Premier Pools Pty Limited & Ors v Commissioner of Taxation for the Commonwealth of Australia

[1992] HCATrans 317

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4

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S99 of 1992

B e t w e e n -

PREMIER POOLS PTY LIMITED

First Plaintiff

THE PARTIES NAMED IN THE

SCHEDULE HERETO

Further Plaintiffs

and

COMMISSIONER OF TAXATION FOR

THE COMMONWEALTH OF AUSTRALIA

Defendant

Directions hearing

MCHUGH J

Premier 29/10/92

(In Chambers)

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 29 OCTOBER 1992, AT 10.18 AM

(Continued from 8/10/92)

Copyright in the High Court of Australia

MR G.A. FLICK:  May it please Your Honour, I appear for the

plaintiffs. (instructed by Roger Williams)

MR A.H. SLATER: If Your Honour pleases, I appear for the

defendant. (instructed by the Australian

Government Solicitor)

MR FLICK:	Your Honour, on the last occasion there was a summons filed by Mr Slater's client. There was
discussion as to stating a case for the Full Court.
Your Honour expressed reservation as to stating a
case in the absence of agreed facts. We have got together and drafted a document which expresses
agreement and I handed a copy of that to the Deputy Registrar.

The crucial passages for Your Honour to look

at, I think, are paragraphs 6 and 10. You will

recall that the issue which was sought to be raised

was whether or not legislation, being in the form

of the Refund Act was unconstitutional, and the two

sets of facts which have been agreed focus, first

of all, upon a payment which precedes what we say

is an agreement and payments made after the

agreement.

Paragraph 6 is the transaction before the

agreement. It has, as an agreed fact, that moneys

were paid, passed on to the pool purchaser and not

refunded, and there is a similar statement of

agreed facts for paragraph 10.

It would be the submission of both counsel

that the facts are sufficiently stated for

Your Honour to refer the questions set forth at the

bottom of page 3 and the top of page 4 to the

Full Court. There is one matter which Your Honour

should be aware of and that is paragraph 8. That

has been expressed in somewhat cautious terms.	We
will be saying that that exchange of correspondence

constitutes an enforceable agreement - enforceable

by the plaintiff.	The defendant does not admit
that.

A question for the Full Court therefore will

be whether that exchange of correspondence does

constitute an enforceable agreement. The only

facts relied upon will be the facts in the

agreement and the exchange of correspondence.

HIS HONOUR:  Yes. What is your attitude, Mr Slater?

MR SLATER:  As to this document, Your Honour?

HIS HONOUR:  Yes, as to the matter generally. I can tell

you at the moment I am not prepared to state a case

Premier 9 29/10/92

in this form and, indeed, I doubt if I am prepared

to state a case at all in the present state of the

matter.

There seems to be a number of problems. The

first is that the Federal Commissioner of Taxation

is not yet a party to the proceedings.	You have
got a conditional appearance on.	The rule applies
to parties.	The second is that the case, in my

view, is not in a satisfactory state. What are the

issues that are relied on here? Is it sought to be

arguments about you had a right - that money has

been paid under a mistake of law or that it was
paid under some agreement? What is the ground for

alleging that the Act is invalid? Does it

constitute an acquisition of property? Is it

alleged that it is just generally beyond the power

of the Commonwealth? Is it alleged that it is

invalid because it is retrospective in operation?

There are further problems - - -

MR SLATER:  Your Honour, it is our allegation, of course,

that the Act is valid.

HIS HONOUR:  I appreciate that but this is an agreed case

between the parties stating issues for

determination. Another problem is the form of the

questions. They are stated very much in the

abstract. That may be a matter of little account

but they should certainly be tied to the concrete facts of this case. The first question asked is:

Whether -

the Act -

is wholly or partly beyond the power of the

Commonwealth.

Now, the Act may be perfectly valid in relation to

transactions other than these particular parties.

MR SLATER:  We would see the only question really arising,

Your Honour, as being the second question, that is

whether, in relation to those two specific

transactions, the Act is valid. We had proposed a

slightly different formulation of the first

question and I think Your Honour might have two

versions of the document in front of you.

HIS HONOUR:	No, I am sorry, unless it is in the file.
MR SLATER:	I thought two versions were handed up to

Your Honour just a moment ago.

HIS HONOUR: Is there? I see, yes.

Premier 10 29/10/92

MR SLATER:  The difference between them, Your Honour, is - I

find that I only have one version in front of me.

