Parks Holdings Pty Ltd v Chief Executive Officer of Customs

THE LEGISLATION 5 Section 15 of the Customs Tariff Act 1995 (Cth) ('Customs Tariff Act') provides that 'Duties of Custom are imposed by this Act on … goods imported into Australia'. Section 16 establishes the mechanisms by which the 'duty in respect of goods must be worked out'. Section 132(1) says that, in general, the rate of any import duty payable on the goods is the rate of duty in force when the goods are entered for home consumption. The value of imported goods for the purposes of an Act imposing duty is their 'customs value' as determined by the Collector: s 159(1). 6 Section 30(1) provides that, with some variations in particular cases, goods are subject to the control of Customs until they are delivered into home consumption in accordance with an authority to deal under s 71B. Under s 68, all goods imported into Australia must be entered for home consumption, warehousing or transhipment. 7 Section 71A(1) provides, inter alia, that an import entry is a communication to Customs of information concerning goods to which s 68 applies that are intended for home consumption. An import entry must be made by the owner of the goods in an approved form and must be communicated to Customs in the specified manner: ss 71A(2), 71K. Where an entry in respect of goods has been given, Customs must give an import entry advice: s 71B(1). The import entry advice must include a statement to the effect that the goods are cleared for home consumption, warehousing or transhipment, or that they are directed for further examination: s 71B(2)(b), (3)(c). 8 Section 153 of the Customs Act provides for the recovery of duties, as follows: 'All duties shall constitute Crown debts charged upon the goods in respect of which the same are payable and payable by the owner of the goods and recoverable at any time in any court of competent jurisdiction by proceedings in the name of the Collector.' 'Owner', in respect of goods, is defined by s 4 to include any person holding himself or herself out to be the owner, importer, exporter, consignee, agent or person possessed of or beneficially interested in the goods. 9 Section 165 is as follows: '(1) When any duty has been short levied or erroneously refunded the person who should have paid the amount short levied or to whom the refund has erroneously been made shall pay the amount short levied or repay the amount erroneously refunded on demand being made by the CEO within twelve months from the date of the short levy or refund. (2) … (3) Where a rebate of duty … has been paid to a person and the whole or a part of the rebate was not payable to him, he shall repay the whole or that part, as the case may be, of the amount of rebate paid to him on demand being made by the CEO within 12 months from the date on which the rebate was paid.' 'CEO' is defined in s 4 of the Customs Act to mean the Chief Executive Officer of Customs. 10 Section 167 is in Div 4 of the Customs Act, which is headed 'Disputes as to duty'. Section 167 relevantly provides as follows: '(1) If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff … the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section. (2) The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid. … (4) No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times: (a) In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment …' 11 It is to be noted that s 167 refers to the 'Collector' and not to the CEO. The expression 'Collector' is defined in s 8(1) as follows: 'In this Act: (a) a reference to the Collector, or to a Collector, is a reference to: (i) the CEO; or (ii) the Regional Director for a State or Territory; or (iii) any officer doing duty in the matter in relation to which the expression is used …' 12 Section 273GA of the Customs Act was introduced into that Act in 1980, but the substance of the provision was originally enacted as Pt XII of the Schedule to the Administrative Appeals Act 1975 (Cth): see Collector of Customs v Gaylor Pty Ltd (1995) 35 NSWLR 649, at 652, per Clark JA; at 658, per Cole JA; Customs Amendment Act (No 3) 1980 (Cth), s 28. 13 Section 273GA(1) of the Customs Act states that, subject to the Act, applications may be made to the AAT for review of certain specified decisions made under the legislation. None of these is relevant for present purposes. However, s 273GA(2), (5), (6) and (7) are relevant. They provide as follows: '(2) Where a dispute referred to in subsection 167(1) has arisen and the owner of the goods has, in accordance with that subsection, paid under protest the sum demanded by the Collector, an application may be made to the Tribunal for review of the decision to make that demand and of any other decision forming part of the process of making, or leading up to the making of, that first-mentioned decision. … (5) An application may not be made to the Tribunal under subsection (2) unless the application is made within the time specified in paragraph 167(4)(a) or (b), whichever is appropriate. (6) Where the owner of goods has made an application to the Tribunal under subsection (2), he is not entitled to bring an action under subsection 167(2). … (7) Where, on an application made under subsection (2), the Tribunal has made a decision reviewing a demand made by the Collector, the proper duty payable in respect of the goods concerned shall be deemed to be: (a) the sum determined to be the proper duty by, or ascertained to be the proper duty in accordance with: (i) the decision of the Tribunal; or (ii) an order of a court on appeal from that decision; or (b) the sum paid under protest; whichever is the less.'

