Commissioner of State Revenue v ACN 005 057 349 Pty Ltd

[2016] HCATrans 230

[2016] HCATrans 230

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M88 of 2016
  No M89 of 2016

B e t w e e n -

COMMISSIONER OF STATE REVENUE

Appellant

and

ACN 005 057 349 PTY LTD

Respondent

KIEFEL J
BELL J
GAGELER J
KEANE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 6 OCTOBER 2016, AT 10.16 AM

Copyright in the High Court of Australia

MR R.M. NIALL, QC, Solicitor‑General for the State of Victoria:   May it please the Court, I appear with my learned friends, MS C.G. BUTTON and MR N.A. KOTROS, for the Commissioner.  (instructed by Solicitor for the Commissioner of State Revenue)

MR N.J. YOUNG, QC:   If the Court pleases, I appear with MR T.M. GRACE and MS C. VAN PROCTOR, for the respondent.  (instructed by Daniel Allison & Associates)

KIEFEL J:   Yes, Mr Solicitor.

MR NIALL:   May it please the Court.  Your Honours should have to hand our outline of oral argument.

KIEFEL J:   Thank you.

MR NIALL:   There are five propositions which I will seek to advance by way of oral submission.

KIEFEL J:   Does the essential question concern the interaction of sections 19 and 90AA?

MR NIALL:   It does, your Honour.  In our submission, where the Court of Appeal went wrong was, when it came to 90AA, it failed to appreciate that the money that had already been paid had been paid under valid assessments which were never challenged.  Although the close correlation is between section 19 and section 90AA, it is necessary, in our respectful submission, as a starting point to get the baseline of the situation where there were valid assessments in play and what the consequences were.

In our submission, the Court of Appeal made some significant errors in relation to its approach to the consequence of assessments being issued which were not challenged, and which remained on foot.  That is why proposition 1 is really directed not so much to section 19 and 90AA, but the anterior question of the significance of the assessment and if the amounts were tax paid.

KIEFEL J:   Yes.

MR NIALL:   If the Court pleases.  Propositions 1 and 2 are essentially questions of statutory construction, and I will come to those shortly.  Propositions 3, 4 and 5 deal with the way that the Court of Appeal addressed the statute.  Before coming to the statute in some little detail, can I just encapsulate the way the Court of Appeal decided the case – the reasoning of the Court of Appeal – and I can do so quite quickly.  There were two proceedings before the court.  One was a proceeding for mandamus to amend and refund tax under section 19 of the Act, and a separate and distinct proceeding was for a proceeding for restitution of the amounts paid on the basis of a mistake.  No orders favourable to the taxpayer were made on the restitutionary claim other than to allow the appeal.  All the orders were made in the mandamus proceeding.

The Court of Appeal reasoned the mandamus claim should succeed on two, or possibly three, bases.  The first basis on which the mandamus claim succeeded was that section 19, although cast in permissive terms, created a duty to assess and to refund ‑ ‑ ‑

GORDON J:   “May” was to be read as “must”.

MR NIALL:   “May” is to be read as “must”, and also carried with it an implied power of refund and appropriation.  The duty was enlivened – that is, the duty became “must” – on the first basis simply because the Commissioner was aware that the tax as recorded in the assessments were excessive.

KIEFEL J:   I note in your written submissions, paragraph 12, that you deal with the Court of Appeal’s findings here, and that they varied the primary judge’s.  Is there any dispute at this point about the fact of the duplication error in the relevant years and the Commissioner’s knowledge?

MR NIALL:   No, your Honour.  The relevant knowledge, of course, came at least a decade after the last assessment.  But the first basis of mandamus was simply an excessive amount and once the knowledge existed ‑ notwithstanding their objection regimes with time limits ‑ once the knowledge existed a duty came upon the Commissioner to refund.  Now, that appears to have been added to – and this is the second basis which was that mandamus went because of conscious maladministration. 

It is unclear, in our submission ‑ and I will take your Honours to the passages about the role conscious maladministration played ‑ it was not pleaded in the proceeding, so it was not taken, at least by the pleader, as an essential element of either cause of action, but the Court of Appeal seemed to have concluded that it was a necessary step in the mandamus claim.  As your Honours will have appreciated, there was no maladministration here.  At best, for the taxpayer, there was an erroneous application of section 90AA rather than a deliberate, wilful failure to do something which the Commissioner was obliged to do and which he knew he was obliged to do.  That is the first basis which simply turns on excess.

The second basis, principal basis, is that if, as in Royal Insurance, mandamus to repay depended on an extant legal liability to pay in restitution, here that was satisfied because of an operative mistake and, therefore, a claim in restitution would have succeeded.  Therefore, that, together with the terms of section 19 crystallised the duty to refund.  That is why the restitution aspect became entwined, so to speak, with the mandamus claim.  That last point about the restitution and the operative mistake was also critical, not so much for the duty point, but for the operation of section 90AA because the Court of Appeal reasoned that by reason of the mistake there was no tax paid when it was paid in answer to the assessment.

GAGELER J:   Your answer to that is simply the assessment, the debt that arose by reason of the assessment.

MR NIALL:   That is so, your Honour.  Our answer is that there was an assessment.  There was a debt.  It was paid.  It was tax paid and it fell directly within the terms of section 90AA.  So even if there is success on duty, even if there is success on restitution, it would still fail at 90AA although there is an interrelationship, which I will need to come to, between 90AA and restitutionary claim.

Finally, can I just note about the summary?  The court concluded that compound interest was payable.  It was only payable on the mandamus claim, not on the restitution claim – no relief on the restitutionary claim – and it was made on the basis of the finding of conscious maladministration. 

Can I turn then, before coming to the reasons of the Court of Appeal, to the statute and just highlight a few of its points?  Of course, the structure of it will be familiar to the members of the Court.  If your Honours could turn – and your Honours should have version No 131 as at 30 November 2005.  If your Honours turn to section 17, your Honours will see the Commissioner is empowered to make or cause an assessment to be made and it is of:

the taxable value of the land owned . . . and of the land tax payable –

So it is an assessment as to those two matters.  A lot of these provisions have cognate provisions in the 1936 federal Act and that is similar to section 166, but I will come to the interrelationship or the analogy shortly.  Section 19 provides:

The Commissioner may from time to time –

and the taxpayer relies heavily on that:

amend an assessment . . . to ensure its completeness and accuracy, and shall notify to the taxpayer affected every alteration or addition which has the effect of imposing any fresh liability ‑

Pausing there for a moment, the reference to liability in section 19 is important because it reinforces that it is the assessment that gives rise to a liability.  If there is an additional liability by virtue of an amended assessment, the objection regime triggers in relation to the additional payment.  Your Honours will see at the tail end of section 19 some critical words which are that:

the validity of an assessment shall not be affected by reason only that any of the provisions of this Act have not been complied with.

