ACI Operations Pty Ltd v Commonwealth of Australia
[1995] FCA 1124
•20 DECEMBER 1995
C A T C H W O R D S
CUSTOMS - Commercial tariff concession order - Duty refunded on day when CTCO was made but without interest - Whether Commonwealth is liable to pay interest on duty paid by an importer prior to the making of a CTCO which is repaid immediately the CTCO is made - Whether a claim lies under s.51A of Federal Court of Australia Act 1976 - Whether law of restitution applies.
Customs Act 1901, ss.163, 167, 269C, 269G, 269M and 269N.
Federal Court of Australia Act 1976, s.51A
NO. NG.598 of 1994
ACI OPERATIONS PTY LIMITED (ACN 004 230 236) v COMMONWEALTH OF AUSTRALIA
NO. NG.597 of 1994
SCI OPERATIONS PTY LIMITED (ACN 005 775 011) v COMMONWEALTH OF AUSTRALIA
CORAM: WILCOX J
PLACE: SYDNEY
DATE: 20 DECEMBER 1995
IN THE FEDERAL COURT OF AUSTRALIA )
)No. NG.598 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:ACI OPERATIONS PTY LIMITED
ACN 004 230 236
Applicant
AND:COMMONWEALTH OF AUSTRALIA
Respondent
CORAM:WILCOX J
PLACE: SYDNEY
DATE: 20 DECEMBER 1995
MINUTES OF ORDER
THE COURT ORDERS THAT:
The Application be dismissed.
The applicant pay the costs of the proceeding incurred by the respondent.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)No. NG.597 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:SCI OPERATIONS PTY LIMITED
ACN 005 775 011
Applicant
AND:COMMONWEALTH OF AUSTRALIA
Respondent
CORAM:WILCOX J
PLACE: SYDNEY
DATE: 20 DECEMBER 1995
MINUTES OF ORDER
THE COURT ORDERS THAT:
The Application be dismissed.
The applicant pay the costs of the proceeding incurred by the respondent.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)No. NG.598 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:ACI OPERATIONS PTY LIMITED
ACN 004 230 236
Applicant
AND:COMMONWEALTH OF AUSTRALIA
Respondent
and
NO. NG597 of 1994
BETWEEN:SCI OPERATIONS PTY LIMITED
ACN 005 775 011
Applicant
AND:COMMONWEALTH OF AUSTRALIA
Respondent
CORAM:WILCOX J
PLACE: SYDNEY
DATE: 20 DECEMBER 1995
REASONS FOR JUDGMENT
WILCOX J: These two proceedings were remitted to the Court from the High Court of Australia. They were heard together as they raise one identical issue: whether or not the Commonwealth of Australia, the respondent to each proceeding, is bound to pay interest on certain customs duty it collected on the importation of goods that was refunded because of the
making of a commercial tariff concession order ("concession order" or "CTCO") under s.269C of the Customs Act 1901. The applicants, ACI Operations Pty Limited and SCI Operations Pty Limited, so contend. They put their argument on two bases: the law of restitution and s.51A of the Federal Court of Australia Act 1976.
The facts and relevant legislation
The relevant facts are not in dispute. Between 1 September 1987 and 29 February 1992, each of the applicants imported into Australia polyethylene terephthalate ("PET") resin for use in the manufacture of plastic bottles suitable for the packaging of carbonated beverages. On the occasion of each importation, customs duty was paid by the importer to the Comptroller General of Customs. It is not necessary to go into the basis of the Comptroller General's demand for duty. It is common ground that the demanded duty was due and payable at the time of each importation. It is also common ground that no payment was made under protest. This last matter is relevant to an argument advanced on behalf of the Commonwealth in reliance on s.167 of the Act. Section 167(4) provides:
"167(1)If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff, or under any Customs Tariff or Customs Tariff alteration proposed in the Parliament (not being duty imposed under the Customs Tariff (Anti-Dumping) Act 1975), 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 in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section.
(2)The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid.
(3)A protest in pursuance of this section shall be made by writing on the entry of the goods the words 'Paid under protest' and adding a statement of the grounds upon which the protest is made, and, if the entry relates to more than one description of goods, the goods to which the protest applies, followed by the signature of the owner of the goods or his agent.
