Thiess v Collector of Customs & Ors [2014] HCATrans 38 (5 March 2014)

Last Updated: 5 March 2014

[2014] HCATrans 038

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B57 of 2013

B e t w e e n -

ALAN CHARLES THIESS

Appellant

and

COLLECTOR OF CUSTOMS

First Respondent

COMMONWEALTH OF AUSTRALIA

Second Respondent

C- AIR LOGISTICS SERVICES PTY LTD ACN 102 936 694

Third Respondent

GLOBAL LOGISTICS MANAGEMENT CORP PTY LTD ACN 111 486 732 (IN LIQUIDATION)

Fourth Respondent

MATTHEW JONES (NOT PARTY TO APPEAL)

Fifth Respondent

PAUL STEVENSON

Sixth Respondent

FRENCH CJ
HAYNE J
KIEFEL J
GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 5 MARCH 2014, AT 10.16 AM

Copyright in the High Court of Australia

____________________

MR A.J.H. MORRIS, QC: May it please the Court, I appear with my learned friend, MR P.L. SOMERS, for the appellant. (instructed by Walsh Halligan Douglas Lawyers)

MR J.T. GLEESON, SC: Solicitor-General of the Commonwealth of Australia: May it please the Court, I appear with MR G.J.D. DEL VILLAR and MR J.K. EDWARDS for the first and second respondents. (instructed by Australian Government Solicitor)

FRENCH CJ: I think you have a summons to extend time for the filing of a notice of contention.

MR GLEESON: Yes, we seek that relief.

MR MORRIS: That is not opposed.

FRENCH CJ: Yes, you have that leave. Yes, Mr Morris.

MR MORRIS: I should apologise to the Court at the outset: I do not have the three-page summary of my oral submissions. That is entirely my oversight, for which I am deeply embarrassed. If it in any way militates from that oversight, my submissions will not in substance depart from what is in our written outline.

FRENCH CJ: It is a fairly important document, Mr Morris.

MR MORRIS: It is, yes.

FRENCH CJ: It is unfortunate that it is not presented, but you had better proceed.

MR MORRIS: Thank you, your Honours. Your Honours, the approach which we adopt in this appeal is one which involves nothing more nor less than looking at the words of the sections and arriving, we would say, at the inevitable conclusion that they cannot apply to a situation where a person, through their own error, enters into the COMPILE computer system incorrect information, thus having no opportunity, in a practical sense, to make a protest as contemplated by section 167(1).

We begin by drawing particular attention to the narrow parameters in which subsection (1) is expressed. If any dispute arises as to three matters: the amount or the rate of duty payable, or the liability of the goods to duty. That is the first criterion. Then there are other provisions about proposed alterations. Putting those to one side:

the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable . . . unless the contrary is determined -

Subsection (4), in our submission, proceeds entirely on the assumption that the provisions of subsection (1) have been engaged, it is incapable of operation in any other situation, and that point has been explicitly determined by this Court. That the whole scheme of the section taken as an entirety is such that the subsequent subsections all depend on the engagement of subsection (1). Subsection (4) is then the provision which is critical in this case, that:

No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times –

That makes sense only if it is a case to which subsection (1) applies. It is, in our submission, not entirely inapposite that this appeal comes on for hearing on Ash Wednesday because there is, as it were, a sectarian divide in our approaches.

Our submissions are unashamedly fundamentalist, that one takes the words of the section and applies them. The approach taken against us is that it cannot say what it seems to say. It must some deeper spiritual meaning which will be revealed only to the initiates. Our approach has the benefit that in Malika Holdings v Stretton, this Court specifically adopted the approach to interpretation for which we contend, and we rely in particular on the observations of Justice McHugh in that case commencing in the Commonwealth Law Reports (2001) 204 CLR 290 at page 298. His Honour at paragraph 27 dealt with the long established principle that:

a statute should not be construed as amending fundamental principles, infringing common law rights or departing from the general system of law unless it does so with “irresistible clearness”.

His Honour then went on to explain that that well settled principle is applied with less force in circumstances where there may be debate as to what is characterised as a common law right in a general system of law. But then on the following page, page 299 at paragraph 30, his Honour remarked:

Speaking generally, a much surer guide to the legislative intention in areas of legislation dealing with ordinary rights or the general system of law is to construe the language of the enactment in its natural and ordinary meaning, having regard to its context –

That, one might say, is perfectly trite, but it is a clear statement relevant to the very provision with which we are dealing on this occasion. His Honour then continues in paragraph 31, “The Act,” meaning the Customs Act, and particularly this section of the Customs Act:

even on the construction adopted by the Court of Appeal, does not interfere with fundamental legal principles or rights derived from those principles. On that construction, it merely suspends the right of a person to challenge the rate of duty until the person allegedly liable pays under protest the sum demanded.

We would say that this case is, if anything, stronger than Malika because in this case, and indeed in any case where the basis of the claim is the importer’s own mistake of fact, there can be no sensible opportunity for a protest. If it is the importer’s mistake of fact, then there is no logical or rational basis for assuming that an importer, having made that mistake, is going to protest or that there is even going to be a dispute preceding a protest in respect of that mistake of fact.

It may be said against us that, as it was on the special leave hearing, that this approach, in effect, advantages the importer who is reckless or negligent as against the importer who is astute and alert to his or her rights. That consequence, it is said against us, means that the section must be construed in a way which imposes a duty or obligation on the importer to act diligently in order to ascertain his or her rights.

The difficulty with that approach is that the section just does not say that. It is not premised on the basis that there is no dispute but there should have been one. It is not premised on the footing that a reasonable person in the position of the importer might have raised a dispute. It is premised explicitly on the footing that the importer is in dispute with the customs authorities and therefore has an opportunity to pay under protest.

One attaches significance, in our submission, in this context, to the fact that section 167 appears immediately under the heading of Division 4, “Disputes as to duty”. It is a section designed only to cover the situation where a dispute has arisen; not a situation where a dispute might have arisen. When one goes to the authorities and - - -

HAYNE J: Before you do that, how then are you construing subsection (4)?

MR MORRIS: We are construing subsection (4) on the basis that where there has been a dispute and a payment made under protest in accordance with subsection (1), subsection (4) operates according to its terms.

HAYNE J: What meaning are you giving to the words:

No action shall lie for the recovery of any sum paid to the Customs as the duty payable . . . unless –

MR MORRIS: The meaning we give to those words is that they apply in accordance with these terms in any case to which the section itself applies.

HAYNE J: Why do you add the qualification? On what basis do you add the qualification that you just add?

MR MORRIS: Well, essentially on the basis of authority that it has been determined by this Court and elsewhere that the section as a whole operates on the presumption that it is a case to which the subsection (1) applies; that subsection (4) has no operation outside the constraints contained in subsection (1).

KIEFEL J: Do you rely upon what was said by Justices Gummow and Callinan in Malika Holdings (2001) 204 CLR 290 at page 319, paragraph 95?

MR MORRIS: We certainly do, although we would start a little - - -

KIEFEL J: Well, you might start at paragraph 90 where it is pointed out that the section:

is a provision for the benefit of the owner - - -

MR MORRIS: Yes.

KIEFEL J: But at paragraph 95 it is said:

the common law rights . . . are replaced by a statutory action –

when the conditions for the statutory action are satisfied, and one such condition is that there be a dispute.

MR MORRIS: Precisely. I am indebted to your Honour. That is the statement to which I was alluding when I answered Justice Hayne’s question in saying that this Court has embraced the notion that the restriction in subsection (4) applies only when the section as a whole is engaged.

KEANE J: But if you accept that – if you rely on paragraph 95, you are accepting that the common law rights are replaced by the statutory action. Statutory action is only available if there is a dispute. If the owner pays without dispute, your statutory cause of action does not even get started.

MR MORRIS: And we have to accept that. The statutory cause of action can never get started unless there has been compliance with subsection (1). That is a condition to the statutory cause of action. The point that we rely on is that the statutory cause of action only comes into being as a substitution for common law causes of action, or general law causes of action, in the circumstances in which the section as a whole is engaged.

KEANE J: So you dispute the proposition in paragraph 95 in Malika that the common law rights are replaced by the statutory action?

MR MORRIS: No, we adopt them with the very qualification which their Honours articulated at the end of that sentence, “if the conditions spelled out in the section are satisfied”. If the conditions spelled out in the section are not satisfied, then as your Honour Justice Keane says, the statutory cause of action does not arise. But equally, if the conditions spelled out in the section are not satisfied, there is no substitution of the common law or general law rights of action.

HAYNE J: A very odd form of replacement, Mr Morris.

MR MORRIS: Your Honour says that, with respect, but what is plain is that section 167 is not a complete code of every possible situation in which an importer of goods may have a cause of action against the Commonwealth. For a start, it is only limited to very specific types of disputes; disputes as to rate or amount of duty, or disputes as to whether the goods are liable to duty. A different dispute altogether, a dispute for example of an administrative nature as to whether an instrument was lawfully made or was ultra vires, which was the situation canvassed in Kawasaki Motors, is not a dispute of that character.

A dispute which arises not as a result of the importer paying the duty under protest, but as a result of the customs authority instituting proceedings against the importer to recover the goods is not the type of dispute which section 167 is intended to deal with. So it is our case that section 167 – your Honour Justice Hayne describes it as a very curious form of substitution, but it is only a limited substitution, as Justices Gummow and Callinan noted. It is only a substitution which takes effect if the section as a whole is engaged.

HAYNE J: I would have thought what their Honours Justices Gummow and Callinan were speaking of might need to be understood in the light of what their Honours say in paragraph 92. In particular, it needs to be understood in the light of the fact that in Malika it was not an action for recovery of duty paid, it was a defence to an action for duty.

MR MORRIS: Yes, and I accept that it is not on point in that sense, but it shows that the section as a whole is not a complete code defining the rights of the importer in respect of goods brought in for home consumption.

HAYNE J: That proposition may be true. The relevant question is not the accuracy of that broad proposition. The relevant question is whether section 167 regulates when and how an importer may recover duty which has been paid.

MR MORRIS: Yes, and we begin with the proposition that it can never be said to regulate every circumstance falling within the characterisation that your Honour just put to me because there are certain types of disputes that simply are not covered by it, and we gave the example of a dispute as to whether a statutory instrument has been validly passed or whether it is intra or ultra vires. Not a dispute as to the rate or amount of duty, or a dispute as to whether the goods are liable to duty, but a dispute of an entirely different character.

FRENCH CJ: So, if an importer pays duty in the mistaken belief that on its proper construction a particular classification applies to the goods that are being imported and later gets legal advice that that construction is wrong, the importer can bring an action on the basis that the payment was made under a mistake of law?