That is corresponding almost in identical terms to section 175, which was considered in Futuris, which I will come to.  Section 20 is an evidentiary provision very similar to section 177, requiring that:

a copy of an assessment shall –

(a)       be conclusive evidence –

That is, due and payable.  Pausing there, the Commissioner was not able to tender in evidence conclusive assessments so as to get the benefit of the evidentiary provision, but it did not matter, in our submission, because there was no dispute that assessments issued and were paid.

KEANE J:   That was in fact the basis of the taxpayer’s claim ‑ ‑ ‑

MR NIALL:   Precisely, your Honour.

KEANE J:   ‑ ‑ ‑ that it had paid on the strength of the assessments.

MR NIALL:   Precisely.  Indeed, from the pleading to the submissions of the respondent there has never been a challenge to the validity of the assessment.  It was the prerequisite for the application.

Section 24A - I will try not to detain your Honours too long with this - deals with the objection.  There is a time limit, a non‑extendable time limit of 60 days.  It requires, in familiar form, the specification of grounds and a prohibition on entertaining any objection to the unimproved value of the land.  So when there are valuation issues in play - objection regime is dealt with exclusively in the Valuation of Land Act 1960 - subsection (3) deals with allowing the objection.

Section 25 deals with review in either the Victorian Civil and Administrative Tribunal or the court, and that is further dealt with in section 26.  Can I just note for your Honours that in section 26, when one gets to a review or appeal in the court, similar to Part IVC, the burden rests with the taxpayer and your Honours will see that in 26(1)(b).

Section 38 is also important because it provides that the fact that an assessment has been subject to an objection does not prevent or affect liability to pay and the words of the statute:

in the meantime interfere with or affect the assessment and tax may be made, levied and recovered on the assessment in like manner as if no objection had been received -

In the event of a successful objection there is an adjustment under subsection (2) and a provision requiring refund.  We note that because one of the points that the Court of Appeal made was that section 19 carried an implied power of refund.  There is an express power of refund in section 38.  There is also an express power of refund in section 90A.

Section 39 appears to have assumed some significance in the Court of Appeal’s reasoning, particularly at paragraphs 196 and 197 which I will take your Honours to.  It provides that every sum payable for tax shall be a debt and the Court of Appeal appears to have reasoned that there is a disjunction between an amount assessed and the amount payable with the implication that the amount payable is somehow the correct amount of tax rather than the amount assessed. 

Now, all section 39 does, in our respectful submission, is crystallise the liability in form of a debt which can be enforced in court and there are provisions which assist that.  Section 57 is the next section, I just note, which provides that land tax is:

due and payable on a date stated in the notice of assessment to be the due date –

There are provisions for attaching liability on assessment to various persons including in respect of trusts.  If your Honours turn then to section 90, section 90(1) was in the original form and, as enacted in 1958, section 90 dealt with receiving, effectively, too little being paid or not enough being paid.  Section 90(2) and section 90(3) were eventually removed and became embodied in section 90AA. 

Can I just note at this point, and I will return to it, as enacted section 90, in terms of refunds, had a time limit.  In 1974 the time limit was removed consciously and the second reading speech makes it clear that it was removed to cover the sort of case that the taxpayer – the sort of problem the taxpayer had here and then it was reinstated in 1992 and then modified again by the introduction of 90AA in 1993. 

If I could just briefly, and I will return to it in some more detail in due course, notice some features of 90AA.  Your Honours will see that subsection (1) provides that “proceedings” and that is defined broadly in subsection (8) to include mandamus and other public law remedies:

Proceedings for the refund or recovery of tax paid under, or purportedly paid under, this Act . . . must not be brought . . . except as provided in this section.

So it is a bar to the proceeding at all.  Then the method for bringing it is set out in paragraph – subsection (2), I beg your Honours’ pardon – and the trigger point is a person who claims:

to receive a refund of or to recover tax paid under, or purportedly paid –

In our respectful submission, beyond argument what the taxpayer did when he got the valid assessment was pay tax and it was under the Act because liability was imposed by the Act.  That then required, if there was to be a refund, a lodgement with the Commissioner within three years of payment “an application in the prescribed form”. 

Then subsection (3) is effectively the limitation period.  It is predicated on (3)(a), if “a person has lodged an application” the Commissioner then has a period of three months to either refund – so that is (3)(b)(i) ‑ or apply the amount – so that is effectively a running balance type arrangement which your Honours will be familiar with in the federal scene – or refund and apply.  If the Commissioner has not done one of those things within three months, the person may within three months after that period, or after the refusal:

bring proceedings for the recovery of the amount, or, if the Commissioner has refunded –

part of the amount.  So there is a detailed regime built upon subsection (2).

KIEFEL J:   The Commissioner expressly relied upon the provisions of section 90AA in giving reasons for exercising discretion against the taxpayer.

MR NIALL:   That is so, at appeal book 210.

KIEFEL J:   In the sense that this informed the exercise of discretion, and is that to say that it was contended and is now contended that section 90AA means that no exercise of discretion can be made in favour of the taxpayer?  Section 90AA in a sense operates as a preclusion, or it does not give rise to a duty.

MR NIALL:   It intersects at a couple of places; one, it does not give rise to a duty.  Another is because even if an amendment were made, it would still need to give rise to a claim for a refund or recovery of tax paid which would then trigger 90AA.  So, in a sense, the Commissioner reasoned that there was a lack of utility in amending in favour of the Commissioner because 90AA would preclude recovery because it was predicated on the time of payment.

KIEFEL J:   And, the Court of Appeal reason that 90AA does not relevantly affect the discretion that they are dealing with separate things and they do not intersect at all.

MR NIALL:   No, with respect.  The Court of Appeal reasoned that by reason of the operative mistake, it was not tax paid under the Act.

KIEFEL J:   Yes.

MR NIALL:   So, it was discounted as a textual matter, your Honour.

KIEFEL J:   Yes.

MR NIALL:   As we understand it, the taxpayer – they are running that and a different argument which is that 90AA does not ‑ ‑ ‑

KIEFEL J:   It is the taxpayer’s argument I am thinking of, not the Court of Appeal’s reasoning.

MR NIALL:   Yes, which does not intersect with ‑ ‑ ‑

KIEFEL J:   Yes.