THE FACTS 14 The appellant is an importer of chemical products. It imported three shipments of petrochemical product called 'gas oil', in August, October and November 1996. The goods were described as 'Solvent X-370 of Philippines Origin'. The appellant entered the goods for home consumption under sub-heading 2710.00.90 of Sch 3 to the Customs Tariff Act. Goods within that classification ('Other') could enter Australia free of duty. The three shipments were duly cleared for home consumption. 15 On 27 November 1996, a decision was given by the Customs Tariff Chemist that the classification of Solvent X-370 was not 2710.00.90, but 2710.00.20, since the product was diesel fuel. The matter was referred to the Customs Investigation Branch and on 5 December 1996, a warrant was executed under s 198 of the Customs Act to seize documents from the appellant. Subsequently an expert opinion was obtained stating that Solvent X-370 was intended for use as diesel fuel. 16 On 19 May 1997, Mr Walker, describing himself as a delegate of the CEO, wrote to the appellant. Mr Walker stated that he had determined that the three shipments of goods had been incorrectly entered. Analysis of the imported product, which had been described as 'Solvent X-370', showed that it should have been classified as diesel fuel under sub-heading 2710.00.20 of Sch 3. In consequence, duty on the shipments had been short levied. The letter further stated that quantities and descriptions stated in the entries were incorrect. 17 The letter continued as follows: 'In accordance with Section 165 of the Customs Act 1901, I hereby demand the sum of $1,305,110.20, being the amount of Customs Duty short levied on the entries mentioned above, be paid within 14 days of the date of this letter. Enclosed are copies of Post Warrant Amendment entries for the three shipments the subject of this demand. These should be forwarded to your Customs Broker for lodgement with the [Australian Customs Service] in order to facilitate payment of the amount demanded. I draw your attention to the fact that Section 167(4) of the Customs Act 1901 enables the payment of duty payable in respect of any goods to be made "under protest".' 18 We were informed that the expression 'Post Warrant Amendment' is not to be found in the Customs Act. The three entries attached to Mr Walker's letter were computer-generated documents. Each contained a demand 'in accordance with section 165 of the Customs Act' for amounts short paid by reason of 'incorrect description, quantity and tariff classification'. The amount said to be payable in respect of the first shipment was $435,372.20, while the amounts payable in respect of the other two shipments were $440,994.61 and $428,743.44, respectively. 19 Following this letter, nothing substantial appears to have happened for a considerable time, although we were informed that negotiations took place between the parties during this period. The negotiations resulted in a deed of agreement between the CEO and the appellant, dated 1 April 1999. The deed recited that: 'The CEO has demanded payment from the Company in the sum of $1,305,110.25, being the total amount of duty which Customs alleges is outstanding on three importations into Australia of a product referred to in the three entries for home consumption as "Solvent X-370".' The deed also recited Customs' claim that the imported product was classifiable to sub-heading 2710.00.20 and that the CEO or another Collector was entitled under s 153 of the Customs Act to institute a proceeding in a court of competent jurisdiction to recover the amount of outstanding duty. 20 Under the deed, the appellant agreed to pay duty 'under protest (as demanded)' in respect of one of the three shipments by 30 April 1999 and to commence proceedings in the AAT within 30 days of payment: 'for a review of the decision to demand payment of duty on the relevant shipment and any other decision forming part of the process of making, or leading up to the making of, that first-mentioned decision'. Subject to any rights of appeal, the parties agreed that the AAT's determination should be binding in respect of all three shipments. Customs agreed to a stay of proceedings to recover the outstanding duty pending the AAT's determination and any appeal therefrom. 21 On 21 April 1999, the appellant paid the amount claimed as duty in respect of the first shipment under protest 'because the goods are a form of chemical solvent that should be classified to sub-heading 2710.00.90 as originally entered'. The record of payment has a notation from Customs: 'Accept Basis of Payment Under Protest'. 