Ginnane v Diners Club Limited

[1993] FCA 167

Re: FOSTER'S BREWING GROUP LIMITED and ELDERS RURAL FINANCE LIMITED
And: CHARLES WILLIAM TAPP; COMPTROLLER-GENERAL OF CUSTOMS; THE COLLECTOR OF
CUSTOMS (NORTHERN TERRITORY) and STEVE GREEN (REGIONAL MANAGER INLAND
REVENUE)
No. S G20 of 1992
FED No. 167
Number of pages - 11
Practice and Procedure - Administrative Law
(1993) 41 FCR 417
(1993) 30 ALD 825 (extract)

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
O'Loughlin(1) J.

CATCHWORDS

Practice and Procedure - Proceedings instituted in Federal Court and also in Supreme Court of the Northern Territory - whether Federal Court proceedings should be stayed - identification of issues in dispute in the proceedings.

Administrative Law - Whether an Authority to pay a diesel fuel rebate can be a decision set out in Schedule 1(e) of the Administrative Decisions (Judicial Review) Act.

Customs Act 1901 (Cth): s164

Administrative Decisions (Judicial Review) Act 1977 (Cth): s5; s3; schedule 1 para (e)

Sterling Pharmaceuticals Pty Ltd v. The Boots Company (Australia) Pty Ltd (1992) 34 FCR 287 (distinguished)

Hughes Motor Service Pty. Ltd. v. Wang Computer Pty. Ltd. (1978) 35 FLR 346 (referred to)

Bennett Honda Pty. Ltd v. Deputy Commissioner of Taxation (1984) 4 FCR 99 (followed)

Tooheys Ltd v. Minister for Business and Consumer Affairs (1981) 36 ALR 64 (referred to)

HEARING

ADELAIDE, 14 October 1992

#DATE 26:3:1993

Counsel for the Applicants : Mr. W.J.N. Wells QC

and Mr. D.P. Rydon

Solicitors for the Applicants : Messrs Finlaysons

Counsel for the First Respondents : Mr. G.G. Holland

Solicitors for the First Respondents : Messrs Michell Sillar

Lynch and Meyer

Counsel for the Second Respondents : Ms. S.J. Singh

Solicitors for the Second Australian Government
Respondents : Solicitor

ORDER

1. Save for the question of the proper construction of s164 of the Customs Act 1901 (Cth) the application be dismissed.

2. The second respondents pay the costs of the applicants and of the first respondent.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

O'LOUGHLIN J. Charles William Tapp, the first named respondent, died on 23 May 1992. Prior to his death, he and members of his family became embroiled in litigation in this Court and in the Supreme Court of the Northern Territory of Australia with the two applicants and another company in the same group, Elders Ltd. It will be sufficient, for the purposes of these reasons, to refer to the applicants in these proceedings and to the plaintiffs in the Supreme Court proceedings collectively as "the Elders Group" and to refer to the second respondents as the Australian Customs Service or "ACS".

1. The history of the litigation is complex but it is necessary to recount some of it to understand the limited issues that are to be resolved in these proceedings. In his lifetime Mr. Tapp owned three cattle stations in the Northern Territory: "Killarney", "Maryfield" and "Roper Valley". Having borrowed heavily from the Elders Group upon the security of stock mortgages and mortgages over his pastoral leases, he found himself unable to meet his financial obligations. As a consequence, he allegedly executed a Deed on 8 December 1989 ("the December Deed") wherein he acknowledged that he was in default in respect of his obligations under the security documents; he also acknowledged that his indebtedness to the Elders Group was then $7.89 million or thereabouts.