MR NIALL:   ‑ ‑ ‑ section 19 at all, they are two separate – and they develop that in their written submissions.  But, on the first point, the Court of Appeal’s point, the question is was it tax paid?  This other argument of the disconnect, in our submission, there is no disconnect because it is a comprehensive provision for the recovery, or refund, of tax paid.  It is protective of the certainty of the revenue, and in 1974 when the Act was amended to remove the time limit, it gave priority to the potential injustice of the circumstance in favour of the taxpayer.  But, when it was returned in a more comprehensive form – first in 1992 in amendment to section 90 and then in 90AA – there was express reference to the importance of the certainty of the revenue.

GORDON J:   Consistent with the Commonwealth scheme.

MR NIALL:   Consistent with the Commonwealth scheme.  And, indeed, when one comes to look at the Court of Appeal’s reasons in this point about not being tax paid, it really writes out the time limits of the Act because whenever you have an excess to the knowledge of the Commissioner, you do not have tax paid, 90AA does not rise.  It does not matter, for example, that the taxpayer knew within the time for objection that the amount was excessive – declined to object, for whatever reason.  Provided the Commissioner knows that is excessive, the duty is engaged.

Now, that analysis – and the Court of Appeal seems to have reasoned that because it was not tax payable or correctly demanded, there was no entitlement to the Commissioner to retain it.  The scheme embodied in the provisions which I have just taken your Honours to ‑ ‑ ‑

GORDON J:   If you have finished with the scheme, can I just ask about one section?

MR NIALL:   Of course, your Honour.

GORDON J:   That is section 94.  What is that directed at?

MR NIALL:   Section 94 is directed to times in which the – it is directed to be times required by the Act directed to the Commissioner.  There was a request to exercise this power.

GORDON J:   That is why I am asking.

MR NIALL:   It was said as not to be available and no challenge to that has ever been pursued.

GORDON J:   Is that right?  So, as I understand, the taxpayer sought to have the Commissioner rely on it, or exercise ‑ apply for relief in relation to it.  Is that the position?  And, it is not the subject of challenge and, therefore, not part of the ‑ ‑ ‑

MR NIALL:   It certainly was said by the Commissioner to be not available and no challenge to that was made.

GORDON J:   Is the position of the State that that is a provision that is only open for the Commissioner to use or is it open for the taxpayer to ask the Commissioner to use?  Or does it matter?

MR NIALL:   It perhaps does not matter.  Can I return to that, your Honour?

GORDON J:   Sure.

MR NIALL:   It was raised.  The Commissioner said it is not available and no challenge has been made on the basis of it and there is no submission between the parties that it is available.  I will find that letter, if I may.  The Treasurer dealt with this at appeal book 152.

GORDON J:   I understand that was the request and it was refused.  My question is more a question of construction, where it sits as part of the scheme of the Act, and that is, what is the breadth of it.

MR NIALL:   Perhaps I might return to that, if I may, your Honour.

GORDON J:   Sure.

MR NIALL:   The scheme of the Act is very similar to and we would say indistinguishable from in relevantly material respects to the federal assessment.  Can I just take your Honours to a couple of positions in Commissioner of TaxationvFuturis (2008) 237 CLR 146 - just for a couple of propositions. Sections 175 and 177 are set out at page 156 at paragraph 22 in the judgment of Justices Gummow, Hayne, Heydon and Crennan. Your Honours will see 175 is in identical words or immaterially different words to the tail end of section 19. Section 177 is the evidence provision.

The concept of assessments is discussed by members of the Court at paragraph 49 and identifies, by reference to Batagol, that the processes of assessment – this is at the top of page 163 – is a process:

with the consequence that a specified amount will become due and payable as the proper tax in the case in question –

There is a reference to Hoffnung and Justice Isaacs’ judgment requiring:

If an assessment definitive in character is made . . . a fixed and certain sum is definitely due, neither more nor less . . . a precise indebtedness of the taxpayer to the Crown  ‑ ‑ ‑

One of the points in Futuris is that the provision of 175 only applies to an assessment. So if there is not an assessment, having regard to the expanded concept of assessment, given the scheme – there is not an assessment – you do not get the benefit of 175. One of the disqualifying factors which was potentially identified by the Court is at paragraph 52 and this becomes important for the Court of Appeal’s understanding of conscious maladministration because their Honours note:

There remains, however, the question whether there was a conscious maladministration of the Act and, if so, whether s 175 had any operation in respect of a complaint of jurisdictional error.

It is resolved by regards to the construction of 175 and your Honours will see that at paragraph 55 at the last sentence on page 164 and at the top of 165:

These considerations point decisively against a construction of s 175 which would encompass deliberate failures to administer the law according to its terms.

So their Honours identified that if you had an assessment affected by conscious maladministration the Commissioner would not be entitled to the benefit of 175.  Now, two points to note about what is meant in this context about conscious maladministration, if I may.  The first is by reference to some passages of Justice Aickin at paragraph 12 where there is – dealing with this concept of knowing excess:

three distinct grounds upon which an exercise of an administrative power might be attacked.  One was the existence of a corrupt purpose‑

Another was:

the presence of an improper purpose outside the scope of the power –

Then the third one is:

where the act done was beyond the power conferred irrespective of the motive –

Now, what is being dealt with in conscious maladministration is the second, improper purpose, where the decision‑maker is acting on facts known to be untrue and the like and where that is satisfied – or where that is met there is conscious maladministration and the protection is not an assessment of the provisions – protective provisions of the assessment do not apply.  The only other point about conscious maladministration is at paragraph 60, where the judgment proceeds that:

Allegations that statutory powers have been exercised corruptly or with deliberate disregard to the scope of those powers are not lightly to be made or upheld.

Now, with that framework, can I take your Honours to the reasoning of the Court of Appeal, dealing first with paragraph 2 of our oral outline - dealing with the finding that there was no tax paid.  If your Honours turn to paragraph 191 at page 455, now the Court is here dealing with the restitutionary claim but it gets to this point in the mandamus claim on the basis that it might be necessary for the taxpayer to establish some anterior liability but I take the Court to it now because it is critical to the reasoning of the whole judgment of the Court of Appeal.  At paragraph 90, the Court concluded there was an operative mistake when it made payments.  Their Honours say:

No liability for land tax in fact existed in respect of ‘65 Albany Road’ as a duplicated landholding –

GORDON J:   You say that is an error?

MR NIALL:   Yes, your Honour, we do.  The words “in fact” are perhaps the wrong question.  The question is not whether it is a liability in fact; it is a question of whether it is a liability in law.  The liability attached in respect because there was an assessment of the owner of the land in an assessable amount.  Their Honours say no liability for land tax existed:

for the simple reason that this landholding was already included within the square metres of land –

So, accepting the duplication error ‑ ‑ ‑

GORDON J:   There seems to be a temporal confusion.  If one is looking at it at the time of the assessment, as I understand your argument, the duplication error is not known.