HIS HONOUR: Well, it is "in its application to the in situ

tax payments".

MR SLATER:  In its application to the two payments which are

specified in the agreed statement of facts. The

Solicitor-General had indicated to me a view half

an hour or so ago that the question should be

confined in that fashion. My friend would rather

have it expressed more broadly.

HIS HONOUR:  Yes, certainly that seems to be a minimum

problem. But another question arises is the

position of the Commonwealth. I mean, really, in a

real sense, the Commonwealth should be a party to

these proceedings.

MR SLATER:  Your Honour, by virtue of the Commissioner being

there, I would have thought the Commonwealth was a

party, except for the conditional appearance point

that Your Honour has taken.

HIS HONOUR: Ordinarily - you are seeking a declaration that

the Act is invalid. Even though it affects the

Commission, the ordinary party would be the

Commonwealth.

MR SLATER:  We would not have any problem with having the

Commonwealth joined for that purpose, Your Honour.

HIS HONOUR:	No, but what about the question of parties, and what about the question of the contentions of the
parties? And I think the Chief Justice has said on
a number of occasions recently, in stating these cases, that stated cases should set out what the contentions of the parties are so that the Court will have some idea of what the issues are, but it
may be very apparent to counsel what the issues are here but for somebody looking at this stated case for the first time, it would be very difficult to
determine just what is the precise issue that is
going to be determined.
MR SLATER:	I am in some minor difficulty in that respect,

Your Honour, because I am not entirely sure how it

is put to me. It has been put to me so far in

discussion that the contention raised by the

plaintiff is, first, that it is not a law with

respect to taxation; second, that it is not within

the acquisition of property terms because it is not

on just terms and, third, that it is not otherwise

within section 51.

HIS HONOUR:  Yes. Well, perhaps these questions should be

addressed to Dr Flick rather than Mr Slater.

Premier 11 29/10/92

MR SLATER:  Perhaps, Your Honour. The reason why it is

framed as it is is that the experience that we had

in Hepples' case makes us cautious about trying to

frame questions too closely; on the other hand,

there is another matter which is to be heard by the Full Court of Genex where the questions were framed

with such particularity that they do not really

finally resolve the issue. So, it is a difficult

exercise.

HIS HONOUR:  I appreciate that. But there are other matters

that concern me with the stated case.	For example,
paragraph 4 states that:

"SPASA" is a body which represents the

swimming pool and spa industry in Australia.

But, for what purpose? I mean, I think there are

things like that that should be dealt with.

MR SLATER:  The only issue that we seek to have tested by

the Court is the question whether, if there are any

rights which are vested in the plaintiffs to

recover moneys from the Commonwealth, the Swimming

Pools Tax Act abrogates those rights. We were

hoping to avoid having the Court to have to delve

into the nature of those rights and the

relationship between SPASA and the plaintiff and

the extent of the authority that SPASA had to

negotiate on behalf of the Commonwealth and simply
confine it to whether or not the Act is one which

is within power of the Commonwealth.

The difficulty with framing a statement of

facts which makes assumptions about the

consequences of correspondence or relationships is

that the Court might express a view based on those

assumptions.

HIS HONOUR:  I understand that and I understand that is why

you seek to use Order 35 as opposed to section 18
of the Judiciary Act.	From this case, one does not

know what the significance of the letters is. In

fact, just looking at the questions, it is not easy

to see what relationship the letters have. What is

the relationship that the letters seek to have in

this particular case? Do they throw some light on

a question of mistake of law or the voluntary

nature of the payments? Does it go to an

acquisition of property? What is the point of

these letters?	How do they advance the case, in
other words?

MR SLATER: Perhaps that is a question for my friend, but if

I can answer Your Honour to the best of my

understand: the contention made by the plaintiffs

is that the letters constitute a contract between

Premier 12 29/10/92

SPASA, as agent for undisclosed principals, on the

one hand, and the Commonwealth on the other and

that the Act, by abrogating any rights to recover

under that contract, acquires property otherwise

than on just terms.

HIS HONOUR: Well, these are the sort of questions that

ought to be formulated for decision and not left in

the way it is. I mean, the questions for

determination do not deal with that in any

particular way. So, to reach these questions for

determination, there are apparently other questions of law involved along the way or questions of fact.

