Kapitany v Commonwealth of Australia [2006] FCA 111 | Case summary

"Where: (a) a notice is given to a person under subsection (7) in relation to an object; and (b) the person does not, within 4 months after the service of the notice, bring an action for recovery of the object; the object is forfeited." 8 Section 37 is in part as follows: "(1) Where: (a) a protected object has been seized under this Act; and (b) the object is not forfeited by section 36 or by or under this section; the owner … may bring an action against the Commonwealth in a court of competent jurisdiction for the recovery of the object on the ground that the object is not forfeited or liable to be forfeited. … (3) Where an action is brought for recovery of a protected object, the court shall determine, on a balance of probabilities, whether: (a) … (b) the object is liable to forfeiture by virtue of subsection … 14(1); and the court: (c) … (d) where paragraph (b) applies - shall order that the object is forfeited; (e) in any other case - may order the return of the object." Section 38(a) provides that where a protected object is forfeited, all title and interest in the object is vested in the Commonwealth without further proceedings. 9 Section 41(1) provides: "A power conferred by this Part shall not be exercised by an inspector in relation to a protected object of a foreign country unless the inspector believes on reasonable grounds that the Commonwealth has received from the Government of the country a request for the return of the object." Sub‑section (3) provides: "In any proceedings, the mere production of a document purporting to be signed by the Secretary to the Department and stating that the Commonwealth has received a request from the Government of a specified foreign country for the return of a specified protected object is prima facie evidence of the facts stated." 10 In his statement of claim, apart from reciting the relevant provisions of the Act, the applicant alleges that · he carries on business as a retailer and wholesaler of fossils · inspectors (members of the Australian Federal Police) seized objects owned by him following a search of various premises · he is unable to provide particulars of the objects because they are in the possession of the Police · notices of seizure given under s 36(2) of the Act were served on him, purportedly specifying the objects seized, and stating that one of the inspectors held the belief referred to in s 34 and that referred to in s 41, the foreign countries in question being Argentina and China · he gave notice to the appropriate person, Kevin Wohlers, in accordance with s 36(5), within the time prescribed · on or about 29 June 2005 Mr Wohlers notified him, in accordance with s 36(7), that if he did not bring an action for recovery of the objects within four months of the service of the notice, they would be forfeited · the instant proceeding was commenced in accordance with s 37 of the Act · the objects are not specimens of cultural heritage significance to Argentina or China because they are not rare specimens but are common specimens of the kind that are or have been frequently traded on the internet and at trade shows or markets in Hong Kong, the USA and Australia · the export of the objects is not prohibited by Argentine or Chinese law relating to cultural property, for reasons which are set out · the country of origin of some of the objects is not Argentina or China but India or Mongolia · by reason of the last three matters, the inspectors did not have reasonable grounds to believe that the objects were liable to be forfeited · accordingly, the objects are not forfeited or liable to be forfeited. 11 The respondent has not filed a defence. 12 The respondent's case is that the s 36(7) notice was served on the applicant on 30 June 2005, that the objects were forfeited under s 36(8) on 31 October, and that the Court does not have jurisdiction to entertain the application under s 37. The evidence establishes that the s 36(7) notice was posted to the applicant at his place of business and was received there on 30 June. In this connection the respondent calls in aid ss 28A(1) and 29(1) of the Acts Interpretation Act 1901 (Cth) (the AIA). The respondent relies on s 37(1)(b) of the Act, which it says, is a precondition to the entitlement to bring an action pursuant to that section. There is no power to waive the precondition, or to extend the time within which an action must be brought in order to avoid forfeiture under s 36(8). In this connection it claims that the applicant no longer has any entitlement to the objects, title thereto having vested in it under s 38(a). 