(4)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;
(a)In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment; or
(b)In case the sum is paid as the duty payable under a Customs Tariff or Customs Tariff alteration proposed in the Parliament, within 6 months after the Act, by which the Customs Tariff or Customs Tariff alteration proposed in the Parliament is made law, is assented to.
(5)Nothing in this section shall affect any rights or powers under section 163."
Section 163 confers general powers on the Comptroller General of Customs in respect of refunds. It relevantly provides:
"163(1)Refunds, rebates and remissions of duty may be made:
(a)in respect of goods generally or in respect of the goods included in a class of goods; and
(b)in such circumstances, and subject to such conditions and restrictions (if any), as are prescribed, being circumstances, and conditions and restrictions, that relate to goods generally or to the goods included in the class of goods.
(1A)The regulations may prescribe the amount, or the means of determining the amount, of any refund, rebate or remission of duty that may be made for the purposes of subsection (1).
(1B)...
(1C) ...
(1D) ...
(2)In this section, 'duty' includes an amount paid to a Collector in respect of duty that may become payable."
On 24 September 1987 the applicants applied to the Comptroller General for a CTCO in respect of PET resin. The power to make such an order is conferred by s.269C of the Customs Act. It applies where the Comptroller General is satisfied that:
"(a)goods serving similar functions to the particular goods are not produced in Australia; and
(b)goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business."
Section 269G specifies the requirements for making applications for concession orders. Subsequent provisions detail the necessary subsequent procedures, the last step being publication of the order in the Commonwealth Government Gazette: see s.269M. Section 269N deals with the effect of a concession order. It relevantly provides that a concession order in respect of particular goods "shall be deemed to have come into effect on such day before the making of the order as is specified in the order" (subs. (1)). Subject to some presently immaterial exceptions, this day is the day occurring 28 days before the day on which the application for the order was made (subs. (3)). Subsection (2) provides that an order "applies in relation to the particular goods to which it relates that are first entered for home consumption on or after the day on which it comes into effect".
Under certain circumstances, that I need not detail, the Comptroller General may make a CTCO for a closed period, up to a day called "production commencement day": see subs. (3B).
The Comptroller General refused the applicant's request for a CTCO. There was a series of applications to this Court pursuant to the Administrative Decisions (Judicial Review) Act 1977: see ACI PET Operations Pty Ltd v Comptroller General of Customs (1990) 26 FCR 531 and Comptroller General of Customs v ACI PET Operations Pty Ltd (1994) 49 FCR 56. A Full Court finally disposed of the litigation by making an order requiring the Comptroller General to advertise the application for a CTCO, limited to a more narrowly defined class of goods, and, in the event that no objections were received within the prescribed time, to make the CTCO as so limited, as from 1 September 1987 up to and including a production commencement day to be fixed by the Comptroller General. I assume that the Comptroller General fixed 29 February 1992 as the production commencement day, and this is the reason why I am concerned only with interest on duty paid in respect of importations from 1 September 1987 to that day.
Apparently, no objection was received in response to the advertising directed by the Full Court. On 3 June 1994, Joseph Eastmore, a delegate of the Comptroller General, made the CTCO. On that same day, two other events occurred. The first was that writs of summons were filed in the High Court to commence the present two proceedings. Each writ claimed the amount of money that had been paid by the particular plaintiff by way of duty on the imported PET resin between 1 September 1987 and 29 February 1992 together with "interest at
such a rate as the Court thinks fit on the whole or any part of the money for the whole or part of the period between the date when the cause of action arose and the date as of which judgment is entered whether pursuant to section 77MA(1) of the Judiciary Act 1903 or otherwise".
The second other event of 3 June 1994 was the repayment by the Commonwealth to each applicant of the whole of the duty paid by that applicant in respect of the period 1 September 1987 to 29 February 1992, together with interest in respect of that duty for the period 15 October 1993 to 31 March 1994, this interest payment being required to fulfil an undertaking given in connection with the Full Court appeal. However, the Commonwealth did not pay interest in relation to any other period. After the remittal of the actions to this Court, they have been continued as claims for interest in respect of the periods 1 September 1987 to 14 October 1993 and 1 April 1994 to 3 June 1994.
