would never have been any contest to the making of such an order. It would appear quite plainly that, had ACI amended its application at a very early stage to seek an order of the narrower class there would have been no opposition to it and it would have been granted. Clearly it suited ACI to maintain its claim for the wider order. This is, perhaps, not surprising because, as the years went by, improvements in technology enabled manufacturers to use PET resin for the production of a far wider range of bottles than those used in the containing of carbonated beverages. Indeed, it appears that it was only when the application was finally rejected on 24 July 1992 that ACI was prepared to apply for the order for the narrower class.
And his Honour goes on to say there was no reason why the delegate of the Comptroller should even have thought about making an order for a narrower class before that time.
I read that to show that their Honours' assumption was wrong in fact but more importantly to show the danger of making any assumption at all. It is my submission that their Honours erred in proceeding upon an assumed factual basis.
KIRBY J: It would be fair though to act on the basis that the Crown or the Comptroller-General had the benefit of the funds over the whole long period of time. That has been traditionally one of the reasons in the awarding of interest in commercial matters.
MR GAGELER: No, it would not, your Honour. The case was put on the basis that the applicant was in the same position as any other importer of PET resin or any other goods the subject of a commercial tariff concession order. No distinction was made between the position of the respondents and the position of any other importer of goods.
McHUGH J: Do you place any reliance on the Comptroller being personae designatae and not a servant of the Crown for the purpose of this?
MR GAGELER: Yes, the Comptroller himself was obviously not enriched in any way, as I will point out in my reply. There is a real question about whether it can be said that the Crown is in any meaningful sense enriched by the holding of money within consolidated revenue, some particular enrichment needing to be shown for the purposes of unjust enrichment. Obviously the money itself is an unjust enrichment but there is a difficulty in showing that there is some fruit of the money that accrues to the Commonwealth by reason of holding it - - -
KIRBY J: That sounds more theoretical than realistic. The actual duty was in the possession of the Comptroller.
MR GAGELER: The actual duty was in consolidated revenue as required by section 81 of the Constitution.
BRENNAN CJ: I presume there is nothing in the Customs Act which requires an applicant for a CTCO on obtaining a refund to distribute it to his customers?
MR GAGELER: No, and indeed in the Industry Assistance Commission report and a subsequent report referred to by Justice Sackville which is also extracted in our materials, it was noted that in some circumstances the making of a CTCO can give a huge windfall gain to an importer.
KIRBY J: But my understanding is that the respondents have indicated that they will make a refund.
MR GAGELER: Yes.
KIRBY J: I appreciate that does not quite meet the point inherent in the Chief Justice's question that they do not have to, but that in the orders made, presumably on the windfall basis, if they did not, that would be a matter relevant to the framing of the order for interest.
MR GAGELER: Yes. They have indicated that they will pass on any benefit they receive from these proceedings to their customers.
KIRBY J: Does that mean everybody who bought a bottle of drink?
MR GAGELER: That is not everybody who bought a bottle of drink. That is the bottling people. There is no indication that there is any attempt to pass on the benefit to those who have actually paid the burden.
KIRBY J: Somebody down the line will, you say, get a windfall. Presumably that would be relevant to calculating the interest, if any, that should be awarded?
MR GAGELER: Yes, or whether or not any interest should be awarded if it were otherwise available. Yes. So far as the construction of section 51A(b) is concerned, your Honours, the language appears to be based almost directly on the language of section 69 of the Supreme Court Act of the Australian Capital Territory which was inserted by Act No 176 of 1981, and somewhat similar language is used in section 30C of the Supreme Court Act of South Australia which was inserted by Act No 12 of 1974 and the language of section 51A(1) is identical to section 77MA of the Judiciary Act which governs the award of interest in this Court.
Your Honours, when the language is examined, paragraph (b), in our submission, is concerned with the quantification of interest only. It permits a lump sum to be awarded instead of performing the more detailed calculations required by paragraph (a) and it does no more than that. It cannot, or at least should not, be interpreted as conferring an independent source of power to allow interest regardless of when the cause of action arose and by reference to a period other than the period referred to in paragraph (a). To so construe paragraph (b) would be to confer a discretion to ignore the restrictions which are clear enough on the face of paragraph (a). Finally, your Honours, the point - - -
KIRBY J: Has there been any decision in the case of the South Australian or - - -
MR GAGELER: No, not that we have found.
GUMMOW J: Can I ask you a question, Mr Gageler, arising from page 20 of the appeal book from the statement of issues?
MR GAGELER: Yes.
GUMMOW J: Paragraph 24 says:
The Applicant in any event commenced these proceedings before the making of the CTCO and cannot maintain them in respect of a cause of action which arose only after their commencement.
Is that right?
MR GAGELER: Yes. That was what was contended at the time. But if your Honour turns to page 54 of the appeal book your Honour will see a letter from the Australian Government Solicitor which indicates that that point was no longer being maintained.
GUMMOW J: Thank you. But you do say that the proceedings were instituted the same day as the CTCO was made - June 1994 - and instituted before the steps had been taken under the regulations to seek a refund. Is that one of your points?
MR GAGELER: What happened, your Honour, as accepted by the parties for the purposes of these proceedings, a sequence of events on the day was that a commercial tariff concession order was made, then the proceedings were commenced, then money was refunded. But I do accept that there was non-compliance by the Comptroller with regulation 127(1), which says that:
A refund of duty shall not be made unless an application for the refund -
is made.
GUMMOW J: So, that was waived in some way.
MR GAGELER: Yes.
GAUDRON J: There was, in fact, no application.
MR GAGELER: There was no application, no. The respondents were racing to the court.
BRENNAN CJ: Unless one treats the writ as an application.
MR GAGELER: Yes, one may do so, your Honour, yes. Let me say, there was no application in form required by regulation 128. That brings me to the final - - -
GUMMOW J: But was there any pleading or any ground of contention, or whatever these documents are called.....pleadings? Was there any point taken that if the interest otherwise might be awarded there was a statute bar?
MR GAGELER: No, no such point was taken. Part of my case was that any cause of action arose only on and from the making of the commercial tariff concession order.
GUMMOW J: I realise that, but there was not any alternative pleading?
MR GAGELER: No, there was not. Your Honours, the third reason why we say section 51A was not available in the particular circumstances of the case relies on the proposition that the section does not authorise an award of interest where moneys are repaid before judgment, something that is dealt with in our written submissions right at the end, in paragraphs 46 to 49, are dealt with at great length in the majority judgment, pages 124 to 143 and - - -
KIRBY J: And in Justice Wilcox's judgment.
MR GAGELER: And in Justice Wilcox's judgment, at page 72. Your Honours, the argument is based on the words of section 51A that say that interest can be included in the sum for which judgment is given. Dictionary definitions of "include" are set out in the joint judgment in the Full Court at page 138 and, as one might expect, they support the view that, as a matter of ordinary language, one would say that interest is only included in the sum for which judgment is given if it is contained as an element in the judgment, and not where it is the whole judgment.
KIRBY J: What is your answer to Justice Wilcox's homely simile of the two ducks and the century in a cricket match, that you would include the century in the score of the cricketer? It seemed a pretty good analogy to me.
MR GAGELER: Your Honour, as a very poor cricketer, I found the analogy attractive, but not persuasive. Your Honour, if the matter were free from authority, Justice Wilcox's approach would be, I accept, an available one; although, as his Honour acknowledge in that case, it involved some straining of the language used. But my point is that the matter is not free from authority; that section 51A was based on the English Act, which was the subject of the decision of Justice Hewson in The "Medina Princess", which is referred to by the majority at page 125 - - -
KIRBY J: A decision based without reference to authority on its part and, subsequently, disapproved in the House of Lords, or distinguished in the House of Lords.
MR GAGELER: Not so, your Honour. The first part of your Honour's proposition is correct. It appears to be the first decision on the point, but there has to be a starting point, and I seek to show that it was never disapproved. At page 125 of the appeal book their Honours say:
Hewson J., without reference to authority -
indeed, there was none -
said (at 21):
"... it seems to me that this Court has no power to order, and there is no discretion in the matter of ordering, interest to be paid unless it has given judgment in respect of the damages or debt. The words of the section are `shall be included in the sum for which judgment is given'. This court has given no judgment in respect of any sum and, so far as I can see, is not empowered to award interest upon sums which have already been paid and which have not been the subject of its judgment."
Their Honours say:
Moreover, Hewson J. went on:
to hold that there was no "inherent" or "residual" jurisdiction to award interest in those circumstances.
Their Honours then say:
In Techno-Impex, Oliver L.J.and Watson L.J. criticised the Medina Princess and discounted its authority.
That is not entirely accurate. It was the second aspect of the judgment, that is the inherent or residual jurisdiction in Admiralty that was criticised by those two members of the court in the Techno-Impex Case.
The first aspect of the judgment concerning the availability of statutory interest was never doubted and in the President of India Case (1985) 1 AC 104 where the House of Lords re-endorsed both aspects of Justice Hewson's judgment, your Honours will find at page 118G in the course of Lord Brandon's analysis of the Court of Appeal's decision in Techno-Impex, his Lordship said:
All three members of the Court of Appeal rightly recognised that section 3(1) of the Act of 1934 itself did not, by reason of its express terms, empower a court to award interest on principal sums already paid, or to award compound interest in any case.
So, relevantly, the decision was never doubted.
When the New South Wales Law Reform Commission came to look at the issue in 1983, it accepted the rules stated in The "Medina Princess", accepted its application to the terms of section 94 of the Supreme Court Act, subsection (1) of which being relevantly identical to section 51A(1); and it recommended the enactment of section 94(1A) to overcome the deficiency that is identified by The "Medina Princess". The report, your Honours, is behind tab 13 of the Commonwealth materials. The relevant paragraphs are at 2.22 and 4.28, and the amending Act introducing section 91(1A) we have reproduced at tab 14. That was in 1983 when the Commonwealth Parliament came to enact section 51A the following year. It continued relevantly to use the words of the old 1934 Act. So, your Honour, The "Medina Princess" - - -
KIRBY J: Did not Lord Brandon say somewhere "in the state of the then law", or something to that effect? I cannot quite find the passage.
MR GAGELER: Yes. Section 3(1) of the Act of 1934 was overtaken by the Supreme Court Act of 1981 in the United Kingdom, section 35A of which overcame the deficiency identified in The "Medina Princess" but it did so in expressed terms.
KIRBY J: Is that the basis of the provision that was amended in New South Wales, is it, the Supreme Court Act of the United Kingdom? Did they follow the same formula?
MR GAGELER: Not the same formulation of words, no. It is perhaps more explicit and - - -
KIRBY J: But the point you make is that both legislatures set out to reform the Act as it had been interpreted and confirmed, you say, in President of India?
MR GAGELER: Yes, that is correct, and that the Commonwealth Parliament did not do so.
KIRBY J: Of course, we are not bound by the decision that breached the other view and that is how the Full Federal Court approached it. They said, "Well, we're not bound by this; we'll just go back to the language and, looking at the language, we don't agree that `include' necessitates the provision of the primary sum".
MR GAGELER: Your Honour, they go back to the language. They acknowledge - and Justice Wilcox in the earlier decision in the State Bank Case acknowledged - that the ordinary meaning of the language would lead to The "Medina Princess" result. His Honour though thought it open to him to take a broader approach to the language. My point is simply this, that The "Medina Princess" result accords with the ordinary meaning of the words without straining to give them the beneficial interpretation that his Honour Justice Wilcox did. It accords with authority. It might perhaps be regretted but it is not inherently absurd or unjust.
KIRBY J: Well, it is defeating of the entitlement to interest, which is the whole purpose of the provision in circumstances such as this where, on the day of the writ, the amount is paid which otherwise would have attracted, even on your argument, the entitlement to interest, dealing with this issue only.