2. The December Deed reflected Mr. Tapp's decision to sell "Maryfield" and "Roper Valley" stations on a "walk-in walk-out" basis; it also provided for the appointment of the Elders Group as his agent for the sale, and delegated to them the arrangements for advertising the proposed auctions. He further covenanted that he would enter into a "destocking" agreement with the Northern Territory Government pursuant to the Brucellosis and Tuberculosis Eradication Programme and that he would pay any proceeds from that agreement or that programme to the Elders Group. Finally, and of particular significance to this litigation, Mr. Tapp covenanted in clause 11 in these terms:
   

"Tapp agrees that all subsidies payable to him by way of fuel subsidies will be paid to (the Elders Group) and that Tapp will upon execution of this Deed execute an irrevocable authority as set out in Annexure C annexed hereto."

1. The annexure to the Deed which was duly signed by Mr. Tapp and dated 8 December 1989 read as follows:
   

"AUTHORITY

To: The Director

Australian Customs and Excise Harry Chan Drive, Darwin, Northern Territory I, Charles William Tapp of Killarney Station via Katherine Northern Territory hereby direct that all subsidy payments in respect of fuel which would otherwise be paid to me is to be paid to Elders Rural Finance Limited, 35 Currie Street, Adelaide SA 5000. This authority if irrevocable."

1. It is common ground that the "subsidy payments" that were referred to in the Authority were in fact the rebates in respect of diesel fuel which are the subject of subs164(1) of the Customs Act 1901 (Cth). So far as material that subsection provides:
   

"164. (1) A rebate is, ... payable to a person who purchases diesel fuel for use by him:

(a) ...

(aa) in primary production (otherwise than for the purpose of propelling a road vehicle on a public road);

(b) ..."

1. Presumably the Authority was served on and acted upon by the ACS. In any event, Mr. Green, the third named respondent, and the Regional Manager (Inland Revenue) of ACS wrote on behalf of ACS to Messrs Finlaysons, the solicitors for the Elders Group, by letter dated 27 March 1992, saying that an advice that he had received from Mr. Tapp dated 7 January 1992 would be accepted by his office as a revocation of the Authority to make payments of diesel fuel rebates to the Elders Group.

2. The applicants treated Mr. Green's letter as the manifestation of an administrative decision that was reviewable under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and on 2 April 1992 they filed an application in this Court seeking an order of review. At this stage, I am only concerned with two preliminary points that have been raised by the ACS in the amended Notice of Motion dated 14 May 1992. The first matter to consider is the claim that, as a matter of discretion, this Court should stay the present proceedings because the status of the December Deed and the Authority will be litigated in the proceedings in the Supreme Court of the Northern Territory. The second issue that was raised by the ACS was that the letter of 27 March 1992 is not a reviewable decision as "it is included in the class of decisions set out in paragraph (e) of Schedule 1 of the (ADJR) Act".

The Northern Territory proceedings
8. These proceedings were instituted on 13 January 1992 by the Elders Group against Mr. Tapp and members of his family. The relief sought included judgments against Mr. Tapp in favour of the three plaintiffs as individual lenders and declarations that the appropriate members of the Elders Group are entitled to possession of the three cattle stations and the stock that is depastured on the stations. Finally, the statement of claim sought orders against Mr. Tapp and his family for possession and for damages. In response, by his defence and counter-claim, Mr. Tapp alleged that the various lending transactions were harsh and unconscionable, that he had been subjected to undue influence and had lacked capacity, and that orders should be made setting aside the security documents. He also claimed damages for breach of contract and breach of duty of care.

1. A perusal of the pleadings in the Supreme Court action establishes that the only reference to the December Deed in the statement of claim is in paragraph 17. That paragraph recited that by the Deed Mr. Tapp acknowledged his indebtedness, his failure to pay the amounts that were due and payable, and his default in respect of the three stock mortgages and the three mortgages over the three stations. The members of the family did not admit the allegations in paragraph 17 and Mr. Tapp, in his separate defence, disputed them. He pleaded that if he did execute the Deed (which was not admitted) he was not indebted in the amount claimed or in any amount. He also pleaded a range of matters, which for convenience can be classified as "under influence", as absolving him from any liability. Save for what was pleaded in paragraph 53 of Mr. Tapp's defence, the Authority of 8 December 1991, although an essential adjunct to the December Deed, was not mentioned in the statement of claim or otherwise in either defence. In paragraph 53 of his defence Mr. Tapp alleged that the Elders Group had breached an agreement with him under which they had agreed to act generally as his agent. One of the alleged breaches was their failure "... to collect and apply in reduction of (Mr. Tapp's) indebtedness to the plaintiffs diesel fuel subsidies...". Based upon these sparse references in the pleadings, Ms. Singh, counsel for the ACS, claimed that the validity of the December Deed (and hence the validity of the Authority) was squarely raised in the Supreme Court litigation. It was her submission that the Elders Group, by seeking an order of review in this Court, was attempting to litigate the same questions: that is, the validity of the December Deed and the validity of the Authority.