MR SLATER:	As I said, Your Honour, we were hoping to avoid burdening the Court with deciding those other
questions.
HIS HONOUR:	I cannot see how you can avoid this question of

determining whether there is a contract. Either it

is relevant or it is irrelevant. If it is

relevant, it ought to be framed as a question or,

at least, as a contention or it ought not to be in

the case at all.

MR SLATER:	I see the force in what Your Honour says.
HIS HONOUR:	It cannot be avoided somewhere along the line.

There is an abstract question asked in question 2

extinguishing any liability of the defendant.

MR SLATER:  Can I be so bold as to ask whether the Court

would approach the matter by answering the question

along these lines: assuming that rights are
conferred by the exchange of correspondence, does
the Act validly destroy those rights? In other
words, is the Court prepared to deal with the

matter on an assumption or would the Court regard

that as unsatisfactory?

HIS HONOUR:  I think that is unsatisfactory, speaking for

myself. I mean, it is one thing to deal with

matters by way of demurrer. Case stateds should

agree on facts, on basic facts, or matters upon

which inferences can be drawn so that the Court can
determine facts. Deciding questions of law on

assumptions gets very close to asking the Court to

state an advisory opinion.

MR SLATER:  I appreciate that, Your Honour. Is the Court

prepared to deal with the question whether there is

a contract?

HIS HONOUR:  My understanding is that the Court has rarely,

in recent years, if at	all, stated a special case
of this to begin with.	The Court has always used
section 18 or Order 26	for the purpose of stating

Premier 13 29/10/92

facts so that there is some concrete facts there.

The other alternative is to deal with the question

by way of demurrer.

MR SLATER:  Yes.

HIS HONOUR: There still remains this question of parties.

The Commissioner is not yet a party to the - the

Court is being asked to determine a question for the purpose of binding somebody who is not even a

party to the proceedings.

MR SLATER:  I am displaying my ignorance of the rules here,

Your Honour. Is it possible for the Commissioner

to be a party in response to one of a multiplicity

of plaintiffs without appearing in response to the

other plaintiffs?

HIS HONOUR:  You are either a party or you are not a party,

are you not?

MR SLATER:	I think that is right, Your Honour.
HIS HONOUR:	And if you are not a party to the action, you

say that the Court has no jurisdiction in respect

of the matter and - - -

MR SLATER:  I suppose what we have to do is to move to

strike out the other plaintiffs as being wrongly

joined.

HIS HONOUR:  I think you have to clear that up one way or

another.

MR SLATER:	Yes.
HIS HONOUR:	The definition of "party" includes "a person

served with a notice of or attending a proceeding"

but I doubt if that is wide enough. I mean, at the

moment, it seems to me, you are no more a party

applicant in a special leave application has been	than somebody in a special leave application. An
held in this Court not to be a party.

MR SLATER:  Not to be a party, yes. Your Honour, that is a

matter which perhaps we should address and we might ask the Court for an adjournment for the purpose of

dealing with that point. If we became a party to

the proceedings, would Your Honour be of a view

that it would be better to deal with the matter by

way of amending the writ and then demurring to it?

HIS HONOUR: Well, that is one possibility but, I mean - - -

MR SLATER:  I am conscious of what Your Honour said about

the Court's attitude.

Premier 14 29/10/92

HIS HONOUR - - - the question of the statement of claim may

have to be amended. I do not want to put the

parties to unnecessary expense, and if the matter

can be dealt with by way of a case either under

section 18 or under Order 35, then I will be happy

to clear up the constitutional question, but at the

moment there seem to me to be a number of

outstanding issues and - I say it with respect - I

am not sure that it has been property thought

through in terms of what will have to be determined

before you reach these final questions.

MR SLATER: Is the Court's view that it is preferable that

the matter come by way of demurrer, because the

parties wish to have the question resolved and we

will mould the proceedings to accommodate the

Court's preference.

HIS HONOUR: Ordinarily I think a stated case procedure is a

better procedure because it states the facts often

in a more specific way and it also should state the

contentions of the parties. But for one reason or

another -

MR SLATER:  So far as the contentions go, the case is

deficient, we accept.

HIS HONOUR:  Yes. But there are a number of models of

stated cases that will be found. I think it would

be in the parties' interests to state with a lot

more precision what the facts are because I can see

this case getting into the Full Court and people

will be asking questions as to what is the basis of

this proposition or why is not this particular

matter taken into account. What about questions of
mistake of law? Are they alleged to arise in this

case at all?

