Werrin v The Commonwealth

The plaintiff, James Werrin, commenced an action in the High Court of Australia against the Commonwealth of Australia and the Federal Commissioner of Taxation seeking to recover £36 1s. 9d. paid as sales tax on secondhand goods sold in 1931. The plaintiff contended that this tax was unlawfully demanded and received. The case was presented to the Full Court by way of a special case stated for their opinion.

The legal issues before the court were whether the plaintiff was entitled to recover the sum paid as sales tax, and if so, whether any legislative provisions prevented such recovery. Specifically, the court had to consider whether the payment was voluntary, made under a mistake of law, and the effect of section 12A of the Sales Tax Procedure Act 1934-1935 on the plaintiff's claim. The validity of section 12A was also challenged.

A majority of the court, comprising Latham C.J. and McTiernan J., held that the plaintiff was not entitled to recover the money. Their reasoning was that the payment was made voluntarily under a mistake of law, and therefore, it was irrecoverable. Rich, Starke, and Dixon JJ. reached the same conclusion, but on the ground that the action was barred by section 12A of the Sales Tax Procedure Act 1934-1935, which they considered to be a valid enactment. Rich and Dixon JJ. further noted that section 75 of the Constitution did not preclude the Commonwealth Parliament from legislating to control the existence of causes of action against the Commonwealth.

The court ordered that judgment be entered for the defendants, with costs.