Bulzomi v Commissioner of State Revenue

[2009] HCATrans 219

[2009] HCATrans 219

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M53 of 2009

B e t w e e n -

ANTONIO BULZOMI

Applicant

and

COMMISSIONER OF STATE REVENUE

Respondent

Application for special leave to appeal

HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 4 SEPTEMBER 2009, AT 9.27 AM

Copyright in the High Court of Australia

MR A.J. MYERS, QC:   May it please the Court, I appear with MR P.H. SOLOMON for the applicant.  (instructed by Christopher Bunnett, Solicitor)

MR N. LUCARELLI, QC:   If the Court pleases, I appear with my learned friend, MR J.C. PATERSON, for the respondent.  (instructed by Solicitor to the Commissioner of State Revenue)

HEYDON J:   Yes, Mr Myers.

MR MYERS:   Thank you, your Honours. Neither this application nor any appeal consequent on it will give rise to any issue of fact. Could I ask your Honours to go to the application book pages 41 to 42, simply to remind your Honours of that terms of section 40 of the repealed provision of the Stamps Act there set out.  Subsection (1) creates a debt in respect of unaccounted for duties due from the person who has failed to account to Her Majesty and provides that the debt is recoverable as such.  It is one of those familiar provisions that are found in taxing statutes to give Crown priority to debts for tax.

Subsections (2) and (3) are quite different.  Subsection (2) provides for an order nisi procedure whereby a person may be ordered to show cause why he should not deliver a statement on oath and that is a statement that has to be made according to a decision of Justice Gillard of the Supreme Court of Victoria, without the benefit of legal professional privilege.  Over the page, paragraph (b) – why the person should not forthwith pay the sum to the Comptroller of Stamps and subsection (3), which is part of that procedure, provides for the order nisi to be made absolute.

CRENNAN J:   Her Honour characterises subsection (3) as a subsection in relation to remedies, does she not?

MR MYERS:   She does.  Indeed, both subsection (2) and subsection (3), we would say, are in relation to remedies.  What I ask your Honours to just note for the moment is that whereas subsection (1) creates a debt due to the Crown and provides that it is recoverable as a debt – so it provides for its own procedure – subsection (2) does not itself create, obviously, any debt and it provides for this order nisi procedure not only in relation to debts for duty but other sums without limitation.  Plainly, there is no need to rely upon the procedure established by subsection (2) to recover a debt due to the Crown under subsection (1).  That is clear.

Would your Honours then look at page 43 of the application book. It is section 14(2) which is referred to. There are similar provisions in all other States and Territories and this enactment derives from English legislation of about 1890. Certainly it derives in this State from an Act of 1890 – the Acts Interpretation Act:

Where an Act or a provision of an Act –

(a)is repealed or amended; or

(b) . . . 

the repeal . . . shall not, unless the contrary intention expressly appears –

. . . 

(e)affect any right . . . accrued or incurred under that Act or provision -

And (g), which is relied upon and was relied upon by her Honour:

affect any investigation, legal proceeding or remedy in respect of any such right . . . 

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced ‑

Our argument does not depend upon this proposition but we would say that the Latin maxim, reddendo singula singulis, is applicable here.  “Instituted” refers to investigation, “legal proceeding” to continued and “remedy” to enforced.  Could I now go to her Honour’s reasoning to deal with the first basis upon which the case was decided.  Could I invite your Honours to go to page 68 of the application book, paragraph 105 of the reasons for decision ‑ ‑ ‑

CRENNAN J:   Just before you do that, Mr Myers, is not part of the nub of her Honour’s reasoning to be found at paragraphs 100 and 101 on the previous page?

MR MYERS:   Yes, it is.  I was going to go to – certainly there is a whole detailed analysis of previous decisions and the legislation.  But in section 101 her Honour says that, in contrast with Yrttiaho –

could not properly be characterised as a merely procedural amendment.

