Tetron International Pty Ltd v A.B. Luckman (Collector of Customs, Victoria)

[1985] FCA 382

Re: TETRON INTERNATIONAL PTY. LTD. and GRAPSAS IMPORTS PTY. LTD.
And: A.B. LUCKMAN (COLLECTOR OF CUSTOMS, VICTORIA); GRAEME ERNEST MINNIECE and
COMMONWEALTH OF AUSTRALIA
V. No. G 50 of 1985
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Northrop J.

CATCHWORDS

Administrative Law - judicial review - forfeiture of goods - notice of seizure of goods pursuant to the Customs Act.

Jurisdiction - whether relief sought at common law and pursuant to Judicial Review Act can be determined by Federal Court - test to determine the extent of the Federal Court's accrued jurisdiction - determining factor not the nature of the remedy but whether the claims form part of the one controversy - common substratum of facts.

Practice and Procedure - leave to amend application - exercise of discretion.

Administrative Decisions (Judicial Review) Act 1977 ss.5, 8, 9, 13, 15, 16

Customs Act 1901 ss.203, 205, 208A, 229

Federal Court of Australia Act 1976 ss.21, 22, 32

HEARING

MELBOURNE
#DATE 7:8:1985

JUDGE1

In these proceedings under the Administrative Decisions (Judicial Review) Act 1977, the "Judicial Review Act", the applicants are seeking orders of review of decisions made pursuant to s.203 of the Customs Act 1901 by an authorized person to seize goods which he claims he believed on reasonable grounds to be forfeited goods under the Customs Act. After some initial confusion, the position has cleared and for present purposes it is sufficient to state the relevant facts in a simple form. Early in the year 1985, each of the applicants imported into Australia goods from Taiwan. The goods so imported included PVC briefcases, hat and coat racks, wooden wash stands and PVC leather expanding attache cases. On 2 April 1985, the respondent Minniece, an authorized person under s.203 of the Customs Act, issued three notices of seizure under that section with respect to the goods so imported. Two of the notices were directed to the applicant Tetron International Pty. Ltd. and one was directed to the applicant Grapsas Imports Pty. Ltd. The details of the notices need not be set out. It is sufficient to say that in each notice Minniece stated the reason for seizure in similar form as follows:

"I, GRAEME MINNIECE, BEING AN AUTHORIZED PERSON BELIEVE ON REASONABLE GROUNDS THAT THE GOODS ARE FORFEITED GOODS BECAUSE (i) PURSUANT TO SECTION 229(1)(a) OF THE CUSTOMS ACT 1901, ... (the goods) ... WERE SMUGGLED AND/OR UNLAWFULLY IMPORTED AND

(ii) PURSUANT TO SECTION 229(1)(i) OF THE SAID ACT, IN RESPECT OF THE SAID ... (goods) ... (a) THERE WAS PRODUCED TO AN OFFICER OF CUSTOMS, AN INVOICE ... WHICH IS FALSE OR WILFULLY MISLEADING IN THAT, ... AND (b) THERE WAS MADE AN ENTRY ... WHICH IS FALSE IN THAT THE CUSTOMS VALUE SPECIFIED ON THAT ENTRY IS UNDERSTATED AND THE DUTY PAYABLE IS UNDERSTATED."

1. The Customs Act specifies detailed procedures that may be followed where goods are claimed by Customs as being forfeited under s.229 of the Customs Act. A summary of those procedures has been given in a number of judgments and for present purposes it is sufficient if I repeat what I said in French v. O'Connor on 23 May 1985, unreported. If Customs, claiming goods are forfeited under s.229 of the Customs Act, refuse to deliver goods to the "owner", the "owner" could institute proceedings in the appropriate Court seeking the recovery of those goods possibly by an action for conversion or detinue. That action could be instituted even though no notice of seizure under s.203 had been given. In that action, the Court would determine whether the goods were forfeited goods under s.229.

2. If notice is given to the "owner" of seizure under s.203, then, unless the "owner" gives notice under s.205, the goods are deemed to be condemned as forfeited to the Crown without any further proceedings being necessary. In those circumstances, and provided there has been compliance with the requirements of the Customs Act, at the very latest, the ownership in the goods is transferred to the Crown upon the statutory condemnation. If the "owner" does give notice under s.205, there is a second opportunity by which the statutory condemnation may take effect. In the absence of the "owner" commencing an action for the recovery of the goods, notice may be given under s.208A and if within the period of four months referred to in that section the "owner" does not bring an action in the appropriate Court for the recovery of the goods, the statutory condemnation occurs. On this analysis, the important matter to note is that a dispute as to whether the goods are forfeited to the Crown under s.229 is determined by legal proceedings brought by the "owner" in the appropriate Court.

