Commonwealth v SCI Operations Pty Limited; Commonwealth v ACIOperations Pty Limited (S16-1997 and S17-1997) [1998] HCA 20
26 March 1998
ORDER
Appeals allowed with costs.
Special leave for the respondents to cross-appeal granted and cross‑appeals dismissed with costs.
Orders of the Full Court of the Federal Court of Australia set aside and in lieu thereof appeals to that Court dismissed with costs.
2.
On appeal from the Federal Court of Australia
Representation in both matters:
S J Gageler with R P L Lancaster for the appellant (instructed by Australian Government Solicitor)
A Robertson SC with J E Griffiths for the respondents (instructed by Blake Dawson Waldron)
Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
CATCHWORDS
Commonwealth of Australia v SCI Operations Pty Limited
Commonwealth of Australia v ACI Operations Pty Limited
Customs and Excise - Customs Duties - Paid and lawfully retained - Entitlement to refund later arising under statute - Duty refunded on granting of Commercial Tariff Concession Order - Whether interest payable from the date of application for a Commercial Tariff Concession Order or from the date the Commercial Tariff Concession Order was made.
Judgments and Orders - Inclusion of interest in sum for which judgment given - Whether s 51A(1) of the Federal Court of Australia Act1976 (Cth) applicable.
Restitution - Interest on moneys received under statutory right to refund - Whether there is a right independent of statute to recover interest where defendant has been unjustly enriched by use of plaintiff's money - Whether interest payable from date of application for Commercial Tariff Concession Order.
BRENNAN CJ. Section 269C(1) of the Customs Act 1901 (Cth) ("the Act") authorises[1] the Comptroller-General of Customs to make an order in respect of particular goods where the Comptroller is satisfied that -
"(a) goods serving similar functions to the particular goods are not produced in Australia; and
(b) goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business".
An order made under sub-s (1) is known as a Commercial Tariff Concession Order[2] (a "CTCO"). It must be in writing and declare that "particular goods are goods to which a prescribed item specified in the order applies"[3]. The term "prescribed item" is defined[4] to mean -
"an item in Schedule 4 to the Customs Tariff Act 1987 that is expressed to apply to goods that a Commercial Tariff Concession Order declares are goods to…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
The Commonwealth v SCI Operations Pty Ltd [1998] HCA 20
Case
[1998] HCA 20
Decision Date
CaseChat Overview and Summary
The Commonwealth of Australia appealed to the High Court of Australia against a decision of the Full Court of the Federal Court of Australia concerning the entitlement of SCI Operations Pty Ltd and ACI Operations Pty Ltd to interest on customs duties that had been paid and subsequently refunded. The dispute arose because the respondents had paid customs duty on imported resin, which was later refunded after a Commercial Tariff Concession Order (CTCO) was granted. The core of the disagreement was whether interest was payable from the date of application for the CTCO or from the date the CTCO was made.
The legal issues before the High Court included whether section 51A(1) of the *Federal Court of Australia Act 1976* (Cth) authorised the inclusion of interest in a judgment sum when the principal moneys had been paid before judgment. Further, the court considered whether the *Customs Act 1901* (Cth) created a cause of action for interest in these circumstances, and if so, from what date such a cause of action arose. The respondents also argued for a right to recover interest on the basis of unjust enrichment, independent of statute.
The High Court reasoned that section 51A(1) of the *Federal Court of Australia Act 1976* did not impose a limitation preventing the award of interest on moneys paid prior to judgment, distinguishing the present case from prior interpretations of similar provisions. The court found that the language of section 51A(1) was broad enough to encompass such claims. Furthermore, the court determined that the relevant provisions of the *Customs Act 1901*, particularly in conjunction with the retrospective effect of CTCOs under section 269N(3), created a statutory right to a refund that accrued from the date the CTCO was deemed to have come into effect, which was prior to the actual granting of the order. This statutory right to a refund, when not satisfied promptly, gave rise to a claim for interest from the date the entitlement arose.
The High Court allowed the Commonwealth's appeals, setting aside the orders of the Full Court of the Federal Court. The cross-appeals by the respondents were dismissed. Consequently, the appeals to the Federal Court were dismissed with costs.
Orders
Orders of the court
1.
Appeals allowed with costs.
2.
Special leave for the respondents to cross-appeal granted and cross‑appeals dismissed with costs.
3.
Orders of the Full Court of the Federal Court of Australia set aside and in lieu thereof appeals to that Court dismissed with costs.
2.