MR GAGELER: Dealing with this issue only. Your Honour, if the amount was paid the day before the writ was issued, there is no doubt that the section would have no application, so the section has limitations inherent in its express terms. One could say that drawing a line anywhere is arbitrary but it is by no means, as I said, inherently absurd or unjust to say that the section has the operation that has been attributed to it in The "Medina Princess". Your Honours, if there is to be a change to the section, it is one which, in our submission, should occur through legislation and not by judicial interpretation. Your Honours, those are our submissions on the appeal.
BRENNAN CJ: There is nothing in this Court's judgment in Hungerfords v Walker and its consideration of the President of India Case which is relevant to this?
MR GAGELER: No, your Honour.
BRENNAN CJ: Thank you, Mr Gageler. Yes, Mr Robertson.
MR ROBERTSON: May I, your Honours, while it is fresh in your Honours' minds, make one or two submissions about the last proposition first. One is that the passage that my learned friend criticised at page 125 of the appeal book, I took it to be a criticism that the majority judges in the court below had misstated the effect of what Lord Justice Oliver and what Lord Justice Watkins had said - that is that in Techno-Impex they had criticised The "Medina Princess" and discounted its authority. That is in fact, although not in inverted commas, an extract from Lord Brandon's speech in President of India (1985) 1 AC 104 at page 121C.
KIRBY J: It may be, but the suggestion is that it is irrelevant to this case, that they did not criticise it on this point.
MR ROBERTSON: No, your Honour. The way that we put it is that our learned friends say this, as a matter of law reform, is within the principle that a statute which has been judicially considered, where there is a later enactment, then the Parliament is taken to adopt the judicial construction of the provision. We submit that at the time section 51A was enacted you had Justice Hewson's decision in the Admiralty sphere, but you also had, for better or worse, a criticism of it and its authority discounted. No doubt its authority was discounted on a slightly different point, that is its authority as a decision in admiralty, but we submit that the result of that is that the principle of statutory construction or the approach of, assuming that the Parliament was picking up the judicial interpretation in The "Medina Princess" is displaced because the authority was a criticised authority at the time.
KIRBY J: That seems a rather weak opening ball because, as I understand it, the criticism and the discounting of authority was on the suggestion that in Admiralty there is an inherent power to award interest and it had nothing to do with the construction of the statute, which is the point that is in issue here, the construction of an Australian statute which is said to have been borrowed from an English statute which was the subject of construction, which construction has not been the subject of criticism, and, indeed, on the contrary, was upheld by Lord Brandon in President of India.
MR ROBERTSON: Yes, after the section that we are presently concerned with was enacted. The other matter that we want to remind your Honours of, in relation to that, is that in The "Medina Princess" (1962) 2 Lloyd's R 17 - and I do not need to take your Honours to it - but at the end, after the judgment, and on page 23 there was a discussion which is reproduced about the costs of the motion. Mr Willmer said, in relation to that:
MR WILLMER: The first plaintiff complicated the matter.
MR JUSTICE HEWSON: I have not said that they were not entitled to interest. I said that this method of asking for it does not appeal to me.
So, there again, we would submit that it is not an authority sufficiently clearly establishing the proposition within the principle of statutory construction that the Commonwealth contends for.
KIRBY J: What do you say about the fact that both in England and in New South Wales it has been thought necessary to amend the statute in order to deal with the problem which the Full Federal Court felt able to correct by judicial construction?
MR ROBERTSON: Your Honour, we submit it is not of any significance because the present question is whether that construction of a differently worded provision - that is the Law Reform (Miscellaneous Provisions) Act - the present question is whether it is correct. The Law Reform Commission in New South Wales recommended what it did because it assumed that that decision was correct. When we submit that the section is different in its terms, what we mean is that the matter we refer to in paragraph 22 of our written submissions - that is that it starts in proceedings tried in any court of record. We also, your Honours, of course rely on the Law Revision Committee report which we have reproduced at tab 5 for the proposition that so far as the recommendation of that body was concerned, there was no intention to limit the operation of the provision. Also we have included at tab 6 the second reading speech of the Solicitor-General in the House of Commons introducing the Law Reform (Miscellaneous Provisions) Bill.
It is of significance, your Honours, not only for the particular point - that is the point about whether payment at any time up to the date of judgment is within the section - but we also submit that it is significant in the proper approach to the construction of section 51A which, as we contend, is a remedial provision and should be approached as this Court approached section 94 of the Supreme Court Act of New South Wales in the Codelfa Case which we also refer to and which I will take your Honours to in due course.
KIRBY J: Do you suggest that if you had been paid in full the week before the writ that you could sue only for interest?
MR ROBERTSON: Under 51A, your Honour, no. We do not contend that 51A has that operation because it only applies in proceedings for the recovery of money. If the principal amount had been repaid before we commenced the proceedings, then there could not have been any proceedings for the recovery of that money to which the section 51A provision could - - -
KIRBY J: Is that because of the word "includes"?
MR ROBERTSON: No, it is because, your Honour, that the opening words - it has nothing to do, in our respectful submission, with the word "includes", and we adopt the approach both of Justice Wilcox, and of the majority in the Full Court, as to its meaning. It is because of the opening words of 51A, your Honour:
In any proceedings for the recovery of any money -
and one needs those proceedings - what one might call the principal proceedings - before the statute can operate to confer a statutory right of interest. If I can answer your Honour's question a different way: if one had sued merely for the interest on the hypothesis that the principal had been repaid, then you would have the section trying to, in a sense, piggyback on itself, because the very proceedings for the recovery of money would have been proceedings for the recovery of the interest. I am not sure whether I have made that clear.
GAUDRON J: What is the judgment, in this case, in which the interest is included? Where is the judgment?
MR ROBERTSON: Where is the judgment?
GAUDRON J: I can find some declaratory orders of a most peculiar wording at page 223.
MR ROBERTSON: Page 223. I was going to say, your Honour, that the judgment of the primary judge is at page - or the order is at page 84 of the appeal book; that is, Justice Wilcox order of 20 December 1995 that the application be dismissed. But if his Honour had held that 51A did operate, then there would have been a judgment for that amount and - - -
GAUDRON J: Why did not the Full Court enter judgment at that time?
MR ROBERTSON: Because the Full Court was of the view that there were other things to be decided which needed to be decided by a single judge.
GAUDRON J: That is what I am worried about. Where is the judgment in which interest is included?
MR ROBERTSON: It has not happened yet, your Honour, because as to the judge at first instance, he held that the respondents were not entitled to interest so there was no money amount to be specified and as to the - - -
GUMMOW J: We are at cross purposes there.
MR ROBERTSON: I beg your Honour's pardon.
GUMMOW J: Look, 51A(1)(a), where does one find the sum for which judgment is given into which there is to be included interest? Looking at paragraph 20 of the pleading on page 4 which pleads that:
After the commencement of these proceedings, the respondent has paid to the applicant the sum of $5,457,379.08 -
et cetera, et cetera. There was never any judgment for the principal debt, to use that loose expression, to which interest is appended.
MR ROBERTSON: We are not at cross purposes, your Honour. That is the point I am attempting to grapple with. What Mr Justice Hewson decided was that an amount in a judgment of whatever sum was a necessary prerequisite for the operation of the section of Law Reform (Miscellaneous Provisions) Act with which he was concerned and the competing construction for which the respondents contend is that - and this is in paragraphs 22 and following of our written submissions, paragraph 25 in particular - that we adopt the approach and conclusions of Justice Wilcox in State Bank v Commissioner of Taxation 62 FCR 371 and at pages 71 to 72 in these proceedings, where his Honour adopted his Honour's earlier view, that the section covers the situation of including in the sum for which judgment is given - - -
GUMMOW J: You say the sum, if any?
MR ROBERTSON: Yes, as we say, a nil amount for principal, it having been repaid, the respondents also adopt the analysis of the majority of the Full Court at 124 to 143. The effect is to read the words "the sum for which judgment is given" as the sum, if any.
KIRBY J: If this point is decided against you then, subject to your restitution point, all the statutory issues fade away, do they not?
MR ROBERTSON: Yes, they do. Yes, it is necessary for us - - -
KIRBY J: If the English decision was right, and the House of Lords affirmation of it was right,and the only way to fix this up is as in New South Wales is by Parliament, then you are left with your restitution claim, if any.
MR ROBERTSON: To put it the other way: if we are unsuccessful on this point, then section 51A does not avail us at all. Yes, we accept that, your Honour.
KIRBY J: Unless you have that separate entitlement, entirely separate under (b). Can you argue that way, because the word "included" is in (a) and you mounted, although only on appeal, the separate argument on (b) which does not refer to "included". I am sorry, yes, it does. The word is there again:
there be included in the sum for which judgment is given -
MR ROBERTSON: Yes.
KIRBY J: So that it is common to both paragraphs.
MR ROBERTSON: Yes, that is common to both paragraphs. What is not common to both paragraphs expressly, in any event, are the other words, that is:
for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered -
those are the words - - -
KIRBY J: Yes, but those paragraphs assume that there is something to be included in something else.
MR ROBERTSON: Yes.
KIRBY J: Therefore, the common point is this meaning of "included" which has this rather narrow but established construction in England.
MR ROBERTSON: We would take issue with "established" for relevant purposes for the reasons that we have submitted - - -
KIRBY J: The statute came from England. There has been an interpretation of it in England. It has lasted a long time. On this point, the House of Lords did not dissent; it was accepted by the New South Wales Law Reform Commission, and it has led to the statutory reform in Australia.
MR ROBERTSON: Your Honour, we would counter those propositions, if we may, by saying that the words of the section are different, for the reasons that we have identified. It does not begin with the preamble of the matter having to be tried in any court. Secondly, that there is the decision of a single judge in the Admiralty jurisdiction and we would also submit that neither Mr Justice Hewson nor the House of Lords which approved his construction of that different provision had the benefit of the extrinsic materials which we have put before your Honours - that is, the Law Revision Committee Report of 1934 and the second reading speech introducing that Bill which said that a remedial provision was to apply in all cases and which involved no limitation whatever in relation to principal sums of money repaid before judgment.
If I could add this, your Honours, that that means that the categories identified by Lord Brandon in La Pintada (1985) AC were not categories which - perhaps, at first glance his Lordship's speech might suggest that they were pre-existing categories, or categories that had been adopted either by the Law Revision Committee, or elsewhere, but they were categories which his Lordship was identifying for the purpose of elucidation, rather than anything else. The categories I am referring to are those identified by his Lordship at page 122 of 1985 AC, and his Lordship says:
I shall describe for convenience as case 1, case 2 and case 3. Case 1 is where a debt is paid late, before any proceedings for its recovery have been begun.
And we accept that 51A does not touch that case.
Case 2 is where a debt is paid late, after proceedings for its recovery have been begun, but before they have been concluded. Case 3 is where a debt remains unpaid until, as a result of proceedings for its recovery being brought and prosecuted to a conclusion, a money judgment is given in which the original debt becomes merged.
What was there said is that the statute only dealt with case 3, and our submission is that there is no reason to exclude case 2, but we accept, although it does not matter for present purposes, that case 1 was not dealt with by the statute. Your Honours, our material accompanying respondent submissions, tab 5, as I have said, includes the Law Revision Committee report, and page 5 of that document, having set out a passage from London, Chatham and Dover Railway Co at page 4. At page 5, it says:
8. We have come to the conclusion that the time has come when the old and rigid Rule should now be altered.
The courts, including all appellate tribunals, should have the power to award interest in every case in their discretion where it is not already provided for by statute -
That was what the Solicitor-General himself said in the Parliament in the material we reproduce at tab 6. Page 2115 of the Hansard gives the court, in its discretion, a power to award interest in all cases.
Your Honours, our basic propositions are that there was a cause of action for the recovery of the money, that the cause of action was one to which section 51A could apply - and I am talking now of that part of it which said "for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered".
GUMMOW J: We do not have the writs which instituted these proceedings in this Court.