22 It might be thought curious that the appellant was prepared to pay any portion of the disputed duty under protest, rather than simply defend any proceedings that might be brought by the Collector pursuant to s 153 of the Customs Act. This is a case where the goods had been released to the importer, not one where payment of duty under protest was required to obtain their release. As Gummow and Callinan JJ asked rhetorically in Malika Holdings Pty Ltd v Stretton (2001) 204 CLR 290 ('Malika'), at 320 [97], why would an importer of goods take the initiative to invoke s 167(1) of the Customs Act, thereby giving rise to the adverse legal relationship preserved against it by s 167(1), when there was no need to do so? The answer in this case is apparently that on 4 December 1998, the Victorian Court of Appeal held that s 167 provided the only means by which an importer or other owner of goods was entitled to challenge the amount, rate and liability of goods to customs duty: Stretton v Malika Holdings Pty Ltd [1999] 2 VR 38. We were told from the bar table that it was this decision, which was ultimately overturned by the High Court (but not until 2001), that prompted the appellant to enter the deed of 1 April 1999. 23 On 26 April 1999 the appellant applied to the AAT for review of: 'The decision to demand the payment of duty in the amount of $435,372.20. The [appellant] has paid the amount demanded under protest … pursuant to s 167 of the Customs Act 1901.' The reason for the application was stated to be the appellant's contention: 'that the goods in relation to which duty was paid under protest [are] properly described as Solvent X-370 and should be classified to tariff sub-heading 2710.00.90 accordingly.' 24 On 16 September 1999, the appellant's legal representatives made a request for evidence to be provided of Mr Walker's delegated authority. Prior to that request being satisfied, the appellant had no specific reason to believe that the purported delegation to Mr Walker had not been valid and effective. 25 The hearing before the AAT occupied 16 hearing days over the period February to June 2001. On 15 March 2001, while the AAT proceedings were part-heard, the High Court decided Malika. The High Court held that in an action by the Collector pursuant to s 153 of the Customs Act to recover duty allegedly due, the owner of the goods may challenge the amount or rate of duty, whether or not the duty has been paid under protest pursuant to s 167(1) or an action for recovery has been brought by the owner under s 167(2). The judgments of the High Court analysed the operation of ss 153, 165 and 167 of the Customs Act. Argument in the AAT took account of the holding and reasoning in Malika.

THE AAT'S DECISION 26 In its reasons, the AAT identified two issues for consideration. The first was whether Mr Walker had delegated authority to issue the demand pursuant to s 165 of the Customs Act. The second was whether the gas oil imported by the appellant was properly classified as 2710.00.90 (no duty) or 2710.00.20 (dutiable). 27 However, following the High Court's decision in Malika, the CEO had raised a third issue before the AAT. Based on the reasoning in that case, Customs submitted that a demand under s 165 was unnecessary for the CEO to recover an amount short levied by reason of misinformation supplied, or a fraud committed, by an importer of goods. The AAT upheld this submission, finding that a director of the appellant had committed a fraud on Customs in connection with the importation of the goods. 28 Having made this finding, the AAT concluded that since Mr Walker was a 'Collector' as defined in s 8 of the Customs Act, the demand made by him on 19 May 1997 was valid even if he lacked delegated authority to make a demand under s 165. It followed, so the AAT held, that it had jurisdiction to consider the correct classification of the imported goods. 29 Notwithstanding this conclusion, the AAT considered whether there had been a valid delegation of authority to Mr Walker to make a demand under s 165 of the Customs Act. It found that, although there had been a clerical error in the instrument of delegation, it was valid and effective to authorise Mr Walker to make the demand under s 165 on behalf of the CEO. 30 The AAT then dealt at considerable length with the question of classification. It analysed a large volume of material, including evidence from experts. The AAT concluded that the goods were properly classified under sub-heading 2710.00.20 and therefore attracted duty as demanded by Mr Walker.