3. Different consequences follow where proceedings are commenced under the Judicial Review Act seeking an order of review of a decision to seize goods under s.203 of the Customs Act. The essential issue in proceedings under the Judicial Review Act is whether there were reasonable grounds upon which the authorized person could base a belief that the goods were forfeited goods. Normally, those proceedings would not determine the issue of whether the goods were forfeited goods or not. Normally, in those proceedings no order would be made for the goods to be delivered up to the "owner"; see French v. O'Connor, above, and Brunetto v. Collector of Customs, Federal Court of Australia, Toohey J., 12 December 1984, unreported.

4. In the present proceedings, the applicants are moving the Court for leave to amend their application to include a claim based on detinue, for orders for the delivery up to them of the goods seized or payment of their value and for damages for the detention or conversion of those goods. The applicants are requesting the Court to exercise the accrued jurisdiction of the Court and in the exercise of that jurisdiction are seeking the determination of the issue of whether the goods seized are in fact goods forfeited under s.229 of the Customs Act.

5. On 27 June 1985, the Court, as presently constituted, allowed the motion and gave leave to the applicants to amend their application in the manner sought. At the same time, the Court gave leave to the applicants to add respondents to the application. At the same time, the Court announced that it would publish its reasons for allowing the motion at a later date. Those reasons are now published.

6. All necessary parties are before the Court. The respondent Minniece is the person who made the decisions sought to be reviewed. The respondent Luckman is the Collector of Customs, Victoria, and is the person named in the notices of seizure as the person to whom notice of claim for the goods is to be given. The third repondent is the Commonwealth of Australia.

7. The motion came on for hearing on 14 June 1985, but was adjourned to enable notices to be given under s.78B of the Judiciary Act 1903. The necessary notices were given, but no Attorney-General has sought to intervene in these proceedings or to have the proceedings removed to the High Court.

8. Counsel for the applicants contended that under s.16 of the Judicial Review Act, the Court had jurisdiction and power to determine the issue of whether the seized goods are forfeited goods under s.229 of the Customs Act. He referred in particular to paragraph 16(1)(c) of the Judicial Review Act which provides:
   
   

"16. (1) On an application for an order of review in respect of a decision, the Court may, in its discretion, make all or any of the following orders:

(a) ...

(c) an order declaring the rights of the parties in respect of any matter to which the decision relates;

(d) ...".

Counsel referred also to s.22 of the Federal Court of Australia Act 1976:

"22. The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided."

Reference should be made also to s.21 of the Federal Court of Australia Act 1976:

"21. (1) The Court may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

(2) A suit is not open to objection on the ground that a declaratory order only is sought."

1. In my opinion, those sections do not assist the applicants. The Judicial Review Act is remedial legislation and should be construed accordingly. Its purpose is to enable persons aggrieved by decisions of an administrative character made under an enactment to force the person making the decision to comply with the requirements of law. Applications for review are limited to the grounds specified in s.5 of the Judicial Review Act. The Judicial Review Act does not, and is not intended to, empower the Court to exercise a discretion conferred by an enactment on some other person. Under the Administrative Appeals Tribunal Act 1975, the Administrative Appeals Tribunal constituted under that Act is empowered to exercise a discretion conferred by other enactments upon other persons. The provisions of the Administrative Appeals Tribunal Act and the Judicial Review Act are complimentary. In the exercise of its powers under the Judicial Review Act, the Court must be careful not to usurp the powers conferred upon other persons. To complete the scene, it must be remembered that the Ombudsman Act 1976 is the third Act designed to widen the scope of remedies conferred upon citizens in ensuring the fair and proper administration of the Executive Government.