MR ROBERTSON: No, we noticed that omission, your Honours, and I have photocopies of each of the writs in this Court. May I hand up copies, your Honours. There are two. One is No 79 of 1994 and one is No 80.
MR ROBERTSON: In terms of chronology, it now being accepted that the sequence of events on 3 June was that the - - -
GUMMOW J: It started out as actions for money had and received.
MR ROBERTSON: Yes. If your Honour is looking at the same number, No 79 of 1994.
GUMMOW J: I am looking at No 80.
MR ROBERTSON: They are both in the same terms, your Honour:
the sum of $5,296,690 being money.....had and received.....or otherwise -
and similarly, in paragraph 2:
interest as such a rate.....whether pursuant to section 77MA(1).....or otherwise -
and that is the state that the process was in at the time the matters were remitted by consent to the Federal Court. Thereafter, there were pleadings: originally a statement of claim, a defence and a reply and thereafter notices of contention on either side.
How it came about that the sum was refunded, in answer to an observation of your Honour the Chief Justice, we submit that it is of significance that the money was repaid - avoiding using the word "refunded" - without any application for a refund and, indeed, as it appears, at least from the date of the service of these writs which appears on the second page of them - this writ was served on 28 June 1994 - it appears that the amounts were repaid before the writs were served. We submit that the fact that regulation 127 says now and said then:
A refund of duty shall not be made unless an application for the refund in accordance with regulation 128 is delivered in accordance with that regulation within the period -
of time, we submit that that shows that the Commonwealth was proceeding on the basis, and we say the correct basis, that an application for a refund was not a prerequisite to the repayment or the recovery by the present respondents of the principal sums.
GUMMOW J: Yes, but on the face of it, the actions asserted in these writs were barred by 167(4).
MR ROBERTSON: No, we would submit not, your Honour.
GUMMOW J: There was no allegation of payment under protest.
MR ROBERTSON: No.
GUMMOW J: These are pleaded as general law actions by the look of it.
MR ROBERTSON: Yes, but that would lead - did lead in due course - to a defence by the Commonwealth saying that so far as any amount of interest was concerned - I am just turning up the amended defence which is at page 5 of the appeal book. The respondents say in paragraph 10:
In further answer to the whole of the Statement of Claim the Respondent says that the Applicant's claim is precluded by s 167 of the Customs Act - - -
GUMMOW J: Yes.
MR ROBERTSON: I take your Honour's point that we do not know what the basis was of the repayment, but certainly the objective facts strongly suggest that it was not, and not thought to be, a refund pursuant to regulation 126, et cetera, and section 163. But your Honour does raise, with respect, an important point of statutory interpretation which is still an issue which the Commonwealth relies on in the present proceedings to make good the - - -
GUMMOW J: If the payment was not authorised by law, the Commonwealth is in an odd position, is it not?
MR ROBERTSON: We submit that it plainly was authorised by law. One would not assume that it was not authorised by law and that what it was was a payment by the Commonwealth on the basis that the present respondents had a cause of action on the statute for a debt in relation to the amounts of tax overpaid.
BRENNAN CJ: Be it so, what is the legal consequence of that?
MR ROBERTSON: The legal consequence in terms of the source of the - - -?
BRENNAN CJ: That the assumption made by the payer as to the authority to make the payment was as you have put it, what then?
MR ROBERTSON: For the purposes of the present case, that is part of our answer. That is what underlies that event that happened is part of our answer to the Commonwealth's contention that the respondents, at the relevant time, did not have a cause of action for the recovery of the money.
BRENNAN CJ: How does it answer that?
MR ROBERTSON: In this sense, your Honour; that the amount was, in fact, paid; there was no refund. We assume that it was duly paid, duly taken from the Treasury, and that it shows that - well, it does not show as an absolute matter, but it tends to show, we would respectfully submit, that, indeed, at the time of payment the Commonwealth recognised that the respondents did have a cause of action for the recovery of the money.
BRENNAN CJ: Is there some kind of estoppel as to the - - -
MR ROBERTSON: No, your Honour. No, we do not put it as an estoppel; we just put it on the basis that it is an assumption of a fact, I suppose, that the moneys would not have been able to be appropriated and repaid unless the officers of the Commonwealth involved had proceeded on the basis that there was a right of recovery which, in due course, would have led to a judgment against the Commonwealth, and the consequences in section 65 and so on of the Judiciary Act.
BRENNAN CJ: I do not presently apprehend the legal significance, from the point of view of the issues that the Court has to determine, of that assumption of fact.
MR ROBERTSON: We put it this way, your Honour, that that - I am not sure whether I can put it in any different way - but our submission is that that tends to show that far from there being a refund under what the Commonwealth now submits is the exhaustive code - - -
BRENNAN CJ: But that is not the point. The point that we have to decide is whether or not there was a cause of action.
MR ROBERTSON: It does not go to that point, your Honour. That point, your Honour - - -
BRENNAN CJ: But is that not the point we have to decide?
MR ROBERTSON: It is the point that your Honours have to decide.
BRENNAN CJ: Is that not the only point we have to decide, on this aspect of the matter?
MR ROBERTSON: As a matter of statutory construction, whether or not there was a cause of action at the time, yes, I would accept that, your Honour.
McHUGH J: Just before we rise, perhaps you can help me on this: what is the effect on the payment on the cause of action, assuming you had one when the writ issued, if there is a payment outside the Court? What effect does that have? Does it discharge the cause of action so that judgment cannot be given for the sum sued upon or does it have some other effect? Does it operate as an accord in satisfaction, in some way, which can then be pleaded? I have a vague idea that in the last century the Rules of Court were changed to provide for this question of payment after the commencement of an action, and prior to that it could not even be pleaded. I may be wrong about that.
MR ROBERTSON: I am not sure what the answer to your Honour's question is. We can have a look at - - -
McHUGH J: But it may throw some light on what form of judgments you could have in this particular case. It may be that if your proposition is correct that you did have a cause of action, that you would be entitled to have judgment entered for the full amount but that there may be some operative order dealing with the fact that it has already been paid. I do not know but you might have a look at that.
MR ROBERTSON: Yes, indeed we will.
GUMMOW J: I just wanted to ask you, Mr Robertson, before we rise, looking at this action for money had and received, at common law that would not carry interest, would it? Surely not. That is why we have had all these statutes.
McHUGH J: It is not an equitable cause of action.
GUMMOW J: There would be no interest at common law. That is why the legislature has intervened.
MR ROBERTSON: The reason that I hesitate though, your Honour, is that if it is now able to be classified under the general heading of a restitutionary - - -
GUMMOW J: Forget about that for the minute and just think about Bullen and Leake, however unfashionable that may be. It would carry no interest, would it?
MR ROBERTSON: Apart from our other contention.
GUMMOW J: What you have to show is that the common law is to be changed in some way by the development of, what, you say some restitution. That is what it comes to, is it not?
MR ROBERTSON: On the alternative argument?
GUMMOW J: To get your interest at general law.
MR ROBERTSON: Yes.
GUMMOW J: So, you are really seeking to change the general law as to non-availability of interest?
MR ROBERTSON: Yes, in so far as we cannot succeed under 51A.
GUMMOW J: Yes, for debts and common money counts.
MR ROBERTSON: Depending on how it is - - -
GUMMOW J: That just seems to me to be a large step which is why I wanted to raise it with you.
MR ROBERTSON: Yes.
BRENNAN CJ: The Court will adjourn until 2.15.
AT 12.49 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.17 PM
BRENNAN CJ: Yes, Mr Robertson.
MR ROBERTSON Your Honour Justice McHugh and Your Honour Justice Gummow raised a question about the Limitations Act.. It would appear that the period for monies recoverable by virtue of an enactment is dealt with in section 14(1)(d) of the New South Wales Act which would be the applicable Act in this case, and the period prescribed in section 14(1)(d) for those actions is six years.
McHUGH J: So it is the Limitation Act of 1969.
MR ROBERTSON: Yes, your Honour. But we could not find anything, your Honour, in answer to your Honour Justice McHugh's other question about the effect, perhaps, in the 19th century of payment before judgment on the form of judgment.
McHUGH J: Or even now.
MR ROBERTSON: There is nothing specific in the Federal Court Act or the Federal Court Rules about it, so far as we can see. But we do submit that what was implicit in your Honour's question is that, in our submission, what we adopt, that is that section 51A is not concerned with the form of matters but with the substance. It is really what underlies our submission, that whether or not one has a judgment in a precise written form, whether it is for a zero amount or not, could not dictate the content of the power in section 51A. I was also dealing before the luncheon adjournment - - -
McHUGH J: But it does lead to this problem, does it not? If the money is paid - let it be assumed, leave aside 51A and assume it was not in the legislation - an action is commenced, as in this case, and the Commonwealth paid the money to you the day after, now what order does the Court make in that situation?
MR ROBERTSON: We would submit that the most direct way that it could - is your Honour leaving aside the question of interest?
McHUGH J: I am leaving it aside, yes. I am assuming it is pre-interest days, pre-51A days. Now what order is the Court going to make, is it going to make an order giving you judgment on the action that you brought or is it going to make an order dismissing your claim, judgment for the defendant or what?
KIRBY J: If the money is tendered and it is tendered in a way that would deprive you of rights, for example as to costs or as to interest, you do not have to accept it on that basis, I would have thought.
MR ROBERTSON: So on that basis we would continue with the action. No doubt what was in fact litigated would be limited, if not negligible, because the principal amount would be - unless the tender was withdrawn, the principal amount would still be offered, but we would submit that if the offer was not accepted, at the very least then a judgment would be entered for the principal amount. Then after the enactment of 51A - - -
McHUGH J: Yes, that is what - I mean I know this is highly technical but it may throw light, it may illuminate this issue. What worries me is, leaving aside any of these statutes which give a right to control interest, if somebody does not pay money into court in discharge of the writ but there is some out of court agreement between the parties, what effect does that have on the order that a court would make disposing of the action?
MR ROBERTSON: We would submit that in practical terms, assuming that there is no statutory power to award interest, nothing would turn on it, whether or not there was judgment for the plaintiff or whatever it might be. Again, we would submit that the pure form of the judgment, and this is why we submit that our construction of 51A is the preferable one, that the mere form of the judgment, that is the principal amount, if any, has the result that the form does not dictate the substance for the purposes of the remedial provision that the Parliament enacted.
But we do not have a direct answer to your Honour's question about what the form would have to be, or maybe the answer is that there would be an option, that there would be an alternative way of approaching it, but in most cases it would not matter. But we have not been able to find anything directly on - - -
KIRBY J: It is not at all unknown, you know, in personal injury litigation for insurers, where they have been negotiating and then the plaintiff starts an action to seek to tender the money at once and avoid costs, but plaintiff's solicitors hang on to their writ. If they have got their writ in on time, that is it. In this case, you got yours in before you had been paid. I would have thought, theoretically, you could have insisted on getting judgment for the sum. In fact, you did not, you just accepted the amount.
MR ROBERTSON: Yes. The first scenario your Honour puts to me is that the plaintiff, in those circumstances, could say, "Well, in substance you've offered the amount for which I sue but I still insist on a judgment in a particular form."
McHUGH J: I know. But that is why I raised earlier the question of accord and satisfaction. It may be that by accepting the sum of money that discharged your cause of action and any 51A rights that were appended to it.
BRENNAN CJ: Apart from cases of unliquidated damages, which Justice Kirby was putting to you, if you were suing on debt and legal tender was tendered, does that not discharge the debt?
MR ROBERTSON: If it is tendered and accepted on that basis.
BRENNAN CJ: On any basis. Does not the debtor have a right to tender legal tender and have a discharge of the debt?
MR ROBERTSON: Is your Honour positing outside Court processes?
BRENNAN CJ: Yes.
