Commonwealth of Australia and Anor v Prior; Commonwealth of Australia v Nojin and Anor

The Full Federal Court considered appeals by the Commonwealth of Australia against decisions of a single judge in two separate proceedings brought by Mr Prior and by Mr Nojin and another. The proceedings concerned the entitlement of the appellants to receive certain payments under the *A New Tax System (Goods and Services Tax) Act 1999* (Cth) (the GST Act) and related legislation, specifically in relation to the acquisition of land for the purposes of the Indigenous Land Use Agreement (ILUA) for the Cape York Peninsula. The core of the dispute revolved around whether the Commonwealth was entitled to recover from the recipients amounts paid by way of GST credits, which the Commonwealth later determined were not payable.

The central legal issue before the Full Federal Court was whether the Commonwealth, having made payments of GST credits to the respondents, was entitled to recover those payments as money paid under a mistake of law. This question turned on the interpretation of the relevant provisions of the GST Act, particularly those dealing with the entitlement to GST credits and the circumstances under which such credits could be recovered or adjusted by the Commissioner of Taxation. The court also had to consider the application of general principles of administrative law and contract law to the relationship between the Commonwealth and the recipients of the payments.

The Full Federal Court held that the payments made by the Commonwealth were not recoverable as money paid under a mistake of law. The court reasoned that the GST Act established a statutory scheme for the payment and recovery of GST credits, and that the Commissioner's determination of entitlement to GST credits was a final determination unless challenged or reviewed in accordance with the Act. The court found that the Commonwealth had paid the GST credits pursuant to its statutory obligations under the GST Act, and that there was no basis in the Act or in general law for the Commonwealth to recover payments made in accordance with its statutory duties, even if it later formed the view that those payments were not legally required. The court distinguished the present case from situations where money is paid under a mistake of fact or where a payment is made under a void or invalid administrative decision.

The appeals were dismissed.