Hornsby Shire Council v Commonwealth of Australia & Anor [2022] HCATrans 105 (14 June 2022)

Last Updated: 14 June 2022

[2022] HCATrans 105

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S202 of 2021

B e t w e e n -

HORNSBY SHIRE COUNCIL

Plaintiff

and

COMMONWEALTH OF AUSTRALIA

First Defendant

THE STATE OF NEW SOUTH WALES

Second Defendant

GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 14 JUNE 2022, AT 10.00 AM

Copyright in the High Court of Australia
HIS HONOUR: In accordance with the protocol for remote hearings, I will announce the appearances of counsel.

MS R. L. SEIDEN, SC appears with MR M.A. ROBINSON, SC for the plaintiff. (instructed by Diamond Conway Lawyers)

MR G.A. HILL, SC appears with MS M.A. JACKSON for the first defendant. (instructed by Australian Government Solicitor)

MR M.O. PULSFORD appears for the second defendant. (instructed by NSW Crown Solicitor’s Office)

HIS HONOUR: The parties have provided to the Court a proposed agreed special case. I am not, for the moment, disposed to grant the leave that is necessary under rule 27.8 of the High Court Rules for that special case to go forward to the Full Court. The principles concerning the formulation of a special case were recently examined by the Full Court in Mineralogy Pty Ltd v Western Australia [2021] HCA 30; (2021) 95 ALJR 832 at paragraphs 51 to 61 under the heading, and I quote:

Use and misuse of the special case procedure –

There are two takeaway points from that discussion. One is that the facts in a special case must be set out with precision. Two is that the necessity to answer each of the questions asked in the special case in the form in which they are asked must appear from the facts set out in the special case in this sense, that the answering of the questions in order to determine the rights of the parties that are in dispute needs to appear.

Now, the document that I have been sent fails on both of those two points. The case the plaintiff seeks to make, as I understand it from the form of the special case and from the pleading is that every amount that it has paid as either notional GST or voluntary GST – and I am not sure that those two things are exactly the same, although they may be – since 1 July 2000 has in truth been an involuntary payment made under compulsion of Commonwealth law. That is said to be contrary to section 114 and certain provisions of the Commonwealth law are also said to fall foul of section 55.

What the plaintiff wants is a declaration of invalidity, and it also wants some form of order for restitution, presumably of all of the payments ever made. But the case for restitution is entirely unpleaded, and there is also some vague hint in the order sought that there may be some non‑restitutionary basis for recovery.

The essence of the Commonwealth’s response, as I understand it, is that the payments are and always have been voluntary. The current form of the Commonwealth’s defence hints that there are defences to a claim for restitution, and it is not difficult to understand what those defences would be, but for the moment they are unpleaded and the suggestion in the defence is that they would only be pleaded on remitter.

Now, if one goes to the form of the special case, there are many difficulties, but the critical problems are in paragraphs 58 and 59, where there is a complete lack of precision as to what transactions gave rise to what liability at what time. The most that I can take from paragraphs 58 and 59 is that at least some time in the last 22 years, some supplies have been made that may engage notional GST or voluntary GST – and I take those terms to be referring to a supply of the kind referred to in paragraph 58(b).

If one then goes across to the questions of law – I will skip over question (1), which has problems of its own – question (2) seems to refer to a “scheme” which includes current legislation and also legislation which is no longer in force. The Court is being asked whether that scheme contravenes section 114, presumably at any time in the last 22 years. If there are clear answers to a claim in restitution in respect of transactions that have occurred in the distant past, then, for the moment, I do not see the utility of – and I certainly do not see the necessity for – asking the Full Court to rule on these matters of ancient history.

I can accept, quite easily, that there may be recent transactions where payments have been made under protest, where restitutionary defences will not be available. In respect of a transaction, or series of transactions of that nature, if they could be isolated, if the underlying facts could be stated with precision, then it may well be that an appropriate special case could be formulated to determine, with respect to those rights in issue, whether the legislation validly bears on them or not. That is the position as I see it.