2. In my opinion, paragraph 16(1)(c) of the Judicial Review Act does not empower the Court to make declarations on whether seized goods are forfeited goods under s.229 of the Customs Act. That section specifies goods which shall be forfeited to the Crown. No person makes a decision that goods are forfeited to the Crown. The Customs Act prescribes procedures to be followed where Customs or an officer of Customs claims goods are forfeited under s.229 of the Customs Act. In addition to the procedures mentioned earlier in these reasons, the Customs Act contains provisions relating to the releasing of goods upon security being given. In addition, Part XIV of the Customs Act specifies procedures by which Customs may institute legal proceedings, referred to in that Part as Customs Prosecutions, for the recovery of penalties under the Customs Act and for the condemnation of goods seized as forfeited. The Customs Act vests jurisdiction in State Courts to hear and determine those legal proceedings. Apart from these provisions, the Customs Act is based on the requirement that in the case of dispute, the issue of whether goods are forfeited under s.229 of the Act are to be determined by legal proceedings brought in the appropriate Court. The Customs Act, apart from the provisions of Part XIV, does not confer jurisdiction on any Court to determine that issue. Thus s.32 of the Federal Court of Australia Act does not confer jurisdiction on the Federal Court to determine that issue in proceedings otherwise properly brought in the Federal Court; see Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 CLR 457.

3. It is true that in matters of practice and procedure the Federal Court has power to make orders pursuant to powers conferred upon it by the Federal Court Act. It is necessary however that the proceedings in the Federal Court are proceedings under other legislation such as the Judicial Review Act. Thus in proceedings under the Judicial Review Act, the Federal Court may exercise powers conferred upon it by s.23 Federal Court of Australia Act and is not limited to the powers conferred in this regard by s.15 of the Judicial Review Act. Sections 21 and 22 of the Federal Court of Australia Act are wide in their application; see for example, McLeish v. Faure (1979) 40 FLR 462 at pp 471-476. The application of those powers however, is limited to matters properly before the Court and to claims properly brought by a party. They do not confer a jurisdiction upon the Federal Court. Section 22 does not empower the Court to determine substantive matters between parties when there is no jurisdiction for those matters to be heard and determined by the Court. In the present case, s.22 empowers the Court to grant all appropriate remedies in the exercise of its jurisdiction whether that jurisdiction is expressly conferred upon it by an enactment or pursuant to the accrued jurisdiction. In particular, in the present proceedings, that section would enable the Court to make all appropriate orders on the claims based upon conversion and detinue.

4. The major authorities concerning the accrued jurisdiction of the Federal Court are Philip Morris Inc. v. Adam P. Brown Male Fashions Pty. Ltd., above, Fencott v. Muller (1983) 57 ALJR 317 and Stack v. Coast Securities (No. 9) Pty. Ltd. (1983) 57 ALJR 731. In Stack's case, Mason, Brennan and Deane JJ., commencing at p 740, discussed the authorities upon which the concept of accrued jurisdiction is based and how the discretion conferred upon the Court to apply the accrued jurisdiction should be exercised. At p.742 they said:
   
   

"In this, as in other cases, the recurrent problem is to identify what it is that falls within the Federal Court's accrued jurisdiction. The majority judgment in Fencott v. Muller (1983), 57 ALJR 317, at pp 331-332, provides this assistance in reaching an answer:

'What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.'

Barwick C.J. in Philip Morris (1981), 55 A.L.J.R. 120, at p.125, had expressed a similar idea, stating that the exercise of the accrued jurisdiction 'is discretionary and not mandatory'. In expressing this opinion, Barwick C.J. expressly acknowledged that the Federal Court had a discretion to allow the non-federal claims to be determined in a State court. His Honour was speaking with particular reference to the exercise by the Federal Court of the jurisdiction conferred by s.86.

It is for the Federal Court to determine how the discretion should be exercised in the present causes. In exercising this discretion it will have regard to the considerations mentioned in Fencott v. Muller, supra. In ordinary circumstances the Federal Court would also have regard to the fact that it is the one court with jurisdiction to resolve the whole of the controversy of which the federal issues are an element: see Philip Morris, at p.125, per Barwick C.J."

1. In determining whether accrued jurisdiction arises, the Federal Court must have regard to whether the non-federal claim under the accrued jurisdiction is non-severable from the federal claim. On this aspect, in the Philip Morris case, Mason J. said at p.512:
   
   

"The classification of a claim as 'non-severable' does not necessarily mean that it is, or must be, united to the federal claim by a single claim for relief, though this is a common illustration of a non-severable claim. The non-severable character of the attached claim may emerge from other aspects of the relationship between the federal and the attached claim. For example, it may appear that the resolution of the attached claim is essential to a determination of the federal question. Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction."

1. It should be noted that in that passage the reference to "attached claim" is to be read as a reference to the non-federal claim coming within the accrued jurisdiction. That passage was quoted and approved in Fencott v. Muller by Mason, Murphy, Brennan and Deane JJ. at p 330.