MR MORRIS: Subject, of course, to what this Court said in David Securities about restitutionary claims based on the state of law but - - -

FRENCH CJ: Yes, but you would say that any class of mistake affecting a payment of duty by an importer will support a restitutionary action subject to all the usual qualifications, notwithstanding the provisions of section 167?

MR MORRIS: It will, if it is not a - - -

FRENCH CJ: It rather blows a large hole in the whole scheme does it not?

MR MORRIS: We would say no, but we would say no in this context, and I would ask your Honour’s indulgence to explain the context. This section has been in its present form for over 100 years. It plainly was not drafted with a view to the modern technologies which are available for assessing Customs which have been, under other provisions of the Customs Act, specifically sanctioned but not in a way which amends the provisions of section 167. So it proceeds on the assumption that a demand being made by the Customs authorities will arise in circumstances where there is, as it were, an interchange between the importer and the Customs authorities.

HAYNE J: Why? The importer here did not simply press money upon the Commonwealth, I do not think. The importer here could not get this article out of the control of Customs without payment, could he?

MR MORRIS: That is two questions; if I may answer them one at a time. The answer to the first is yes, he did press money on the Commonwealth. The Commonwealth at no stage – no officer of the Commonwealth turned his or her mind to the issue and said, “This is the amount of duty payable. I’m demanding it”.

What occurred, and we believe this is uncontentious, is that the importer’s clearing agent enters certain figures into the computer system, the computer system applies some algorithm and presents a total figure as being payable. So, yes, in every practical sense it was pressing money on the Commonwealth. It was not the Commonwealth forming a view that this is the amount that should be paid. It was the taxpayer, through the error of his clearing agent – and I think the error is common ground – arriving at a conclusion that this is the correct amount to pay and then paying it.

KIEFEL J: But the COMPLILE system calculates the required duty on the basis of the information provided and then populates the required amount into a field on the computer screen. That is how it works.

MR MORRIS: Yes.

KIEFEL J: The provisions which require that duty which is assessed must be paid before the goods are released for consumption; those facts together would constitute a demand which is acceded to by payment. Is that not how it works?

MR MORRIS: We would say not, but we would say not in this context: when the legislative amendments were enacted which allow for the use of the computer technology in themselves, those legislative amendments attached a number of legal consequences to the entry of information into the computer system and the receipt by the importer of responses from the computer system.

What the Parliament did not do at that time was to address any of this from the context of section 167 and attach to a computer-generated figure the legal consequences of a demand on behalf of or in the name of the Commonwealth. That is why we make the point in our written submissions in reply that to characterise a figure produced by a computer applying an algorithm as a demand made by the Commonwealth would necessarily entail attaching to that act all the consequences, both beneficial and disadvantageous, of an Act of the Commonwealth.

HAYNE J: When my electricity supplier uses a computer to generate a bill derived from information fed to it by a smart meter I would have thought the electricity supplier was requesting that I pay the amount indicated on the bill. Would you go with me that far?

MR MORRIS: I certainly would, your Honour, without reservation.

HAYNE J: What is different here?

MR MORRIS: What is different here is that no agent of the Commonwealth has any involvement in translating what my client enters into the computer into the electricity bill that is received. It is a system where my client keys in certain figures into a computer and the computer says this is the mathematical consequence of the figures that have been keyed in.

FRENCH CJ: Well, this is the COMPILE system and I am just looking at the agreed facts at page 48, item number 9, I think – beginning at number 8 you have the importer’s agent “fills in a computer Import Entry” and puts in 108 tonnes, and then “The COMPILE System calculates and displays the assessed Customs duty”. Now, the COMPILE system, as I understand it, is a software system on a Customs website of some kind.

MR MORRIS: That is so, yes.

FRENCH CJ: So this is Customs telling the importer what has to be paid in order to have the goods entered into Australia.

MR MORRIS: What your Honour says is literally correct, but I am not sure that I can accede to the proposition that that makes it a demand by the Commonwealth - - -

FRENCH CJ: Well, that is the debate.

MR MORRIS: Yes. In the same way that if I go to the ATM and put my card in to withdraw $100 and the machine spits out $100,000, I cannot say that that was a gift by the bank because it is not the result of a conscious decision. It is the result of, in that instance, a computer error. Indeed, as your Honours will be aware, there have been cases where people have been prosecuted for retaining the results of such computer errors. Attaching to a computer error, whether the result of an erroneous algorithm or the result of the erroneous inputting of data, the consequences of a conscious demand made by the Commonwealth is a pretty serious step.

HAYNE J: What does it matter whether there is an officer standing across the counter from the Customs agent who, in response to the information supplied by the Customs agent, turns to an abacus and works out the amount of money and says there is the form, there is the amount? What is the difference?

MR MORRIS: The difference is the legislation dating in its present form from over a hundred years ago presupposes that a demand will be made in the context where the importer has the option either of saying, “Yes, I accept that is the right figure. Here is my cheque”, or saying, “I dispute that that is the right figure. Here is my cheque, but I am paying under protest”. That is the difference.

Where the computer spits out a figure which is unarguably erroneous – and it is our fault, we put in the wrong entries and so we get the wrong figure – but when that happens it is just not the situation for which section 167 was drafted, it is not the situation in which, whether on a face-to-face encounter or otherwise, an authorised agent of the Commonwealth says you owe this much and the taxpayer has the opportunity and means to say, “Well, no, I dispute that, I owe less than that”.

HAYNE J: Do you say that 167 has a different meaning now from the meaning it had at the time of its enactment?

MR MORRIS: No.

HAYNE J: Therefore, do you say that 167 can have no operation in respect of entries for home consumption that are made using the COMPILE system?

MR MORRIS: I do not go that far because it is perfectly conceivable that there would be situations where, despite the use of the COMPILE system, a dispute arises in that the importer says this system has applied the wrong tariff, or this system is erroneous and I am paying under dispute, and when that happens the importer is then confined clearly within the terms of subsection (4); there has been a dispute, there has been a payment under protest, therefore subsection (4) is operative. That is very different, with respect, from the situation where the person’s own error is not only the basis of what would otherwise be a general law cause of action. There is also the circumstance which prevents the importer from paying under protest.

HAYNE J: So 167 applies only where the importer is either conscious of error or asserts error? That is the proposition, is it not?

MR MORRIS: We would say there are two elements. That is one of the elements. The prior element is that there must actually be a demand, but subject to that qualification, yes, your Honour accurately summarises my proposition.

GAGELER J: So, textually you say that the reference to “no action” in subsection (4) is a reference to an action of the kind referred to in subsection (2), which is only brought in the circumstances of subsection (1). Is that the way you get there textually?

MR MORRIS: That is the way we get to it and we think, with respect, that the clearest statement of how we get to that is the decision of the Full Court of the Federal Court in Parks Holdings Pty Ltd v Chief Executive Officer of Customs [2004] FCAFC 317; (2004) 141 FCR 165, in which we refer specifically to the observations of the Court unanimously at page 175, where their Honours begin:

Section 167 of the Customs Act has always been concerned with disputes as to duty. However, a new provision was substituted in 1910, in consequence of the decision in Sargood Brothers . . .

In its original form, s 167 was as follows –

Then their Honours explain the differences, and the third difference, relevantly for present purposes, is identified about halfway through paragraph 45 where their Honours say:

A third difference is that s 167(4) now expressly precludes any action for recovery of any sum paid to Customs as the duty payable in respect of the goods, unless the requisite protest has been made and action commenced –

If it stopped there we would say it is clearly against us, but then - - -

GAGELER J: As is the reference I think, Kawasaki Motors is against you, is it not?

MR MORRIS: Well, I will come back to that if I may because, in our submission, it is actually in our favour, but we will come back to that. When your Honours reach page 179, in paragraph 54 the Full Court of the Federal Court began the observation that:

Section 167 is expressed to apply “if any dispute arises –

Their Honours note that:

The word “dispute” is not defined, but bears its ordinary meaning of controversy or difference of opinion. The dispute must of course relate to the amount of duty payable or the liability of goods to duty, not to some other aspect of the administration of the Customs Act –

which was the point I made earlier –

a point illustrated by Ex parte Woolworths and Ex parte Berliner. But all that is necessary is a dispute “in fact”: Sargood Bros v Commonwealth at 308, per Higgins J.

Section 167 seems clearly enough to be drafted on the assumption that for a dispute to have arisen as to the amount of duty payable or the liability of goods to duty, the Collector must have demanded that the owner pay a sum “as the duty payable in respect of the goods”. It is difficult to envisage how a dispute between the Collector and an owner could arise without the Collector demanding from the owner payment of the duty said to be payable in respect of the goods. As Malika confirms, the administration of the Customs Act depends on the honesty and diligence of owners in describing imported goods accurately so that they may be properly assessed for duty. If Customs disagrees with the description of goods entered by the owner, or claims that goods not entered for home consumption or otherwise are liable to duty, at some point the Collector will have to do something that can be characterised as making a demand for the duty payable in respect of the goods. There may be a factual question in any given case as to whether in fact a demand has been made and therefore a dispute of the kind envisaged by s 167 has arisen . . . But in the ordinary case there will be little room for doubt that the Collector has in fact demanded the sum said to be due.

Then their Honours continue in 56:

This construction of s 167 is consistent with the principal object of the section. Where a dispute arises between Customs and the owner of imported goods, triggered by Customs in fact demanding the duty said to be payable in respect of the goods, the owner may take advantage of the procedure in s 167. In particular, the owner, upon payment of the duty demanded, can secure a judicial determination of the dispute and can obtain release of the goods pending that determination.

In our submission, every word of that is, as it were, contrary to the notion that the section is intended to operate in a situation where there is no disputing any genuine sense of the term.

GAGELER J: By the section you mean subsection (4), do you?

MR MORRIS: Yes. Subsection (4) but subsection (4) in the context of the section read as a single unit.

GAGELER J: So underlying that, is there some notion that it would be manifestly unjust for subsection (4) to have the effect of excluding actions that could not be brought under subsection (2)?

MR MORRIS: We would urge the view, and I hope I am responding to your Honour’s question, that the injustice in that is so apparent that the Court should strain against giving an interpretation which effectively denies any remedy to a person who has simply made a mistake.

GAGELER J: Section 163, the operation of which is expressly preserved by subsection (5).

MR MORRIS: Well, section 163 is, we would say, neither here nor there because it is simply a facilitative provision that allows for refunds to be made in certain limited circumstances as an administrative action. It is not, in itself, something which takes away what would be a general law right absent the exclusion in subsection (4) of section 167.

I am not perhaps putting that very clearly, but our point is that to remove the general law right to bring an action on a restitutionary basis for a mistake of fact one has to arrive at the conclusion either that there is an express abrogation of that right or that there is a code which means these are the only ways in which an importer can ever get back his or her money.