THE PRIMARY JUDGMENT 31 The primary Judge first addressed the issue of whether there had been a valid demand by Mr Walker. He noted that although there had been some confusion in the appellant's position, ultimately it did not challenge the jurisdiction of the AAT. Rather, its position was that the AAT had jurisdiction to determine whether there was a valid demand and that it should have concluded that the demand was invalid. The appellant contended that, had the AAT reached this conclusion, it should have refrained from considering the merits of the classification dispute since there was no basis for the demand for payment of the duty allegedly due in respect of the importation. While the appellant recognised that it might be open to the CEO to claim the amount allegedly due pursuant to s 153 of the Customs Act, that was said to be a matter for another forum and another day. 32 The primary Judge held, contrary to the AAT's finding, that there had been no valid delegation of power to Mr Walker enabling him to issue a demand pursuant to s 165 of the Customs Act. Nevertheless, his Honour held that, having regard to s 153 and the High Court's decision in Malika, the demand made by Mr Walker was valid and effective. His Honour said that as Mr Walker was a 'Collector' as defined in s 8 of the Customs Act, it was open to him to make a demand in accordance with his power to institute proceedings under s 153 of the Customs Act. 33 In his Honour's view, there was no reason why the demand could not be validated on some basis other than s 165. In particular, it was implicit in the authority given to the Collector by s 153 that the power to recover duty by instituting proceedings carried with it the power to make a demand on the importer of the goods. Given that there was a statutory basis for the demand other than s 165, the AAT had jurisdiction to consider the merits of the classification issue. His Honour said (at [82]) that the correct position is that: 'a demand made which does not comply with s 165 because, for example, the person making the demand is not authorised to make the demand under s 165, may nevertheless be a valid demand if it is a demand in respect of a claim for short levied duty which can be the subject of suit in the name of the Collector under s 153 of the Customs Act.' 34 The primary Judge then held that there had been no error of law in the AAT's finding that the goods entered for consumption were dutiable as diesel fuel. In the result, his Honour dismissed the appellant's application.

SUBMISSIONS 35 The CEO interpreted the appellant's submissions in chief as contending that the AAT had no jurisdiction to review the relevant decision, being the decision to demand payment of duty pursuant to s 165 of the Customs Act. The appellant's reply made it clear that no such contention was advanced. 36 The appellant's submissions took as their starting point the primary Judge's holding (not disputed on appeal) that the purported demand was not a valid and effective demand under s 165 of the Customs Act. The submissions then proceeded as follows: (i) The AAT had jurisdiction pursuant to s 273GA(2) of the Customs Act to review the decision to make the purported demand. A 'decision' for the purposes of s 273GA(2) includes a purported decision: Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (NSW) (1978) 1 ALD 167. (ii) The AAT erred in finding that the demand was validly made. It should have found that the decision to make the demand was ineffective in point of law and unacceptable administrative conduct. (iii) The AAT should have set aside the decision to make the demand and ordered instead that duty was not payable on account of that demand. (iv) The primary Judge erred in not holding that the AAT had made the errors identified in (ii) and (iii) above. 37 Mr Dreyfus QC, who appeared with Mr Slonim for the appellant, submitted that s 167(1) of the Customs Act is enlivened only when the Collector makes a demand for the payment of duty that is authorised by s 165 of the Customs Act. In the alternative, he submitted that s 167(1) is satisfied only where the Collector makes a demand in accordance with the provisions of the Customs Act. Mr Dreyfus pointed out that the Customs Act does not confer a general power upon the Collector to make a demand for duty that is said to be due. He contended that s 153 of the Customs Act does not authorise a demand in the relevant sense, since it merely empowers the Collector to institute proceedings in a court of competent jurisdiction to recover duty due and payable. 38 Mr Dreyfus further contended that even if s 167 of the Customs Act can be enlivened by a demand made under provisions other than s 165, it cannot be enlivened by a demand purportedly, but invalidly made under s 165. To hold otherwise, so he argued, would violate the long-established principle of statutory construction that when Parliament explicitly grants a particular power which prescribes the mode by which it is to be exercised and imposes conditions and restraint which must be observed, it excludes the operation of more general provisions that otherwise might be relied on for the same power. Although the AAT could exercise all the powers of the original decision-maker, it could not make a decision not authorised by the Customs Act or regulations made thereunder. In other words, the AAT could not cure the defect in the demand purportedly made under s 165, as the officer making the demand had no power to cure the defect. 39 The CEO submitted that there is nothing in the Customs Act which requires the Collector to make a demand for the payment of duty on imported goods. On the contrary, according to Mr Cavanough QC, who appeared with Mr Lenczner for the CEO, duties are imposed by s 18 of the Customs Tariff Act and the system is in practice one of self-assessment. Mr Cavanough submitted that the flaw in the appellant's argument was the contention that s 167 refers to a statutory demand, when in truth the reference is simply to a demand in fact. Section 167, so he argued, is concerned with disputes between Customs and owners of goods. For there to be such a dispute Customs must make a demand, either explicit or implicit, that the owner pay a certain amount in respect of duty on the goods. 40 Mr Cavanough submitted that the fact that Mr Walker had no delegated authority to make a demand under s 165 was irrelevant because s 165 applies only where the short levy occurs as the result of an error by Customs. In this case, the error came about because the appellant (on the case put forward by Customs) had misclassified the goods. The fact that Mr Walker invoked s 165 did not matter as he had clearly made a demand for payment of duty in respect of the goods, a fact confirmed by the terms of the deed entered into between the parties.