2. In determining whether the Court has accrued jurisdiction in cases similar to that presently before the Court, it is helpful to see whether the non-federal claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In the present case, the essential issue between the parties is whether the goods seized are forfeited to the Crown under s.229 of the Customs Act. The federal claim is based on the review of the decision by the respondent Minniece to seize the goods. This involves a consideration of whether the respondent Minniece had reasonable grounds for believing that the goods are forfeited goods. Of necessity, from the affidavits filed in these proceedings, this involves a consideration of facts giving rise to the question of whether the goods are forfeited goods under s.229 of the Customs Act. The claims based on detinue and conversion, of necessity, will involve a consideration of facts giving rise to the question of whether the goods are forfeited goods under s.229 of the Customs Act. In my opinion, the federal claim under the Judicial Review Act and the non-federal claim based in detinue and conversion so depend upon common transactions and facts that they arise out of a common substratum of facts. In my opinion, the federal claim and the non-federal claim are within the scope of one controversy between the parties and the Federal Court is the only Court which has jurisdiction and power to determine the whole of that controversy; see s.9 of the Judicial Review Act.

3. In considering the question of accrued jurisdiction in this case, consideration was given to the fact that the jurisdiction conferred upon the Federal Court by the Judicial Review Act is of a special kind. In the exercise of that jurisdiction, the Federal Court is not determining the substantive issue between the parties being the matters which give rise to the seizure of the goods, namely whether the goods are forfeited goods or not. The jurisdiction conferred by the Judicial Review Act is with respect to and arises out of the exercise of the discretion conferred upon the person who made the decision under s.203 of the Customs Act. The jurisdiction of the Federal Court is limited, namely to determine whether the decision has been made according to law. In that respect, the jurisdiction is very similar to the original jurisdiction conferred upon the High Court of Australia by s.75(v) of the Constitution, namely matters in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth.

4. In the present case, counsel for the respondents submitted that because of the nature of the jurisdiction conferred upon the Federal Court by s.8 of the Judicial Review Act, there was no basis for the Federal Court to exercise an accrued jurisdiction to determine substantive matters arising between the applicants and the Commonwealth of Australia.

1. In my opinion, that submission should be rejected. In the exercise of the jurisdiction conferred by s.75(v) of the Constitution, the High Court regularly issues prerogative writs against persons who are not officers of the Commonwealth. The essential requirement for this to be done is that in the same proceedings an officer of the Commonwealth is a proper party. Likewise, once the High Court is exercising original jurisdiction conferred upon it, that Court is "clothed with full authority essential for the complete adjudication of the matter and not merely the interpretation of the Constitution ... . Once jurisdiction is acquired by the Court, that jurisdiction is not lost by reason of the rejection of the constitutional point ..."; per Starke J. in R. v. Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at pp 465-6. The fact that different remedies are available under the non-federal claim to those available under the federal claim and that different parties may be involved does not make the claims severable. The determining factor is whether the claims form part of the one controversy between or among the parties and essentially this depends upon whether the claims so depend on common transactions and facts that they arise out of a common substratum of facts.

2. In my opinion, once a federal claim is properly before the Federal Court, that Court has a discretion to exercise its accured jurisdiction even though the remedies available under the federal claim are restricted while the remedies available under the non-federal claim are unrestricted and the parties under the two claims are different. To adapt the words of Starke J., once jurisdiction with respect to the non-federal claim has been attracted, the Federal Court is clothed with full authority essential for the complete adjudication of the matter and not merely adjudication of the federal claim. It should be remembered however, that the federal claim must be a bona fide and substantial claim. In the present case, there is no suggestion that the federal claim by the applicants is not bona fide. Certainly, it is a substantial claim.

3. Counsel for the respondents, while not denying the power of the Court to give the leave sought in the motion, submitted that in the exercise of its discretion, the Court should not give that leave since it added new parties and new causes of action to existing proceedings. He relied upon authorities such as Raleigh v. Goschen (1898) 1 Ch D 73 and Levy v. Norton-Culhane (1928) 28 SR(NSW) 302. In those cases, leave to add additional parties and additional causes of action was refused. I do not find those authorities of assistance in determining the motion. The purpose of s.22 of the Federal Court of Australia Act is to enable the Federal Court to determine all matters in controversy between parties so as to avoid multiplicity of proceedings concerning any of those matters. To give effect to that purpose, the Court exercised its discretion and granted the relief sought in the motion.

4. For these reasons, the Court exercised its discretion to allow the applicants to bring their claims based in detinue and conversion in the Federal Court.