AMI Toyota Limited v The Comptroller-Generasl of Customs

The applicant, AMI Toyota Limited, sought special leave to appeal to the High Court of Australia from a decision of the Full Court of the Supreme Court of Victoria. The dispute concerned the correct rate of exchange to be used for calculating customs duty on imported motor cars. AMI Toyota had arranged forward exchange contracts to purchase Japanese yen for payment of the cars, and these contracts provided a more favourable exchange rate than the spot rate available on the date of exportation. The Comptroller-General of Customs had applied the spot rate, leading to a higher customs duty assessment. A secondary issue related to the applicant's claim for interest on amounts paid under protest, pursuant to section 167 of the *Customs Act* 1901 (Cth).

The primary legal issue before the High Court was whether, for the purposes of section 161B of the *Customs Act*, the "fair rate of exchange" at the date of exportation was the prevailing spot rate or the rate available to the importer under pre-arranged forward exchange contracts. The secondary issue, contingent on success on the first point, was whether payment under protest constituted a "payment with demand" for the purposes of section 58 of the *Supreme Court Act* 1958 (Vic), thereby entitling the applicant to interest on the repaid duty.

The applicant argued that the rate available under the forward exchange contracts, which it had used to acquire the necessary yen, represented the "fair rate of exchange" applicable to its transaction. The Comptroller-General contended that the fair rate was the spot rate on the date of exportation, irrespective of the importer's prior arrangements. The Court was required to interpret the meaning of "fair rate of exchange" in the context of section 161B and consider whether the applicant's use of forward contracts established a rate that was available and effectively used for the payment. The question of interest turned on whether the payment under protest satisfied the criteria for attracting statutory interest under Victorian law.