13 The applicant first disputes the respondent's reliance on ss 28A(1) and 29(1) of the AIA. He then contends that s 37 does not have the effect claimed by the respondent. He submits that in a proceeding under s 37 the Court determines whether a protected object has been seized under the Act and whether it is forfeited by operation of s 36. He submits that there is a serious question to be tried as to whether the objects in question are liable to forfeiture. As appears from the statement of claim, he contends that the objects are not protected objects of a foreign country, their export was not prohibited by law of a foreign country relating to cultural property, and the inspectors did not have reasonable grounds to believe that the objects were liable to be forfeited. If the objects are not protected objects, their seizure was unlawful and they could not become liable to forfeiture under s 36. 14 The first question is when the s 36(7) notice was "served" on the applicant. Section 28A(1) of the AIA is in part as follows: "For the purposes of any Act that requires or permits a document to be served on a person, whether the expression 'serve', 'give' or 'send' or any other expression is used, then, unless the contrary intention appears, the document may be served: (a) on a natural person: (i) by delivering it to the person personally; or (ii) by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document … …"

"Where an Act authorizes or requires any document to be served by post, whether the expression 'serve' or the expression 'give' or 'send' or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post." 15 The respondent relies on evidence that the notice was posted in accordance with the requirements of s 29(1), and the evidence recorded at [12] that it was received at the applicant's place of business on 30 June 2005. It relies on this last‑mentioned evidence as proof to the contrary for the purposes of the concluding limb of s 29(1). The applicant did not contest this aspect of the "service" issue. If service by post (ie s 28A(1) of the AIA) was available to the respondent, its reliance on s 29(1) is made out. See Skalkos v T & S Recoveries Pty Ltd (2004) 141 FCR 107 at [22], [24]‑[25]. 16 The issue between the parties was whether service by post was available. The applicant contended that s 36 of the Act discloses a contrary intention for the purposes of s 28A(1) of the AIA. I cannot discern in s 36 any indication that service by post is not to be available in relation to a notice under sub‑s (7) thereof. 17 The applicant relied on sub‑s (8)(a), which speaks of notice having been "given" to a person under sub‑s (7). Sub‑section (7) requires the appropriate person to "serve" the notice. Sub‑section (8)(b) speaks of a failure to bring an action within four months after "service" of the notice. It was said that the contrast between "serve" and "service" on the one hand and "given" on the other shows that "serve" in sub‑s (7) requires personal service. In my view that contrast is too feeble to constitute a contrary intention. In any case, s 28A(1) of the AIA applies "whether the expression 'serve', 'give' or 'send' or any other expression is used". 18 The applicant also relied on the obiter observations of Gummow J in Secretary, Department of Social Security v Garratt (1992) 109 ALR 149 at 157‑158, approved in obiter by a Full Court in Secretary, Department of Social Security v O'Connell (1992) 38 FCR 540 at 551‑554. In my view Garratt is readily distinguishable. The statutory scheme in s 168(3) and (4) of the Social Security Act 1947 (Cth) (the SSA) was entirely different from that in the Act. Section 168(4) dealt with the time at which a determination upon internal review would take place. If the person concerned had sought review within three months after "a notice was given to the person … advising the person of the making of the previous decision", or if no such notice was given, the determination took effect on the date of the previous decision. Otherwise, the determination took effect on the date of the application for review. 19 Further, as Gummow J pointed out at 157, other sections of the SSA (eg s 163) made provision for notices to be given "personally or by post", whereas the provision in question referred to a notice being "given". 20 Unlike the present case, there was no provision in the SSA that required a notice to be given of a cancellation decision. Although the Act implicitly permitted the Secretary to serve such a document, and to serve it in accordance with s 28A of the AIA, there was no statutory link between that document and the notice of the previous decision referred to in s 168(4)(a). Thus in O'Connell at 552, the question whether the Secretary was entitled to serve a notice of cancellation in accordance with s 28A was treated as separate from whether notice had in fact been given of the previous decision for the purposes of s 168(4)(a). By contrast, s 36(7) of the Act expressly requires a notice to be served, and sub‑s (8) refers to the service of that notice. That is to say, the time period specified in sub‑s (8) begins to run on "the service of the notice" under sub‑s (7). This is not analogous to the legislative setting in Garratt, where the relevant provisions fixed a date which was "determinative of the right of persons in relation to pensions, benefits and claims under the Act": Garratt at 157. 