2. There is no doubt that if litigation has been commenced in one court, and thereafter litigation covering the same or substantially the same issues and parties is instituted in another court, common sense dictates that one or other of the courts should take such action as is necessary or desirable to ensure that duplication is avoided or, at least, minimised. Lockhart J. recently considered this issue in Sterling Pharmaceuticals Pty. Ltd. v. The Boots Company (Australia) Pty. Ltd. (1992) 34 FCR 287. In that case the applicant was the Australian subsidiary of a US Company (Sterling) and the respondent was the Australian subsidiary of a UK Company (Boots). Sterling supplied "Panadol", one of the essential ingredients of which was "Paracetamol". Boots supplied "Nurofen" with packaging that claimed that it is "gentler on the stomach than Aspirin and is as well tolerated as Paracetamol". Boots Australia rejected Sterling Australia's complaint that this claim was "against all accepted and scientific evidence" and as a consequence Sterling Australia commenced proceedings in November 1991 against Boots Australia. However, Sterling New Zealand had some 12 months earlier instituted proceedings in New Zealand against Boots New Zealand in identical terms to the Australian proceedings. This led his Honour to stand the Australian proceedings out of the list after he had helpfully compiled a catalogue of relevant considerations. They were:
   

". Which proceeding was commenced first. . Whether the termination of one proceeding is likely to have a material effect on the other. . The public interest.

. The undesirability of two courts competing to see which of them determines common facts first. . Consideration of circumstances relating to witnesses. . Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted.

. The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues.

. How far advanced the proceedings are in each court. . The law should strive against permitting multiplicity of proceedings in relation to similar issues. . Generally balancing the advantages and disadvantages to each party." (291)

1. These are practical extensions of the principle earlier espoused by Bowen C.J. in Hughes Motor Service Pty. Ltd. v. Wang Computer Pty. Ltd. (1978) 35 FLR 346 when he said at 355:
   

"It appears to me that justice and good sense require that there should so far as practicable be an end to litigation and that the law should strive against permitting multiplicity of proceedings in relation to similar issues."

1. Despite an initial inclination to avoid a duplication of the litigious process, I am compelled, somewhat reluctantly, to reject Ms. Singh's arguments. I say "reluctantly" because I feel, as a matter of practicality, that the scope of the Supreme Court proceedings is so huge that its ultimate resolution will probably bring about a practical resolution of this relatively minor issue. But I must determine the issues according to the law and I am compelled to conclude that there is not here present that same identity of issues that was present in Sterling Pharmaceuticals v. The Boots Company. Quite apart from the question of the validity of the December Deed, a question of construction of s164 of the Customs Act and its effect on the validity of the Authority has been raised in these proceedings: that is, whether the terms of the section permit the ACS to pay the rebate to anybody other than the "person who purchases diesel fuel". That issue probably will not surface in the Supreme Court proceedings. Let it be assumed, for present purposes, that the Elders Group are successful in all respects in the Supreme Court proceedings. That might mean that there could be an express or implied finding that the December Deed was valid (and that is an assumption that might turn out to be inaccurate for it could be possible for the trial Judge to find in favour of the Elders Group without addressing the validity of the December Deed). But in any event, it is most unlikely that the trial Judge would investigate the validity of the Authority as there would be no need for him to consider it except in passing for the purpose of taking an account of any moneys that had been paid to the Elders Group pursuant to it. On the other hand, I do not consider that the validity of the December Deed has yet been raised in these proceedings. I am conscious that Mr. Holland, counsel for the estate of the late Mr. Tapp, flagged his proposal to raise in these proceedings the validity of the December Deed and of the Authority. I am also aware that some of the affidavits that have been filed on behalf of the first respondent touch upon these matters, but as yet, opposition to the relief sought, based on issues of the validity of the December Deed and the Authority, has not yet been pleaded. Whether this Court would consider it inappropriate for any party to seek, by way of amendment or otherwise, to raise those questions before the outcome of the Supreme Court proceedings is known is, therefore, hypothetical at this stage.