MR NIALL:   That is so.

GORDON J:   What is issued is an assessment in accordance with the scheme which attaches to it certain legal consequences.  That is the argument?

MR NIALL:   That is the argument.

GORDON J:   The fact of the duplication error arises a decade later.

MR NIALL:   Even a decade later, it only goes to the question of whether the assessment was excessive or not.  It does not go to whether the assessment created a liability.

GORDON J:   Consistent with the express provisions set out in 19 itself.

MR NIALL:   Section 19 and 38, the express recognition in the case of where there is an objection.  Your Honours will see at 195:

we consider that the belief held by ACN –

and I will take your Honours to the mistake in a moment:

was not correct . . . In particular, the excess amount was paid by ACN under a mistaken belief that there was a legal liability to make those payments on the basis that the assessments for those years accurately identified ACN’s landholding.

That is the second sentence of 195.  Liability to pay did not depend upon accurate identification either by the Commissioner or by the taxpayer.  It turned on the existence of the assessment as to those matters.  The critical error at this point – and it is an error of construction – emerges at 196:

It is clear that the power to amend under s 19 gives the Commissioner no authority to retain payments without authority –

We will deal with that, but their Honours go on to say:

as we explain below –

which is in the next paragraph:

the Commissioner’s duplication error deprived the payments of the character of ‘a sum payable for tax’ within the meaning of s 39 of the Act.  No reliance can be placed on the conclusive evidence provision under s 20 –

Now, as was made clear in Futuris, the conclusive evidence certificates are just evidence certificates.  The liability and the protection of the liability emerges from the assessment and the concluding words of section 19 which preserves an assessment even though provisions of the Act have not been complied with.  So, the conclusive evidence was a complete irrelevancy and your Honours will see in Futuris – perhaps I should have dealt with it but I do not need to take you to it.  It is paragraph 64 through to 67 in Futuris where it is made clear that 177 is simply giving evidentiary effect to 175.  That is paragraph 67, by reference to Justice Dawson’s judgment in Richard Walter.

The critical point in that passage between 64 and 70 is that conclusive evidence is simply that, evidence provision, but the liability exists in the assessment as protected by 177.  So, just returning to 196, if I may, your Honours?  Their Honours say:

In any event, it is not the issuing of assessments . . . which gives rise to a statutory debt; it is s 39, which we consider not to apply here.

So, their Honours appear to reason that one can have a disconnect between an amount assessed and the tax payable and, in our submission, one cannot have disconnect between the amount assessed and the tax payable because the amount assessed is the amount that is payable.  So, that is, with respect, a complete misunderstanding of the role of section 39 and then their Honours go on to say:

The fact that the excess amount –

This is in 197:

was paid cannot convert it into ‘a sum payable for tax’ within the meaning of s 39 ‑

Excess amount, of course, is no more than a statement that it had exceeded the liability properly claimable under the Act, but as Justice Brennan in Richard Walter makes clear, that is a natural consequence of the Act, that you can have a disconnect between those two things and the remedy for it is in the objection regime.  Their Honours go on to say:

The payment of the excess amount was never a ‘tax’ payment given that the Commissioner never had the authority to demand it –

The Commissioner’s authority to demand it was founded in section 17.  He had an obligation or a power to assess.  The fact that it was based on an error was irrelevant to the power unless, of course, you are in Futuris territory, but we were not in Futuris territory at the time as Justice Gordon observed in discussion; we are not at that time of the assessment.  And then their Honours go on to say in 197:

Furthermore, as mentioned, the Act does not generate a statutory debt from the issuing of an assessment; the debt depends upon the payment being properly characterised as ‘a sum payable for tax’.  The Commissioner having no authority under the Act to demand the excess amount, it was never ‘land tax’ –

Your Honour will see that theme when the court came to 90AA and your Honours will see that while I have got your Honours at this point of the judgment at 212.  This is where their Honours give reasons for disengaging 90AA, in answer to your Honour Justice Kiefel’s question:

ACN submits that, nevertheless, s 90AA does not apply because the proceedings are not ‘for the refund or recovery of tax . . . In short, the submission is that because the operative mistake ultimately deprived the Commissioner of authority to take, and retain, the excess amount, the excess amount could not be aptly described as a payment made ‘under, or purportedly paid under’ the Act. 

It is important when one is looking at mistake in this area that the mistake has to exist at time of payment, not subsequent.  I will take your Honour to David where it establishes that.  So the retention point is a red herring here on the mistake point.  What was the authority to take and the authority to take was assessed and their Honours are disengaging section 90AA because of this construction to amount due.  Your Honours will see their conclusion at 213 that 90AA is “not applicable”.  In the same vein at 217, line 19, their Honours say:

While in truth the excess amount was not lawfully demanded as land tax, it nevertheless had the character of an amount that is ‘attributable to . . . [a] purported tax’ payment.

I will explain how they got to that conclusion when I come to section 20A but only note that there again the court is saying that there was no lawful demand.

Now, it is clear, in our submission, that this part of the reasons were heavily influenced by two factors:  one, the misconstruction of the Act by reference to section 39, and the other was its understanding of mistake and how a party can recover for payments made by mistake.  In our submission, the first point, 39, is a construction one; the second point is an error of principle. 

So can I turn now to how the court dealt with the mistake which is paragraph 3 of our outline?  To deal with this first, can I firstly identify for the Court the evidence as to mistake?  It appears at appeal book 164 in paragraphs 39 and 40 of the affidavit of Mr Davis.  There was no cross‑examination and this is the sum total of the evidence on mistake and, of course, it said:

The plaintiff, in the belief that these demands were lawful and proper . . . paid the land tax assessments . . . 

The plaintiff paid these land tax assessments in the belief that it was legally obliged to make these payments ‑

Well, in our short submission, it was:

and in the mistaken belief that the landholdings listed for the plaintiff in the assessments issued by the defendant for these years were accurate.

Our submission in relation to that second sentence is that it was legally irrelevant because liability did not turn on or depend upon the state of mind of the taxpayer, nor did it turn on the state of mind of the Commissioner.  It turned on the Commissioner exercising the power in section 17.  That is the sum total of the evidence.  The Court of Appeal deals with it at 185 – starting at 185 on page 453, deal with the mistake, and particularly at paragraph 187, line 28:

The duplication error rendered the assessments inaccurate; it thus rendered the belief under which ACN made the payments it did a mistaken belief.