MR ROBERTSON: One would think that would be so, yes. But the factual circumstances here have not been, on the hypothesis your Honour Justice McHugh put to me, or even on the hypothesis your Honour the Chief Justice put to me, explored as to the basis upon which the proceedings, having been commenced - the basis upon which the moneys were received by the then plaintiffs. But our contention would be that, if there were an examination of the facts, it would show that at no time had the then plaintiffs accepted the money on the basis that the claim for interest would be, shall we say, dissipated, or would disappear as a result of that payment, because it was quite clear to all parties that the Commonwealth was offering the principal only, and not the interest, and that the then plaintiffs contended that they were entitled to interest as well.
GUMMOW J: Well, there was an allegation in paragraph 20 of the amended statement of claim, on page 4, by your clients that there had been payment, and then the defence, on page 6, paragraph 8, admits the payment, but denies it was after commencement of the proceedings.
MR ROBERTSON: Yes.
GUMMOW J: That tendered a rather narrow issue, on the face of it.
MR ROBERTSON: But the issue between the parties was, in substance, at least from that time onwards, the then plaintiffs entitlement to interest, and that was why the pleadings, which were, of course, long after - and just looking at, your Honour, page 1 of the appeal book, which was the statement of claim, which was some five months after 3 June 1994 - that all those events had happened; that is, the commencement of the proceedings, obviously, and the payment of the principal amount. So, what the statement of claim and the defence were doing was, in a sense, formal, because everybody knew at that stage that the principal amount had been repaid and that this - - -
GUMMOW J: Well, then there is the letter you took us to at page 54.
MR ROBERTSON: Yes.
GUMMOW J: About line 35.
MR ROBERTSON: Line 45?
GUMMOW J: Line 35:
Secondly, the Respondents will not argue that the amounts of principal were repaid prior to the commencement of proceedings -
That seemed to have got, really, the only issue that was tendered on the pleadings about all this, as far as I can make out.
MR ROBERTSON: On that paragraph of the defence - - -
GUMMOW J: This paragraph of discharge.
MR ROBERTSON: - - - that is, on page 7 of the appeal book, paragraph 8(b) - - -
GUMMOW J: Yes, that is right. Well, that was withdrawn.
MR ROBERTSON: - - - that gets rid of that as an issue. That gets withdrawn.
GUMMOW J: Yes, that left the case on page 54.
MR ROBERTSON: Yes. I am not sure whether I am following your Honour, but the respondent at that stage was saying in that letter of 27 November - - -
GUMMOW J: They have withdrawn 8(b). That is what it means.
MR ROBERTSON: Yes. That is the effect of it, yes. Your Honour Justice Gummow had also mentioned, in the context of the pleadings, section 167(4) of the Customs Act which remains part of the Commonwealth's defence - as we understand it, independent defence - to either the existence of a cause of action on the part of the present respondents or as to its maintainability. Your Honours, we have set out in paragraph 11 of the written submissions the conclusions on this aspect of the matter of the four judges, Justice Wilcox at first instance, and each member of the Full Court, each of whom has rejected the submission that 167(4) has any bearing on this case, and the Commonwealth's written submissions refer as well to a judgment of Justice Ormiston of the Supreme Court of Victoria which is reported in (1995) 129 FLR 23. I do not wish to take your Honours to the detail of that but just wish to say two things about it.
One is that, as Justice Sackville said and, with respect, we would agree with him - and he said this at page 204 of the appeal book, with reference to A & G International 129 FLR, that in the latter case Justice Ormiston made some observations about the interrelationship between sections 167(1) and 167(4), which may require some qualification to take account of a case such as the present. The submission in relation to section 167(4), shortly stated, is that that section can have no application where there is neither a dispute at the time the payment is made nor the possibility of a dispute.
So, in other words, as a Full Court differently constituted has held, 167(4) is limited to those circumstances. When I say "a Full Court differently constituted", I am referring to the majority decision in the Comptroller General of Customs v Kawaski Motors (No 2), [1991] FCA 518; 32 FCR 243, where their Honours at page 263 say, which we would, with respect, adopt, that it is only in cases of payments which either are disputed or could have been disputed but were not that 167(4) operates.
We would, however, in relation to other submissions of the Commonwealth, that is in relation to section 163, adopt some of what Justice Ormiston says, or his observations about section 163. If I can give your Honours the page references to 129 FLR, at page 25 his Honour refers, in the context of 163, to the plaintiff wishing to persuade the Collector to exercise his discretionary powers under 163. Again, at page 26, his Honour makes the same observations, that being a case where what was involved, at one stage of the proceedings anyway, was an application for a refund on the basis of regulation 126(1)(e) which provides for a refund where there has been a patent - if I can get the words:
Duty has been paid through manifest error of fact or patent misconception of the law.
That was part of what had been involved in that case. But the main reference that Justice Ormiston gives us at page 30 to this question of 163 and his Honour says:
The principal provision ..... is expressed in permissive terms -
and provides for -
circumstances defined in order to give authority to make payments from consolidated revenue.
In our submission, that is borne out by the legislative history of section 163, and if I can take your Honours briefly to the second reading speech at tab 2 of the respondents' materials. My learned friend took your Honours to this second reading speech this morning but to the paragraph below, the paragraph that I wish to refer to. It is tab 2, right-hand column which is the second reading speech, the Customs Bill 1953, by the Vice-President of the Executive Council, and 10 lines down, the second column, he says:
Section 163 of the act makes provision for refunds of duty to be made in certain circumstances. It is the practice for the Department of Trade and Customs to grant refunds of duty where goods are imported in a faulty or defective condition caused by faults or damage in manufacture. In these circumstances the goods cannot be used in the manner in which they are intended to be used and the manufacturer or supplier makes an allowance commensurate with the with the extent of the fault or defect. The section does not specifically provide for such refunds and consequently there is some doubt whether refunds can validly be paid. The proposed amendment will remove all doubt about the legality of these payments.
To the same effect is the second reading speech at tab 3, which is Senator Cotton. In other words, it is to do with the authority for granting refunds in particular cases. At tab 4, we have reproduced one or two pages from Mr Wollaston's book, the book that was published in 1904 at about the time of the first federal Customs Act and Mr Wollaston, of course, was at that time the permanent head of the Department of Trade and Customs and the Comptroller-General of Customs and, certainly, at least at that time, and it is particular at page 104 of that book which we reproduced, there was no suggestion that section 163 was anything more than facultative and was not directed to the exclusion of common law rights and, indeed, was not directed to rights of action at all. Our submission is that that is the same position which applies today and the provision that is made by section 163 and the regulations, both in terms of its language and its subject matter, are quite distinct, in our submission, from the matter under consideration in Royal Insurance.
BRENNAN CJ: That passage from Mr Wollaston's book would not have anything to do with section 163, would it? Section 163 is dealing with refunds, rebates and remissions of duty.
MR ROBERTSON: Yes.
BRENNAN CJ: That is all it is dealing with. It is not dealing with monies wrongly exacted under cover of office.
MR ROBERTSON: No, we accept that, your Honour. We accept that. I may not have put it clearly, but our submission is that 163, then and now, does not deal with any causes of action directly and, furthermore, that it does not, by implication, because of its limited terms and its limited subject matter, purport to deal with actions generally.
BRENNAN CJ: Indeed. On what I have just put to you, though, it does not deal with actions at all. It deals with that which, falling within one of those three categories, does not answer for the description of "action".
MR ROBERTSON: That is what we wish to contend for, your Honour; that is, that even now, what is listed in the successor to section 163 - that is, in regulation 126 - deals with a multifarious list of circumstances which do not coincide, subject to one paragraph that I will mention, do not coincide at all with actions and, therefore, that founds our submission that it would not, by implication, displace the actions that would otherwise be maintainable in relation to taxes overpaid. It does not deal with, in our submission, taxes overpaid at all; it merely deals with - - -
BRENNAN CJ: Perhaps we have approached this, in the course of your argument, from, as it were, the end result back to the fundamental question. Perhaps we need to approach it from the other direction. In other words, what is your cause of action?
MR ROBERTSON: Yes. Our submission is that our cause of action is on the statute, 269N, consistently with the Court's decision in Royal Insurance.
BRENNAN CJ: What do you mean by "on the statute"? Is it a common law cause of action?
MR ROBERTSON: Yes. Our submission is that it is an action - perhaps I can best explain it, your Honour, by taking your Honour to the decision of the Court in Royal Insurance, because our submission is that that language that your Honour the Chief Justice uses in Royal Insurance is directly applicable; that is that, in terms of the amount of tax that was overpaid - and this is volume [1994] HCA 61; 182 CLR 51, at page 89 which I think your Honours were taken to this morning, at about point 7 of the page, that:
the rights and liabilities of the Commissioner and those who overpaid money must be so altered as to place them in the same position as they would have been in had the Act not imposed the stamp duty abolished by the 1987 amendment during the period of the retrospective operation -
Sorry, I have probably started a bit too far down the page, but the second paragraph on that page, after your Honour says:
However, there was no mistake affecting the payment of the amount in item (ii)(a). When paid, the Comptroller was entitled - indeed, she was bound - to retain it. But, by force of the operation attributed to the 1987 amendment, the Commissioner is retrospectively disentitled to retain what was paid as stamp duty under the Act as it had stood -
And then, at the foot of that page, your Honour says:
The Commissioner's liability thus arises directly from the provisions of the Taxation Acts Amendment Act. I see no reason to treat the Commissioner's liability to refund the amount in item (ii)(a) as other than statutory.
So, our submission is that at least - and we would say it does more work than the retrospective amendment - but that at least 269N has the same effect, so that, in order to give effect to its terms, there is a liability arising directly from its provisions which we would submit is constituted as an action for that amount.
BRENNAN CJ: That is where the problem lies. At the bottom of that page, as I said:
I see no reason to treat the Commissioner's liability.....as other than statutory.
MR ROBERTSON: Yes.
BRENNAN CJ: If it is a statutory right you look to the statutory remedy. If there is no statutory remedy but you have still got a right, then the common law will imply the remedy.
MR ROBERTSON: Yes.
BRENNAN CJ: But here you have a statutory right and you have a statutory remedy.
MR ROBERTSON: Your Honour, we would submit that the relevant principle is not where there is merely a discretionary administrative remedy, and I will develop that in a moment, but where one has the circumstances that the remedy as such is cast in, at the very best implicit terms, that is a power to prescribe circumstances in regulations, where one has to spell out of that a power or an authority to make a refund, our submission is that that is insufficient to displace what would ordinarily be the implied right arising from the statute to enforce its terms. In other words, putting that differently, section 163 and regulations 126 and following are not in the same language and do not achieve the result that your Honours held that section 111 of the Stamps Act achieved.
The differences, in our submission, follow both from the history of the legislation which we have taken your Honours to, that is the purpose for which section 163 was originally inserted and later amended, and its language. What we submit is that it may be one thing where one is dealing with a statutory right and where there is a remedy within the statute which vindicates that right but that same result is not achieved where all the statute has in it is refunds may be made in respect of the goods generally and in such circumstances as are prescribed and where the circumstances are circumstances which do not coincide with and, indeed, do not intersect with the rights that the citizen would ordinarily have to approach the courts for remedies as of right.
BRENNAN CJ: It is the word "ordinary" that is giving me the difficulty here. If you can demonstrate that there are situations in which the provisions of 163 in the regulations would be inconsistent with the giving of effect to 269N according to its terms, then I could understand the argument. But if, having regard to 269N, it is open to the taxpayer to use that term to say, "I want my money back under 163, now pay it." and is entitled to get it, I do not understand the argument.
MR ROBERTSON: Well, your Honour, what we submit is that if one looks, for example, at section 111 of the Stamps Act, what it was dealing with was the position where the Comptroller had made a finding in any case that duty had been overpaid, and then, indeed, as your Honour has adverted to, there was differing provisions at different times for the Comptroller to either approach the Treasurer, in one form of section 111, or later, the appropriation provision with section 166D. So, there was a total coincidence, if I can use that word, between any right that the taxpayer might have to assert that tax had been overpaid and to recover that tax, and the discretion that the Comptroller had to deal with that application.
