GLEESON CJ, McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ
BRITISH AMERICAN TOBACCO AUSTRALIA LTD APPELLANT
AND
THE STATE OF WESTERN AUSTRALIA & ANOR RESPONDENTS
British American Tobacco Australia Ltd v Western Australia
[2003] HCA 47 2September 2003 P62/2002
ORDER
1. The proceedings be amended to name the appellant as British American Tobacco Australia Ltd.
2. Appeal allowed with costs.
3. Set aside orders 2, 3 and 4 made by the Full Court of the Supreme Court of Western Australia on 13 February 2001 and, in place thereof, order that the appeal to the Full Court be dismissed with costs.
On appeal from the Supreme Court of Western Australia
Representation:
N C Hutley SC with N Perram for the appellant (instructed by Clayton Utz)
R J Meadows QC, Solicitor-General for the State of Western Australia with R M Mitchell for the respondents (instructed by Crown Solicitor for the State of Western Australia)
Interveners:
D M J Bennett QC, Solicitor-General of the Commonwealth with A R Beech and G A Hill intervening on behalf of the Attorney-General of the Commonwealth (instructed by Australian Government Solicitor)
B M Selway QC, Solicitor-General for the State of South Australia with J C Cox intervening on behalf of the Attorney-General for the State of South Australia (instructed by Crown Solicitor for the State of South Australia)
M G Sexton SC, Solicitor-General for the State of New South Wales with J K Kirk intervening on behalf of the Attorneys-General for the State of New South Wales and Victoria (instructed by Crown Solicitor for the State of New South Wales and Victorian Government Solicitor)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
British American Tobacco Australia Ltd v Western Australia
Constitutional law (Cth) – Exclusive powers of Commonwealth Parliament – Duties of excise – State law imposing tobacco wholesalers' and retailers' licence fee in contravention of s 90, Constitution – Claim against State for money had and received to the use of taxpayer – Federal jurisdiction – Whether action arises under the Constitution or involves its interpretation – Constitution, s 76(i).
Constitutional law (Cth) – Exclusive powers of Commonwealth Parliament – Duties of excise – State law imposing tobacco wholesalers' and retailers' licence fee in contravention of s 90, Constitution – Claim against State for money had and received to the use of taxpayer – Right to proceed against State – State laws imposing conditions on right of action against State – Whether State laws apply of their own force – Whether State laws apply pursuant to s 64 or s 79, Judiciary Act 1903 (Cth) – Crown Suits Act 1947 (WA), ss 5, 6 – Limitation Act 1935 (WA), s 47A.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
British American Tobacco Australia Ltd v Western Australia [2003] HCA 47
Case
[2003] HCA 47
Decision Date
CaseChat Overview and Summary
British American Tobacco Australia Ltd (BAT) appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Western Australia. The dispute concerned the recovery of licence fees paid by tobacco wholesalers and retailers to the State of Western Australia under laws that were subsequently found to be invalid by this Court as contravening section 90 of the Constitution, which reserves the exclusive power to impose duties of excise to the Commonwealth Parliament. The core of the matter was whether the State could retain these payments, which had been made under the erroneous assumption of the laws' validity.
The High Court was required to determine whether the State of Western Australia was entitled to retain licence fees collected under laws that had been constitutionally invalidated as duties of excise. This involved considering the fundamental principle that no tax can be levied without parliamentary authority and how this principle applies in the context of payments made under a mistake of law. The Court also had to address the applicability of State laws, such as the Crown Suits Act 1947 (WA) and the Limitation Act 1935 (WA), to actions brought against the State in federal jurisdiction, particularly those arising under section 76(i) of the Constitution.
The Court reasoned that the principle that the Crown cannot retain money it lacks authority to receive, particularly when paid by mistake as tax, is a fundamental aspect of public law and constitutionalism. This principle, derived from the Bill of Rights 1688 and reinforced by the Australian Constitution, dictates that the executive government requires valid parliamentary authority to levy taxes. The Court found that the Full Court of Western Australia had overlooked this starting point in its analysis. The appeal was allowed, and the orders of the Full Court were set aside, with the result that the appeal to the Full Court was dismissed.