We disagree with that.  I will come to why in a moment.  The summary of her Honour’s reasoning is in paragraph 105:

It follows that, in my opinion, s 40(2) and (3) of the Stamps Act are preserved pursuant to s 14(2)(g) of the IL Act, because they create or constitute a proceeding and remedies in respect of the accrued substantive right to recover the debt which is preserved under s 14(2)(e) of the IL Act.

So they create or constitute a proceeding and remedies. The first thing we observe is that they do far more than that. They are partly in aid, it must be conceded, I think, of section 40(1). But section 40(1) has within it not only the creation of the substantive right but the means of recovery. It is recoverable accordingly as a debt.

These provisions that her Honour refers to in subsections (2) and (3) deal with all sums of money, they need not be debts for duty.  It does not result in a judgment for a debt, it results in an order for payment of money – not too fine a distinction, I hope, to make these days but nonetheless correct.  It is a procedure of a different character which has very different consequences, of course, for the person who is subject to it.  I have mentioned that you are required to make on oath a statement in respect of which, according to the Supreme Court of Victoria, there is no legal professional privilege.

CRENNAN J:   It is clearly an alternative but it is still a legal proceeding, is it not?

MR MYERS:   Yes, but it is not in aid of subsection (1).  It is in essence a procedure or a mere remedy for the purposes – they will be various.  It does not create a substantive right.  Subsection (1) does not depend for its operation upon it; and it goes far beyond in its operation use in relation to a claim for a debt.  That is what we say in relation to that paragraph.

Now, may I invite your Honours to look at what Justice Gibbs said in Yrttiaho 125 CLR 228. I am going to refer to page 245 – I am sure your Honours have it there. In the first full paragraph his Honour began, “The real question” and then dropping down about 10 lines:

Plainly enough, par. (e) ‑

That is like paragraph (g) of the Victorian Act -

and the words which follow it require that, unless the contrary intention appears, an amending enactment shall be construed so that, notwithstanding the amendment, proceedings pending thereunder at the time of the amendment can be continued, and proceedings can be initiated after the amendment in respect of substantive rights acquired before the amendment took effect.

That is really what your Honour Justice Crennan, I think in a way, is putting to me.

The question is whether the subsection goes further and requires an amending statute to be construed, prima facie, in such a way as to preserve unaffected not only the legal proceeding or remedy itself, but also the course of procedure to be followed in taking the legal proceeding or pursuing the remedy.  I had occasion to deal with this question in Smith v Thiess Peabody Coal Pty. Ltd. and I then said that it seemed to me –

“that all paragraph. (e) is intended to do is to preserve the availability of investigations, legal proceedings and remedies in respect of accrued rights, and not to preserve the procedure to be followed in the course of such legal proceedings.”

After further consideration I adhere to this view.

We say that that is correct, of course.  They are observations that attracted the majority of the Court – the Chief Justice dissented – in this case, and they have been followed a very great many times since.  What we have here, we say, in truth is nothing more than a remedy.  It is an order nisi procedure which is aptly characterised for the purposes of the analysis that Justice Gibbs undertook as a mere remedy.  This is the view which we understand Justice Mandie to have taken at first instance in this case and we say, with respect, he is correct.  That appears, I believe, your Honours, at application book pages 28 to 29.  Right at the bottom of the page in paragraph 99, the sentence:

I agree that these words have the effect that the plaintiff’s right to institute a legal proceeding in relation to any obligations and liabilities that had accrued under s.40(1) of the Act would be preserved but this does not mean that the particular procedure laid down by s.40(2) and (3) of the Act is preserved.

That is to adopt the reasoning, we say, with respect, of Justice Gibbs.  Justice Mandie was correct and the Court of Appeal in this case was wrong. 

I did say that there are similar statutes in other jurisdictions.  That appears from application book 86 at paragraph 20.  I will not ask your Honours to look at it, but the statutes are set out there.  A number of cases in which Justice Gibbs’ reasoning has been adopted and followed are set out at application book page 87 at footnote 14.