In our submission, that is not right.  Again, there is a confusion of concepts, in our respectful submission.  To describe the assessment as inaccurate is of no moment in answering the question of whether it imposed a liability to pay. 

GORDON J:   I wonder if it is overstated, in this sense.  It is not irrelevant.  If it is overstated, then there is an objection process.

MR NIALL:   I am sorry, your Honour, yes.

GORDON J:   So, the whole scheme is that you have an assessment of liability which becomes payable, as I understand it, by reference to the issue of the assessment, consistent with the scheme of the Act, and if there is a problem at that time, identified by either the taxpayer or the Commissioner, for that matter, then there is a process of (a) objection for the taxpayer and amendment for the Commissioner.

MR NIALL:   That is so, but irrelevant and perhaps – but irrelevant in the sense that it did not affect the liability to pay.

GORDON J:   No, that is my point.  My point is - the scheme of the Act is this.  The liability is established and the mechanisms for then adjusting it are different depending upon who you are. 

MR NIALL:   From that mistake, the Court of Appeal carried through it on the basis of restitutionary principle both as to the tax payable and also as to the section 90AA.  In terms of error of principle, in our submission the Court of Appeal misunderstood, with respect, the principles explained by this Court in David Securities 175 CLR 353.

The first point we make is to define or put the principle in its relevant framework which is the decision of course established that it is permissible under restitutionary principles to have recovery from mistake of law, that is, mistake of law could be an unjust factor relevant to restitution.  At page 376 in the joint judgment the members of the Court identify what is meant by a mistake in this context.  Your Honours will see, at about 2 of the page:

In referring to moneys paid under a mistake of law, we intend to refer to circumstances where the plaintiff pays moneys to a recipient who is not legally entitled to receive them.  It would not, for example, extend to a case where the moneys were paid under a mistaken belief that they were legally due and owing under a particular clause of a particular contract when in fact they were legally due and owing to the recipient under another clause or contract. 

So the critical point is that there is a payment and the person who makes the payment is mistaken as to the obligation to pay and the person who received them is not legally entitled to receive them.  The other element or other two important elements are in the middle of the page – there is a reference to the mistake must have been causative.  The other important aspect of the principle is the time and your Honours will see that at 385, the time at which this is to be assessed, 385 point 5:

From the point of view of the person making the payment, what happens after he or she has mistakenly paid over the money is irrelevant, for it is at that moment that the defendant is unjustly enriched. 

Now, the crucial factor is that the recipient has been enriched and, of course, this is in the context of unjust enrichment but the concept of unjust enrichment is not a normative exercise as to whether or not the recipient – it was fair to the recipient to receive the money.  It is not unjust in that sense.  It is unjust in the sense that the recipient had no legal entitlement to receive it and, therefore, restitution would work. 

Justice Brennan makes similar points, in our respectful submission.  Firstly, at 389, his Honour identifies that the critical time is at the moment of receipt.  Your Honours will see that at point 7 of the page.  The payer’s right to recover the amount accrues at the moment when the payee received the money.  So, here the taxpayer would have to say on mistake that at the time of payment they had an entitlement to recover.  His Honour Justice Brennan returns to the concept of unjust enrichment at page 392 at the first full paragraph, in essence to say that a defendant who has been unjustly enriched by the receipt of a payment is to say that the defendant has no right to receive it.  Now, down the bottom of that page, there is a sentence:

If the payer would not have paid the money had the payer known all the relevant circumstances, both legal and factual, the defendant is unjustly enriched by the receipt.

That is relied on by the Court of Appeal here at 195 but, in our respectful submission, taken out of context because the critical element is that there was no obligation to make the payment, no entitled to receive the payment.  Once we put that in the statutory regime for so long as the assessment remained on foot there was an obligation to pay and when the Commissioner received the money he had a legal entitlement to receive it.  It was not unjust.

So the concept of the application of the mistake and the restitution has the two errors which I have identified and it infected section 90AA.  I have already taken the Court to 212, where it was the operative mistake that denied it the character of payment.  That is what I wanted to say about paragraph 3 in proposition 1.

Can I now deal with section 90AA.  I have probably already said most things that I wanted to say about it.  Firstly, this was a proceeding for the recovery of tax paid at least in form for both proceedings.  If your Honours look at how the proceedings were constituted, firstly with the originating motion, which is relevantly at appeal book page 4, the prayer for relief as a first item for the mandamus was:

directing the defendant:

(a)       to issue amended land tax assessments . . . and

(b)       to refund to the plaintiff the land tax which was overpaid ‑

So in form it was a claim for tax overpaid.  Your Honours will also see that in the restitution proceeding, which was commenced by writ, supported by a statement of claim.  Your Honours will see in the prayer for relief at page 24:

The sum of $363,680, or such other amount as represents the amount overpaid on account of land tax for the years 1990 to 2002 inclusive.

Section 90AA is exhaustive in its terms and plainly, in our submission, applied.  There is an argument against us not considered by the Court of Appeal which appears to be based on a contention that section 90AA has a narrow operation; it does not intersect with the amended assessment and it only operates where there is a single assessment and relies on a decision of this Court in Trustees, Executors and Agency Co Ltd v Commissioner of Land Tax (1915) CLR 21.

The question in issue in this proceeding was whether there could be more than one amendment of assessments in relation to land tax, and the Court held that there could be.  One of the arguments that was made was that the power of amendment, which was limited by sections 59 and 60, which were effectively refund adjustment provisions - your Honours will see sections 59 and 60 on page 34 of the report in the judgment of the Chief Justice.

Section 59 is in similar form to section 90.  Section 60 is in similar form to section 90(2) as enacted, but the 1958 Act also had subsection (3), which I will come to.  What was said in this case by Justice Isaacs was that sections 59 and 60 had a very limited operation.  Your Honours will see that at page 37 of the report.  The view Justice Isaacs took – it is about point 8 on the page:

the view I take is that secs. 59 and 60 are adjustment sections only.  Clerical and accountancy errors, not perceived before payment, may be set right within three years after payment, the taxpayer, if he alleges overpayment from such a cause, being bound to satisfy the Commissioner that it is so.  But the accuracy of the basic –

value of the assessment is assumed.  The Chief Justice at page 35 observed, at about point 5 of the page:

sections relate only to matters of account and payment.

As I understood from that starting point, it is said that section 90A is only an amount by reference to clerical error.  If you have an assessment for $10,000 and you put the decimal point in the wrong place and paid $100,000, sections 59 and 60 would recover it, but the liability remains the same as that dealt by the assessment.  Whatever the position was in the Land Tax Act 1910, when the 1958 Act was introduced, it was introduced in a different form.