the approach to construction 41 The Customs Act was the sixth enactment of the Commonwealth Parliament in the first year of the Commonwealth's life. In its original form, the Customs Act occupied forty pages in Vol 1 of the Commonwealth Acts. The current reprint of the Customs Act, exclusive of notes, runs for 827 pages. Nonetheless, as Gummow and Callinan JJ observed in Malika, at 310 [64], despite extensive amendments 'in broad outline, the structure [of the Customs Act] remains the same'. 42 Most of the argument in the present appeal revolved around ss 153, 165, 167 and 273GA of the Customs Act. Section 153 has remained unchanged since 1901. Except for the substitution of 'the CEO' for 'the Collector' and the addition of subss (2) and (3), s 165 has also remained unchanged for over a century. 43 Section 167 of the Customs Act has always been concerned with disputes as to duty. However, a new provision was substituted in 1910, in consequence of the decision in Sargood Bros v Commonwealth (1910) 11 CLR 258. (The legislative history of s 167, including amendments after 1910, was examined in length in Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 2) (1991) 32 FCR 243, at 258-263, per Hill and Heerey JJ.) 44 In its original form, s 167 was as follows: 'If any dispute shall arise as to the amount or rate of duty or as to the liability of goods to duty the owner may deposit with the Collector the amount of duty demanded and thereupon the following consequences shall ensue:- (1) The owner upon making proper entry shall be entitled to delivery of the goods. (2) The deposit shall be deemed the proper duty unless by action commenced by the owner against the Collector within six months after making the deposit the contrary shall be determined, in which case any excess of the deposit over the proper duty shall be refunded by the Collector to the owner with Five pounds per centum per annum interest added. The provisions of this section shall not apply to any goods which may be detained or seized for undervaluation or in respect to which any attempt to evade the payment of duty may have been made.' 45 This provision differs from the current s 167 (reproduced at [10] above) in a number of respects. One difference is that the current section requires the owner of goods not merely to deposit with the Collector the amount of duty demanded, but to pay under protest 'the sum demanded by the Collector as the duty payable in respect of the goods'. A second difference is that the later version omits any reference to the owner of the goods being entitled, after paying the amount of duty demanded, to delivery of the goods. A third difference is that s 167(4) now expressly precludes any action for recovery of any sum paid to Customs as the duty payable in respect of the goods, unless the requisite protest has been made and action commenced within the six months time limit: see Kawasaki Motors, at 263, per Hill and Heerey JJ. 46 As we have noted, s 273GA was introduced into the Customs Act in 1980, although its predecessor dates from 1975 (see [12] above). Section 273GA(2) applies '[w]here a dispute referred to in [s 167(1)] has arisen and the owner of the goods has … paid under protest the sum demanded by the Collector'. In these circumstances, an application may be made to the AAT for review of the decision to make the demand. If such an application is made, the owner is not entitled to bring an action under s 167(2): see s 273GA(6). Where the AAT makes a decision reviewing the Collector's demand, the proper duty payable in respect of the goods concerned is deemed to be that determined by the AAT or the sum paid under protest, whichever is less: s 273GA(7). It will be noted that s 273GA is silent as to the means by which the owner can enforce a determination of the AAT. 47 In Chief Executive Officer of Customs v Tony Longo Pty Ltd (2001) 52 NSWLR 458, Heydon JA (with whom Mason P and Rolfe AJA agreed) observed (at 464 [25]) that where the High Court has considered the construction of legislation, as is the case with the Customs Act, it is desirable for intermediate appellate courts to proceed by reference to what the High Court has said as a guide to meaning. His Honour suggested that this approach is preferable to construing the statutory language and then determining whether the reasoning of the High Court can be reconciled with that construction. 48 In the end, of course, the question of construction must be resolved by reference to the words used by Parliament. Nonetheless, in the case of legislation which has such a long history and which has received, in certain respects, an authoritative interpretation not always self evident from the statutory language, it is sensible to follow the approach in Longo. Indeed, in addition to decisions of the High Court, reference should also be made to decisions of intermediate appellate courts construing the relevant provisions since, in some circumstances at least, they will be determinative: Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, at 492; Trans Pacific Investment Corporation Pty Ltd v Rusty Rees Pty Ltd (1995) 57 FCR 210, at 214.