Now, your Honour puts to me, as I would understand it, that if, notwithstanding the variety of issues that are dealt with in the regulations as they are from time to time, both in relation to matters that may affect legal liability and other things which are purely administrative and could never give rise to an action - such as where, for example, goods are imported in a damaged state - then your Honour puts to me that if there is a coincidence in any one of those paragraphs between the taxpayer's right that would otherwise exist to, as a matter of action, recover the amount of the tax, then the regulation effectively, by implication, displaces that right of action. Now, our submission, your Honour, is - - -
BRENNAN CJ: No, that was not what I was putting. Perhaps I have not made it clear. What I am putting is that if the remedy that is available under the Act is sufficient to give complete satisfaction to the taxpayer by a full acknowledgment of the taxpayer's entitlement under 269N, then there is no foundation for the submission that the taxpayer has a right of action aliunde.
MR ROBERTSON: I think I understand what your Honour puts to me but our submission is that a mere authority to make a payment in those circumstances is not sufficient to displace what would otherwise be the right of action on the statute. One can see the same principle, with respect, being contended for and being rejected in, for example, the decision of the New South Wales Court of Appeal in Gaylor v The Collector of Customs 35 NSWLR 662, where the argument was put that - which, as we apprehend it, would be a similar proposition - the only remedy that the importer/taxpayer had was an order by way of mandamus to require the Comptroller to carry out his obligation to give effect to, in that case, the tribunal's decision.
The New South Wales Court of Appeal said that that was - if I can just pick up where the contention was considered - for example, by Mr Justice Cole who wrote the longest of the three judgments, at page 662D, where his Honour said:
I can see no reason in principle, nor is there any provision in s 273GA, which results in the owner being restricted to commencing proceedings by way of mandamus to enforce a decision of the Tribunal altering the deemed proper duty payable in respect of goods. It follows, in my view, that the respondents were entitled to commence proceedings, as they did, for recovery of the moneys paid to the Collector under protest and, such actions being actions for the recovery of money, the Court had a power to award interest.
That, as a matter of history, followed earlier litigation, which is referred to in the judgments, a case called Dahlia Mining Company Limited v Collector of Customs (1989) 17 NSWLR 688 - I do not wish to take your Honours to it - where the same contentions were put on behalf of the Collector or the Commonwealth and again the Court said that there was an insufficient basis - and this is really our submission - an insufficient statutory basis for drawing the inference that what would otherwise be the taxpayer's rights to recover, as of right, the money that it had been overpaid, an insufficient inference that that had been displaced. The pages at which that is dealt with are 692 to 693. We deal with this matter at paragraphs 12 and following of the outline of submissions. In paragraph 14 we refer to the history that I had taken your Honours to, the second reading speeches in Mr Wilson's book.
BRENNAN CJ: Was that case a case of an overpayment, that is paying more than was due at the time it was paid?
MR ROBERTSON: Yes, that is so. Yes, there is that factual distinction and, indeed, as your Honour may recall, it was a matter that went to the Administrative Appeals Tribunal, and then the question became, both in the Court of Appeal and on the application for special leave by the Commonwealth, was the Court of Appeal right or was the exclusive remedy for the taxpayer, once the tribunal had made its decision, mandamus to require the Collector or the Controller to give effect to the AAT's decision? Special leave was refused on the basis that the judgment was not attended with sufficient doubt, as I recall.
Your Honours, it must be a matter of statutory construction, that is what the effect is of the statutory scheme taken as a whole, and what we put in paragraph 15 of our submissions is - and we develop that in paragraph 17 in relation to Commissioner of State Revenue v Royal Insurance - that the language of 163 is permissive; it stands in high contrast to the terms of - and we give as the two examples the two recent cases where, in one instance, the Full Court of the Federal Court and in the second instance, of course, this Court have held that there is exhaustive and exclusive provision made for the recovery of taxes by the statute.
Our submission is much turns on the comprehensiveness of the statutory language that is used and we would contrast section 26 of the Sales Tax Assessment Act, held to be the exclusive remedy in Chippendale Printing 62 FCR 347, and we contrast the language of 167(4) of the Customs Act which puts the matter beyond doubt where the legislature wished to put it beyond doubt:
No action shall lie.....unless the payment is made under protest in pursuance of this section -
and the Commonwealth's submissions, as we would see it, would treat section 163 which, in terms, is only an implied power to make refunds in circumstances to be specified as having that absoluteness of language and, indeed, the absoluteness of language found by your Honours in section 111 of the Stamps Act, that is, where the Comptroller finds in any case that duty has been overpaid, that was held to prescribe the means by which the Commissioner's liability should be discharged.
BRENNAN CJ: Mr Robertson, I do not wish to interrupt you on the same point again, but can I just say that it seems to me that the distinctions that have been made are really distinctions as to the existence of the cause of action at common law. So that in this present case, for example, as in Royal Insurance, at the time that the money was paid and received, the money was due and owing, so that no cause of action arose at common law. Therefore, when one looks to see the effect of a section such as 269N, one is looking to give effect simply to the statutory provision.
Now, that can be given effect to in one of two ways. One way is to say you have a statutory provision and you have a statutory remedy; pursue that and that only. The other way is to say 269N deems something to take place so that for the purpose of determining what the cause of action is, you must always assume that at the time that the money was paid it was not, in truth, payable and, therefore, you go to the common law. Now, is that the way in which you are putting it, because I could understand that as then falling outside the 163?
MR ROBERTSON: If I understood your Honour correctly, yes, we do put it that way, because we say that that is the effect of the deeming provision.
BRENNAN CJ: Yes.
MR ROBERTSON: We rely, not only on subsection (1) of the legislation, and we see this as the central provision because, of course, without 269N neither the 51A would be available, nor would there be any basis on which to say that the payments had been made so as to give rise to a claim for interest on any other basis.
What we say about it, your Honours, is this: that not only does one have subsection (1), that is:
A concession order.....in respect of particular goods -
and we, as well, rely on the expression "in respect of particular goods" -
shall be deemed to have come into effect on such day before the making of the order as is specified in the order.
Now, so far as it goes, subsection (1) is misleading because you have to read further to see what other implications are involved in the making of a concession order. It is misleading to this extent because, of course, subsection (3) says that:
the day to be specified -
so it removes what one might think would be the discretion in section 269N(1) -
the day to be specified in a concession order for the purposes of subsection (1) is the day occurring 28 days before the day on which the application for the order was made.
There are one or two, in fact there is three, immaterial exceptions specified in section 269N(3) and your Honours do not have to be concerned about them.
But, also, we rely on subsection (2) which, again, subject to immaterial exceptions, provides that:
a concession order applies in relation to the particular goods to which it relates that are first entered for home consumption on or after the day on which it comes into effect.
So that, in our submission, once the concession order is made, one has to give effect to subsections (1), (2) and (3) and it then becomes apparent that the retrospectivity that one is talking about is of a particularly unusual nature and we would respectfully submit that what the Industry Assistance Commission was talking about, and what his Honour Justice Sackville picked up in his judgment about the limited role for the future for retrospectivity, was concerned with quite a different matter. In other words, on our view of the operation of 269N it is prospective to this extent that you apply for the commercial tariff concession order, if it is to be granted it is granted prospectively. You then import the goods and the goods are imported on the basis that if a concession order is made, then those very goods are taken to be, at the time they are imported, imported at the lower rate of duty. So, we submit that that is apparent from the - - -
GUMMOW J: Is this what you are saying? The trader or the importer makes the application, imports the goods and takes the risk, namely that he will or will not get the TCO.
MR ROBERTSON: In a sense, your Honour, that is right but once the concession order is made then the risk is either fulfilled or displaced but the important thing, in our respectful submission, on the facts of this case is that the concession order is made.
GUMMOW J: Yes.
MR ROBERTSON: One has to give effect to the intentions of the Parliament. What is the intention? The intention is that goods which are imported, and where there is no protection of local industry required to be achieved by the tariff, are to be imported on the basis that the protective element of the tariff is inapplicable, that is as we know from the commercial tariff order having been made, that the rate of duty was to be free.
What the retrospectivity was that the Industries Assistance Commission was concerned about and which his Honour Justice Sackville mentions is, if I could take your Honours to tab 2 of the Commonwealth materials, at tab 2 - the page numbering is at the foot of the page and about six or seven pages in there is a page numbered 3 which has a list of the recommendations of the Industries Assistance Commission and there are one or two references, that is the first cryptic one. The paragraph numbered 7, do your Honours have page 3 of the document? Paragraph 7:
There be no retrospective commercial by-law unless the applicant can demonstrate that failure to lodge the application was due to the administering Department.
Now one goes from there to page 103, and if I could ask your Honours to look at that, and at the foot of page 103 under the heading "Retrospectivity" what the IAC is talking about is retrospectivity in the true sense, that is that goods are imported under the system then in force and then a by-law is applied for and as they say:
Present procedures permit applications for by-law up to 12 months after goods are ordered.
KIRBY J: It not a difficulty presented by this for you that here is quite an elaborate scheme which has been deliberately introduced to cure a past defect, and it would have been so easy for Parliament to make a specific provision as part of the scheme for the provision of interest, but it refrained from doing so, and presumably the scheme is supposed to work within the four walls of the Customs Act, whereas your theory, at least in the statutory entitlements, seems to contemplate that you have got to go outside and bring an action in the courts.
MR ROBERTSON: Well, your Honour, in our respectful submission, there are two answers to that. Even on the Commonwealth's view of the world, one has to go outside the Customs Act because, if certain events happen, then mandamus has to be sought and obtained to make the Collector - - -
KIRBY J: But that is for the purposing of ensuring the operation of the Customs Act scheme.
MR ROBERTSON: Yes, indeed, your Honour. But that shows that - - -
KIRBY J: I would add to what I said, that it has important, or said at least significant, consequences for the consolidated revenue, to which one would have thought Parliament would have given express attention.
MR ROBERTSON: Your Honour, the other answers that I was going to give, which intersects with what your Honour just put to me, is that the Customs Act, as one can see from the Dahlia Mining litigation and the Gaylor litigation, does not expressly deal with common law, general law rights of action at all. So, we would submit that there is no inference to be drawn, other than the fact that the Parliament did not intend to displace what taxpayers' rights otherwise would be.
GUMMOW J: Yes, it did, because there were not any rights, because it was creating a new regime.
MR ROBERTSON: Well, your Honour, it was creating a new regime but - - -
GUMMOW J: At the time these duties were paid, they were properly levied.
MR ROBERTSON: That is so. That is so.
GUMMOW J: No common law rights of any nature flowed from any vitiated payment of any sort at that time.
MR ROBERTSON: No, that is so, your Honour.
KIRBY J: You, as I understand it, have to say, well, look, we have got these substantive statutory rights under the Customs Act, but we pick up rights to interest either under the Federal Court Act and the general rights that all citizens have to interest if they can establish the criteria, or we pick up a restitution general law right, and that that is a sort of procedural add-on that just is part of the general law, being the larger circle within which the small circle of these special provisions of the Customs Act operate.
MR ROBERTSON: But, your Honour, we do not limit it to what your Honour just put to me as to the right to interest as an add-on. What we submit - and, again, consistently with the other litigation to which I have referred - Dahlia Mining and Gaylor and so on - is that the right to recover the overpaid tax is not displaced. There is certainly, on any view, nothing express in the Customs Act which says where tax is overpaid there can be no right of recovery.
BRENNAN CJ: What you must be saying, then, is that the deeming provision not only deems the rate of duty to be zero, but to deem the demand that was then made to have been unlawfully made.
MR ROBERTSON: No, your Honour, we do not put that. What we do say - - -
BRENNAN CJ: That it is deemed to have been made by a mistake.