Your Honours should have section 90 as enacted.  Your Honours will see subsection (1) and (2) are very similar to 59 and 60 of the Act considered by the court, but subsection (3) is very different because it says:

No application for a refund of an overpayment shall be entertained by the Commissioner unless made within three years after such overpayment was made, or if there has been an objection then within three months after the date of the decision on such objection.

So subsection (3) did not have the limited operation that subsection (2) might have had on the basis of the authority of trustees.  It made it clear that section 90 was going to deal with overpayments not limited to the sort of clerical overpayments that had been considered in Trustees. 

Now, what then happened was that in 1974 – and I will try to do this as neatly as I can – subsection (3) was repealed and subsection (2) was replaced and broadened, and that was done in 1974 by Act No 8538 and in the second reading speech, which your Honours should have, to the amendment of 1974, the Premier who moved the Bill – this is on 6 March 1974 at page 3743 – the Premier noted that subsection (3):

limits the time for the application by a taxpayer to the commissioner for a refund to within three years after the overpayment was made.  The time limit has on occasions led to the unfortunate situation –

There is a reference on the next page to a matter arising recently where a company “had been paying land tax on land it had not owned for six years” and subsection 90(3) was seen to be a problem for the taxpayer and it was removed.  Your Honours will see that a bit lower down that paragraph:

enables the commissioner to refund tax overpaid without any time limit.

So that is important, in our submission, to the context.  Subsection 90(2) was expanded.  It is broader than considered by the court in Trustees because it says:

Where the Commissioner finds in any case that tax has been overpaid he may refund.

So there was a significant change in 1974.  In 1992, the time limit was reimposed and your Honours will see that in Act No 76 of 1992, where section 90(2) was amended dealing with receiving application for refund, finding tax being overpaid, must overpay but there is a time limit for an application within three years.  That was, as the second reading speech – I will not take your Honours to it – made clear, was for certainty of the revenue.

In 1993, the certainty of the revenue was further enhanced because section 90(2) and (3) were repealed and section 90AA was introduced, and 90AA is very comprehensive in its terms.  I should have noted when one – perhaps I will do that now ‑ when one turns to 90AA(6) it provides that if:

an application for a refund is lodged with the Commissioner in accordance with subsection (2); and

there is a finding of an overpayment, the Commissioner “must refund”.  So, there is a duty currently imposed in the Act of 1958 and must apply a running balance.  In subsection (7) your Honours will note that there is an express appropriation from the consolidated fund in relation to the amounts overpaid.  So, in our submission, just on its terms and given its context and purpose and its legislative history, section 90A clearly covers the amounts that were paid by the taxpayer. 

Can I now turn to the finding, proposition 3, in relation to conscious maladministration?  Now, as I submitted earlier to your Honours, conscious maladministration was not pleaded as an aspect of the cause – either cause of action, but your Honours will see in paragraph 50 of the judgment of the Court of Appeal that the allegation of conscious maladministration ‑ paragraph 50 of the Court of Appeal, appeal book page 391 – the Court records that the submission:

was developed below into the allegation of conscious maladministration.  It is a serious and important allegation in the circumstances of the case.

The Court of Appeal returned to it at paragraph 150.  Now, in the immediately preceding passages to 150, the Court of Appeal had held that there was a duty to refund on the basis of an excess amount.  But the Court identified at paragraph 150:

The difficulty for ACN is that s 19 not only confers on the Commissioner a power to amend but it also contains by its closing words –

Now, this appears to have directed the Court of Appeal’s attention to Futuris which, in our respectful submission, was completely irrelevant to the issues that were before the Court.

The Court of Appeal appears, in our respectful submission, to have concluded that because of the concluding words in section 19, the mandamus action could not succeed without conscious maladministration and that is why their Honours then set out in 151, an analysis of Futuris and the critical findings at 155:

the actual refusal of the Commissioner on 15 August 2013 –

and your Honours, that is at appeal book 210:

to amend the assessments to make them accurate, in the circumstances . . . amounted to conscious maladministration.  The decision not to amend . . . was deliberate.

Well, it was considered and it was deliberate:

It was taken in the light of the knowledge of the duplication error –

That may be accepted.  And their Honours go on to say at 156 ‑ I beg your Honours’ pardon, there is one passage that I should draw your Honours’ attention to, this is at the bottom of 437, paragraph 155:

The context was one where the evidence was overwhelming that the duplication error was operative and enduring throughout the 1990‑2002 land tax years.  The decision not to amend was taken after the Commissioner allowed objections based on the duplication error for the 2006 and 2007 –

and amended the references:

by deleting the duplicate property –

Just pausing there, if I may, your Honours.  2006 and 2007 was not done under the 1958 Act.  It was done under the 2005 Act together with the 1997 Taxation Administration Act which had an express power to extend the time for an objection and that was a factor that the Court of Appeal misapprehended which I will take your Honours to in a moment.  Their Honours go on at 156, the last sentence:

at the time of his refusal on 15 August 2013, he was aware that the assessments did ‘not reflect any rational assessment of the taxpayer’s liability to tax’.

And again that brings up the sequencing point that your Honour Justice Gordon raised with me.  And the last sentence of 157:

In our view, the Commissioner’s refusal to amend amounted to a deliberate disregard by the Commissioner of the scope of his powers without good reason or justification.

Then over at 159:

in the particular circumstances of this case, the decision of the Commissioner not to amend the assessments constituted a deliberate failure of due administration.  It amounted to a wilful refusal of the Commissioner to perform his duty without good reason . . . Such a claim clearly falls outside of the objection and refund regimes.  We have already concluded that the power under s 19 was here enlivened –

So, that was on the basis of an excess, which I will take your Honours to:

because the Commissioner had knowledge that the assessments . . . were inaccurate –

So, to encapsulate the point, section 19 was enlivened on knowledge, nothing else:

he had, therefore, a duty to exercise the power to amend . . . We consider that the decision of the Commissioner not to amend the assessments when his power . . . was enlivened amounted to conscious maladministration for which mandamus is available.

And their Honours go on in 160:

With great respect to the judge, we consider that she erred in failing to view s 19 as an integral part . . . give rise to a duty –

this is important:

and failing to find that there was conscious maladministration of the Act sufficient to found an action for mandamus to compel an exercise of the power under s 19.

Your Honours will see it repeated at 162:

and he has deliberately refused to do so.

The submission we put, firstly, is that there was no basis for a finding of conscious maladministration, regardless of the construction of the Act which the court arrives at.  There could be no suggestion that the Commissioner knew that 90AA was not available, but relied on it wilfully in disregard of his duty to refund the money.  The court seems to have regarded it as critical to its order for mandamus in paragraphs 159 and 160.  It is not clear why and our submission on that point is that it misunderstood Futuris and section 19. 