Now, in terms of an express abrogation of general law rights, 167(4) says what it says. If it applies, then that is the end of this appeal. If it does not apply, one cannot cobble together 167 and 163 and say if you look at both of them together that is a code, because plainly it is not. Plainly, it does not cover the sort of cases alluded to by the Full Court of the Federal Court in Parks Holdings where, for example, there is a right of recovery because of an erroneous administrative decision, not because of a demand for excess duty or an excessive amount of duty or a dispute as to whether goods are exigible to duty, but an entirely different character of dispute.

KEANE J: But if we come back to Justice Gageler’s question of you, which is, is there some fundamental notion of justice or injustice which would lead a court to strain against the construction for which your opponents contend, is not the circumstance that section 163 did provide in terms a remedy a reason not to strain in the way that you urge?

MR MORRIS: We would urge not, and we would urge not on the footing that, as we say, 163 facilitates refunds and similar disbursements in certain limited circumstances, but it does not cover the entire range. It does not cover, for example, the situation alluded to in Parks of administrative error.

KEANE J: But you accept it covers this case?

MR MORRIS: It would have covered this case if my client had been in a position to take advantage of it within the time limits and other constraints. It would have covered this case, but as a part of the process of statutory interpretation, the fact that it might have applied in this case if certain things had happened is no reason, we would say, for construing 167 more widely than its express terms bear, that 167(4) only operates where the section as a whole is engaged. I have made that point, and I am really only repeating myself. The fact that there are remedies under 163 which do not cover the field but which may assist some importers on some occasions depending on the circumstances is not in itself a good reason for saying we do not strain to give 167 a meaning confined within its express terms.

Your Honours, the consequences of the attempts which have been made to give 167 a wider interpretation than that which we contend can be seen in what we would say is the series of convoluted and, with the deepest respect, unconvincing attempts which have been made to lay down some sort of proposition that when you read section 167, you read it against the background that the importer has a duty or an obligation to look after his or her own interests and therefore to make a timely assessment of whether or not duty should be payable, and therefore to make a payment under protest within the section. The clearest instance of that – and I appreciate in the present context it is only a single judge decision, but nonetheless it highlights the difficulties that such an interpretation raises, and we refer in that context to the decision of Justice Rolfe in Matchbox Toys Pty Ltd v The Chief Executive of Customs [1997] NSWSC 494.

Regrettably, I am not sure whether any of your Honours have attempted to read this case, but it is not easy to read because of the computer printout – another instance of computer glitches, I suppose – but the computer printout which makes it rather difficult to distinguish what is his Honour’s own remarks and what is quotations made by his Honour from other sources. Adding to the complication is the fact that the pages are not numbered.

But if one goes to the fifth page of the printout – I am most indebted to my learned friend. Apparently, your Honours have a different version which might be easier to work with. If your Honours then go to page 8 of that version, the agreed facts are set out on pages 6 and 7. Then his Honour sets out other findings of fact which he himself made and the relevant findings include, in items 7 and 8:

The monies paid by the Appellant were paid without protest –

And 8:

There was no reason why monies paid as duty could not have been paid under protest –

So that was the factual context. I am sorry that I am working from a different copy. Perhaps the easiest thing is to get my junior to highlight the passages and I will come back to that so that I do not waste the Court’s time.

Your Honour Justice Gageler asked me about Kawasaki, which was the next case I was going to come to. Your Honours will have noted that in Kawasaki Justice Beaumont dissented and, although it is a dissenting judgment, we would draw particular attention to his Honour’s approach which, we would respectfully say, is clearly the correct one. His Honour, at page 249, cites from the judgment of Sir Samuel Griffith in the case - - -

FRENCH CJ: This is Comptroller-General of Customs v Kawaski Motors (No 2) [1991] FCA 518; (1991) 32 FCR 243.

MR MORRIS: Yes, 32 FCR 249, where Justice Beaumont refers to the judgment of Sir Samuel Griffith in respect of the legislation in the form which it took prior to the amendments which brought it to its current form. That is relevant only as demonstrating, in our submission, why the legislation was amended. Sir Samuel Griffith noted that the words of section 6, as it then was:

are probably open to the construction contended for by the defendant; but, if that construction were adopted, it would have the effect of changing the ownership of this money on that day. Up to that time the money had clearly been recoverable by the plaintiff if an action had been brought for that purpose. If, therefore, the section receives the construction contended for by the defendant, the effect would be to deprive the plaintiff of a vested right. Such a construction should never be adopted if the words are open to another construction. Comparing that section with the two preceding sections it will be seen that another construction is open.

Then on page 250, again there is a lengthy quotation from Sir Samuel Griffith setting out how his Honour rejected the construction then advanced by the Commonwealth of section 167 in its then form, which would have excluded the rights of the importer, particularly the words:

In my opinion it is impossible to regard the circumstances as giving rise to a dispute within the meaning of s 167. Both parties were aware that the goods were not by law liable to duty. The only question upon which a difference of opinion could arise was whether Parliament would or would not in the future ratify the collection.

That is, as I say, what led to the section taking its present form. If one moves on to the majority judgment in Kawasaki the critical passage, in our submission, is at page 263 where Justices Hill and Heerey begin on that page saying that:

It may be conceded that s 167 confers upon an importer, who is in a relevant dispute with the Collector, a choice whether or not to pay under protest, but it does not follow, from that, that it also confers upon the importer a choice not to comply with the terms of the section but rather to take action freed from its limitations.

Their Honours then explain that and continue in the next paragraph:

In our opinion subs (4) makes the legislative intention clear, assuming that prior to the amendment it was open to doubt. Whenever there is a dispute of the kind described in subs (1), the owner of the goods, if he wishes to protect his position, must not only pay the duty, but also must protest in the manner provided by that section.

Up to that point it is all in our favour because their Honours are putting it on the footing that if there is a dispute of the kind described, if the importer wishes to protect his position, he has to comply with the section. Then their Honours go further in the last paragraph on the page:

It follows that s 167 represents the only method whereby an action for recovery of overpaid Customs duty can be brought where there is a dispute between the owner and the Collector as to liability or matters affecting liability and that it operates to exclude the availability of any alternative common law remedy. This is consistent with the approach adopted by Brennan J, when sitting as President of the Administrative Appeals Tribunal . . . and by the Tribunal in Re Pilkington . . . What was said in the first two cases must, of course, be read in the context of an administrative appeal. In the last-mentioned case, Giles J held, as we understand his Honour, that where an owner elected, rather than to bring proceedings under s 167, to adopt the procedure under s 273_GA(7) to seek review of the question of the proper duty payable, the prohibition under s 167(3) had no application. To hold otherwise was to render the right to obtain administrative review under s 273_GA of the Act nugatory. It is not necessary here to consider the correctness of that decision, although we should not wish to be thought to suggest that the decision was incorrect. The result is, however, to construe s 167 as inapplicable to a case arising under s 273_GA; it is not to construe s 167 as providing no more than a general alternative remedy to the common law.

Then their Honours say:

It was submitted by the respondent that the present was not a case which fell within s 167, that is to say, that the present was a case where no protest was possible. No doubt if this were the case, an action at common law might be taken to be outside the prohibition in subs (4).

Now, if we just pause there, what could their Honours possibly have in mind as a situation in which no protest was possible other than the sort of practical situation we have here where no protest is possible because the very foundation of the alternative restitutionary claim under the general law is the mistake which is both the genesis of the cause of action and also the reason why no protest is possible? It is, we would suggest, hard to think of any other situation which would more clearly fall within their Honours’ description than the one that we presently have of, if this were the case, if no protest was possible, an action at common law might be taken to be outside the prohibition. Then their Honours continue:

The argument proceeds on the basis that there never was any “dispute as to duty” whether in terms of amount, rate or liability of goods to duty. Rather there was a dispute as to whether a TCO had been validly revoked. This argument places too narrow a construction upon the words of s 167(1). The dispute was not an abstract dispute . . . The consequence of that dispute being resolved in favour of the owner of the goods was that there was no liability to pay Customs duty. To characterise such a dispute as not being a dispute as to the liability of the relevant goods to duty is in our view pedantic and to prefer form over substance.

FRENCH CJ: Why cannot one simply look at section 167, look at subsection (4) and, subject to the provisions made in section 163, infer that a premise of the legislative scheme is that the importer will be diligent to make factually correct statements in relation to the goods that are being entered for home consumption and that there is simply no remedy in the event outside the framework of 167 in the event that the importer fails to do that subject to 163?

MR MORRIS: I will readily acknowledge that what your Honour has put to me is the strongest argument against us.

FRENCH CJ: Because otherwise, I put to you earlier on and you accepted that on your construction, one could make a mistake about the fact or you might assert that you got the law wrong upon which you base your entry, and at any time later on, subject to general limitations of action, you could bring an action for recovery.

MR MORRIS: As I say, I accept that what your Honour the Chief Justice puts to me is the strongest case against us. The difficulties with it are twofold. The first is that it introduces an element of a duty which the section itself does not articulate which, as your Honour the Chief Justice said, is only to be inferred from the context of the sections - - -

FRENCH CJ: I am not sure that one needs to construct some sort of obligation or duty if it is simply a premise upon which the exclusion of any other form of action than the statutory cause of action is based in order to secure certainties for the revenue in terms of what has been paid without dispute or protest.

MR MORRIS: It cannot, with the deepest respect, simply be a premise on which the exclusion of other remedies is based because that would operate in favour of the subject rather than against it. It has to be some positive obligation so that when the section refers to a dispute it actually means it is code for either a dispute in fact or a situation where there may have been a dispute if the importer had been diligent and astute.

HAYNE J: Your argument appeals to notions of justice, does it not?

MR MORRIS: We would like to think so.

HAYNE J: Why would you not assess the justice of making a general prohibition on the bringing of action against what might be thought to be a reasonable assumption about ordinary commercial life, that persons entering goods for home consumption will actually look to their own interests in determining what duty is payable?

MR MORRIS: Indeed, we would do so, your Honours. We would do so, and that is why we submit that the floodgates arguments that were advanced against us on the special leave hearing – although they do not feature so prominently in the submissions now made on behalf of the Commonwealth – are nonsense, because one expects that in the vast majority of cases, people will be astute to look after their own interests. But the question then becomes there will be a category of cases in which a greater degree of diligence might have brought something to someone’s attention, and where do you draw the line? If this is, as the Chief Justice says, just a premise underlying the entire section - - -

HAYNE J: But you would have no line drawn because you would say the only line to be drawn is the general statute of limitations, six years, otherwise any action can be brought at common law if otherwise available. So you would draw no line?

MR MORRIS: We would draw one other line, and I am sorry if this sounds nit-picking, but it would also be subject of course to the general law limitations on restitutionary claims, as mentioned in David Securities and other cases. But that is where the line, we would say, should be drawn. We are not ashamed to say that, may I add, because that is the line that operates in every other branch of the law against every other person who brings a restitutionary claim based on their own error.