The issues
The Statements of Claim in each proceeding are in similar terms. They make allegations about the processing of the application for a CTCO, it being said that "(t)here was no opposition from manufacturers in Australia to the making of a commercial tariff concession order in respect of the goods", so that a concession order should have been made by a date no later than 1 November 1987. Building on this, it is claimed
that the demands for customs duty made after 1 November should not have been made and the receipt by the Commonwealth of duty after that day "was pursuant to wrongful demands and not authorised by law". On that basis, it is claimed, payment of the duty was involuntary and the money was "money received by the respondent to the use of the applicant and was payable to the applicant by the respondent as money had and received". Alternatively, it was pleaded, "the respondent has been unjustly enriched by each such payment and was liable to make restitution to the applicant of those amounts".
By its Defence in each action, the Commonwealth admitted its receipt of the duty, the application for, and making of, the CTCO and the repayments made on 3 June. It denied the allegations that the Collector General should have made a commercial tariff concession order by 1 November 1987, that subsequent demands for payment were wrongful and unauthorised by law, that the payments were made involuntarily, that the money was repayable as money had and received and the claim of unjust enrichment.
At a directions hearing on 2 December 1994, the parties asked me to direct the filing and service of statements of facts, issues and contentions. Apparently, they expected this would narrow the gap between their positions. But the filed documents only reflected the pleadings. It was not until the hearing that it became clear that the applicants abandoned their allegations that the CTCO should have been made earlier and that the demands for payment were wrongfully made. As then stated, the applicants' case was simply that, the CTCO having been made, the duty was refundable on 3 June 1994 and the applicants were entitled to interest on the amount of the refunded duty from the dates of the original payments, either on the basis of the law of restitution or s.51A of the Federal Court of Australia Act. Inherent in this approach are several concessions. First, the duty was payable when the goods were imported, so the demands for duty were properly and lawfully made. Second, the moneys paid by way of duty were moneys that the Comptroller General was entitled, and obliged, to retain on behalf of the Commonwealth, at least until the CTCO was made. There was no element of unjustly retaining from the applicants moneys that were truly theirs. Third, it was only on 3 June 1994, when the CTCO was made, that the Comptroller General became bound (or entitled) to refund the duty to the applicants. That obligation arose from the statutory retrospectivity given to the concession order by s.269N(1) and (3).
It follows from these concessions that this case does not address the situation that might arise where an officer of the Australian Customs Service makes a demand for payment of money by way of duty that is not legally justified and money is paid pursuant to the demand, whether under protest or otherwise. Nor does it address a situation where a dispute arises as to liability for payment of duty, or the amount thereof. Contrary, therefore, to the submission of counsel for the Commonwealth, it seems to me that s.167 of the Act has no relevance. The applicants' case is that, regardless of initial lawfulness and lack of dispute, whenever duty is refunded consequently on the making of a CTCO, it carries interest; at least if an action for recovery was commenced in the interval (however brief) between the making of the CTCO and the making of the refund.
Section 51A
Counsel for the applicants put their s.51A argument first. Section 51A(1) of the Federal Court of Australia Act is in these terms:
"(1)In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:
(a)order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or
(b)without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest."
Notwithstanding the use of the word "included" in para. (a), I held in State Bank of New South Wales v Commissioner of Taxation (1995) 95 ATC 4734 that the power conferred by s.51A(1) extends to a case where the whole of the money the subject of the cause of action was paid between commencement of the action and judgment. In the present case, counsel for the Commonwealth submits that I erred in this conclusion. He says that the subsection only enables the Court to allow interest on so much of the original debt as is included in the judgment. For the reasons expressed in State Bank at 4,743 - 4,744, I reject that submission. Accordingly, the fact that the whole of the original debts was paid on the day the writs were issued is not a reason for rejecting the s.51A claim.
However, counsel for the Commonwealth raises another problem. Section 51A(1)(a) refers to "interest ... on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered". Counsel says that the date when the cause of action arose was 3 June 1994, this being the day when the CTCO was made and there came into existence, for the first time, an obligation by the Commonwealth to make a refund of duty. However, the money was paid the same day. There was a gap of a few hours between the making of the CTCO and the payments, but the law takes no account of portions of a day, counsel argues, so no interest is payable. Alternatively, it would be difficult to calculate the precise time difference between the making of the CTCO and the payments; as a matter of discretion, the Court will not attempt to do so. I accept both these propositions. If it is correct to say that the cause of action arose on 3 June, interest under s.51A ought not be awarded.