It is a finding, in our respectful submission, that not only should not have been made but could not have been made on the material.  In our submission, it was a material error in relation to the mandamus claim.  It featured there as an aspect of the mandamus and it also features – while I have got your Honours on conscious maladministration – at 241, to compound interest.  It was the only basis for rewarding compound interest, at paragraph 241.

Can I now turn to section 19 and our construction of section 19.  At paragraph 162 the court concluded that mandamus would issue under section 19 without regard to the reasoning in Royal Insurance – in other words, in our submission, mandamus issued without regard for any restitutionary claims supporting the duty to refund. 

How it arrived at that conclusion starts at paragraph 122.  In our submission, the construction adopted by the Court of Appeal started as its point of origin that the purpose was to ensure completeness and accuracy.  Your Honours will see that at 123.  That is reinforced at the last sentence in 123:

The language of s 19 makes it plain that it is one of the integrity mechanisms of the Act . . . for ensuring that the Commissioner collects the correct amount of tax and only the correct amount of tax.

What is informing, in our submission, the construction is a starting point that if there is any departure from the correct amount of tax the scheme has somehow failed, but of course the correct amount of tax is the amount assessed as varied by objection.  The Act does not pursue completeness and accuracy as an end in itself without regard to any of the other considerations that are mediated within this scheme including time limits, process and certainty.

The concept of integrity mechanism is repeated in 124, the last sentence.  Their Honours then have regard to cases such as Finance Facilities where it may - can give rise to an obligation.  They are not controversial propositions.  The reasoning on section 19 commences – the critical reasoning is paragraph 139 – if I can take your Honours to that, please.  There is a reference to Justice Hunt and earlier cases including the expectation the Commissioner will take a high position.  That is not controversial.  But at 139 the court identifies circumstances which would be:

improper for the Commissioner to continue to claim the tax identified in an original assessment –

for example, where the Commissioner knows that:

assessment is necessary to ensure the accurate assessment of land tax –

Of course, knowledge that the assessment is not excessive might occur in a range of circumstances.  It might occur after the objection period has expired in which the taxpayer knew the point and declined or sat on his or her hands to bring the objection.  But their Honours go on to say at 139:

We consider that it would be equally improper for the Commissioner to continue to claim to be entitled to an amount he knows to have been overpaid in response to an inaccurate assessment in the same way as it is improper for the Commissioner to continue to claim the tax identified in an original assessment –

In our submission, there is just no tethering to the scheme for that concept.  In our view, the nature of the power and the conditions that must be satisfied before it is enlivened mean that once the Commissioner has knowledge that an assessment is inaccurate he has a duty to exercise.  Immediately, the objection regime and the time limit imposed is rendered otiose or significantly undermined, the refund and recovery provisions in section 90AA are rendered otiose or bypassed and you have an entirely parallel and unstable system of collection of tax.  Then, in our submission, in another significant constructional error, the Court in 141 says:

the Commissioner must have the power to do everything that is necessary and convenient for the achievement of the purpose of s 19 -

Calling in aid the statutory construction of conferral of a duty will carry the power, or conferral of a power might – and their Honours refer to:

‘every power and every control the denial of which would render the grant itself ineffective’.

There is no inefficacy in section 19 by limiting it to an assessment or an amended assessment.  It does not become ineffective because the Commissioner cannot refund the money.  In circumstances where in two express places the Act deals with refund – one in the amendment regime and one in section 90AA:

In our view, the power to refund an overpaid amount is a necessary incident of the power to amend. 

Their Honours go on to say there is “an implied appropriation” and their Honours rely, at footnote 153, to Royal Insurance and Justice Brennan, but Royal Insurance was a power to refund. 

KIEFEL J:   An express power.

MR NIALL:   The duty was the power to refund which necessarily carried with it the obligation to meet the power out of the consolidated fund.  So that simple error of construction, there was simply no need to infer or imply, I should say, the duty of refund and appropriation – no principle of statutory construction which would permit it and it would obviate all the restrictions that exist on the express powers of refund.

Now, I should draw your Honours’ attention to 142 and 143 because they look somewhat out of place with my submissions.  Their Honours say “the Commissioner relied upon a power to refund” in 2006 and 2007.  “He relied upon the same power” for 2008 to 2011 and issued the refund of $300,000. 

GORDON J:   Was that not under the 2005 Act?

MR NIALL:   It was, your Honour, and your Honours will see:

The Commissioner paid these refunds . . . the refunds must have been paid as an incident of the power under s 19 to ensure that the assessments of tax for the 2006‑2011 land tax years were complete and accurate.

In paragraph 143, their Honours say:

The power he has already exercised under section 19 with respect to the 2006‑2011 –

Your Honours will see at appeal book 95 that the objections for 2006 and 2007 were expressed to be under the 2005 Act, as they could only be, I hasten to add, and of the Administration Act, sections 96 and 100.  Section 100 of the Taxation Administration Act, which your Honours do not need to go to, allows the Commissioner to lodge an objection after the 60‑day period so there is an express power for 2006 onwards and the gap between 2002 and 2006 which was met through ex gratia payment by the Treasurer, and your Honours will see that at page 152, and that reflected the three‑year time limit.

Now, we have set out in writing in some detail the construction of section 19.  Could I just make a couple of points by way of oral amplification?  It is important firstly that section 19 only deals with assessments, so the consequences are to be found elsewhere.  Secondly, it is imposed in discretionary terms.  Thirdly, objections can only be challenged by way of objection within time and limited to grounds. 

So if the duty – if the discretion in 19 was converted into a duty based on knowledge, it would completely remove the time limit for objection because the knowledge could be obtained.  The taxpayer could, in effect, run a parallel system of objection by arming the Commissioner with knowledge and once the knowledge is obtained the duty is enlivened, and the Commissioner would not be entitled to say, well, you had as a matter of discretion a deliberate decision not to exercise your objection rights, or alternatively, as a matter of discretion, the time is too long or for some other reason.

GAGELER J:   So do you say there are no circumstances in which the discretion can become a duty compellable by mandamus?

MR NIALL:   We do, your Honour, but in the alternative we would – that is, that the – it is effectively a code within the objection regime as to duty and that if it was done within the objection regime the Commissioner would not be under a duty but would ‑ the taxpayer’s rights would be protected by way of objection.  After the objection regime has expired there is no duty.  It is a discretion of which that would be a powerful factor, in our respectful submission. 