That is what the law has, in its wisdom, determined to be a fair balance between giving parties a remedy for the consequences of their mistake, and allowing the recipient of a mistaken payment to hang on to a windfall. We certainly do not resile from the proposition that that is the appropriate point to draw the line, at the point where it has been drawn historically in what were once called “quasi-contractual claims” and are now more generally known as “restitutionary claims”. That is the appropriate point to draw the line.

Any attempt to draw the line anywhere else requires a qualitative criterion of what level of care, or wisdom, or legal knowledge, or research is required before a person attracts the benefit of what the majority said in Kawasaki, that where no dispute is genuinely possible, the section does not arise. How does one draw that line? Is it a common law negligence standard? Is it whether the importer was negligent? Is it some different standard of what a reasonable commercial person would do in the situation?

If that is to be the test, then surely, we would say, that is a matter for the Parliament to say, not so much there is this duty, but if a person fails to exercise a prescribed standard of care, then there is taken to be a dispute even though there was not one in fact. If there would have been a dispute, had a person acted with reasonable regard to their own interests, then that is enough. But that is not what Parliament has done.

Parliament has premised the section not on the assumption that a person will act with wisdom and with diligence but on the simple fact as to whether or not there is a dispute. That is why we, and again we make no apology for it, we keep coming back to the words of the section: either there is a dispute or there is not. What one sees from all of the cases is that if you try and get beyond that question of fact, you then run into all sorts of complications of what amounts in practical terms to judicial legislation of introducing concepts of duty or obligation or reasonableness or appropriateness to try and limit the implications of a section that on its face simply asks a simple question, was there a dispute or was there not. Your Honours, I am not sure I can assist any further unless there are - - -

KIEFEL J: Just before you finish, even if one assumes that section 167 does not foreclose an action for money had and received based upon a mistake - - -

MR MORRIS: Yes.

KIEFEL J: Here regulation 126(1) provides for a case such as this where for a refund where there has been manifest error or error of fact, and it is made under section 163, and it has time limits associated with it. Why would that not foreclose at least a case such as this? That is to say, section 167(4) may not foreclose all actions but where a case is provided for by section 163 and the regulations made under it, why would that not foreclose your action?

MR MORRIS: I understand your Honour’s question and I think it is closely related to the question that Justice Keane asked me earlier. Our proposition in response to that falls into three parts. The first part is, section 167(4) contains an explicit abnegation of common law or general law rights. So, when one has 167(4) saying, in this situation you lose your general law rights, it is hard to read anything else in the Act as saying, by the way, you also lose your general law rights in other situations.

That brings us to the second point that yes, we accept that if a person in the position of Mr Thiess had taken proceedings in a timely fashion, he could have availed himself of section 163 and the regulation but there is nothing apart from 167(4) to make that an exclusive form of recourse.

That brings us to our third proposition; the very fact that there is section 163 in the regulation providing for situations outside the operation of 167 in itself is the clearest possible demonstration that the abrogation of general law rights under section 167(4) is not universal. It is subject of course to the explicit exception in subsection (5), but it is equally subject to other exceptions which may arise, for example, as observed in Kawasaki where for some reason a dispute was not possible or where there was no demand or where the dispute relates to something other than the rate or quantum of duty or whether duty is exigible or some other area of dispute.

So, to put it in a nutshell, what is different about this legislation and, for example, the sales tax legislation which is discussed in one of the cases referred to by our learned friend, is that the Court is not called upon to infer whether the recovery proceedings are exclusive or an alternative. Here we have the legislature in the most explicit way saying, in this situation you cannot proceed under the general law, and that is only in the situation covered by section 167. So, you cannot then take that and say, well, yes, there is this express provision abrogating general law rights in 167(4), but also there is this sort of sense that when you look at 163 and the regulations there may be other situations where Parliament also intended to abrogate general law rights. It just does not make sense. There is an explicit abrogation in narrow circumstances and we would say that has to be the end of it.

FRENCH CJ: Yes, thank you, Mr Morris.

MR MORRIS: Thank you, your Honours.

FRENCH CJ: Yes, Mr Solicitor.

MR GLEESON: Your Honours, I wish to say something at the outset about the framework of the Act in order to deal with - - -

HAYNE J: Mr Solicitor, are these propositions or is this an encyclopaedia?

MR GLEESON: No, no, they are propositions, your Honour.

HAYNE J: All right.

MR GLEESON: The first propositions concern the provisions of the Act which, properly read, will eliminate certain red herrings from the appeal. The red herrings are identified in paragraph 16, which are essentially some matters repeated this morning, that because the scheme is self-assessment, it is said, section 167 cannot have an operation. There is another red herring that because COMPILE is used section 167 cannot have its operation, and a related red herring is that there cannot be a demand in the circumstances involving the present case.

So I wish to deal with those as I would say red herrings, which can be dismissed by the scheme, and then come to what we submit are the real issues which are in paragraph 17, which is whether the bar in section 167(4) applies in circumstances of the present where Customs does demand an amount of money as duty, and on the facts and circumstances then existing it is possible for the importer to crystallise a dispute and to protest but, for reasons of mistake or otherwise, the importer fails to do so.

Our submission is that question should be answered yes, by reason of the language of section 167(4). The related issues which arise in the notice of contention are the broader ones which have come up in debate this morning, which are that, as we would put it, the combined effect of sections 163, 167 and 273GA is to erect a statutory code where the importer cannot pursue claims for refunds unless it is done under and in accordance with the Act.

That is the broader provision as to the statutory code. The narrower provision of the statutory code takes up the question your Honour Justice Kiefel just asked, which is at least in the case of mistake the effect of these provisions, read together, is you are confined to the remedy under section 163 and regulation 126(1)(e). You are subject to that time limitation and you simply do not have an election, as Mr Morris would put it, in cases of mistake to say, “Well, I will either go under the regulation or I will go under the general law”.

That is where we had wished to go. Can I deal first with what I have put are the provisions of the Act which can dispose of the red herrings. Your Honours know the boilerplate provisions that goods must be entered for home consumption, warehousing or transhipment under section 68, and if not so entered they may be dealt with by Customs under section 72.

That is important as a background fact because that creates the circumstance, as your Honour Justice Kiefel put in argument, in which it is clear that when Customs says, “I need or I request from you X-dollars in order to release the goods from my control”, it is in truth a demand that is being made. That is the reason why we draw attention to sections 68 and 72.

The next matter is to draw attention to the concepts of import entry and import entry advice, and if I could ask the Court to go to the Act at section 71A. The import entry is provided for by subsection (1) and there is an option to use either the documentary method or the computer method. Document and computer are simply different ways of engaging in communication. They do not alter the substantive operation of the Act. Subsection (2) explains how you proceed by document and subsection (3) explains how you proceed by computer or COMPILE.

That we would describe as the submission of inputs by the importer which are required by the Act, and then the response is under 71B. Subsection (1) indicates there is a duty to give the import entry advice and (2) specifies what it is to deal with if it is a documentary case and (3) specifies what is to occur if it is a computer case. Your Honours will see immediately in subsections (2) and (3) that there is an option open to Customs either to clear the goods or direct them for further examination.

That is one of a number of indicators that this is not a self-assessment scheme in the sense of the Income Tax Assessment Act. The statute leaves a discretion to Customs, whether it be by document or computer entry, whether to accept the correctness of the information provided or to carry out further examination and for that reason the submission which is, well, there is not really a demand because Customs is simply regurgitating what it was told by the importer does not meet the scheme of the Act.

Your Honour, the other provision which confirms that is 71D, which are the range of steps open to Customs, whether it be a document case or a COMPILE case, to seek more information. So there is a fundamental difference between this scheme and the Income Tax Assessment Act wherein provisions under the 1936 Act, such as section 161AA and 166A there is true self-assessment where the assessment is required to be issued in accordance with the statement of income provided by the taxpayer.

The next aspect, your Honours, is that the importer must provide information as required by the Act and steps taken under it. If I could ask your Honours to go to 71K and 71L. The importer must provide the information in the “approved form” in the case of a documentary communication or in the “approved statement” in the case of a COMPILE communication.

We have provided the Court with the approved statement which was in force at the time, and it required the importer to identify the weight of the goods and to identify or nominate a tariff classification. So that is part of the imports coming from the importer which importantly Customs has a discretion under the statute whether to accept or not. Your Honours, for those reasons, as put in paragraph 4 of the outline, whether the import entry is documentary or computer based does not alter the essential structure of the Act. In terms of the basic facts the Court is well apprised of those facts.

Could I then move directly to paragraph 16 of the outline? Our submissions then are that to describe this as a self-assessment scheme is overly simplistic. It is a scheme which requires importer inputs but it is not dependent on them. Next, section 167 can operate even though inputs come from the importer and next, the system created by the Act does contemplate a demand, a demand which meets the language in section 167, a demand, as Justice Hayne put in argument, is no more than a request for the payment of a sum of money, and the request is made in the present case when the import entry advice under section 71B says your goods may be cleared for home consumption upon payment of the sum of money shown on the COMPILE system.

Your Honours, in terms of the matters which are agreed, in the appeal book at pages 25 to 26 – this is in the defence – paragraph 6(a) was admitted in the reply and paragraph 6(b)(i) to (v) were admitted in the reply, and they conform to the agreed facts which your Honour the Chief Justice referred to at pages 47 and 48.

Identifying the matter in that way, if your Honours look on page 26 at item (vi), at the point when the import entry advice was transmitted to Mr Thiess’ broker, when the broker then printed out what is described as “Print 2” from the screen, and Print 2 said here is the amount of duty you must pay if you wish the goods to be cleared for home consumption, there was a relevant demand within section 167.

GAGELER J: Do you say that emerges from the language of section 71B?

MR GLEESON: Yes, given its role in the Act, which is this is the response that must be given to a 71A import entry. The response can either be under 71B clearance or further examination. If the response is a clearance response, you may take the goods into your custody and you may take them out of our control, in any case where a sum of money is identified as the duty payable that is a sum that is being requested and demanded. In circumstances where (a) the advice is for clearance and (b) the sum of money is at that point identified, that is the request for payment. Then the next step in the process under 71B(4) is that if the advice is given, and if payment is made of “duty . . . payable at the time of entry”, Customs must then proceed to the next step which is the authority “to take the goods into home consumption”.

KIEFEL J: What (4)(b) comprehends is that it is duty assessed and required to be paid.

MR GLEESON: Yes. To take the point raised by your Honour Justice Hayne, there is no difference in principle in terms of the operation of the Act whether the person presents physically over the counter and fills in some information in a form, and the official puts a stamp on that and says “You are required to pay $50,000 for entry” and the case where the computer makes a similar request or demand of the person.