MR ROBERTSON: No, your Honour, we do not put that. What we do say is that to give effect to what was plainly the desire of the legislature to be derived from 269N, that there would be no point in merely saying the CTCO is deemed to take effect from some date in the past when one is dealing with money paid as tax or dealing with tax. So one has to give effect to the policy, in our submission, in 269N(1), (2) and (3), and that is to put the taxpayer, vis-a-vis the particular goods that have been imported, in the position that they would have been in if the commercial - - -
BRENNAN CJ: What you are saying is that 269N defines a presently owing liability - presently at the time that it cuts into operation - by the Commonwealth to the person who paid the tax?
MR ROBERTSON: Yes.
BRENNAN CJ: And that all you need is 269N and as soon as you have that you have your cause of action.
MR ROBERTSON: Yes, yes.
BRENNAN CJ: So that one does not need to look at, and one does not look at, 163 at all.
MR ROBERTSON: One does not need to look at 163 if what one is claiming is, as of right, the amount, on this hypothesis, which is now being fulfilled, the making of the commercial tariff concession order, to recover the amount that has been overpaid.
BRENNAN CJ: Does the taxpayer have an alternative, to go either at common law or under 163?
MR ROBERTSON: Yes, yes, because 163, in our submission, is a purely administrative remedy, and what 163, with regulation 126 as well, is a multifarious list of circumstances where, without seeing whether or not there is a cause of action or without invoking the jurisdiction of any of the courts, one can, with the authority that is conferred on the Comptroller by 163 in the regulations, fill in a form, within a prescribed time, pay the fee, if there is a fee to be paid, and have that application processed.
BRENNAN CJ: Is it open to the Comptroller, under 163, to pay interest?
MR ROBERTSON: There is nothing in the regulations that expressly deals with interest, and the logical corollary of what I am putting to your Honours is that, if it is a purely administrative task and one that does not involve settling or forestalling an action, then one would expect there to be specific reference, either in section 163 or in regulation 126 or thereabouts, to some additional amount. But as it is, all it says is "refund the duty paid", or language along those lines.
BRENNAN CJ: So, the taxpayer has alternative rights, one of which attracts interest and one of which does not.
MR ROBERTSON: Yes, and really, in the same way as - on one view, anyway - would be the position if the Administrative Appeals Tribunal had decided that the tax - I know it is a different case, because it is talking about the meaning and application of the Tariff Act at all times - but in the same way as the taxpayer has a choice where the AAT, for example, has decided what the tax should be, the taxpayer can either apply to the Comptroller under 126(1) - I think it is section 126(1)(ea) - which deals with a case where the - it lists, as a prescribed circumstance, the - yes, 126(1)(ea) lists as a prescribed circumstance that a decision -
has been reviewed by the Administrative Appeals Tribunal and the Tribunal.....has held that the amount of duty payable (if any) is less than the amount of duty demanded.....or has remitted the matter to a Collector who has decided that the amount of duty payable (if any) is less than the amount demanded -
That is a prescribed circumstance in regulation 126, and we would respectfully submit that there is that alternative.
But it really falls to be considered on the same footing, in our respectful submission, that an administrative authority - do your Honours have 126(1)(ea) in the copy of the regulations that - - -
BRENNAN CJ: No, I do not think so. We have 126(e), but not (ea) ??
MR ROBERTSON: But again, perhaps I can make the point by reference to 126(1)(e), that there is an intersection between duty that may be overpaid and recoverable by action, consistently with 167, and 126(1)(e) that prescribes an administrative procedure where the taxpayer is content to say, "Well, manifest error, or a fact, or patent misconception of the law on the facts of my particular case I can get within 126(1)(e) but I could not make good a cause of action," or even when the taxpayer thought that they could make good a cause of action for the recovery of the tax.
Your Honours, I was going to also, I think, refer to, if I can go back for one moment to the Industries Assistance Commission report, I was also going to refer your Honours to page 133 of that report. At the foot of the page, which is the part of the report that coincides with the recommendation 7 that I earlier took your Honours to:
In view of the discussion in Chapter 7 the Commission considers that by-law applications should not be considered unless lodged at or before the time of Customs clearance, except where the applicant can demonstrate that failure to lodge the application was due to action of the Department, eg through misinformation on classification supplied by the Department. Abolition of the requirement on the Department to investigate retrospective by-law would reduce its administrative costs -
It is that retrospective by-law, that is retrospective in the true sense, that is the by-law being able to be applied for after the goods are imported, that his Honour Justice Sackville picks up at page 178 of the application book, perhaps somewhat shorn of its longer explanation but his Honour says at line 40:
The IAC recommended that commercial by-laws should not apply retrospectively from the time of clearance of goods, unless the applicant could demonstrate that the failure to apply at the time of clearance was due to the conduct of the administering department.
But his Honour makes fuller reference on the preceding page, page 177 at line 40 or so:
to the issue of the retrospective operation of concessions.
and how at that time applications of by-laws were permitted up to 12 months after the goods had been ordered and sometimes longer.
KIRBY J: Just looking at how this scheme is supposed to work because presumably it is supposed to work without troubling the courts in a great multitude of cases. You would have already levied your charges down the line and the consumer would have paid the charge. If you were to get the retrospective sum and the retrospective interest we are told that you have said that you are going to pass the retrospective interest down the line but that will not benefit the consumers at all. It will just be of benefit to you and the people who have purchased from you, presumably. You might say that that is how it is supposed to work. I am just trying to understand how the scheme operates.
MR ROBERTSON: It is really no different - perhaps I will start again. On the facts of this case, as your Honour will recall, your Honour will see in the affidavits where it will say, as to the primary tax, once it was received by the taxpayers, the taxpayers reimburse their contractors, that is the people who manufactured the bottles and so on.
What happened after that, what happened to the retailers, what happened to the consumers, we do not know. But what your Honour puts to me, we would respectfully submit that there are really two answers. One is that the same would apply in any case where tax was overpaid.
KIRBY J: Yes, and that is obviously the intention of Parliament, that it be paid and acknowledging that it may not get back to the ultimate consumer.
MR ROBERTSON: Unless one has a provision such as, I think it is section 26A of the old Sales Tax Assessment Act which said, and this is the matter that was considered in the Chippendale Case that I gave your Honours the reference to, where the Commissioner finds there is an overpayment then - yes, 26(1) and (1A) of the 1930 Sales Tax Assessment Act and section 51 of the 1992 Sales Tax Assessment Act, is that there you have provisions which were held to be a code and one can well understand why they were. Where the Commissioner finds in any case that tax has been overpaid, the Commissioner shall refund the amount of any tax overpaid, but that subsection does not apply in relation to any tax paid by a person unless the Commissioner is satisfied that the tax has not been passed on by the person to another or, if passed on to another person, has been refunded to the other person.
So that there one has a specific explicit regime and that is plainly how that is intended to work, but there is nothing said about it on either hypothesis. That is even if section 163 and regulation 126 and so on are exhaustive in some way, there is nothing that says the taxpayer is not entitled to an administrative refund unless the taxpayer can show they have not passed on the tax.
KIRBY J: Is it a matter that you intended to reserve to be taken into account in the quantification of an interest or do you say that is just part of the scheme? There is a reservation about windfall benefits and so on.
MR ROBERTSON: Yes, there is, and that is one of the two subject of our application for special leave to cross-appeal, and we put the submission that as a matter - - -
KIRBY J: Do not take this out of your turn, please.
MR ROBERTSON: No, I am happy to deal with it, your Honour. We put the submission that although that was a matter that was expressly reserved by the Full Court to be dealt with by a single justice when the matter was remitted by the Full Court to a single justice of the Federal Court, we have contended or would seek leave to cross-appeal and to contend that that is not a consideration that should be applicable in terms of either section 51A or otherwise for the reasons that we have endeavoured to explain.
Really, we do not develop it much more, perhaps, except to advert to the very considerations that Chief Justice Mason was referring to in Commissioner of State Revenue v Royal Insurance 182 CLR where, leaving to one side the question of the taxpayer being a constructive trustee for those to whom the taxpayer has passed on the tax, leaving aside that case - at page 78, His Honour the Chief Justice said, applying what Justice Windeyer said in Mason v New South Wales, that that windfall aspect, as so described, would not be a defence to a restitutionary claim to recover the mistaken payments of duty and we would submit it is not appropriate to have that sort of tracing, which is what it would amount to, being contemplated and achieved under, say, section 51A or equivalent provisions where, of its nature, that would require both people who are not immediately parties to the litigation, such as the contractors to the taxpayers in the present case, but further down the line those who purchased from - purchasers from the taxpayer and so on, and one might well have, in a particular case, further links in the chain but, in answer to your Honour Justice Kirby's question, we have endeavoured to deal with that matter at paragraphs 35 and onwards in our written submissions.
The other matter about the statutory scheme that we should put to your Honours is this, is that it is very easy, in our respectful submission, to look at how the statute is meant to operate by reference to the, one would hope, unique facts of this particular case. In other words, that one is always looking at a lengthy delay between the time of the application for a concession order, at the time at which it is advertised and matters of that nature. Whereas, so far as the statutory scheme itself is concerned, there is nothing to suggest that commercial tariff concession orders either cannot be or should not be determined promptly and advertised accordingly and made so that no great question of either the recovery of duty or interest on duty "overpaid" - I use that word in inverted commas - is going to cause any great question to arise.
KIRBY J: But the suggestion is that the Parliament has assumed that that will be stimulated by administrative law in the normal way, not by interest payments, because it did not provide for interest payments specifically.
MR ROBERTSON: It goes to this point, your Honour, that although this case raises, in acute form, whether or not interest is payable, it - - -
KIRBY J: It could, potentially, be millions of dollars, could it not, over very large sums? Would not one have thought that Parliament, had it intended interest, would have turned specific attention to the budgetary and allocation implications of this?
MR ROBERTSON: Your Honour, we would submit not, with respect. The history of litigation in the New South Wales courts that I have been referring to goes back maybe 10 years. That was an application of section 94 of the Supreme Court Act to taxes that were overpaid. The courts - - -
KIRBY J: They were moneys that were - - -
MR ROBERTSON: They were moneys that were ultimately held to have been overpaid because of - - -
KIRBY J: Yes. That is a sort of very small number, but we are talking here of the regular scheme.
MR ROBERTSON: No, your Honour. The idea of administrative review or curial review of demands for tax which result in overpayments is not something that is unusual. But the point that we wish to make is that there is, in terms of the Customs Act, silence on those matters also. We would submit that it is not to be assumed by that silence that the Parliament intended to displace the operation of the ordinary statutory provisions, such as section 94 of the Supreme Court Act, and the courts have so held that the Parliament did not intend to displace those statutes of general operations.
GUMMOW J: Mr Robertson, at the time the concession order is made and therefore the time at which 269N is triggered, in the ordinary course the revenue would be able to assess, would it not, its liabilities as to refund?
MR ROBERTSON: I do not think I follow your Honour.
GUMMOW J: They would know what had been paid, would they not, what they had to pay back?
MR ROBERTSON: Yes.
GUMMOW J: And they could draw a line under it.
MR ROBERTSON: Yes, and in this particular - - -
GUMMOW J: If your theory is right they have to wait 12 months, do they not, under 128A(4) for applications to be made and then for interest to be attached to that uncertainty?
MR ROBERTSON: Even on the administrative scheme the Commonwealth does not know - I accept what your Honour is putting to me - until the end of that period, does not know how many claims there may be under - - -
GUMMOW J: Or what the interest component would be. The interest component will vary as between them across that 12-month period, I suppose.
MR ROBERTSON: I have accepted, in answer to his Honour the Chief Justice's question, that so far as the administrative scheme is concerned payment of interest is not part of it, that is it is not contemplated by either the regulations or the terms of section 163.