the authorities 49 The authorities establish a number of propositions relevant to this appeal. 1. Longo holds, on the basis of a close analysis of a series of High Court decisions, that goods are dutiable under the Customs Act on importation into Australia. Accordingly, they are dutiable even before they have been entered for home consumption and, indeed, regardless of whether the owner ever complies with the requirement in s 68 to enter the goods for home consumption. It follows that the liability of the owner of the goods to pay duty is not dependent on any demand by the Collector that payment be made. As McHugh J said in Malika, at 301 [38]: 'The Collector would be doing no more than enforcing his or her strict legal rights if he or she sued for the duty [pursuant to s 153] immediately the goods were imported.' 2. Section 153 of the Customs Act creates a right in the Commonwealth and provides the method for the enforcement of that right, including specifying the appropriate forum: Malika at 312 [69], per Gummow and Callinan JJ (with whom Gleeson CJ agreed). The expression '[a]ll duties' means duties imposed by law: Malika, at 312 [69], citing Sargood v Commonwealth (1910) 11 CLR 258, at 273, per Griffith CJ. Section 153 imposes a specific charge upon imported goods which binds all persons taking them, unless they are bona fide purchasers for value: Wing On & Co Ltd v Collector of Customs for New South Wales (1938) 60 CLR 97, at 109-110, per Dixon J. 3. Section 165 of the Customs Act limits what would otherwise be the operation of s 153. It does this by requiring the Collector to make a demand for duty 'short levied' within twelve months from the date of the short levy: Malika, at 313-314 [72]-[74], per Gummow and Callinan JJ. (By contrast, s 153 provides that duties are recoverable 'at any time in any court of competent jurisdiction'.) The limitation imposed by s 165 is, however, a narrow one. The expression 'short levied' refers to the case where Customs has made an error. Section 165 has no application where Customs has been misinformed by the importer or owner: Malika, at 302 [40], per McHugh J; at 315 [77], per Gummow and Callinan JJ. The effect of s 165, therefore, is that Customs has twelve months in which to correct its own mistakes in circumstances where it has been apprised of all relevant facts. This apparently narrow reading of s 165 reflects, inter alia, the fact that the Customs Act requires the Collector to rely on the 'honesty and diligence of importers in describing goods so that they may be assessed for duty': Malika, at 314-315 [76], per Gummow and Callinan JJ. It follows from Malika, as Mr Cavanough submitted,that the demand made by Mr Walker in the present case, independently of the delegation question, was not in truth a valid demand made pursuant to s 165. Mr Walker's letter of 19 May 1997 asserted that the three shipments of goods had been incorrectly entered. That is, the letter asserted that Customs had been misinformed by the owner of the goods and had not been apprised of all relevant facts. If Customs made good this assertion (as the AAT found it had), the case was not one of a duty having been 'short levied'. Accordingly, the Collector was not subject to the twelve months time limit imposed by s 165(1) of the Customs Act, but could have instituted proceedings under s 153 at any time to recover the correct duty payable by the owner of the goods. 4. As Hill and Heerey JJ held in Kawasaki Motors, at 263, s 167(4) of the Customs Act 'precludes any action for the recovery of any sum paid as Customs duty unless the requisite protest has been made under [s 167(1)] and further, unless the action is taken within the time limited by [s 167(4)(a)] … It follows that s 167 represents the only method whereby an action for recovery of overpaid Customs duty can be brought where there is a dispute between the owner and the Collector as to liability or matters affecting liability and that it operates to exclude the availability of any alternative common law remedy.' This proposition was accepted as correct by Handley JA in Collector v Gaylor, at 655, and was accepted 'for present purposes' by Gummow and Callinan JJ in Malika, at 318 [88]. 