MR SLATER:  I imagine they will be alleged to arise,

Your Honour, if the matter goes to a hearing on the

merits - goes off on the facts it will be alleged
that the payments were made by mistake.	I would

have expected my friend to take that point. But if

the Act is valid then we would say that that

question just does not arise.

HIS HONOUR:  Let me illustrate with the two payments that

took place before the agreement.

MR SLATER:  We have actually confined that to one,

Your Honour, because I realized that the way in

which the second of those two payments, in the

draft that was sent to Your Honour yesterday, was
expressed, the Commissioner had no basis for

refusing to pay. So it is now confined to the case

where the tax has been passed on and not refunded.

Premier	15	29/10/92
HIS HONOUR:	Yes.	Now, in relation to the payment referred

to in paragraph 6, am I right in thinking that that

payment was made before 19 November 1990, before

this correspondence was entered into?

MR SLATER:	Yes, Your Honour.
HIS HONOUR:	You mentioned earlier questions of acquisition

relation to that. If there was no operative mistake than, arguably, the money was the

of property otherwise than on just terms.

Commissioner's money and no question of an

acquisition could arise. On the other hand, if it

was money paid under some mistake, which was

recoverable in equity, then it may be you would

reach a different conclusion about

paragraph (xxxi).

MR SLATER:	The only mistake, I think, which is relied upon, and I think could be relied upon, in this case is a
mistake as to whether or not the law was valid.
HIS HONOUR:	But that assumes that you can determine this

question in the abstract.

MR SLATER:  That is the law which was held to be invalid in

Mutual Pools, Your Honour, not the present Act, but

the previous Act.

HIS HONOUR:	I see. It was held to be - - -
MR SLATER:	It was held that the sales tax law was invalid.

The payment was made upon the basis that the Sales

Tax Act was valid, the Commonwealth statute.

HIS HONOUR:	I appreciate that, but that -
MR SLATER:	And that, I think, is the only mistake that is

relied upon.

HIS HONOUR:  That does not necessarily mean that it was

recoverable.

MR SLATER:	No, it does not.
HIS HONOUR:	Is it alleged that that payment is recoverable

if the Act was invalid only on a Sl(xxxi) ground?

MR SLATER: In fact, I cannot answer that question.

HIS HONOUR:  No, I know, but these are the sorts of problems

that seem to me to arise. I hope I am not being

dense and not following the submissions that the

parties wish to put, but it is a very sketchy case

stated and it has got some very bare facts in it,

and then it asks two fairly general questions. And

Premier 16 29/10/92

there appear to be some underlying issues as to

whether there have been contracts between the

parties, what the effect of the contracts are, and

so on.

MR SLATER: Perhaps if Your Honour would give us the

opportunity to make another attempt.

HIS HONOUR: 

Yes.

MR SLATER: 

As I said, we have been endeavouring to keep the

confines of the dispute before the Full Court to
the narrowest possible area but, in light of what

Your Honour says, perhaps we have tried to keep it

too narrow.

HIS HONOUR:  Mr Flick, you have heard what I have said. I

do not know who is the moving party here - - -

MR FLICK:  Your Honour, I have benefitted, as has Mr Slater,

of course, from Your Honour's exchange. I would

endorse the approach of another attempt being made.

The formulation of the contentions is obviously primarily in our camp, rather than the

Commonwealth's camp. That formulation of the

contentions will obviously throw up with greater

precision the need for the facts that Your Honour

has identified -

HIS HONOUR:  I think that is absolutely right and will make

the Court itself more comfortable in seeing what it

is about.

MR FLICK:  I think the questions may stay, they may or may

not stay, but the contentions will focus attention

upon what the facts are which are relevant and the

broader and the narrower the contentions are, the

greater or less Your Honour's concern may be with

the facts. I think that is the starting point.

Obviously the Commonwealth can and should be added

as a defendant to the proceedings. We can do

nothing as to the attitude, rightly or wrongly,

taken by the Commonwealth as to a conditional
appearance but it may be that once the contentions

are framed, and framed with some particularity, the

Commonwealth may rethink that position.

HIS HONOUR:  I must say, just off the top of my head, I

would have thought that, except for some limited

purposes, that the Federal Commissioner really is

not even a relevant party. After all, these moneys

presumably have gone into consolidated revenue and

it is the Commonwealth that would be asked - - -

MR FLICK: Yes, we take Your Honour's criticism, but I

repeat, Your Honour, and I will only do it once,

that if the contentions are framed so that

Premier· 17 29/10/92

Your Honour's questions are answered, such as the law is invalid because it is not a law with respect

to taxation or it is a law which attempts to,

without formulating it now, redistribute moneys
which were paid under an unconstitutional statute,

or it is a law which effects an acquisition of
property namely, and it is unjust because, that

sort of formulation would cure a lot of the

problems.