Royal Insurance (1993) 182 CLR 51, on which the Court of Appeal spent some time, is a very different case but can I take your Honour to just a couple of passages in it? Your Honours will be familiar with the case and I will not dwell on it but there it was an express power to refund. The Commissioner may refund, so we do not have the same assessment problems or issues that currently arise. Your Honour will see the statute at bottom of page 62 of the report:

“Where the [Commissioner] finds in any case that duty has been overpaid, whether before or after the commencement of the Stamps Act 1978 he may refund to the company –

The circumstances in which there was an occasion for refund are slightly complicated but they involve in part some amounts as premiums which should never have been paid, they would have been subject to some adjustments, and in another part which were liable to be paid under the Act but which retrospectively the obligation to pay was removed. 

For present purposes, in the judgment of the Chief Justice at page 65, point 4 on the page, point 5, his Honour having noted – perhaps I should take your Honours to page 64, bearing in mind that this was entirely a question of construction, his Honour says – the Chief Justice says:

in terms it confers no authority upon the Commissioner to levy, demand or retain any moneys otherwise than in payment of duties and charges imposed by or pursuant to the Act.

That proposition needs to be seen in its context where the statutory obligation to tax or to charge the stamp duty was removed entirely.  There was a statutory provision which says that these premiums are subject to duty.  That was removed.  The insurer continued to pay.  There was a period of a gap where the Commissioner continued to pay but, in fact, although there was an attempt to exclude this other policy from stamp duty liability, the legislature misfired and there continued to be some compensation premiums which were subject to stamp duty.  That obligation was removed retrospectively.  So, there are different categories.

But in our case, the issues that his Honour was there dealing with as a matter of construction do not arise, because we are not dealing with moneys which are not imposed pursuant to the Act.  His Honour the Chief Justice refers to that in part of the context of construction.  If your Honours go over to 65, his Honour says:

I cannot accept the proposition that, once overpayment has been found to have been made, the discretion must be exercised by making a refund.

His Honour goes down, at about point 8:

It would be surprising, to say the least of it, if the conferral of a discretion to make a refund was intended to exclude power to refuse a refund when in the circumstances the taxpayer was not entitled to recover under the general law.  An action which is time barred is another illustration of circumstances in which refusal to make a refund would be justified.

His Honour goes on to consider whether recovery would be available under the general law by way of restitution.  On this point, Justice Brennan, with whom Justices Toohey and McHugh agreed, concluded that there was no liability to pay – at page 87, right in the middle of the page.  There is a sentence right in the middle of the page where it is said:

But no enforceable obligation to make the refund arises merely
from a finding that there has been an overpayment.

KIEFEL J:   Thank you, Mr Young.  Yes, Mr Solicitor.

MR NIALL:   A couple of points by way of reply.  In my learned friend’s submissions, he referred to Royal Insurance and the application of the relevant time limit in section 20A.  If your Honours turn to page 92 of Royal Insurance in Justice Brennan’s decision, the critical aspect there – perhaps if your Honours turn to page 91 where your Honours will see the statute of section 20A and your Honours will see that the fee was – the impost was paid “under the authority or purported authority of any Act”. 

The Chief Justice said that does not include one as to mistake as a matter of construction.  Justice Brennan, with whom two other members of the Court took a different approach, as your Honours will see about line 7, having identified an action for the recovery amount of paid under the Act, so that was the amount that was retrospectively removed, his Honour says on that account:

an action to recover the amount in item (ii)(a) answers the description of an action falling within s 20A. 

So his Honour said it falls within the text of section 20A but that there was an implied amendment by the retrospective removal of liability which meant the two could not sit together.  So we do not have that problem here.  When one looks at section 90AA one has recovery of tax paid under or purportedly paid under the Act.  It would include as a matter of text, as Justice Brennan – even in circumstances where the liability was retrospectively amended. 

In our submission, 90AA, to answer your Honour Justice Gordon’s question, would include a Futuris‑type error so that if it was tax that was paid under an invalid assessment it includes an accounting error where you have an assessment and simply paid too much and it would include where there is an amended assessment.

The premise, of course, is refund or recovery of tax paid, so there has to be a disconnect between what you have paid and a current assessment.  If you have the same amount, the revenue keeps the money.  So you have to have that disconnect, and the disconnect can occur in a number of respects.  It could occur for the invalid assessment, it could occur from an amended assessment or it could occur by way of simply an administrative error, as occurred in – and so it is broader than in Trustees.

The only exclusion is that in subsection (5), which provides the 90AA provisions do not apply if the tax is paid under an invalid provision of the Act.  So there is an express carve-out in subsection (5) and the reason for that is that where the payment is made under an invalid Act, most particularly in an excise setting more likely than in a land tax setting, section 20A of the Limitation of Actions Act applies.  The two sections were introduced in almost exactly the same time – Act No 102 and Act No 104 of 1993.

The point was that with invalid Acts, you get one year.  With other excesses, you go to the relevant Taxing Act.  In this case it is 90AA, which is three years, so it is more advantageous.  So it is not our submission that 20A of the Limitation Act applied; it was in effect the taxpayers, because they wanted to get advantage of the mistake extension.  Our case is that 90AA is a code in relation to the requirements for a refund and it is more than a limitation period because it conditions the circumstances in which you can make a claim.  It conditions the obligation of the Commissioner and imposes a duty in subsection (6).

Just two other final points.  My learned friend put a submission that section 19 has to be read as implying a duty because otherwise the section 19 amendment would fail.  In our submission, that is not sustainable because provided it comes within the time and in the conditions met by section 90AA, there is power to refund.  There is no failure of the refund power.  In fact, not only is there power to refund, there is a duty to refund in 90AA(6)(c) which provides, provided the circumstances are met, the Commissioner:

must refund the overpaid amount –

So, it is not an empowering problem, it is a mandatory duty, conditioned on the satisfaction of the terms of 90AA.

The last point by way of reply, if the Court pleases, in answer to your Honour Justice Gordon’s question about section 94.  In our submission, section 94 only applies where something must occur under the Act and then within a time limit.  So, it does not apply to objections which

do not have to occur, but they may, there is a facility for them to occur, or an application for a refund under section 90AA.

Of course, no issue has been taken in relation to section 94 and it is not a power that rests with the Commissioner.  In terms of interest, we have put some brief written submissions.  We seek to put no other submissions by way of reply.  Unless there is anything I can assist the Court with, they are the submissions.

KIEFEL J:   Thank you.  The Court reserves it decision in this matter and adjourns until 9.30 am tomorrow in Canberra.

AT 3.46 PM THE MATTER WAS ADJOURNED