Counsel for the applicants argue that it is wrong to say that the cause of action arose on 3 June 1994. They say that a cause of action arose in relation to each duty payment at the time it was made. In support of that argument they cite Collector of Customs v Gaylor Pty Ltd (1995) 127 ALR 641, a decision of the New South Wales Court of Appeal. The case involved two importers who had paid customs duty under protest, the goods being jewellery in one case and oil in another. In each case, the importer took the matter to the Administrative Appeals Tribunal which held that the goods were not dutiable. In each case, the importer instituted recovery proceedings in the Supreme Court of New South Wales; however, before judgment, the Collector repaid the duty, without interest. In each case, the importer pressed the claim for interest and succeeded in obtaining judgment for interest on the moneys paid by way of duty during the period between payment and repayment. The Court of Appeal upheld these judgments. The Court held that an application for AAT review of an ACS decision to impose duty was an alternative to recovery action under s.167(2); nonetheless, the cause of action to recover duty (in the event of a favourable decision by the AAT) is complete at the time of payment under protest. Although s.273GA of the Customs Act, which deals with applications to the AAT, does not in terms deal with recovery of duty following an AAT decision, it implicitly removes, in relation to goods the subject of an AAT determination, the restrictions as to recovery contained in s.167(4). Cole JA, with whom Clarke and Handley JJA agreed, said at 652:
"that the respondents were entitled to commence proceedings, as they did, for recovery of the moneys paid to the Collector under protest and, such actions being actions for the recovery of money, the court had a power to award interest."
I do not think Gaylor has any relevance to the present problem. I do not doubt that, where duty is wrongly demanded and paid under protest, a cause of action immediately arises; the money has been unlawfully and coercively taken and the payer is entitled to sue for its recovery. This is the scheme of s.167. As Cole JA remarked at 651, it is implicit in s.167(2) "that the cause of action to recover duty paid under protest is complete at the time of payment under protest for otherwise there would be an incomplete cause of action insufficient to ground the contemplated proceedings". However, in the present case, nobody suggests that the duty was wrongly demanded and paid under protest. On the contrary, it is common ground that the duty was payable when demanded and that the Comptroller General was not obliged to make a refund until the CTCO had been made; indeed he would not have been entitled to do so. How then can it be said that the applicants had a cause of action before the time when the CTCO was made? If they had sued to recover the money before that date, they would have failed. There would have been no basis upon which they could have claimed that they were entitled to a repayment; in other words, they would have had no cause of action.
It seems to me, with respect to counsel, that the s.51A argument is quite misconceived. It must be rejected.
Restitution
In support of their argument that the law of restitution enables their clients to recover interest, counsel say that the Court should put the applicants back into the position in which they would have been if not compelled to pay the duty. The situation in this case, they contend, is similar to that which applied in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70, a case I discussed in State Bank. I there suggested (at 4,739) that there was no reason why the reformulation of the law effected in Woolwich should not be adopted in Australia and (at 4,741) that, as a matter of general principle, subject to any special circumstances or agreement and independently of any statutory provision, an appropriate order might include interest. But I was writing in a case where money had been paid into a Commonwealth government bank account pending resolution of a dispute over a taxpayer's liability for sales tax. That dispute was ultimately resolved in the taxpayer's favour. It was held that the Commonwealth was not entitled to the tax it had claimed. Similarly, in Woolwich itself, the tax was paid under protest pursuant to regulations that were subsequently held invalid. In both cases, the demand for payment, which had a strong element of compulsion attaching to it, related to moneys that the payer was never legally obliged to pay. As already indicated, that is not this case. Here the moneys were payable when demanded. They remained payable until the day the CTCO was made, on which day they were refunded. If the law of restitution gives the applicants an entitlement to interest, it must be because it includes a general principle to the effect that, whenever money is paid under compulsion and subsequently refunded, the payer is entitled to interest.