HIS HONOUR:  But I think there will have to be at least one

further question and that is the effect of this

agreement. No doubt the form of that question will

depend upon what the precise contentions of the

parties· are and where it fits into the overall

scheme.

MR FLICK:  Your Honour, I would ask, as has Mr Slater, for a

further indulgence to cure the omissions.

HIS HONOUR:  There is no problem about that at all. What

about this question of parties, though, that

worries me, that is the question of the conditional

appearance?

MR FLICK:  Your Honour, we can add the Commissioner. We can

serve the summons but they would require, perhaps,

time after the draft stated case has been served

upon them to form a view. So it may be that the

length of the adjournment is a bit extended.

HIS HONOUR:  Yes, I am entirely in your hands in terms of

adjournments.

MR FLICK:  I do not think we require leave to add a

defendant, so that can be done, and I would seek an

adjournment for, say, four weeks to enable

sufficient time to restate the case and serve the

Commonwealth.	It may or may not have separate
representation.

HIS HONOUR:  What about the outstanding summons and this

question of a conditional appearance?

MR FLICK: Like Mr Slater, that is a question better

addressed to him, Your Honour.

HIS HONOUR:  Mr Slater, it does raise a real question as to

what the effect of the determination would be on a

party who has never submitted to the jurisdiction

of the Court. How can the Commissioner or the

• Commonwealth, if it is added, be bound by a

determination when it has never submitted to the

jurisdiction of the Court?

MR SLATER: Perhaps I should have a discussion with my

friend about the practical solution to that,

Premier 18 29/10/92

Your Honour. One solution might be to confine the

matter to one plaintiff on the basis that the

matter is tested in relation to all those who are

in a like position.

HIS HONOUR: This action was obviously commenced before

assent was given to the legislation.

MR SLATER: Before it was conceived, I think, Your Honour.

HIS HONOUR: Before it was conceived, and perhaps that

explains why you have all these plaintiffs in a

schedule, I suppose, to avoid commencing all these

actions. But off the top of my head, I cannot

think of any practical effect it would have if the

action had been commenced the day after the

legislation had started.

MR SLATER:  Our problem lies with the multiplicity of

plaintiffs and the lack of identity and perhaps

between us we can resolve that in some way which

will - - -

HIS HONOUR:  I appreciate that. It is really a very

technical issue. It is a question of form rather

than substance -

MR SLATER:	The parties point, Your Honour?
HIS HONOUR:	The parties point, yes.

MR SLATER: It is a very technical issue, Your Honour.

HIS HONOUR:  But this Court itself has made some adverse

comments about other courts not having its record

in proper order and it is a case of what is good

for the goose is good for the gander, I think. The record in this Court should also be in proper form.

MR SLATER:  We take that point, Your Honour.

HIS HONOUR:  How long would you like it to be adjourned for?

I will be out of Canberra for two weeks next.

MR SLATER: Bearing in mind, Your Honour, that both of us

have a large constituency to serve, because my

friend has not only 150 clients but also five firms

of accountants and X number of solicitors, and we

on our part have a variety of officers who all want

to have their say on the matter - - -

HIS HONOUR:  Mr Slater, there is no problem at all, as far

as I am concerned, about putting it over for a

month or more.

Premier 19 29/10/92

•

,

MR SLATER:  Something like a month or a bit more,

Your Honour.	When is Your Honour next conveniently
in Sydney?

HIS HONOUR:	Would a month be sufficient for you?
MR SLATER:	I think so, Your Honour.

HIS HONOUR: Otherwise I will be in Canberra in the first

couple of weeks in December and then it is bringing

up around the Christmas period .after that.

MR SLATER: Perhaps 26 November, Your Honour.

HIS HONOUR:  Very well. I will adjourn this matter until

26 November and costs - reserve the question of

costs?

MR SLATER:  Yes, Your Honour.

HIS HONOUR: Costs will be reserved.

AT 10.48 AM THE MATTER WAS ADJOURNED

UNTIL THURSDAY, 26 NOVEMBER 1992

...

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Premier 20 29/10/92