The second basis upon which the court below overturned the decision of Justice Mandie was that based upon the implied saving, as it was said, of paragraph (e).  That in turn referred to the reasoning of the Court of Appeal, in particular Justice Brooking, in the case of Sutton v Bradshaw [1988] VR 920, if I can direct your Honours’ attention to it. In Sutton at page 928 Justice Brooking observed that he could not rely upon paragraph (g) of section 14 of the Interpretation Act – that is in the second part of that page and down to line 17.

CRENNAN J:   I am sorry, what page number, Mr Myers?

MR MYERS:   Page 928.

CRENNAN J:   Thank you.

MR MYERS:   It is from about midway through page 928 to line 18 of the next page.  The last sentence, line 15 of 929:

But in the face of Yrttiaho’s Case I do not think that this Court can say that in a case like the present, para (g) of s. 14(2) bears a meaning and so has an operation different from its meaning an operation where a procedural amendment is made, and with regret I reject this simple and otherwise satisfactory solution.

So his Honour did not like the reasoning of Justice Gibbs but at least followed it.  He then went on to deal with implied saving.

CRENNAN J:   Repeal.

MR MYERS:   Yes, or implied saving.  The test that he formulated was put in various ways but, in the end, it was something like ‑‑ at line 20 on page 930:

since I am satisfied that, on any formulation that might be accepted of the test for determining whether an implication resides in the express words of a statute, the test is here satisfied.

He used expressions like “necessary or obvious”.  The learned judge below in paragraphs 114 and 118 of her judgment - page 68 and following ‑ ‑ ‑

HEYDON J:   It is on page 70.

MR MYERS:   Yes.  Paragraph 114, the last sentence:

On Brooking J’s analysis, it sufficed if a provision were necessary to the effective operation of the legislative scheme of which it was a part.

We accept that that is a fair statement of the test applied by Justice Brooking.  But applying that test to the present case it is plain that there is not an implied saving.  It is not in any sense necessary for the recovery of the debt that this order nisi procedure be preserved.  The debt is recoverable as a debt according to the terms of subsection (1).  With respect, the judgment of the Court of Appeal on this point is plainly wrong, insupportable by any means.  It is simply not necessary.  It is sufficient to rely upon the words of subsection (1).

Indeed, it is somewhat curious that in the very long statement of claim which was delivered as a result of some order below in the order nisi proceeding, there is in fact a claim for a debt that could have been made in an ordinary proceeding for debt.  I direct your Honours in particular to pages 123 of the application book, paragraph 53L:

By reason of –

all sorts of things the sum of such‑and‑such is a debt due.  The prayer for relief on page 151, paragraph B3, is, we assume, intended to be a claim for debt although normally it would just be a claim for a sum not an order for payment.  But certainly there is a pleading or a plea of debt.  We say that this is a case that is apt for special leave.  The decision below is attended with very grave doubt and, furthermore, this is a matter that affects a wide range of statutes and affects the understanding of a decision which has long been acted upon by many judges.  May it please the Court.

HEYDON J:   Thank you, Mr Myers.  We need not trouble you, Mr Lucarelli.

This hearing has concerned the application of section 14(2) of the Interpretation of Legislation Act 1984 (Vic) (“the Interpretation Act”) to section 40(2) and (3) of the Stamps Act 1958 (Vic) which was repealed with effect from 1 July 2001.

The Court of Appeal below allowed an appeal from a decision of the primary judge on the question whether section 40(2) and (3) continues to apply to duty allegedly misappropriated before the repeal either by the operation of section 14(2) of the Interpretation Act or on the common law doctrine of implied saving. At least in relation to section 14(2)(g) the decision of the Court of Appeal is not attended by sufficient doubt to warrant a grant of special leave to appeal.

Special leave to appeal is therefore refused with costs.

The Court will now adjourn in order to reconstitute.

AT 9.47 AM THE MATTER WAS CONCLUDED