Your Honours, in the present case, so far as those documents were available for proof on the facts, the key documents are at pages 102 and 105. Page 105, your Honours see in the top right-hand corner is the “Print 2” document referred to in the defence, and that is the screen which the broker saw and then printed out immediately after the import entry advice was given, and the entry advice so far as it is in evidence is at page 102, in the top right-hand corner. It is again “Print 2”. The advice was effectively the goods were cleared for payment subject to quarantine.

Going back to page 105, as your Honour Justice Kiefel put, this is a form that has been populated by the system in response to the inputs from the broker. The broker would have input at about just above line 30 on the left-hand side, the tariff classification ending in 92 10 and the broker input in the middle column at about line 17 the gross weight of 108,000.00. Then the system populated the entry and included, if one follows from that tariff classification, just above line 30, across the page, it then calculated a customs value, it calculated the duty and it calculated the GST.

So one then sees the bottom right-hand corner a specification of how much duty and how much GST is payable and, consistent with the Act, that was the request for payment. That request for payment was then provided by the broker to Mr Thiess, that is page 106, and Mr Thiess some time later authorised a payment, that is page 111, and the payment was of the amount requested at page 105. Then page 113 is the 71B for authority to deal.

What that also illustrates is that, after the demand is made under 71B, the importer still has options. The importer can either pay, that is the first option. That is, pay without any protest. On our case, if that is the option taken, because the importer has failed attach a protest, there will be no action available under section 167 and the bar in subsection (4) will apply, subject to any remedy available under section 163.

The second course of action is to pay under protest which will then make available the section 167(1) action if it is brought in six months, and the third option is to withdraw the entry which is open to the importer up until just about the conclusion of the process under section 71F. So the proposition that the appellant had no practical opportunity to pay under protest has at its heart the notion of mistake but in a legal sense there was a demand for a payment of money to which the appellant could have responded in one of the three ways that I mentioned.

Your Honours, I think the final aspect in this set of what I have called the red herrings is the notion that section 167 just does not accommodate COMPILE; clearly enough, it does because it is in the provision itself in subsection (3A). So could I then come to what we would submit are the real questions? Firstly, I will put our submissions on section 167 and then I will come to regulations made under 163 and then come to the scheme as a whole.

FRENCH CJ: When an entry is withdrawn is it possible to lodge a fresh entry?

MR GLEESON: Yes, and an amendment of an entry is a deemed withdrawal, so that a person who having received the demand - admittedly demand based on their own information - perhaps says, I am now in some doubt about that, has a choice to withdraw the entry and put in a different entry. So if the mistake had been discovered you could put in a different entry, or if you are not clear you can then attach a protest and say, well, it is currently classified as X but I am not sure what the true gross construction tonnage of the vessel is, my protest is the amount may be too great if the tonnage is less, so those options are all available.

So, your Honours, in terms of section 167, clearly enough subsection (1) is creating the statutory cause of action and it is identifying the conditions for that action, and the first condition is that a dispute has arisen and the second condition is that there must be a protest. Then subsection (2) builds on that and says this statutory action has a further condition attached to it, you must bring it within time and the time will be found later in the section in subsection (4).

In relation to your Honour Justice Kiefel’s question on paragraph 95 of Malika, we would read that paragraph as correctly stating the positive conditions for the statutory cause of action under subsections (1) and (2) and in that sense not in any way controversial. The more critical thing is as this section then proceeds on are the remaining provisions, particularly subsection (4), merely telling you something about the statutory cause of action and with no other operation, which seems to be one of the appellant’s positions this morning, or are they actually operating, as subsection (4) would indicate, to bar actions?

That is, not just give you the time limitation that subsection (2) had foreshadowed but actually to bar actions unless they meet two conditions, and we would submit the latter is the correct view of subsection (4). That is what we have called in the written submissions the double operation of subsection (4). Clearly, enough, it tells you the time limit that was foreshadowed in subsection (2), but our submission is it goes further and creates a bar on actions.

Proceeding through the section, subsection (3) and (3A) tell one in an exhaustive manner what you have to do to attach a protest under the section, whether it be documentary or COMPILE. So then coming to subsection (4), we would observe first that the opening language “No action shall lie for” et cetera is clear and precise and comprehensive in its bar of actions and it is apt to speak of actions which would otherwise be available at general law. It is the very sort of language you would expect a Parliament to use if it wanted to be clear that it was taking away what would otherwise be general law actions.

The second matter is that the bar is attached to a category of actions described as actions for recovery of any sum paid to the Customs as the duty payable in respect of any goods. That is as broad a description as one could give of the category of actions to which the bar is attached, actions for recovery of sums paid in respect of goods. Clearly enough, an action based on mistake falls within that category of actions.

Then the section goes on to qualify, as it were, the bar, and say that the bar will not apply in a case where certain conditions are met and the conditions are payment under protest in accordance with the section and the action commenced within the following time. Just observing that first condition, payment under protest pursuant to the section, your Honour the Chief Justice raised a question about that on the special leave. We would submit that what that is referring back to is subsections (3) and (3A), the sections which tell you what it is you must do to make a valid protest under the section.

It is doing that rather than doing something indirect by way of importing into the condition the notion that there be a dispute in fact which will be a necessary step under subsection (1). So that is the first condition and then the second condition is the time limit and the final matter we would observe is that the concept of there being a dispute in fact is not stipulated or referred to in subsection (4).

The effect of the section so read is to indicate that, save for the statutory cause of action, which has its limits, there are to be no other actions at general law for recovery of duty paid, save to the extent the Act recognises them under section 163, and that is the construction we would offer based on the ordinary meaning.

FRENCH CJ: So when you speak as you did in opening about these provisions, 167, 163 and, I think, 273GA, comprising a code, that is a code in respect of recovery of duty paid?

MR GLEESON: Yes.

FRENCH CJ: Not in respect of liability, because I think that proposition is not accepted in Malika.

MR GLEESON: Yes. Malika remains correct, and if you are sued for duty you can raise your available defences. But in respect of the matter covered in subsection (4), recovery of duty paid, your remedies are to be the statutory action if you avail yourself of the conditions, or there to be your remedies under section 163, and no other. So, without straying into Ash Wednesday and spiritualism, we would submit that that submission accommodates the ordinary language of the statute and is appropriate in that sense. Can I then step back a little to what purpose that achieves in the context of the Act?

KIEFEL J: Just before you do, before you leave the text of subsection (4), in pursuance of this section, given that section 167 has been described as beneficial to an owner, the pursuit of the section allows a statutory action in place of common law action. That is what was said in Malika.

MR GLEESON: Yes.

KIEFEL J: But it does so where the conditions identified by the section arise, and one of those conditions is that a dispute exists. There is no point to having provisions for payments under protest unless there is a dispute. I am sorry; I should allow you to comment on that.

MR GLEESON: We would disagree with part of that, your Honour. First of all, I have submitted that the words “in pursuance of this section” are attached to the condition “unless the payment is made under protest in pursuance of this section”. What that is harking back to is subsections (3) and (3A) to say this is how you make a payment under protest. So if you do not comply with (3) or (3A), including, for example, you have to provide adequate particulars of your dispute, then you have not met the first condition. So we would submit that is what is meant by the words “in pursuance of this section”.

But as to the broader point your Honour raises, if one takes that too far you end up where Mr Morris is in one strand of his argument, that subsection (4) is not barring actions at all. All it is doing is telling you you need to have a protest, you already know that, and here is the time limit for the action, and you were already told that was coming.

As we would put it, subsection (4) has, first of all, created this comprehensive bar on actions for recovery. In its opening words it has, in effect, removed the common law. It has then given something back and said, “Well, the only circumstance in which you will have an action is one where you are under the statute and you comply with two conditions”.

KIEFEL J: But to view the section as dealing only with a circumstance where a dispute exists about the payment of duty or the amount of duty does not mean that the statutory scheme fails. It simply means that your bar arises at another point, at section 163, and it may or may not be complete, depending upon whether or not the regulations have identified every circumstance that may arise. So it might beneficially allow for there to be some disputes which are not caught by the bar of 167(4) and are not dealt with as a circumstance in 163 in which an action at common law may still lie. They might be very few in number, but it allows for the odd case that is not comprehended.

MR GLEESON: That would be our fall-back position and that position is sufficient to dispose - - -

KIEFEL J: That is your notice of contention position.

MR GLEESON: - - - of this appeal, but our primary position would be not to accept that potential for a category of common law actions to revive, the essential reason being – no doubt as your Honour says, to have the action under subsection (1) you must have a dispute in fact. If you do not have a dispute in fact, you cannot be bringing an action under subsection (1).

The question under subsection (4) is: is it speaking only to cases where the parties have fallen into dispute in fact, such the protest is possible, or is it speaking to the category of cases we have identified where a dispute is possible on the facts and circumstances existing at the date of the importation and the payment? As Justice Rolfe correctly analysed in Matchbox Toys, that can cover two types of cases. It can cover not just the case where all the facts are there but they are mistaken, but it can cover a case where the importer knows that there may be a reason to generate a dispute, but decides not to generate one, in fact.

In either of those cases, that is, whatever be the reason why the importer who could crystallise a dispute chooses not to do so, our submission is that is where the bar in (4) goes further that merely mirroring the action that would be available under (1).

HAYNE J: Well, the textural distinction, I think, between the arguments is that your opponent would read the section in a fashion that would attach “in pursuance of this section” to the words “no action shall lie”. That is, I think the argument against you is: “no action shall lie . . . in pursuance of this section” for the recovery of, et cetera, “unless”. I would understand your argument to attach “in pursuance of this section” only to the notion of “made under protest”. Is that right?

MR GLEESON: Yes.

HAYNE J: Now, if “in pursuance of this section” were to attach to the notion of “no action shall lie” that would be consistent with the existence of other actions continuing to be available. But, textually, at least, unless you attach “in pursuance of this section” in that way it is not yet evident to me what textural hook the argument against you is hanging from.

MR GLEESON: I think it is hanging on the possible argument Justice Gageler identified that although it is not there in words, when it says “no action shall lie” it is implicitly referring back to the action in subsection (2) which takes you back to the action in - - -

HAYNE J: No action of a kind contemplated by this section shall lie.

MR GLEESON: Yes.

KIEFEL J: Then that raises questions about the clarity with which legislation must speak when it affects common law rights.

MR GLEESON: Yes, and our submission on that is that if you start off with the words “no action shall lie” that speaks naturally to any and all actions that might be available under the law, so that is as clear and as comprehensive as you can get, and then the subject of the bar, recovery of any sum paid as duty, is as general as you can get to cover the present type of case.

