Reasons of the primary judge
153 The primary judge observed that the legislation constituting the Scheme did not expressly limit the time by which a suit for the recovery of levies or additional levies owing under the Scheme must be commenced. To the extent that Coal LSL sought the imposition of civil penalties, the action was subject to a six year limit contained in s 82(2) of the Regulatory Powers Act, which applied by virtue of s 13A of the Collection Act and s 49A of the Administration Act.
154 The primary judge said that Hitachi had not made submissions elucidating its pleaded reliance on s 79 of the Judiciary Act as the mechanism by which s 14 of the State Limitation Act could apply: LJ, [254]. Her Honour said that she accepted the submissions of Coal LSL that s 79 may operate in combination with s 64 to "pick up" limitation laws and that, according to the approach taken by the High Court "s 64 and not s 79(1) controls the question as to whether or not a State limitation law applies" to a Commonwealth entity. That approach, her Honour said, was applied by the High Court in Maguire v Simpson (1977) 139 CLR 362 (at 377) and Deputy Federal Commissioner of Taxation v Moorebank Pty Ltd (1988) 165 CLR 55 with differing outcomes: LJ, [257], [258]. Moreover, her Honour said that in Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 (at [36]) and Northern Territory v GPAO (1999) 196 CLR 553 (at [38]), the High Court had determined that s 79(1) could not operate because of the operation of s 64. The primary judge concluded that a State or Territory limitation law would not be picked up by s 79(1) of the Judiciary Act in a suit for the recovery of the levy, and that s 64 was controlling on the question of whether s 14 of the State Limitation Act applied: LJ, [259].
155 In addressing that question, the primary judge said that s 64 could not be construed as intending to indirectly apply the provisions of a State law to circumstances where the application of the State law would be invalidated by reason of inconsistency with a law of the Commonwealth under s 109 of the Constitution: LJ, [260] (citing Moorebank (at [63]) and Dao v Australian Postal Commission (1987) 162 CLR 317 (at 331 - 332)).
156 The primary judge summarised the facts and outcome in Moorebank (considered below) and identified "marked similarities" between that case and the present. Her Honour placed particular emphasis on the discretion conferred on Coal LSL under s 6 of the Collection Act to extend the time by which a levy must be paid, concluding that the State Limitation Act would "intrude on the operation of the Scheme". That was because if Coal LSL granted an extension of time for payment of the levy to a date after expiry of the limitation period, there would be a bar on recovery: LJ, [268].
157 The primary judge went on to consider Hitachi's submissions about the simplicity of the Scheme for the collection of levies, but said that that simplicity did not of itself preclude a finding that Parliament intended the Scheme to "operate exclusively to cover the field": LJ, [270]. Her Honour continued:
271 I am of the view that the provisions of the Collection Act do, in their terms, cover the field and do comprise a comprehensive code. I accept the applicant's submission that while the regime may not involve the intricacies of other Federal tax statutes, this does not mean it lacks comprehensiveness nor that the analysis in Moorebank is inapplicable.
272 The regime provides for:
(a) the setting of a levy (ss 4 - 6 of the Levy Act);
(b) the levy being calculated based on the eligible wages of eligible employees (s 3B of the Collection Act);
(c) the levy being payable by the employers of the eligible employees (ss 4 and 6 of the Levy Act), on a monthly basis (s 4 of the Collection Act), together with the requirement to make 'returns' monthly, and to provide audited reports annually (ss 5 and 10 of the Collection Act);
(d) the applicant being empowered to extend the time for payment of an amount of levy, or to permit levy to be paid by instalments (s 6 of the Collection Act);
(e) the applicant being empowered to seek an audited report of accounts (ss 10, 10A and 10B of the Collection Act), sue for recovery of unpaid levy (ss 9(2) and 11(1)(d) of the Collection Act), and also to seek civil penalties for non-compliance (s 13A of the Collection Act, s 49A of the Administration Act);
(f) the applicant being empowered to make compulsory enquiries to determine compliance with the regime (s 52A of the Administration Act) and the Commissioner of Taxation being similarly empowered (ss 12 and 13 of the Collection Act); and
(g) civil penalties being enforceable under Part 4 of the Regulatory Powers Act (s 13A of the Collection Act, s 49A of the Administration Act), where s 82(2) of Part 4 of that legislation provides that an application for civil penalty is to be made within six years of the alleged contravention.