Counsel for the applicants did not cite any authority for such a wide proposition. I know of none. The argument that this case is covered by the law of restitution seems to be inconsistent with the reasoning of most of the Justices in a High Court case cited by counsel for the respondent, Commissioner of State Revenue v Royal Insurance Limited (1994) 182 CLR 51. That case concerned overpayments of $1,907,908.10 made by the respondent insurance company to the Victorian Comptroller of Stamps in respect of stamp duty on workers' compensation insurance policies. The overpayments occurred between 1985 and 1989. They came about because the company was unaware of amendments to the relevant taxing Act, the Stamps Act 1958 (Vic), that had been made in 1985 and 1987. The 1985 amendment exempted from duty premiums paid for "wages" policies issued after 30 June 1985. The 1987 amendment (which was made on 12 November 1987 but was deemed to have come into operation on 30 June 1985) exempted premiums on "cost plus" policies issued after that date. The overpayments fell into four categories: overpayments of premiums on wages policies received for extensions after 30 June 1985 ("post-1985 wages payments"), premiums on cost plus policies received before 12 November 1987 ("pre-1987 cost plus payments"), premiums on cost plus policies received after 12 November 1987 ("post-1987 cost plus payments") and over-estimates of premiums on cost plus policies received before 1 July 1985 ("overestimated payments"). The Comptroller of Stamps found that duty had been overpaid but decided not to make any refund. Overruling a primary judge, the Appeal Division of the Supreme Court of Victoria held that the Comptroller of Stamps did not have a discretion to refuse a refund and made an order in the nature of mandamus directing the Commissioner of State Revenue (the Comptroller's successor) to refund the money. The High Court unanimously upheld that order.
In relating Royal Insurance to the present case, it is important to note that the order sought by the company did not extend to interest; consequently, the High Court was not concerned to consider the circumstances under which interest might be payable. Nonetheless, I agree with counsel for the respondent that the case is of present interest because of the way in which the members of the High Court analysed a situation not unlike the present case. This is especially true of the pre-1987 cost plus payments. These were made at a time when duty was exigible but in respect of a period for which duty was retrospectively abrogated.
Mason CJ applied the law of restitution. After referring to the High Court's decision, in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, that mistake of law does not bar recovery he said at 67:
"... and in this case there is no question but that Royal made the relevant payments in the mistaken belief that in law it was bound to do so. In one respect, Royal's belief at the time of payment was not mistaken: in the case of the cost-plus policies, payments were made when there was a legal liability to pay them. Only subsequently and retrospectively was an exemption granted. But the retrospective operation of s.2(4) of the 1987 Act enables one to say that, in the light of the law as it was enacted with retrospective effect in 1987, the payments of duty were made under a mistake as to the legal liability to pay them. In David Securities it was accepted that: 'the payer will be entitled prima facie to recover moneys paid under a mistake if it appears that the moneys were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the moneys or that the payee was legally entitled to payment of the moneys. Such a mistake would be causative of the payment.' And, prima facie, that is all that is required where, as here, the recipient has no legal entitlement to receive or retain the moneys. The recipient has been unjustly enriched. Indeed, it is perhaps possible that the absence of any legitimate basis for retention of the money by the Commissioner might itself ground a claim for unjust enrichment without the need to show any causative mistake on the part of Royal. But there is no occasion to pursue this aspect of the case further."
On this approach to the present case, it would be similar to State Bank and Woolwich; a question would arise as to whether the repayment necessary to effect restitution should not include interest.
However, none of the other Justices treated the case as one of mistakes (or deemed mistakes) of law. Brennan J (with whom Toohey and McHugh JJ agreed) distinguished between the various categories of moneys. He said the post-1985 wages payments and post-1987 cost plus payments were made under mistakes of law. The duty exceeded that which was then legally required to be paid. Brennan J held these payments were recoverable under the general law of restitution. But he held that payments in the other two categories were not made through error of law. In relation to the pre-1987 cost plus payments, he said, at 89-90, there was no mistake:
"When paid, the Comptroller was entitled - indeed, she was bound - to retain it. But, by force of the operation attributed to the 1987 amendment, the Commissioner is retrospectively disentitled to retain what was paid as stamp duty under the Act as it had stood before the 1987 amendment commenced. What effect in law does the 1987 amendment have? If the 1987 amendment is to be effective retrospectively, the rights and liabilities of the Commissioner and those who overpaid money must be so altered as to place them in the same position as they would have been in had the Act not imposed the stamp duty abolished by the 1987 amendment during the period of the retrospective operation of the 1987 amendment. In other words, the Commissioner is bound to refund the amount paid by way of stamp duty exigible under the Act during the period of the retrospective operation of the 1987 amendment. It is only by creating a right to a refund of stamp duty already paid that retrospective effect can be given to the 1987 amendment. The Commissioner's liability thus arises directly
from the provisions of the Taxation Acts Amendment Act 1987. I see no reason to treat the Commissioner's liability to refund the amount in item (ii)(a) as other than statutory. There is no occasion to invoke notions of common law restitution in order to discover a cause of action entitling a payer to a refund."