21 It was submitted by the applicant, again by analogy with Garratt at 157, that a contrary intention was constituted by the fact that s 36(8) brought about the forfeiture of property. I do not think that constitutes a contrary intention. In Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96, speaking of a Queensland provision in the same form as s 28A, the High Court said: "Paragraphs (b) and (c) of s 42(1) contemplate the possibility of something less than actual receipt by the person to be served. As was observed by Tindal CJ in Bishop v Helps in relation to a comparable provision, although leaving notices at a place of abode or sending them through the post involve the possibility of non-receipt by the intended recipient: 'It was probably considered that the public convenience would be promoted by the present provision, and that its advantages would greatly outweigh the inconvenience which, in some few cases, might possibly arise from it.' Nevertheless, proof of the use of any one of the methods of service provided by s 42(1) constitutes proof of service for the purpose of the Hire Purchase Act …." 22 Repatriation Commission v Gordon (1990) 26 FCR 569 concerned a situation analogous to that in the present case. Service of a copy of a decision marked the commencement of the period within which an application for review could be made. Spender J held that the veterans' entitlements legislation did not evince an intention that service by post was not available. His Honour said at 577: "The object of service, in whatever form, is to bring the contents of the document or documents served to the attention of the person to be served. The mere fact that one might more confidently expect that aim to be achieved if personal service, as opposed to service by pre-paid post, is required, does not permit the conclusion that service by pre-paid post was intended to be excluded. Such a consideration would apply in every case. Accepting, as I do, that the veterans' entitlement legislation is benevolent in purpose, nonetheless in my view there is nothing in its provisions which manifests an intention to preclude service by pre-paid post of the documents that s 34(2) requires the Commission to cause to be served on the claimant or applicant." 23 My conclusions are that s 28A of the AIA was available to the respondent, the notice was served in accordance with s 29, and was delivered on 30 June 2005. 24 In case it might be thought that the application of s 28A has produced a harsh result in this case, I note four matters. First, as I have said, the notice was delivered to the applicant's business premises on 30 June 2005. Second, it was received by him, in the sense that he read it, on 5 July 2005, which gave him almost four months in which to commence proceedings. The four month period did not expire until 31 October. Third, according to the applicant's statement of claim, on or about 29 June 2005 Mr Wohlers notified him that if he did not bring an action for recovery within four months of service of the notice, the objects would be forfeited. Fourth, the applicant's counsel contacted the Department on 20 October and was informed of the Department's view that the period expired on 31 October. The file note recording the conversation states that counsel responded that "they would contemplate (bringing the action) by the end of the following week [ie 28 October 2005]". Notwithstanding this, the proceeding was commenced out of time. 25 The action against the Commonwealth for which s 37 provides is available only if two conditions are satisfied. The first is that a protected object has been seized under the Act. The second is that the object has not been forfeited by s 36. The action that is authorised by s 37(1) is one to recover the object on the ground that it is not forfeited or liable to be forfeited. In a case such as the present, the ultimate task for the court is to decide whether the object is liable to forfeiture by virtue of s 14(1). That involves determining the three matters prescribed by s 14(1): whether a protected object has been exported from a foreign country, whether the export was prohibited by a law of that country relating to cultural property, and whether the object has been imported into Australia. Section 37(3) prescribes what the court is to do in certain events. If it determines that the object is liable to forfeiture under s 14(1), it is required to order that the object is forfeited. If it finds that the object is not liable to forfeiture, it may order its return. 