158 The primary judge went on to reject Hitachi's submissions that there were other distinguishing features between the Scheme and the regime considered by the High Court in Moorebank. In addition, she noted again that Parliament had seen fit to incorporate a limitation of time for suits seeking orders for the imposition of civil penalties by incorporation of the Regulatory Powers Act. It mattered not, she said, that that limitation arose under the provision of another enactment, as it was nonetheless an indication that Parliament had turned its mind to the question of limitation periods, and the Regulatory Powers Act contained provisions that had previously been directly enacted within the Scheme: LJ, [275].
159 The primary judge concluded that the Scheme therefore covered the field for the purposes of applying s 109 of the Constitution and that s 14 of the State Limitation Act could not be picked up because it was inconsistent with a federal law: LJ, [276].
160 In light of that conclusion, it was unnecessary for the primary judge to consider Coal LSL's alternative argument that s 14 of the State Limitation Act could not apply because of the exception contained in s 10(3) relating to actions by the Crown for the recovery of (relevantly) a tax. On that topic, the primary judge reasoned as follows:
(1) As determined by the Full Court in Coal Mining Industry (Long Service Leave Funding) Corporation v Commissioner of Taxation (Cth) (1999) 85 FCR 416 (Coal LSL v Commr Taxation); the Collection Act was supported by s 82 of the Constitution, being the legislative competence of the Parliament to make laws in relation to taxation, and the collection of the levy was a delegation of the Commonwealth's tax collection role. However, the issue to be determined in that case was whether the applicant was a public authority, and the question of whether the levy was a tax was not a specific issue that needed to be decided.
(2) Other cases considered the features of payments that assisted in their characterisation as a tax. For example, in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263, Latham CJ (at 276) described a levy there in issue as a tax because it was:
… a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered.
(3) However, as Gaudron and Hayne JJ cautioned in Luton v Lessels (2002) 210 CLR 333 (at [10]), the presence or absence of features of that kind is not determinative. For example, in Roy Morgan Research Pty Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97, a superannuation guarantee charge was characterised as a tax notwithstanding that it was not imposed primarily for a revenue raising purpose.
(4) It was clear that the Scheme served a public purpose relating to the maintenance of an industry producing an important commodity (Coal LSL v Commr Taxation, [2] and [22]), and the enactment of the Scheme in 1992 served the objective of ensuring that the then unfunded liability for long service leave was accounted for without imposing an unreasonable burden on the industry. As identified in earlier authorities, a public purpose of the Scheme was the retention of labour, including by removing disincentives for employers to employ people with previous experience in the industry.
(5) The levy was to be distinguished from mechanisms for the enforcement of a pre-existing private liability: Luton, [14].
(6) Even if a narrow definition of public purpose (as opposed to the wider public interest) were employed, the levy would meet the description.
(7) The levy is a debt that is due to the Commonwealth and when collected it is placed in the Consolidated Revenue Fund (appropriations then being made out of the Consolidated Revenue Fund to the Fund established under s 44 of the Administration Act). Whilst that was not decisive, it supported a conclusion that the levy was exacted for a public purpose.
(8) Whilst the existence of a revenue raising objective was not a universal determinative feature, its absence will often be significant. As Gordon J (writing extra-judicially) explained, "the importance of a legislative objective to raise revenue is not without some controversy": Gordon J, "The Commonwealth's taxing power and its limits - Are we there yet?" (2013) 36(3) Melbourne University Law Review 1037.
(9) As to Hitachi's submission that the levy involved inter partes payment obligations: LJ, [304]:
Whilst this is strictly the case, this case is very different from Luton, where the payment related to a 'distinctly personal liability' arising out of the natural and moral obligation of a parent to support a child, in the form of a debt payable by the liable parent to the eligible carer. By contrast here, the levy is imposed on an employer of eligible employees at the relevant time, not because it is that employer (who is liable to pay the levy) who will ultimately hold the liability to pay out the entirety of those eligible employees' long service leave entitlements. Nor is there any connection between what the employer pays the employee (for which reimbursement will be made), and the contribution made by that particular employer on the eligible wages of that specific eligible employee. The concept of accrual of leave (and payment once leave has accrued) is conceptually separate in the Scheme from the liability of an employer to pay the levy - there is no statutory link between the two concepts.