The parties may wish to respond immediately, or you may wish to have some time. I realise that you are not all in the same room, and I can tell from the form of the documents that a great deal of effort has gone into them. Ms Seiden, do you wish to respond immediately, or would you prefer to have some time to think about what I have said?

MS SEIDEN: Thank you. Your Honour, we would appreciate some time to think about what your Honour has said. However, if I could just say that the form that the questions took, I think, were anticipated that we would demonstrate that the question – at least the question about whether the Act imposed a tax, was not hypothetical, but we have certainly heard what your Honour has said, and we would appreciate more time to respond with a plan of where we might go from here, your Honour.

HIS HONOUR: Thank you. Mr Hill.

MR HILL: Your Honour, I think I would need to respond fully with a bit of time, but could I raise a threshold issue, which is, I think the thinking underneath the special case was that this Court could determine the question of validity without needing to determine restititionary defences, because those defences could only be determined after a trial of fact and it is, from what I am hearing from your Honour, your Honour does not necessarily accept that as a proposition.

HIS HONOUR: Correct, for two reasons, Mr Hill.

MR HILL: Thank you, your Honour.

HIS HONOUR: One is that – you have not actually indicated, Mr Hill, whether you would be just taking an ordinary six‑year limitation period point, but if you did, and if it appeared clear‑cut, there is very little point in raking over the coals of history, particularly in respect of a legislative scheme, the pre‑2009 scheme, that is no longer applicable. Secondly, your point – your essential point – is that these were voluntary payments. It may well be that the concept of voluntariness is a different one when you get to the restitutionary defences, but there is at least an overlap that would need to be explored. At the moment, I just do not have the material in the special case or in the pleadings to understand the extent of that overlap.

MR HILL: Thank you, your Honour.

HIS HONOUR: Mr Pulsford.

MR PULSFORD: I would appreciate some further time, like Ms Seiden, your Honour.

HIS HONOUR: Very well. Do you want to come back today to formulate a plan for going forward, or do you want considerably more time than that? Ms Seiden?

MS SEIDEN: Your Honour, we would appreciate a bit more time in order to have an opportunity to discuss with our learned friends and reality‑test the various options, your Honour, but appreciate of course that your Honour would like to hear from us as soon as possible, but we would respectfully ask for a little bit more time than today.

HIS HONOUR: Yes. This could be attacked in a number of different ways. My preference would be to see a proper formulation of the pleadings and the defence first. Another option is a narrowing of the case. A further option is a narrowing of the special case within the case. There is no reason
why a special case has to cover every issue raised in the pleadings, or even every potential constitutional issue. If it were possible to focus on and specify recent transactions resulting in actual payments where the utility of the Court answering the questions of validity was clear‑cut, that would most likely satisfy my concerns. Mr Hill, what do you want to do?

MR HILL: Of those options, your Honour?

HIS HONOUR: Just in terms of timing, Mr Hill. I do not really want to put you on the spot.

MR HILL: Thank you, your Honour. One issue within our team, your Honour, is that we would need to raise this with my leader, the Solicitor‑General, so we might be looking for more days rather than hours to consult with him, if that were suitable for the Court.

HIS HONOUR: Yes. Mr Pulsford, I suppose you are more flexible?

MR PULSFORD: Your Honour, I would also need to confer with the Solicitor‑General, but could accommodate whatever approach suits the other parties.

HIS HONOUR: Well, what if I give you a week? We can possibly reschedule for next Tuesday, 10.00 am, and if you are able to formulate a proposal, please feel free to capture it in some proposed directions, which you are free to send to me. But I think it is still useful that we talk about how we are going forward. We will have a directions hearing next Tuesday, whether or not you are able to formulate a plan with which you are all satisfied. The only order that I will make at this stage is that:

1. The directions hearing is adjourned until 10.00 am next Tuesday by video link.

Very well. The Court will now adjourn.

AT 10.17 AM THE MATTER WAS ADJOURNED