26 There is an oddity in the drafting of ss 34 to 37. Section 34 confers power to seize a "protected object" where the relevant belief exists. Section 36(2) and (5) and s 37 also use these words. Although s 36(8) speaks of "an object" and "the object", it is clear from s 36(5) that what sub‑s (8) calls an "object" is a "protected object". One of the questions for the Court under s 37(3) is whether what has been seized is a protected object. See par (b) and s 14(1)(a). Where the court finds that an object is not liable to forfeiture by virtue of s 14(1), it may order its return. This it may do if it is not liable to forfeiture because it is not a protected object within s 14(1)(a). Accordingly, it seems to me that "protected object" in s 37(1)(a) and "the object" in par (b) must include an object that is alleged to be a protected object. Similarly with s 34, which appears to contemplate that in some cases a seized object will not in fact be liable to be forfeited because, for example, it is not in fact a protected object within s 14(1)(a). 27 However, satisfaction of the two matters in s 37(1)(a) and (b) is a condition of the Court's jurisdiction. If there has been no seizure under the Act or if the object has been forfeited by s 36, the court has no jurisdiction to entertain a claim for the recovery of the object on the ground that it is not liable to be forfeited. If an action for recovery is not brought within four months after the service of a s 36(7) notice, the object is forfeited by s 36(8). It is no longer "liable to forfeiture" by virtue of s 14(1). The second condition in s 37(1) will not be satisfied, and there will be no entitlement to bring an action for recovery. If an action for recovery is brought within the four month period, the court must determine the matters described in [25]. 28 In deciding whether it has jurisdiction under s 37, the court may determine whether or not an object has been forfeited by s 36(8); that is to say, whether the person served with a s 36(7) notice has brought a recovery action within four months after service of the notice. But in determining whether jurisdiction exists, there is no occasion to enter upon the question whether or not the object is liable to forfeiture by virtue of s 14(1), namely whether the three conditions of liability to forfeiture are made out. That matter only arises in determining the merits of an action for recovery brought under s 37(1), once jurisdiction has been established. See sub‑s (3)(b). 29 The applicant's contentions recorded at [13] do not accommodate the important provision in s 27, set out at [6]. In ss 36 and 37 (amongst others) the word "forfeited" does not include "liable to forfeiture". This is reflected in s 37(1) itself, where par (b) speaks of "not forfeited by section 36" whereas the concluding part of the sub‑section speaks of an object not being "forfeited or liable to be forfeited". It is thus clear that s 27 makes irrelevant to the preliminary question posed by s 37(1)(b) the matters the applicant wishes to air, namely whether an object is liable to forfeiture. The sole question is whether the object has been forfeited under s 36. The applicant's objects have been. 30 An inspector's power to seize an object is not conditional on whether an object is in fact liable to forfeiture by virtue of s 14(1). Under s 34, an inspector may seize an object that he or she believes on reasonable grounds to be liable to forfeiture. 31 The respondent contends that the condition in s 37(1)(b) has not been satisfied. That contention should be upheld. The applicant did not bring his action within four months after the service of the s 36(7) notice. Accordingly, the objects were forfeited at the expiration of that period. There is no doubt that s 37 of the Act is a code in respect of the matters with which it deals. Accordingly, the applicant cannot raise in this proceeding or any other proceeding the first two of his claims: that the objects are not protected objects within s 14(1)(a) and that their export is not prohibited by the law of a foreign country within s 14(1)(b). Those questions are for the Court to determine in a proceeding brought within four months after the service of a s 36(7) notice. 32 The third claim the applicant seeks to make is that the inspectors did not have reasonable grounds to believe that the objects were liable to be forfeited under s 34. That is not an issue that arises under s 37. It may be that in an action brought within time under s 37 it could be raised under the court's accrued or associated jurisdiction. However it cannot be raised in an out of time proceeding purporting to be authorised by s 37. 33 The objection to competency should be upheld. The Court has no jurisdiction to entertain the application, which should be dismissed. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Kapitany v Commonwealth of Australia

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (5)

Cited By (1)