GUMMOW J: Yes, but I do not see how it comes in otherwise.
MR ROBERTSON: It does not come in under what I have been calling the administrative scheme, which is 163 and 126, but certainly the - - -
GUMMOW J: It only comes in by reason of the special effect you would give 269N on creation, really, of common law rights.
MR ROBERTSON: Yes, that is so. I think the time limit that your Honour was putting to me is, on the copy of the regulations that I have, is 128A(4).
GUMMOW J: That is right.
MR ROBERTSON: Yes.
KIRBY J: This is a time limit for bringing applications for retrospective payments, is that - - -
MR ROBERTSON: Yes. I am not sure whether your Honours have a copy with (f) in it but there is also - that time limit talks about 12 months after the date on which the commercial tariff concession order was made, that is (f) is concerned with "after duty has been paid" then the commercial tariff concession order is made and so on. At some later stage, I think a regulation was put in to allow for refunds where tax was paid after the commercial tariff concession order had been made, but what the period of time specified in 128A is for that, I assume it is the 12 months, but it would operate in a different way, of course.
What we say, therefore, about the retrospectivity, by reference to those pages of the Industries Assistance Commission Report and by reference to 269N(2) and (3), is that the sequence of events in this case was the application was made - the application for a commercial tariff concession order. It signified, as we construe the Act and the regulations, that from that time forward the importer had signified to the Collector, or the Comptroller-General, that the importer claimed that the goods that they were importing were goods that were liable only to the lower rate of duty and that if the Comptroller made the commercial tariff concession order, then, once he had made the order - and in this case, it came into effect on 1 September 1987 - it applied to the particular goods imported after that date - 1 September 1987. The rate of duty was the lower rate, the overpaid amount became repayable by virtue of 269N, and there was a right to recover it. And, in a sense, there was always that right to recover, provided that the Comptroller made the tariff concession order.
In terms of section 51A, and going now to the question of when the cause of action arose, we have again dealt with this in our written submission, but one of the observations that your Honour Justice Gummow made this morning we would accept - we do not have it on our list of authorities, but we would remind your Honour of what your Honour said in a different context, but where one was looking at similar remedial legislation, but which had to have a number of operations.
What I am referring to is what your Honour said in the Australian Institute of Marine and Power Engineers v Secretary of the Department of Transport [1986] FCA 443; 13 FCR 124, at 131, where, in relation to the standing provision in the general Act - Judicial Review Act - your Honour said that it had to be borne in mind that that Act was ambulatory in operation, and drew within its scope a diverse and extensive collection of decision-making processes. And what we submit in relation to that is that 51A, being a general provision, ambulatory to that extent, has to be construed so as to be applicable to all sorts of causes of action and, in particular, the cause of action that, in our respectful submission, is constituted by the claim once the commercial tariff concession order is made.
The Full Court of the Federal Court dealt with this matter in a similar way, although not using that language, in its consideration of section 51A(1)(a) at pages 143 and 144. Again, of course, that turns on the logically precedent question which is, "What is the effect of 269N in the first place?". We also give, in our written submissions, your Honours, a reference to the approach this Court adopted to "moulding", I think was the expression that was used, section 94 of the Supreme Court Act in the decision in Coldefa, 149 CLR at page 336.
Your Honours will recall that the question there was whether, in the context of a Scott v Avery clause, an arbitrator could award interest when the Scott v Avery clause operated so as to prevent the cause of action arising until the award was made. If I can give your Honours the page references rather than reading it out. His Honour Justice Mason, at pages 367 to 370. His Honour said:
The statutory power is therefore to be moulded -
that is the statutory power in section 94 of the Supreme Court Act -
so that it is expressed in terms appropriate to, and capable of being exercised in, an arbitration.
And the effect was that section 94 was read in a particular way so as to allow the arbitrator to award interest in those circumstances. Your Honour Justice Brennan dissented on that point, and that is at pages 422 and 423. Justice Stephen, Justice Aickin and Justice Wilson agreed with Justice Mason.
Your Honours, in relation to Royal Insurance, without wishing to repeat what we have so far submitted, our submission is that when one compares the terms of section 111 of the Stamp Act and section 163 of the Customs Act, and for the reasons that we have advanced at paragraphs 17, 18 and, in particular, paragraph 19 of our written submission, it is to be seen that 163 does not achieve the same function as 111 in terms of its exhaustive provision, particularly when one has regard to what is prescribed in regulations.
BRENNAN CJ: It raises another problem in my mind. I understand you to say that section 163 in the present context would permit the exercise of the power thereby conferred to meet the claim made by the present respondents. In other words, the claim made by the present respondents is a refund, rebate or remission?
MR ROBERTSON: No, we may be at cross purposes, your Honour. There could have been a refund claim and if there had been, the subject matter would have fallen within paragraph (f) of regulation 126. I do not think I am disagreeing in any fundamental way with what your Honour has put to me.
BRENNAN CJ: The point that I want to direct your intention to is the scope of section 163. In a situation where section 269N operates, and money, to use a neutral term, has to be paid to a taxpayer, it can be paid under section 163(1), is that correct or not?
MR ROBERTSON: Yes, a refund - - -
BRENNAN CJ: Can be paid.
MR ROBERTSON: Can be made under section 163(1).
BRENNAN CJ: So that the payment that is to be made must answer the description of refund, rebate or remission?
MR ROBERTSON: Yes.
BRENNAN CJ: Now, if one goes to subsection (1A), that provides that:
the regulations made prescribe the amount.....of any refund , rebate or remission.....that may be made for the purposes of sub-section (1).
MR ROBERTSON: Yes.
BRENNAN CJ: Now, I take it that subsection (1A) would have no impact upon any cause of action that is litigated in reliance on section 269N in judicial proceedings?
MR ROBERTSON: Yes, we would so submit, yes, your Honour.
BRENNAN CJ: It could not affect it?
MR ROBERTSON: No.
BRENNAN CJ: So the right of refund, rebate or remission might be different not only as to interest, but even as to substance or principle under section 163 of what it would be in judicial proceedings?
MR ROBERTSON: Yes, and we would submit, your Honour, that that is another reason why it is evident that the intention of Parliament was to have an administrative regime which is not exhausted because if there were regulations prescribed in the amount to be refunded, which amount was less than the amount that had been paid, and I am not aware that there are any such regulations, but if there were and the power is there, that would be another reason why one would not construe section 163 and the regulations made under section 163 as operating in the same field or as operating exclusive in the field so as to oust the taxpayers' right to recover under the general law.
BRENNAN CJ: What is the situation with respect to 167, payments under protest?
MR ROBERTSON: Payments under protest: if there is a dispute, either actual or possible, at the time the money is paid - - -
BRENNAN CJ: Why at the time the money is paid?
MR ROBERTSON: Because 167 says:
If any dispute arises.....the owner of the goods may pay under protest the sum demanded - - -
BRENNAN CJ: I see.
MR ROBERTSON: Then if your Honour's question is, what is the relationship between 167 and 163 - - -
BRENNAN CJ: Yes.
MR ROBERTSON: The answer is provided by 167(5), which says:
Nothing in this section shall affect any rights or powers under section 163.
BRENNAN CJ: Yes.
MR ROBERTSON: Our submission is, your Honour, that there is a class, of which the present proceedings is one, that stands outside 167(4) or 167 generally - and I mention (4) because that is the limitation on the time within which proceedings are brought and how they are to be brought - but there is a class of case, of which this is one, that stands outside 167(4). It is 167(4) that operates as the relevant code in circumstances where it applies, that is where there is a dispute, actual or potential, at the time the amount is paid, but apart from 167 and 167(4), 163 and those powers operate as facultative only to authorise the payment out of consolidated revenue as a matter of mere administrative process where one can see that the list of items bears no necessary relationship to claims that may be brought under the Act, such as in the case of tariff concession orders.
BRENNAN CJ: Does it follow from your submission that in this case, when the payment was not made in strict compliance with 163, there really is no way in which a debt, if it be a debt, sued for in judicial proceedings, can be paid otherwise than in accordance with the Audit Act consequent upon a judgment?
MR ROBERTSON: Well, not necessarily consequent upon a judgment, we would submit, your Honour, because the Commonwealth has a capacity, frequently exercised, to settle actions before judgment, and otherwise than by ex gratia payments under the Audit Act. That was the point of our reference, I think, this morning to the Commonwealth, as we apprehended what had happened here, in light of a claim that was expected to be made, taking moneys from the Treasury to settle that expected claim. So that, even though, so far as the Commonwealth knew at the time, although, as we know, the sequence of events was different - sorry, I will start again. Even though the Commonwealth did not know at the time that proceedings had been commenced, although, in fact, they had been, our submission would be that the authority for withdrawing the amounts from the Treasury must have been the authority that derived from sections 64 and following of the Judiciary Act; that is, in anticipation of the claim that was to be made. So that it stands outside any provision for appropriation for the administrative refunds under section 163.
GUMMOW J: But this settlement of claims before suit, the authority to pay the money is placed under the Judiciary Act, is it? When the Commonwealth settles anticipated litigation, before institution, and compromises an action, what is the statutory source of the payment that is made? I should really be asking Mr Gageler that.
MR ROBERTSON: Yes. I understand it to be sections - it would not be the true operation of section 66 - - -
GUMMOW J: Well, that is what - - -
MR ROBERTSON: - - - because there would not be a certificate of a judgment.
GUMMOW J: That is right.
MR ROBERTSON: But, as I understand it, given that the liability is imposed in an anticipatory way by section 64 of the Judiciary Act that claims can be - or even potential claims can be settled on that basis. But we do not know what the facts were in this particular case, or under what authority the money was taken from the Treasury. We are assuming that that was what happened. Your Honours, as I have earlier put, in the written submissions we have set out in paragraph 9 our contentions in relation to special leave to cross-appeal, and I hope your Honours will not think us disrespectful if we do not develop those in the ordinary way that we would have done if this had been a free-standing application for special leave. Our submission is that your Honours would be able to deal with the merits of the cross-appeal, and either allow or reject the application for special leave at the same time.
We notice that the Commonwealth, for its part, in its written submissions in reply, does not oppose the grant of special leave but says that the arguments are wrong or not available.
Your Honours, I should say one thing about the facts seeing that my learned friend, Mr Gageler, has taken your Honours to a part of the second judgment of Justice Foster where his Honour says things about what it is that ACI must have had in mind at the time that it amended its application for a commercial tariff concession order. I only do this, in our respectful submission, not because it goes anywhere in particular because the way that the majority in the Full Court seems to have dealt with the facts is to say well these are the reasons that a single judge could, if the matter were remitted, deal with the application under 51A(1)(a) or (1)(b) so their Honours seem to have proceeded on the basis that these matters of fact went to the availability of the power and potentially to the manner in which it could be exercised.
Having said that, I should ask your Honours to look at the report of the Full Court of the Federal Court in (1994) 49 FCR 56. At page 56, that is the judgment of the Full Court of the Federal Court - and I will not go through the complete history of the matter other than to notice two things. I draw your Honours' attention to three things, I should say. One is at page 64 where is set out an extract from paragraphs numbered 97 through to - it goes on for some pages - 131 of a statement of reasons under section 13 of the Judicial Review Act as to why the decision maker at that point of time in 1992, that is 24 July 1992, why the Comptroller's delegate refused the application for the commercial tariff concession order and this is his subsequent statement of reasons for the decision.
This is his subsequent statement of reasons for decision. Paragraph 102 is the central paragraph because it was that paragraph, that finding of fact that led the present respondents to narrow their application in order to cut the Gordian knot of the litigation thus far, in other words, it had been going on at that stage for five years and there had just been a further one or two refusals, either on formal matters or substantive matters. What the decision maker said was:
Except in the case of carbonated beverages, for which PVC is unsuitable, the goods mentioned in paragraph 101 have for many years been packaged in PVC bottles.