HAYNE J: Well, it also may have to confront questions of meaning attached to 167(4) somehow changing over time, because at the time of its enactment protest was the foundation of the action was an essential element to the cause of action for recovery, was it not? There would be an action for money had and received demanded by colour of office and absent protest, would that action lie?

MR GLEESON: That was the view expressed by Dr Wollaston in his work in 1904, that prior to subsection (4) coming in in 1910 the basis of the common law action would be protest and if you did not protest your payment would be treated as final and irrevocable, and in his work he drew attention to there not being express language baring actions, and we would contend that the objective purpose of the 1910 amendment which refashioned the section, but brought in subsection (4), was to provide the very bar that Dr Wollaston said he did not see in clear words in the 1901 version.

HAYNE J: Provide a complete and comprehensive bar.

MR GLEESON: A complete and comprehensive bar, leaving only whatever be available under section 163 from time to time and on that, coming back to what your Honour Justice Kiefel put out, our proposition is that the intent of that carve out is that if you do not pursue your statutory right under 167(1), you have nothing more or less than whatever 163 gives you from time to time. It is not simply a case of does 163 give you a remedy in your area, which is clearly does for mistake, but 163 is designed to cover all refunds which are not brought pursuant to a 167(1) action.

KIEFEL J: Do you rely on section 167(4) as also being responsive to the decision in Sargood Bros v the Commonwealth [1910] HCA 45; 11 CLR 258?

MR GLEESON: Yes, because of the two justices in that case who posed the question whether the former provision was exhaustive, Justice O’Connor in the majority and Justice Isaacs in dissent, they came to differing views on that question and it would seem that with that decision there, with the expressions by Dr Wollaston, one thing Parliament was doing in subsection (4) was to say, we do want to make clear this action is in truth the only action for recovery save for section 163.

KIEFEL J: Are you referring to, I think it is the Chief Justice and Justice O’Connor as identifying disputes which might lie outside the section?

MR GLEESON: Yes. The Chief Justice identified it as a question and did not decide it. Justice O’Connor expressed a view that there could be actions outside the section. Justice Isaacs in dissent tended the other way and, in effect, the 1910 amendment is to take up Justice Isaacs’ view and to say this is to be the scope of the remedy available where you seek recoveries.

GAGELER J: Could I just ask you about your fall-back position which I think is based on the Matchbox Toys analysis? How texturally do you make subsection (4) apply just in cases, as I understand it, of potential disputes? I might have misunderstood the submission but - - -

MR GLEESON: Yes, so in the case of disputes which are capable of being raised on the facts and circumstances existing at the date of the payment, the way it applies is that the opening words down to the “unless”, have in effect created a bar upon all actions. All actions are prima facie barred and then the words following “unless” say, these are the only exceptions to the general bar on actions and the only exception is if you bring an action under subsection (1) in accordance with its conditions.

Therefore, if you want to come within the exception to the bar, it is up to you to identify, crystallise a dispute and make your protest and, therefore, if you have a dispute in the back of your head but you do not crystallise it, you are caught by the bar. If you under mistake do not realise you could be crystallising a dispute, you are again caught by the bar. So it arises from reading the opening one and a half lines of subsection (4) as a bar on actions, and then it says if you want to escape the bar you must bring yourself within subsection (1).

GAGELER J: It sounds like your primary argument again, but I will not delay you.

MR GLEESON: No. That is our primary argument. The alternative argument focused more closely on the interrelationship between subsection (4), subsection (5) and section 163, and focused in particular upon regulation 126(1)(e) dealing with cases of mistake, and says two things. The first is that Parliament’s intention was if, for whatever reason, you cannot bring an action under subsection (1) or you do not, your rights lie only in section 163 and the regulations, however expansive they may be from time to time - - -

FRENCH CJ: The role of protest before its express inclusion in 167 was simply to establish that you were paying under duress, as it were, to support your common law action.

MR GLEESON: Yes, and when the change was made from the original provision which was a concept of deposit - - -

FRENCH CJ: Deposit, yes.

MR GLEESON: - - - into a concept of payment, in effect that element from the common law was brought into the statute. It was the statutory evidence that this was a payment, if you like, under duress, and if it had stopped there and you did not have a subsection (4), then you still would have had the question left open in Sargood as to whether this was meant to be the whole of your rights. The purpose of subsection (4) was to say that now is the only gateway available to you unless you can bring yourself within section 163. So it makes perfect sense that protest would be taken out of the common law, but then subsection (4) would come in and provide the comprehensive bar.

GAGELER J: This may be a metaphysical question, but was the action to which subsections (1) and (2) were referring a statutory action, or is it simply setting up the elements of a common law action?

MR GLEESON: The former, an action which derives from the statute and owes its existence to the statute and would create a statutory debt.

HAYNE J: What, SCI Operations, that line of country?

MR GLEESON: Yes.

HAYNE J: I cannot remember the reference to SCI Operations, but it is that line of country that you are engaging, is it?

MR GLEESON: Yes, your Honour.

FRENCH CJ: The remedy creates a cause of action?

MR GLEESON: Yes.

HAYNE J: We have looked at it more than once after SCI Operations, I think.

MR GLEESON: Yes, in SCI Operations [1998] HCA 20; (1998) 192 CLR 285, particularly in the judgment of Justices McHugh and Gummow at paragraphs 65 to 66.

FRENCH CJ: Page?

MR GLEESON: Page 313; the critical concept being Parliament has created the duty to pay the money in certain circumstances giving rise to an action for recovery. It was said in that case in the context of section 163 and the regulations, but it would apply equally to section 167.

Of course, one of the important insights that SCI Operations applied to this Act was that prior to that case it was thought and argued that section 163 created merely an administrative right, possibly not even a matter of obligation. SCI has made clear that under section 163 there is a duty to make the refund if the conditions are met and the duty gives rise to the statutory debt. So with that clarification one sees that there are statutory duties and debts under 163 and 167 and we submit that between them they cover the field if you are seeking recovery of moneys paid.

Coming back to your Honour Justice Gageler’s question, the real and fall-back alternative was that is so at least in the case where the regulation deals with the very subject matter of the claim at common law, such as a stake, but we would submit the better view is that the code applies to all actions and, whatever be in the regulations from time to time, that is what you have available to you. If not, you have section 167(1).

So, your Honours, that was the argument on the text of section 167(4). In terms of whether that effects a statutory purpose which would be consistent with the meaning and would be one that the Court would not regard as requiring some different approach of the taking of the language, the statutory purpose it affects is essentially a balance of interests, that the balance of interests, and this is the same balance that has been traced back to the earliest provisions of this type, is of course that the importer has the opportunity to get the goods released from Customs and does not suffer the consequential loses of having the goods tied up and the importer has a means of having any dispute as to liability determined.

Customs, conversely, achieves its purpose of having the money paid before the goods leave its control and Customs has the relative certainty that it will not be vexed with later claims, up to six years, for recoveries, and I say “relative certainty” because Customs will know that where a protest is attached and an action is brought within six months those moneys are under dispute, and apart from that it knows that there could be claims under section 163. But, subject to that, it is not left with the uncertainty of claims being made up to six years after the date of payment. So, it is that balance of interests which results in a practical but not legal burden being cast on the importer.

If you want your goods released in advance of a final determination of duty then if there is any matter in the facts and circumstances existing at the date of payment which could bear upon the correctness of the duty demanded there is a practical onus upon you to either protest, that is, to crystallise the dispute and follow up the action, or you can take the option of withdrawing your entry, I have discussed that, or you otherwise rely upon such rights as section 163 may give you, and beyond that, your payment is final and irrevocable. That is the statutory purpose, consistent with the purposes that have underlain these provisions from their outset, and it is one that the language gives effect to and there is no reason to strain against that as a construction.

Your Honours, in terms of the authorities, in our submission, none of them have had to deal precisely with this point, so the authorities are of assistance but this is not a case that is governed by authority. Could I go to the key authorities that have been relied upon by the appellant? First, in Malika Holdings 204 CLR 290, reliance was placed primarily on Justice McHugh but given that none of the justices were dealing with the case we are dealing with all of the comments need to be read in that light. We would, however, refer to what his Honour said in paragraphs 53 and 54 on page 306. In paragraph 53 he said that:

Plainly, the enactment of s 167 means – by necessary implication – that it provides the only means by which the owner of goods can recover overpaid customs duty in a court of law.

Then in paragraph 54, about eight lines down he says:

Where the owner has paid the duty without protest, no action for recovery lies –

At footnote (56) his Honour had cited Kawasaki. In the judgment of Justices Gummow and Callinan, as has been identified this morning, the key passage probably starts around 90 and goes to 95. No doubt, in paragraph 90, as your Honour Justice Kiefel pointed out, there are statements that the provision is for the benefit of the owner and in a sense that is a key part of the provision. Their Honours go on immediately to note in 91:

that the right identified in these cases has attached to it conditions and qualifications designed to balance the interests of the owner with those of the Revenue.

So the real question for us is precisely how that balance has been struck by these provisions. Paragraph 92 makes clear that their Honours are addressing the precise issue in that case, which is what happens where the importer is seeking to raise a defence and it needs to be read in that light.

In paragraph 95 that has been discussed, no doubt there is a concept of replacement of the common law rights with the statutory action if the conditions are met. The conditions for the action that are there specified (i), (ii) and (iii) we would submit to be a statement about the operation of section 167(1) and (2). Then when their Honours come to section 167(4) they refer to the provision but do not have to deal with the precise point that is before the Court today. So to the extent Mr Morris says Malika has decided the point in his favour, we would disagree with that submission.

Second, he went to Kawasaki Motors 32 FCR at 243. We acknowledge that Kawasaki is distinguishable on the facts from the present case. In Kawasaki, as is seen from the headnote, the parties were in a dispute of sorts. They were in dispute about whether the TCO had been validly revoked. The question in the case was whether that was a dispute about liability such that section 167(1) was triggered. With that acceptance, there is some assistance to be obtained from Justice Hill and Heerey’s judgment, both through their analysis of the history of the provisions and of the balance being struck by the provisions.

On page 261, when dealing with Sargood v The Queen, they set out the passages from Justice O’Connor and Justice Isaacs that I referred to earlier as being the competing views on whether the earlier Act was exhaustive of common law claims. The critical passage is 263 to 264, and 263 speaks of section 167 and the concept of parties being in dispute. In the second paragraph it illuminates the purposes and the balance of interests that are reflected in section 167 and in the following paragraph it refers to what I have called the double operation of the section in that it is the only method by which actions can be brought.

The paragraph that gets close to the present point but does not decide it is the top paragraph on page 264 where there is a recognition that if no protest was possible then perhaps you might be taken outside the prohibition. Mr Morris said to you that can only be a reference to his client; what else could it possibly refer to? What it refers to, or could reasonably refer to, is what we have indicated: a situation where the circumstances which might give rise to a refund were not in existence or ascertainable at the date of the payment.