5. It was held in Malika that s 167 does not require an owner, in order to defend proceedings brought by the Collector for the recovery of unpaid duty, to pay the duty demanded under protest or to institute proceedings against the Collector pursuant to s 167(2) of the Customs Act. Thus an owner to whom imported goods have been released and who therefore has no need to take the initiative under s 167 to obtain their release, may defend any proceedings made by the Collector without having to follow the procedure laid down by s 167: Malika, at 293 [6]-[7], per Gleeson CJ; at 306 [54], per McHugh J; at 321 [99], per Gummow and Callinan JJ; at 332 [130], per Kirby J. The contrary argument would turn s 167 'on its head so that it limits the rights of owners in situations to which [it] is not addressed': Malika, at 319 [91], per Gummow and Callinan JJ. 6. Section 167 of the Customs Act is a provision for the benefit of the owner of imported goods, in the sense that it gives an owner who pays the duty demanded by the Collector under protest a right to establish in a court that the duty demanded is excessive or not warranted: Malika, at 318 [90], per Gummow and Callinan JJ. If the Collector seeks to obtain moneys from the owner otherwise than pursuant to a demand for duty, mandamus will lie to require the Collector to determine the value of the imported goods and to demand the duty payable thereon, thereby allowing the owner to pay the sum demanded under protest and to take proceedings to recover that sum pursuant to s 167(2). For that reason, it is not open to the Collector to demand that an owner of goods provide security in respect of duty, refundable only if the owner establishes to the satisfaction of the Collector that the owner correctly stated the value of the goods: The King v Comptroller-General of Customs; Ex parte Woolworths Ltd (1935) 53 CLR 308; The King v Collector of Customs for Victoria; Ex parte Berliner (1935) 53 CLR 322. 7. Where a dissatisfied owner of imported goods invokes administrative review by the AAT pursuant to s 273GA(2) of the Customs Act, and the AAT determines that the moneys paid under protest were improperly demanded by the Collector, the owner may commence an action in the courts to recover those moneys: Collector v Gaylor, at 661-662, per Cole JA, with whom Clarke and Handley JJA agreed. This is so notwithstanding the restrictions imposed by s 167 of the Customs Act on the owner's right to bring an action to recover the duty paid under protest. Collector v Gaylor holds that the effect of the introduction of s 273GA into the Customs Act is to provide a second means, in addition to the action authorised by s 167(2), whereby an owner of imported goods can obtain a determination that duty paid under protest is not to be 'deemed … the proper duty payable in respect of the goods'. As Cole JA observed (at 661): 'The purpose of the proceedings by way of administrative review as the owner knows, and as the Collector accepts, and as is in any event obvious, is to determine whether or not the Collector is obliged to repay to the owner either the whole or portion of the sum paid under protest. In substance the administrative procedure is a claim by the owner to recover the moneys paid under protest.' Section 273GA is therefore to be read as qualifying s 167 to the extent necessary to entitle an owner to enforce by action the Collector's obligation to repay duty paid under protest which the AAT finds to have been overpaid: at 654, per Clarke JA. In Malika, at 319 [94], Gummow and Callinan JJ said it was unnecessary to decide whether this construction of s 273GA was correct. In making this comment, their Honours referred to the decision of Giles J in Dahlia Mining Co Ltd v Collector of Customs (1989) 17 NSWLR 688, but not to the later decision of the Court of Appeal in Collector v Gaylor, which approved Dahlia. In Kawasaki Motors, Hill and Heerey JJ said (at 263) that they did not have to decide whether Dahlia was correct, but that they 'should not wish to be thought to suggest that the decision was incorrect'.