Orders
Orders of the court
1. The proceedings be amended to name the appellant as British American Tobacco Australia Ltd.
2. Appeal allowed with costs.
3. Set aside orders 2, 3 and 4 made by the Full Court of the Supreme Court of Western Australia on 13 February 2001 and, in place thereof, order that the appeal to the Full Court be dismissed with costs.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
GLEESON CJ
HUGH, GUMMOW AND HAYNE JJ
KIRBY J
CALLINAN J
Submission (iv) should be rejected, thereby making it unnecessary to rule upon the preceding submissions. The Commonwealth correctly submitted that upon the hypothesis presented by South Australia, s 64 might be read down to operate differentially between the Commonwealth and the States, and to apply to the suits a federal jurisdiction, including those based upon s 76(i) of the Constitution, in which the State has the character of a defendant.Conclusions The appeal should be allowed with costs. Orders 2, 3 and 4 of the orders made by the Full Court should be set aside. In place thereof, the appeal to the Full Court should be dismissed with costs. This is another appeal arising out of the constitutional invalidation of the State tobacco licensing laws operating before 1997. Pursuant to such laws, the States of the Commonwealth raised very large amounts of revenue. By this Court's decision in Ha v New South Wales[89] the State laws were held invalid. Numerous problems then arose as to the entitlement to recover payments that had been made on the erroneous assumption of the validity of those laws."An important constitutional value"[89](1997) 189 CLR 465. Recovery of invalid taxes: In Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd, Mason CJ observed[90]:"There is [a] fundamental principle of public law that no tax can be levied by the executive government without parliamentary authority, a principle which traces back to the Bill of Rights 1688 (Imp)[91]. In accordance with that principle, the Crown cannot assert an entitlement to retain money paid by way of causative mistake as and for tax that is not payable in the absence of circumstances which disentitle the payer from recovery. It would be subversive of an important constitutional value if this Court were to endorse a principle of law which, in the absence of such circumstances, authorized the retention by the executive of payments which it lacked authority to receive and which were paid as a result of causative mistake."[90](1994) 182 CLR 51 at 69. See also Northern Suburbs General Cemetery Reserve Trust v The Commonwealth (1993) 176 CLR 555 at 597-599 where the history of unconstitutional exaction of taxation is described by McHugh J.[91](1688) 1 W & M, Sess 2, c 2 ("By levying Money for and to the Use of the Crown, by pretence of Prerogative, for other Time, and in other Manner, than the same was granted by Parliament"). In a federal polity, such as the Commonwealth of Australia, the foregoing passage is necessarily understood as requiring a clarification of the "fundamental principle of public law" so that no tax may be levied by an executive government without valid parliamentary authority. This additional requirement derives from the language and implications of the Constitution itself. The foregoing is the starting point for analysis in the present appeal[92]. It was overlooked by the Full Court of the Supreme Court of Western Australia from which this appeal comes. It is a point that distinguishes this case from earlier proceedings in Roxborough v Rothmans of Pall Mall Australia Ltd[93] in which an attempt was made (successful in the event) to recover moneys paid by retailers to a wholesaler pursuant to contracts framed to conform to the system of State licence fees on the sale of tobacco products. The wholesaler in that case, which failed in its resistance to the action of the retailers, was the present appellant, British American Tobacco Australia Ltd ("BAT"), then known by its former name. The foundation for the proceedings was the decision of this Court in Ha[94]. The basis of that decision was that, properly understood, the State law imposed a duty of excise. That is a form of taxation the imposition of which is reserved by the Constitution to the Federal Parliament[95].[92]From a judgment of the Full Court of the Supreme Court of Western Australia: The State of Western Australia v Rothmans of Pall Mall (Australia) Ltd [2001] WASCA 25. The Full Court reversed a decision of Master Sanderson who, on 14 August 2000, had dismissed the State's application for summary judgment.[93](2001) 208 CLR 516.[94](1997) 189 CLR 465.[95]Constitution, s 90. Note also the special provisions in relation to Western Australia in s 95 of the Constitution, now spent.
Ratio Decidendi
Legal Principle Established
Established by:
GLEESON CJ,
HUGH, GUMMOW AND HAYNE JJ,
KIRBY J,
CALLINAN J