The classic example would be where a tariff concession order had not yet been enacted at the date of payment but might be enacted at a future date. That is the very sort of case where a protest is not possible and, therefore, you would not be caught by the bar in section 167, but what would happen is that section 163, providing the only other available remedies, would come in and assist you or not, depending on its terms. In fact, there are regulations which govern that very situation under section 163.

HAYNE J: The decision, I think, in The Commonwealth v SCI Operations [1998] HCA 20; 192 CLR 285 may support the proposition that recovery is available only in accordance with section 163 and the regulations because the decision in SCI was the amount to be repaid was fixed by regulation and interest was not allowable on the amount to be repaid – that is, I think, no common law action lay.

MR GLEESON: That is correct, and no interest was available but the larger point was the regulation had specified exhaustively what your rights to refund were to be and they did not extend to interest.

HAYNE J: But no interest was available because - - -

MR GLEESON: Yes.

HAYNE J: Yes.

MR GLEESON: Yes. So Kawasaki takes us only that far. Your Honours, Matchbox Toys, I do not ask the Court to go to it but can I just make a simple submission? Justice Rolfe got that case correct, and his reasoning is correct.

KIEFEL J: He will be pleased to hear that.

MR GLEESON: Well, I did not say it just for Justice Rolfe, but the case is correct – the reasoning is correct, and it is the reasoning between pages 26 and 33 that is correct, and he in fact covered both parts of the present issues. So he covered the section 167 point and said provided it is possible to crystallise a dispute the bar applies.

Then he also covered the section 163 point at pages 32 to 33, and indeed on page 34, because this was a case of mistake, it is the very case we are dealing with, he got right to the heart of it and said, by providing a statutory remedy for mistake on defined terms there is a clear intention that if you do not avail yourself of that provision you cannot simply resort to a general law mistake action.

GAGELER J: When he dealt with the proposition that if it is possible to crystallise a dispute the bar applies, did he relate that to the text of the section? I would be interested to see.

MR GLEESON: Only in the sense that I attempted to answer your earlier question. Your Honours, that is what I wish to say on section 167. Could I then just move specifically to section 163 and the regulations? If I could ask your Honours to go to the regulations, they cover a large variety of cases. If I could just group them generically, regulation 126(1)(a) to (d) cover the case where the goods are lost or damaged so that the duty turns out to be excessive; (da) covers the case where the entry has been withdrawn after payment; (e) is the present case, “duty has been paid through manifest error of fact or patent misconception of the law”; (ea) is the case where the section 167 action has been pursued administratively to the AAT and there is been a successful review resulting in a need to adjust the duty.

Then (eb) and (f) are two of the examples I mentioned earlier where an event arises after payment such as a tariff concession order which impacts back on the duty payable at the date of payment, so that can be pursued through the regulation. That is an example of a case where, we would submit, there would be a difficulty applying the 167 bar to it. Subsection (fa) is a similar case where there is a post-payment event where the price has changed, and then the following provisions descend into detail, but they are largely cases where the precise classification of the product, particularly a fuel product, may turn out to be incorrect.

So what do we get from that? It is a very comprehensive specification of a range of circumstances including those after payment, but not limited to that, where there is a right to a refund, not merely an administrative discretion and where, if the refund is not met, the importer can either sue on the statutory debt under SCI Operations or can go to the AAT under section 273GA. When that is read together with section 167 it indicates the intention that this is to be the exhaustive scheme for recovery of refunds.

GAGELER J: Now, do you include the regulation itself within the exhaustive scheme? Do you get your scheme from reading the Act with the regulation, or purely from reading the Act?

MR GLEESON: Primarily, the scheme is section 163 plus 167 together with 273GA, and the argument is you get such rights as are provided to you by those sections or under those sections from time to time through regulations made, and you get no other rights. If the regulations tomorrow were reduced from this comprehensive list down to only two, then the scheme argument would be unchanged. That is the primary way it is put.

The other matter we mentioned was simply that where there has been a provision for mistake, which there has been since the commencement of this Act, whether it be in the Act or the regulations, there is a clear intention that that is to be your only way of pursuing mistake claims. Your Honours, on that point, could I just make some submissions about regulation 126(1)(e) and the nature of the statutory mistake claim? It would be different from a general law claim in a couple of respects. Firstly, there is a heightened standard. The error must be manifest; that is if it is an error of fact, and the misconception of law must be patent. That may raise the bar beyond simply the general law standard.

On the present facts, this would most likely have been a case of manifest error of fact. Dr Wollaston in fact gave this very example in his discussion on section 163 which is where the weight of the goods in truth is different to the weight which was placed in the entry. That is one element of the statutory action.

The next element is that there are no defences. There is no defence of change of position or the like. Provided you prove the relevant error or misconception, it is established. Then of course the final element is the time limit which is attached under regulation 127(1) and 128A(5).

Together, that has stipulated that if one is dealing with the question of mistake, this is the nature of the statutory action and that, we submit, is exhaustive of any common law action. Your Honours, for completeness, in relation to the time limit, it was 12 months at the date of this event. It was later increased to four years but after Mr Thiess’ circumstances and so not available to him.

KIEFEL J: If section 167(4) is not regarded as foreclosing all actions at common law, why do you say section 163 must be regarded as comprehensive of all actions and not just operating within the circumstances to which it refers?

MR GLEESON: Essentially for the reasons that have been adopted in the sales tax cases, such as Chippendale. The statute has come along and said there is a duty to repay the money in a range of circumstances which we identify. It has created new rights. The rights, to some extent, travel beyond what the common law would have provided. To some extent they have conditions attached to them different to the common law and the intention conveyed by such a scheme, applying the Chippendale reasoning, which I will come to, is that is to be an exhaustive code.

HAYNE J: It may be important to notice that 167(5) speaks not only of powers under 163 but rights.

MR GLEESON: Yes.

HAYNE J: It may also be important to notice that, as SCI Operations demonstrates, there are circumstances in which the refund provisions operate in a fashion that create a debt recoverable by action for debt, that is, the person who has paid money to the Executive has a right to recover from the Executive the money which, whether because of subsequent events or events of the kind described in now the regulations, has been overpaid.

Now, these are matters looked at in the reasons of Justices McHugh and Gummow in SCI [1998] HCA 20; 192 CLR 285 at 310 and following, paragraphs 60 and following. It may be that in working out the intersection or the relationship between 167 and 163 one can give meaning to the preservation of rights under 163 – perhaps; perhaps not – only by reading 167(4) as otherwise taking away all rights. Now, I do not know whether that is an available construction of the intersection of the provisions, but it is a matter which I expect we would have to consider, would we not, in this case?

MR GLEESON: Yes, and we would put that submission. We would put that and - - -

HAYNE J: What - put my question is a submission? Thank you, Mr Solicitor.

MR GLEESON: Just being economical for a change, your Honour. That is to use the presence and the conferral of rights under 163 in defined terms as part of the group of provisions which together inform exactly what that bar in 167 is designed to do. Your Honour refers to SCI at those paragraphs. The concluding paragraph at 66, where it was explained why there was no scope to add interest, says this:

The statutory scheme . . . represented a balance struck by the legislature between the competing interests of importers, local producers and the revenue -

and then the balance is spelt out. Now, coming back to your Honour Justice Kiefel’s question, that is what we submit one gets by putting 163 together with 167. Here is the balance. If you are the importer, you will get the range of statutory rights recognised under the regulations from time to time plus the specific 167(1) right. To some extent, that would give you more than you would have at common law. In other extents, it may give you less than at common law but that is your package of rights and the competing balance is the revenue is exposed to that group of claims and no other.

Your Honours, there is one other exercise we engaged in which might be an exercise in superfluity or not, which was we looked at the history of section 163 and how it came to be in the regulations and not receive the prominence of being in the Act. We have prepared a four-page note which explains the history of the provision for manifest error of fact or patent misconception of law and we have traced through how the provision changed.

Essentially, that would establish these things: number one, there has always been a right to refund where the duty was paid through manifest error of fact or patent error of law; secondly, the right was originally in the Act until the 1970s. The reason it was moved to the regulations was solely to accommodate the concept of commodity control which was introduced in the 1970s.

What Mr Morris refers to as self-assessment is better referred to as commodity control and the document at tab 13 which is the 1971 second reading speech in the last paragraph, first column, explains what commodity control is and why it is that the rebate refund provisions were moved into the regulations rather than left in the Act itself.

The third thing demonstrated by this history was that the statutory intent throughout has been to create a right which may in certain respects go beyond the common law. It did at its outset because it covered mistakes of law at a time when they were thought not to be actionable at common law, but it has always had attached to it a time limit. The limit was very short originally, about three days. It was subsequently made a longer limit and what we would discern from that consistent history of a right to recovery for that category of mistakes is a clear intent that that was to be the sole remedy if an importer argued mistake.

Your Honours, I was going to move to the GST point, unless there are any other matters on Customs. The GST point is the forlorn cousin in this appeal. You have heard nothing about that ground in writing or orally, so it is tempting to say that the Court should simply dismiss the appeal so far as it concerns GST. The extra matters that I would want to put are these. Firstly, it is accepted that if the Customs duty cannot be recovered, there is no basis to recover the GST. Secondly, it seems to be argued without reasons that if the Customs duty can be recovered the GST can be pursued under a common law claim of mistake. However, that implicit assertion does not grapple with the fact that it is a different statutory regime for GST

The short point of the regime for GST – and some of the provisions are found at page 169 of the appeal book – the short point is that the statutes create a duty to repay any excess amounts of GST without need to establish any grounds such as mistake but subject to a four year time period, and Mr Thiess did not bring the claim within the four year time period. The GST scheme is similar in principle to the sales tax scheme dealt with in Chippendale where the statute creates the duty to repay if it is an overpayment and it attaches a time limit, it is comprehensive, if you do not bring your claim in time you cannot resort to the common law. In terms of the provisions which give effect to that scheme, what the Court sees at page 169 are sections 36 and 39 of the Taxation Administration Act as in force at the date of payment.

Those provisions were subsequently replaced by section 105-55 of the Taxation Administration Act to the same effect. If I could just show from both those provisions the effect they provide? If the Court first were to go to the later provision, that is 105-55, which applied from 1 July 2005, subsection (1) says:

You are not entitled to a refund . . . in respect of a *tax –

to which the section applies –

unless:

(a) within 4 years –

you give notice of the claim. Then subsection (2)(d) – do your Honours have the provision I am going to, 105-55?

KEANE J: It is in your bundle.

MR GLEESON: Yes. I just draw attention to subsection (2)(d) which says the section applies to:

a refund of an amount of *indirect tax relating to an importation.