(10) Hitachi had overstated concerns that the Scheme exacted a payment that was arbitrary and capricious in nature which was anathema to its characterisation as a tax.
(11) The levy was not akin to a fee for service as Hitachi had submitted. Hitachi had not identified what the "service" was, nor that there was a sufficient relationship between the liability to pay the charge and the provision of services: LJ, [311]:
… As submitted by [Coal LSL], here there is a collection of a 2.0% levy on eligible wages. Ultimately, some of those funds are used to fund long service leave entitlements to employees, but that is a contingency which may never arise, and even if it does arise, may arise with respect to an employer different to the one that made the contribution, or one who only made a small contribution. …
161 The primary judge went on to conclude that the word "Crown" in s 10(3) of the State Limitation Act must include the Crown in right of the Commonwealth and so Coal LSL met the description of the "Crown" within the meaning of s 10(3): LJ, [313] - [340]. Her Honour said: LJ, [337]:
By virtue of s 11(1)(d) of the Collection Act, [Coal LSL] may sue to recover levy and additional levy. It does so because its function is also to receive payments of levy and additional levy on behalf of the Commonwealth: ss 11(1)(b)-(c) of the Collection Act. As explained above, those are debts due to the Commonwealth, to be understood as monies due to be received by the Executive of the Commonwealth under s 81 of the Constitution. It follows that when the applicant sues for recovery of levy and additional levy, it is doing so on behalf of the Executive of the Commonwealth, or put differently, 'the Crown in right of the Commonwealth, in which the executive power is vested'.
162 The primary judge rejected Hitachi's argument that Coal LSL was an agent of the Commonwealth that is not entitled to Crown immunity. Questions of Crown immunity, her Honour said, were irrelevant to the proper construction of s 10(3) of the State Limitation Act.
163 As to s 18 of the State Limitation Act, the primary judge considered that its application depended on two questions: first, whether the additional levy constituted a "penalty" and secondly, whether a Commonwealth law is an "enactment" within the meaning of s 18. That analysis occurred in a context where there was no definition for either word contained in the State Limitation Act. The definition of the word "enactment" contained in s 14(1)(d) was not replicated in s 18.
164 The primary judge said that the correct constructional approach was that discussed in Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd (2012) 209 FCR 428. North and Flick JJ there identified three reasons why the word "enactment" when used in s 18(1) was confined to an enactment passed by the Parliament of New South Wales, summarised by the primary judge (at LJ [345]) as follows:
… First, the operation of the general rule of construction requires an interpretation which restrains the general words so that they would not apply to Federal proceedings; secondly, where there is a legislative intention to the contrary, the legislature must have provided so using express words, as in s 14(3); thirdly, the conferral by the Commonwealth Parliament of 'standing' under the applicable Federal law to specified persons to seek civil remedies and to order a 'pecuniary penalty' 'sits uncomfortably' with any conclusion that a State legislature may impose a limit upon the time within which this Court may exercise that power. …
165 The primary judge rejected Hitachi's submissions that the present case was distinguishable and that more recent judgments of the High Court in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 undermined the reasoning of the Full Court in Toyota Material Handling.
166 Having concluded that s 18 of the State Limitation Act did not apply to a penalty recoverable under a Commonwealth enactment, the primary judge considered it unnecessary to substantively determine whether an additional levy payable under s 7 of the Collection Act constituted a penalty at all, but said that she would answer the question in the affirmative if it were necessary to decide. That was because it was clear to her Honour that the additional levy was not akin to interest but rather was intended to have a deterrent or punitive effect: LJ, [353].
167 Lastly, the primary judge noted that if the additional levy did not meet the description of a "penalty" for the purposes of s 18 of the Limitation Act, it appeared to be arguable that it would meet the description of "interest on tax" and so would be caught by the exclusionary effect of s 10(3) in any event.