Background
Background to the litigation
The questions which arise in the appeals turn principally upon a construction of the provisions of the Act with respect to refunds of duty and upon the construction of s 51A of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). Section 51A provides for the making of orders for the inclusion of interest in sums for which judgment is given.The facts The relevant facts are not in dispute and may be stated shortly. SCI and ACI imported certain resin for use in the production of plastic bottles for the packaging of carbonated beverages ("the goods"). The customs duty upon the goods was demanded and paid. Payment was not made under protest but SCI and ACI contended that without such payment they could not have obtained the release of the goods. In respect of periods commencing in each case on 1 September 1987 and ending on 3 June 1994, the amount of duty paid by SCI was $5,457,379.08 and by ACI was $6,695,068.03. Part XVA of the Act (ss 269B‑269S) is headed "COMMERCIAL TARIFF CONCESSION ORDERS"[44]. Section 269G provides for applications to the Comptroller‑General of Customs ("the Comptroller") for a commercial tariff concession order ("CTCO") in respect of the particular goods specified in the application. Section 269C states:"(1) Subject to this Part, where the Comptroller, after considering an application under section 269G for the making of an order under this section in respect of particular goods, is satisfied that:(a)goods serving similar functions to the particular goods are not produced in Australia; and(b)goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business;the Comptroller shall make a written order, declaring that the particular goods are goods to which a prescribed item specified in the order applies."It follows that the benefit of a CTCO applies in respect of the particular goods and its enjoyment is not limited to the particular applicant under s 269G. A CTCO in respect of particular goods is deemed to have come into effect on such day before the making of the CTCO as is specified in the order (s 269N(1)). In the present case, s 269N(3) required that the day to be so specified was the day occurring 28 days before the day on which the application for the CTCO was made. On 3 June 1994, a CTCO was made and it specified 1 September 1987 as the date upon which it came into effect. In the intervening period there had been lengthy litigation in the administrative review jurisdiction of the Federal Court. This history is recounted in the judgment of Beaumont and Einfeld JJ in the present litigation[45] and it is unnecessary to repeat it here.[44]Part XVA was repealed with effect from 1 November 1992 and a new Pt XVA inserted by s 10 of the Customs Legislation (Tariff Concessions and Anti‑Dumping) Amendment Act 1992 (Cth). However, as Gaudron J explains in her reasons for judgment, the parties have conducted the litigation on the footing that it involves accrued rights preserved by s 8 of the Acts Interpretation Act 1901 (Cth). This judgment refers in the present tense to the form of the Act which is relevant to this appeal.[45](1996) 69 FCR 346 at 351‑353; 139 ALR 595 at 597‑599.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
BRENNAN CJ
(dissent)
GAUDRON J
(dissent)
HUGH AND GUMMOW JJ
(dissent)
KIRBY J
(dissent)
The Commonwealth contends that s 51A(1) does not authorise an award of interest in the present cases because, in the circumstances:(a) there is and can be no judgment for the moneys claimed by SCI or ACI and, thus, there can be no judgment sum in which interest can be included;(b) the Act does not create a cause of action with respect to the money refunded to SCI and ACI; alternatively(c) if the Act does create a cause of action, no cause of action arose prior to 3 June 1994, the day on which the moneys were in fact paid.Section 51A: interest where moneys paid before judgment In essence, the Commonwealth’s first argument is that s 51A(1) does not authorise the payment of interest where the moneys claimed in legal proceedings are paid in full prior to judgment. It was put that it was held by Hewson J in The "Medina Princess"[26] that a provision which is not relevantly distinguishable from s 51A(1)(a), namely, s 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934 (UK)[27], had no application in that situation and that, properly construed, s 51A(1) is also inapplicable. [26][1962] 2 Lloyd’s Rep 17.[27]Subject to provisos which are not presently relevant, that section provided:" In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment". In The "Medina Princess", the moneys claimed were, in fact, paid prior to judgment. However, Hewson J did not base his decision on that aspect of the matter but, rather, on the view that the court had no power "to award interest upon a motion when it [had] not given judgment upon the principal sum claimed."[28] The decision in that case was subsequently criticised in Tehno‑Impex v Gebr Van Weelde Scheepvaartkantoor BV[29]. Later, in President of India v La Pintada Compania Navigacion SA[30], Lord Brandon of Oakbrook expressed the view that The "Medina Princess" was correctly decided, his Lordship apparently treating it as having decided that the provision in question in that case did not confer power to award interest on debts paid prior to judgment.[28][1962] 2 Lloyd's Rep 17 at 21.[29][1981] QB 648 at 665 per Lord Denning MR, 675-676 per Oliver LJ, 681 per Watkins LJ.[30][1985] AC 104 at 121. In my view, neither the language of s 51A(1) nor the decision in The "Medina Princess" dictates the conclusion that interest cannot be awarded on moneys paid prior to judgment. In this last regard, it may be noted that, in discussion as to costs in The "Medina Princess", Hewson J made this observation[31]:"I have not said that [the plaintiffs] were not entitled to interest. I said that this method of asking for it does not appeal to me."More significantly, however, the power conferred by s 51A(1), being a power conferred on a court, is not to be construed as subject to limitations which its terms do not require[32].[31][1962] 2 Lloyd’s Rep 17 at 23.[32]See Owners of “Shin Kobe Maru” v Empire Shipping Co Inc (1994) 181 CLR 404 at 421. See also FAI General Insurance Co Ltd v Southern Cross Exploration NL (1988) 165 CLR 268 at 283-284 per Wilson J, 290 per Gaudron J; Knight v F P Special Assets Ltd (1992) 174 CLR 178 at 185 per Mason CJ and Deane J, 202‑203 per Dawson J, 205 per Gaudron J; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 275-276 per Gummow J; Emanuele v Australian Securities Commission (1997) 71 ALJR 717 at 729 per Gaudron J; 144 ALR 359 at 376; Hyman v Rose [1912] AC 623 at 631 per Earl Loreburn LC.