So the section operates as a bar on entitlement if you do not bring your claim within time. The earlier provision, sections 36 and 39, was to similar effect, although the language was slightly awkward. Section 36 started the same way:

(1) You are not entitled to . . .

(d) a refund, under subsection 39(1) of this Act, of an amount of indirect tax relating to an importation;

unless –

you notify the claim within four years. The words under section 39 are a little awkward but they are intended as a cross-reference to section 39(1) which says:

This section applies to:

(a) so much of any net amount or amount of indirect tax as you have overpaid –

So the intention is putting those two together to say if what you are seeking is a refund of indirect tax relating to an importation on the ground of overpayment you must bring your claim within four years. That is the argument which the Court of Appeal relied upon to say it is a simple situation, no claim within four years, no refund. We have developed that argument in our written submissions. The only additional provision I need to draw the Court’s attention to – and we have provided a copy – is that in the Taxation Administration Act itself section 8AAZLF which is on page 64 of the bundle we have provided, is one of the generic provisions which covers GST as well as a raft of other taxes and imposes the positive obligation to refund excess tax.

It then breaks down into complication as whether you have got a running account or you do not have a running account. None of that matters in the present case because the Commissioner accepted that there was a statutory duty to refund this money, save for the limitation point. So I draw attention to that generic provision as providing some underpinning for the other provisions I have been to. So, for those reasons, irrespective of the result in the Customs’ appeal, the GST was not recoverable. If your Honours please?

FRENCH CJ: Thank you, Mr Solicitor. Yes, Mr Morris.

MR MORRIS: Thank you, your Honours. By way of reply, I think the first point I should go to is your Honour Justice Hayne’s question to my learned friend as to the textual basis for our submission that 167(4) only operates where the section as a whole is engaged. I think your Honour put it to our learned friend that we picked up the words of subsection (4) in pursuance of this section and sought to apply those at an earlier point in subsection (4) where it says:

No action shall lie for the recovery of any sum paid to the Customs as the duty payable –

That, with respect, is not our contention. We advance a more general contention that when subsection (4) is speaking about an action for the recovery of a sum it is speaking about an action of the kind contemplated by subsections (1) and (2). Although it was only the intermediate appellate decision rather than the decision of this Court, we pick up in particular what was said by the Victorian Court of Appeal unanimously in Malika Holdings. We have set out in our written outline at paragraph 17 the passage in which the Victorian Court of Appeal observed that subsection 167(1) opens with a clause which stipulates the conditions that:

all the succeeding provisions of the section are linked not only conceptually but by words which look either backwards or forwards –

and they excerpt the words –

(“thereupon. . . so paid” and “action brought in pursuance of this section”. . .“within the times limited in this section” and “so paid” . . . .“protest in pursuance of this section” –

and so on.

So it is really the integrity of the section as a whole that we rely on rather than an attempt to reposition the words “in pursuance of this section”. Our learned friend’s answer to that was to say that the words “in pursuance of this section” refer back only to the period within which a protest is to be made under subsection (3) and subsection (3A).

That, with respect, cannot be right. When subsection (4) talks about a payment made under protest in pursuance of this section, it does not just mean a payment made under protest within the times specified in subsections (3) and (3A). It means a payment made under protest within the context of the requirements of the section as a whole. It cannot be right to confine those words as a reference back simply to subsections (3) and (3A).

From there we come to the question which your Honour Justice Kiefel posed to our learned friend, which was – it is my formulation rather than your Honour’s – if subsection (4) does not have the effect of precluding all alternative causes of action, how do you get that result from the combined operation of 267, 263 and 273GA? Our learned friend’s answer to that was to say well, look at what was said in relation to the sales tax legislation in Chippendale. But when one looks at what was said in relation to the sales tax legislation in Chippendale, that was legislation which contained nothing like subsection (4). It did not have one provision saying this is to the exclusion of common law remedies. It was a situation in which the only way common law remedies could be excluded was by treating it – and I use this not in the technical sense – but as treating it as a scheme which covers the field.

What is then asserted against us is that the combined operation of 267, 263 and 273GA is to, in effect, cover the field by limiting the importer to such rights as the importer is expressly given under those sections, or pursuant to those sections by regulation made under section 263, and we would say, with respect to our learned friend, that that is an extraordinary approach to construing legislation to say that common law rights, or general law rights, are taken away in favour of one specific right in section 267 in the very limited circumstances mentioned in that section, and whatever are the rights the Governor in Council might choose to give you from time to time; not a situation where Parliament says, “We take away your general law rights and give you a range of rights in substitution”, but a situation where Parliament takes away your general law rights and gives you, relevantly, whatever rights the Governor in Council might choose to give you from time to time.

Since what is being asserted against us is merely a matter of implication, merely a matter of saying if your general law rights are not excluded by 167(4) then they are impliedly excluded by the combined operation of 267, 263, 273GA, in the context of the regulations as they exist from time to time, we would strongly urge the view that that implication cannot be drawn in a case where the existence of such other rights depends on what regulations are in force from time to time.

That brings me to the third point of general nature which I need to address and it was the point made – again, it was your Honour Justice Hayne’s point about the intersection of 167(4) and 167(5) in the context of what this Court said in SCI. At one point I think your Honour went so far as to suggest that the reading of SCI leads to the conclusion that there is no common law or general law cause of action because the Court in that case held that there was no right to recover interest.

That, with the deepest respect to your Honour, is not the effect of SCI. SCI was a case in which the claim was solely a claim for interest, and it was advanced on two footings. It was advanced on the footing first that under section 51A of the Federal Court of Australia Act, interest could be recovered in respect of an amount obtained on a judgment and alternatively, and it was quite specifically alternatively, on the basis that there was a restitutionary right to recover interest.

As to the first of those, the Court held that section 51A had no application in circumstances where the amount of money claimed had been repaid the very day that the cause of action arose, so there just could not be such a claim under that section. As to the restitutionary claim, the majority held that a restitutionary right to recover interest could not succeed because the entitlement to refunds was derived from the Customs Act which provided for payment of refunds without interest. But there is nothing, we would say, in SCI which suggests that the Court turned their minds to the question whether or not there was a residual availability of established common law or general law rights.

Reference was made in the course of our learned friend’s submissions to the observation of Justices McHugh and Gummow in SCI that section 5 talks about both rights and powers. We would have thought, with the greatest respect, that rather than taking the matter any further, that simply confirms what we say, that one cannot look at 267 and 263 and 273 and say they form some sort of code that defines the only remedies that an importer will ever have. The reference in subsection (5) to rights or powers under section 163 is, in our submission, a pretty clear indication - it is not, of course, absolute - but a pretty clear indication that these sections are intended to operate independently of one another and that, whereas Parliament has chosen explicitly to say what it says in 167(4) about excluding other remedies, it has not chosen to say any such thing where remedies are given under 163. The last couple of points we wanted to make by way of reply are fairly narrow ones, but they just arise out of things our learned friend said that we think need to be completed.

Firstly, at an early stage in his submissions our learned friend drew attention to subsection (3A) of section 167 and made the point, well, look, (3A) talks about the COMPILE system so you cannot say that 167 does not allow for or contemplate a protest within the meaning of subsection (1) using the computer-based system. The problem with that submission is that (3A) addresses only one implication because (3A) was inserted to say that:

If a computer import entry has been made by a registered COMPILE user . . . a protest under this section is taken to have been made if, and only if –

it is entered on the COMPILE system. So (3A) goes part of the way to define a protest made using the computer system as a protest for the purposes of the section. What it does not do – it does not go the next step and say that a demand made on the computer system is a demand for the purposes of subsection (1) or that a dispute is taken to arise where there is no dispute in fact.

We would say, with respect to our learned friends, that the real flaw in their submission is that they simply do not come to grips with the need for a dispute. They look for various ways to get around that problem. At one stage our learned friend put it that a dispute arises wherever an importer could crystallise the dispute but chose not to do so. That is not a dispute, that is a potential for a dispute, or a possibility for a dispute, or a likelihood of a dispute, but it is not a dispute.

Similarly, our learned friend, dealing with the decision in Matchbox, told your Honours, rather generously, that Justice Rolfe got it right. We would say, with respect, that his Honour not only did not get it right but it is pretty easy to identify where his Honour did not get it right, and that is at page 33 where, at about point 2 on the page, his Honour said:

As Mr Robertson submitted, which submission I accept, an owner wishing to take advantage of s.167 has an obligation to find out relevant matters and consider its position before the payment is made. If no dispute is raised the only relevant enquiry is whether it could have been on the facts which existed at the time of payment and viewed objectively.

That is, again, an instance of simply rewriting the section. The section does not talk about a situation where a dispute could have been raised. It talks about a situation where there is a dispute, and to read into the section an obligation to find out relevant matters and consider a position and to

interpret the word “dispute” as being a dispute which could be raised on the facts which existed at the time of payment viewed objectively is to give the word “dispute” a meaning which it simply does not bear.

The final point was that, in relation to the GST, I think it would suffice – your Honours have heard what our learned friend said in relation to the sections of the Tax Act – to say that those sections have no application at all in a situation where has simply been no supply.

The GST imposed on us in this case is the GST on the Customs duty, the Customs duty and the curious way that the GST legislation operates, the Customs duty is actually the service that is supplied by the Commonwealth. So when we pay Customs duty that is the supply and so we also have to pay GST on that supply. The sections on which our learned friend relies simply have no application if there actually has not been a taxable supply whatsoever. It is not in our list and I apologise to our learned friend for raising it at a late stage but we have found just overnight a decision of Justice Emmett in the Federal Court that makes precisely that point. It is the case of KAP Motors Pty Ltd v Commissioner of Taxation [2008] FCA 159, but that is just the confirmation of the point that if there has been no taxable supply and therefore no liability to GST, the limitations on recouping overpaid GST do not arise. Those are our submissions.

FRENCH CJ: Yes, thank you, Mr Morris. Yes.

MR GLEESON: Your Honour, that last point is not in the appeal, it is the first I have heard about it. It is not in the grounds of the notice of appeal. We would ask the Court to not consider it unless there is some application to amend the notice of appeal, which we would oppose. There is an answer to it perhaps but it is a brand new point. Your Honours have no submissions from us on that and Mr Morris put nothing in writing, nothing in this ground of appeal, it is a bit late really.

MR MORRIS: It is a late point, your Honours, and if the Commonwealth takes the position that because it is a late point a taxpayer should not be given the opportunity to deal with it, there is nothing I can say against that.

FRENCH CJ: We will not entertain that proposition outside the grant.

MR MORRIS: As your Honours please.

FRENCH CJ: Yes, all right. The Court will reserve its decision. The Court adjourns until 9.45 tomorrow morning for pronouncement of orders.

AT 12.54 PM THE MATTER WAS ADJOURNED