And it was that finding of fact, as is evident from page 67B - if I could ask your Honours to look at that - does your Honours see that heading in italics? "ÁCI's further application in September 1992 for reconsideration".
By letter dated 28 September 1992, ACI's agent wrote to the Comptroller as follows:
"We refer to your refusal to grant a Commercial Tariff Concession Order in respect of PET Resin -
and then the next paragraph:
On behalf of ACI Petalite Pty Ltd, we now ask that, in light of the finding at paragraph 102 of the section 13 statement dated 11 September 1992, and without prejudice to our other rights, you reverse that decision in part by granting a Commercial Tariff Concession Order in respect of PET resin for use in the production of plastic bottles -
and there was some further reference to that matter. So, it was the finding of fact about a limited use which led to the change being made but, of course, contrary to his Honour Justice Foster's observation which my learned friend read out, it was still a further almost two years after this event of narrowing the class until the matter was finally resolved - - -
KIRBY J: But the basic complaint is that it would involve a procedural unfairness to the appellant if we were to permit you to rely on section 51A(b).
MR ROBERTSON: Yes.
KIRBY J: You did not plead this, you did not run it at trial, you did not argue it. It was raised by the Bench itself. It was resisted by Mr Gageler.
MR ROBERTSON: But, your Honours, there seems to us, with respect, to be an ambiguity. We, certainly, did not contend that there was a legal consequence following from the failure of the Comptroller to make the commercial tariff concession order earlier. In other words, it was pleaded in the statement of claim that the refunds and so on, and the right to refunds, followed from a legal proposition, that is that the commercial tariff concession order should have been made earlier, and we certainly abandoned that but we did not abandon, because the transcript, even the pages in the appeal books are replete with it, complaints about the length of time that it took as going to the circumstances relevant to the exercise of the section 51A discretion and matters of that sort.
GUMMOW J: The length of time, in part, is bound up with the vigour with which there was resistance by the local manufacturers, is there not, ICI and Goodridge, throughout this saga? In a way, this has been a tripartite dispute with the Customs in the middle.
MR ROBERTSON: We would not accept that characterisation. We would certainly accept that the PVC bottle manufacturers maintained that the commercial tariff concession order should not be granted. We would certainly accept that. But in terms of procedural fairness, we have dealt with it in the written submissions, and I will not repeat that. But we do not see where the matter goes, given that the matters that the majority of the Full Court were talking about were all matters that were in the judgment of the Full Court and were used by the majority, really, for no other reason than to identify the availability of the power and how it might be exercised when, pursuant to their order, it was remitted.
So it does not, in our respectful submission, have a consequence in procedural unfairness because, as we understand the judgment, it was not used in order to defeat any rights that the present appellant had. The other factual matter that your Honours should be aware of, for completeness, is in the same report, at page 82 - and I do not think we have mentioned this in our chronology of events - that two things happened: there was the limited class, in light of the finding of fact that I have taken your Honours to, and also there was an application to limit the time during which the commercial tariff concession order was to operate, because there is a statutory provision for having a cut-off time. The reason that a cut off time was nominated appears at page 82C, and their Honours say:
this reasoning is, in our opinion, subject to the possible operation of s 269E (and its application has never been suggested in the evidence, especially in the light of the circumstance that as from March 1992 the import of PET resin was dealt with by a specific by-law.
So that is why there was proposed to be a cut-off date, as there was when the commercial tariff concession order was made, and that was why the mandatory order made by the Full Court took the form that it did, as is set out in the balance of page 82.
Your Honours, in relation to the cross-appeal: as I have indicated, so far as the windfall matter is concerned, we have put our submissions at paragraphs 35 and following. Could I ask your Honours, though, to correct a typographical error which might otherwise be misleading. On page 17, the heading, "The alternative basis for interest" has got in the wrong place. It should be below paragraph 37 and not above it. Does your Honour see that at page 17? I apologise for that.
There is two or three other matters that we wish to mention. One is what we have said there about windfall games and matters of that sort, and the approach to be taken to the power to award interest is, in our submission, consistent with what his Honour Chief Justice Gibbs said in Cullen v Trappell [1980] HCA 10; 146 CLR 1, at page 22, and, although we will not take your Honour to it, the case that we have referred to at the foot of page 37 - or the two cases - one is Falkner v Bourke, which is the decision of the Court of Appeal in New South Wales as to generally when interest is to be awarded and when it is not, and the other decision, Pech - if that is how it is pronounced - v Tilgals, is Justice Dunford of the Supreme Court of New South Wales applying Falkner v Bourke in the context of an allegation that interest should not be awarded because of punitive windfall games to the person to whom interest was to be given. Then, your Honours, could I supplement, lastly, paragraph 43 by two references - or perhaps three references. One is to - - -
KIRBY J: Do we have this unreported decision of the New South Wales Court of Appeal?
MR ROBERTSON: I think so, your Honour. Yes, it was handed up before the luncheon adjournment. But his Honour, the President of the Court of Appeal, refers in that National Australia Bank decision to the decision of Justice Wilcox in State Bank v Commissioner of Taxation 62 FCR 371, at page 387, where Justice Wilcox discusses the present question, that is, a separate restitutionary cause of action for interest and, indeed, made an award of interest on that basis in that case.
GUMMOW J: Of what is it restitution? It is not reversing any transaction, is it?
MR ROBERTSON: No, your Honour, it is providing a remedy, as we have endeavoured to explain it in paragraph 42, that is - - -
GUMMOW J: For use of someone else's property, really.
MR ROBERTSON: Yes, and - - -
GUMMOW J: Make an account of profits.
MR ROBERTSON: And again it depends, in this particular case, on what we submit is the proper construction of 269N, because unless - the position being that the tax paid at the time, at the time it was paid, was properly payable, so, therefore, it must proceed on the basis that - we submit it does proceed on the basis that it was paid on the condition that if the commercial tariff concession order was made, then the respondents should be put back in a position that they would have been in had their goods been imported at the proper lower rate.
We have given your Honours a reference in paragraph 42 to paragraph 2807 of Mason and Carter, and there is also a reference - and I am not sure your Honours have this reference - Star v O'Brien in New South Wales Court of Appeal. We give your Honours that reference for completeness because their Honours there were content to assume, for the purposes of argument - and I will give your Honours the reference - that there could be such a claim sustained. It is 40 NSWLR 695 at pages 703, which is Justice Clarke; 706, Justice Cole; and 707, Justice Beazley.
In answer, finally, to paragraph 16 of the Commonwealth's submissions in reply, which was the point that the sum should be, as we would apprehend it, some special rule for the Commonwealth where the money has been paid into consolidated revenue, we submit that the short answer is that the Commonwealth has had the use of the money and it does not matter, so far as the taxpayer is concerned, whether the Commonwealth invested the money or borrowed less money as a consequence; it is immaterial, in our respectful submission.
GUMMOW J: The question really is whether the community at large should bear this additional burden as a result of this statutory scheme designed to partially alleviate your position. If you are going to get down to tintacks, that is what is involved. Why should that be?
MR ROBERTSON: Your Honour, in a sense that is so, but equally it is so, in our respectful submission, whenever either money is repaid or perhaps more accurately - - -
GUMMOW J: No, no, these are public moneys.
MR ROBERTSON: No, I am sorry, your Honour, I am talking about public money but wherever public money is paid with interest then the same observation or criticism, if it is - - -
GUMMOW J: If there is a common law claim then the interest will not run with it. You want to make it run. I ask you why?
MR ROBERTSON: We submit, your Honour, that the - - -
GUMMOW J: We are talking about a liquidated claim.
MR ROBERTSON: We submit that in this particular case, then - - -
GUMMOW J: You are asking us to change the law. That is what I am trying to get you to. I tried to get you to it before lunch. You will not come to the point. The question is, why should it be changed? Not by feel-good words like "restitution" and so on. One has to get down to specifics.
MR ROBERTSON: Well, your Honour, our submission is that the same result should follow. Contrary to our primary submission, if there is a limitation to be found in section 51A of the Federal Court of Australia Act, then our submission is that for the reasons that we have identified, that is in paragraph 39, the function of interest, the construction of 269N, the basis upon which we say the sums were paid, which will be later adjusted by repayment when the commercial tariff concession order was made, we submit that for those reasons and the reasons which we adopt from paragraph 2807 in particular of the Mason and Carter book that that remedy is an appropriate remedy to restore the respondents to the position that they would have been in if they had the use of the money.
Your Honours, those are our submissions, if the Court pleases.
KIRBY J: Could I just ask you very briefly in relation to orders that you seek in your notice of cross-appeal, order (b), what on earth would that mean to a judge to whom it was sent back, that is to say:
declare that the Respondent is entitled to an order for interest in accordance with restitutionary principles -
I assume that that is alternative to (a). This is on page 235.
MR ROBERTSON: Page 235 of the - - -
KIRBY J: It is the cross-appeal, your document. This is in order to expunge the windfall clause that the Full Court majority felt had to be added.
MR ROBERTSON: Paragraph (a) is directed to expunging the windfall matter.
KIRBY J: Yes, that is (a), now what about (b)?
MR ROBERTSON: Paragraph (b) would be in the alternative. I fully accept, your Honour, that as it is framed it probably would mean not very much to a judge to whom it was remitted, which would not be - - -
KIRBY J: How could this Court ever make such an order?
MR ROBERTSON: - - - which would not be covered by paragraph (c) to which it is an alternative. Paragraph (b) - - -
KIRBY J: Is not the problem that you have on your general claim under restitutionary principles, the difficulty of framing an order that would have any real legal effect and which would give any guidance whatsoever to the judge at first instance?
MR ROBERTSON: Your Honour, because the way the matter has been litigated this far, that is that the matter has not been determined on that basis, then it is a matter of framing an order, and (c) would suffice, in our respectful submission, so that the matter could be - as it would have to be - the subject of evidence.
KIRBY J: Yes, I just say to you that I find it impossible to conceive the making of an order in those terms.
MR ROBERTSON: Your Honours, we would be content at (b) - - -
KIRBY J: It is a serious matter for a court to make an order, and by declaration. However, I have said my say.
MR ROBERTSON: I do not know whether it answers your Honour's point, but we would be content for (b) to be deleted and for the matter - - -
KIRBY J: Does that mean you are abandoning your free-standing - - -?
MR ROBERTSON: No, your Honour, because (c) covers the same ground. If your Honours please.
BRENNAN CJ: Thank you, Mr Robertson. Yes, Mr Gageler.
MR GAGELER: Your Honours have a document entitled, "Appellant's Submissions On Cross-Appeal". There is nothing I wish to add to those submissions, save in relation to the controversial paragraph 16. May I give your Honours simply two references: one is Johnson v The King (1904) AC 817, at page 822, and Justice Wilcox's decision in the State Bank Case, 62 FCR 371, at page 380.
Gaylor is dealt with in his Honour Justice Wilcox's judgment at first instance at pages 73 to 75 of the appeal book and in our written submissions at paragraph 34, and we rely upon analysis in both of those places.
In relation to the submission that nothing flowed from the Full Court's factual analysis of the circumstances of the case, what flowed was the order made by the Full Court at page 223 of the appeal book, which is, in substance, a determination of liability on the part of the Commonwealth to an order for interest under either section 51A(1)(a) or 51A(1)(b).
The answer to your Honour Justice Gummow's question about where is the appropriation for the settlement of actions before the commencement of proceedings. There is what is called a compensation and legal vote which is included in the annual Appropriation Acts - I believe it to be Appropriation Act No 1. The actual procedures for settling actions are matters dealt with in the finance regulations made under the Audit Act.
GUMMOW J: Thank you.
MR GAGELER: Those are my submissions in reply.
BRENNAN CJ: Thank you, Mr Gageler. The Court will consider its decision in this matter.
AT 4.18 PM THE MATTER WAS ADJOURNED
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/HCATrans/1997/230.html