2. It seems to me that a summary of the situation is as follows: the question whether the December Deed is binding on the estate of the late Mr. Tapp has been raised in the Supreme Court proceedings but not in the Federal Court proceedings. On the other hand, the question whether a person such as Mr. Tapp can validly require the ACS to pay the statutory rebates to which he is entitled under s164 of the Customs Act to a third party has been raised in the Federal Court proceedings but not in the Supreme Court proceedings. In those circumstances I would not exercise my discretion to stay these proceedings as presently constituted.

The ADJR Act
14. Section 5 of the ADJR Act entitles a person "who is aggrieved by a decision to which this Act applies" to seek an order of review. The expression "decision to which this Act applies" is defined in s3 to mean:

"... a decision of an administrative character made, proposed to be made, or required to be made, as the case may be (whether in the exercise of a discretion or not) under an enactment, other than a decision by the Governor-General or a decision included in any of the classes of decisions set out in Schedule 1."

1. If, said Ms. Singh, the letter from ACS dated 27 March 1992 amounted to "a decision of an administrative character made... under an enactment" (and she did not concede it to be so) it was, nevertheless, a decision that is included in paragraph (e) of Schedule 1 to the Act. That paragraph refers to:
   

"... decisions making, or forming part of the process of making, or leading up to the making of, assessments or calculations of tax or duty, or decisions disallowing objections to assessments or calculations of tax or duty, or decisions amending, or refusing to amend, assessments or calculations of tax or duty, under any of the following Acts:

...

Customs Act 1901... "

1. It is clear that there is an expansive element in the language of this paragraph. In Bennett Honda Pty. Ltd v. Deputy Commissioner of Taxation (1984) 4 FCR 99, for example, Morling J. said that a "decision as to the value of goods is an essential part of the process of making an assessment or calculation of tax". In Tooheys Ltd v. Minister for Business and Consumer Affairs (1981) 36 ALR 64 Ellicott J. was of the same opinion. Speaking of Customs duty he said at 77:
   

"The calculation of customs duty in a particular case, involves identifying the applicable rate of duty and the value of the goods."

1. In my opinion, however, there is no question in these proceedings about an assessment or a calculation of a tax or a duty or of any act which might constitute a step in the "making, or forming part of the process of making, or leading up to the making of, assessments or calculations...". Assuming that a rebate is properly to be considered as falling within the meaning of the word "tax" or the word "duty", these proceedings are not addressing the quantification of the rebate or any aspect of the decision-making process which led to that quantification. What is being questioned here is the identify of the ultimate payee of the rebate.

2. The conclusion that I have reached is that neither of the preliminary points that were raised by the ACS can succeed. The notice of motion, as filed by the ACS, raised a further preliminary argument: that is, having regard to the language of s164 of the Customs Act and to the stipulation that a rebate is payable "to a person who purchases diesel fuel", could the ACS as a matter of law pay the rebate to anyone other than Mr. Tapp or his legal personal representative? The parties agreed, however, that this question should be put to one side until the Court had ruled on the two issues that have been discussed in these reasons. Meanwhile, I decline to stay the proceedings in this action. Save for the question of the proper construction of s164 of the Customs Act, the notice of motion is dismissed. The second respondents must pay the costs of the applicants and the first respondent.