Interestingly, in a footnote to this passage, his Honour commented:
"This case is quite different in principle from Air Canada v. British Columbia, [1989] 1 S.C.R. 1161; (1989) 59 D.L.R. (4th) 161, and Woolwich Equitable Building Society v. Inland Revenue Commissioners, [1993] A.C. 70, where payments had been made under statutory provisions that were held to be invalid."
Dawson J dealt with the case by different reasoning. He held that the relevant provision of the Stamps Act conferred on the Comptroller of Stamps a duty, not a mere discretion, to make a refund of the overpayments. Of present interest is his indication at 100 that the pre-1987 cost plus payments should not be regarded as having been paid under a mistake of law. He said at 100-101:
"That amount of duty was payable according to law at the time it was paid and only became an overpayment when the legislation was retrospectively amended. It does not seem to me that the retrospective amendment converted the payments of duty making up the amount of $1,370,000 into payments made under a mistake of law, however much the amendment retrospectively removed the Comptroller's entitlement or authority to receive those payments. As Deane J. observed in University of Wollongong v Metwally (1984) 158 C.L.R. 447 at 478.:
'A parliament may legislate that, for the purposes of the law which it controls, past facts or past laws are to be deemed and treated as having been different to what they were. It cannot however objectively, expunge the past or "alter the facts of history.'
It need hardly be added that the legislation in question did not deem the payments made by Royal to have been made under a mistake of fact or law.
...
No question such as that which arose in Air Canada v. British Columbia would arise in the present case. In the Canadian case a majority of the Supreme Court held that, whilst moneys paid under a mistake of law might be recovered upon the basis of unjust enrichment, that doctrine did not extend to moneys paid under unconstitutional legislation. No question of unconstitutionality arises in this case. The application of the common law would also raise the question whether the principle of unjust enrichment can be invoked when moneys paid under a mistake of fact or law constitute an expense which has been passed on to someone else, as the respondent insurer is said to have passed on the overpayments of stamp duty to its insured in this case. The better view would seem to be that it is the unjust enrichment of the payee rather than loss suffered by the payer which should govern entitlement to restitution, but, having regard to the view which I take, it is unnecessary to determine that question in these proceedings.
Were the Comptroller to be governed by the common law rather than s.111(1) with regard to her obligation, if any, to refund the overpaid stamp duty, the remedy available to the respondent would be of a quite different nature."
As I have said, in Royal Insurance the High Court was not directly concerned with interest. But I think it is clear that, with the exception of Mason CJ, the members of the Court reached two conclusions that are fundamentally opposed to the restitution argument put by the applicants in this case. First, they thought that the law of restitution is inapplicable to a situation where payments are made pursuant to an existing legal obligation, but the obligation is retrospectively abrogated. Second, they thought the rights of the parties in such a situation were governed by the relevant statute, not the common law.
In the present case, there is power to make a refund, under s.163 of the Customs Act. I need not pause to consider whether that power should be construed as a duty to do so, in appropriate circumstances. Royal Insurance would probably support such an approach; but it is not necessary to consider the point because the duty itself has been refunded. The Customs Act says nothing, relevantly, about interest. Once it is concluded that s.51A does not assist, the applicants have to get an obligation to pay interest from the general law of restitution; and the majority High Court view in Royal Insurance is that it does not apply to a case like this. The restitution argument also fails.
Each application should be dismissed with costs.
I certify that this and the preceding twenty (20) pages are a true copy of the Reasons for Judgment of his
Honour Justice Wilcox.
Associate:
Dated: 20 December 1995
APPEARANCES
Counsel for the Applicant: D H Bloom QC and A Robertson SC
Solicitor for the Applicant: Blake Dawson & Waldron
Counsel for the Respondent: S Gageler
Solicitor for the Respondent: Australian Government Solicitor
Date of hearing: 4 December 1995
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