this case 50 The appellant's submissions rested on the proposition that the 'demand' referred to in s 167 must be authorised by the Customs Act. Since the demand was not authorised by s 165 (by reason of the absence of a valid delegation to Mr Walker), nor by any other provision of the Customs Act, the decision to make the demand was ultra vires and should have been set aside by the AAT. As we have noted, another reason why the demand was not authorised by s 165 is that it was not made in respect of duty 'short levied', as that expression was interpreted in Malika. 51 In Malika, Gummow and Callinan JJ identified (at 319-320 [95]) three conditions that must be satisfied before the statutory action contemplated by s 167(2) may be brought: '(i) there be a dispute which has arisen as to the amount or rate of duty payable in respect of any goods or as to the liability of any goods to duty (the opening words of s 167(1)); (ii) payment of the sum demanded by the Collector be made "under protest" in accordance with the requirements of s 167(3); and (iii) the action be commenced within the times specified in s 167(4).' If the owner chooses to seek review of the decision to make the demand in the AAT pursuant to s 273GA(2), the same conditions must be satisfied, except that it is the application to the AAT that must be made within the time limits specified in s 167(4): see s 273GA(5). It will be noted that the reference in s 167(1) to a 'demand' occurs as an element of the second condition identified by Gummow and Callinan JJ, and is not treated by their Honours as an independent condition. 52 As we have noted, the liability of an owner of imported goods to pay duty under the Customs Act is not dependent on any demand being made by the Collector. It is true that, as Mr Dreyfus pointed out, the Customs Act contains a number of provisions which refer expressly to demands made by the Collector. For example, s 35A(1) requires a person who has been entrusted with possession of dutiable goods which are subject to the control of Customs and who fails to keep the goods safely, to pay on written demand by a Collector, an amount equal to the amount of duty which would have been payable had the goods been entered for home consumption on the day the demand was made. (For other examples, see ss 130B(1), 149(1), 209(5)(b).) But those specific provisions do not detract from the general proposition. 53 It is clear that the word 'demanded' as used in s 167(1) cannot refer to a demand expressly authorised by a particular section of the Customs Act. It must be remembered that s 167 is intended to benefit owners of imported goods by providing them with a mechanism by which to challenge the Collector's calculation of the rate of duty and to obtain release of the goods pending final resolution of the dispute. If s 167(1) applies only where the Collector makes a demand under specific provisions such as ss 165 or 35A(1), s 167 simply could not achieve its principal object. 54 Section 167 is expressed to apply 'if any dispute arises as to the amount of duty payable in respect of any goods, as to the liability of any goods to duty'. The word 'dispute' is not defined, but bears its ordinary meaning of controversy or difference of opinion. The dispute must of course relate to the amount of duty payable or the liability of goods to duty, not to some other aspect of the administration of the Customs Act, a point illustrated by Ex parte Woolworths and Ex parte Berliner. But all that is necessary is a dispute 'in fact': Sargood Bros v Commonwealth, at 308, per Higgins J. 55 Section 167 seems clearly enough to be drafted on the assumption that for a dispute to have arisen as to the amount of duty payable or the liability of goods to duty, the Collector must have demanded that the owner pay a sum 'as the duty payable in respect of the goods'. It is difficult to envisage how a dispute between the Collector and an owner could arise without the Collector demanding from the owner payment of the duty said to be payable in respect of the goods. As Malika confirms, the administration of the Customs Act depends on the honesty and diligence of owners in describing imported goods accurately so that they may be properly assessed for duty. If Customs disagrees with the description of goods entered by the owner, or claims that goods not entered for home consumption or otherwise are liable to duty, at some point the Collector will have to do something that can be characterised as making a demand for the duty payable in respect of the goods. There may be a factual question in any given case as to whether in fact a demand has been made and therefore a dispute of the kind envisaged by s 167 has arisen: cf Re OES Holdings Pty Ltd and Collector of Customs (1982) 5 ALD 58, at 65 (AAT). But in the ordinary case there will be little room for doubt that the Collector has in fact demanded the sum said to be due. 56 This construction of s 167 is consistent with the principal object of the section. Where a dispute arises between Customs and the owner of imported goods, triggered by Customs in fact demanding the duty said to be payable in respect of the goods, the owner may take advantage of the procedure in s 167. In particular, the owner, upon payment of the duty demanded, can secure a judicial determination of the dispute and can obtain release of the goods pending that determination. 57 In the present case, Mr Walker purported to make a demand pursuant to s 165, which requires a demand to be 'made by the CEO'. The purported demand was not effective under s 165 if only because Mr Walker lacked the appropriate delegated authority from the CEO. But Mr Walker was an officer of Customs who could in fact issue on behalf of a Collector, or indeed as a Collector himself, a demand for payment of duty payable in respect of the goods and thus could satisfy the terms of s 167(1) of the Customs Act (see the definition of 'Collector' in s 8). The general principle that applies in these circumstances was stated by Heydon J (with whom Gleeson CJ, Gummow, Kirby, Hayne and Callinan JJ agreed) in Eastman v Director of Public Prosecutions (2003) 214 CLR 318, at 362: 'If the maker of an administrative decision purports to act under one head of power which does not exist, but there is another head of power available and all conditions antecedent to its valid exercise have been satisfied, the decision is valid despite purported reliance on the unavailable head of power.' 58 The letter of 19 May 1997 from Mr Walker constituted a demand by Customs for the payment of a specific sum as duty in respect of the gas oil imported by the appellant. That demand was capable of triggering a dispute between Customs and the owner as to the amount or rate of duty payable in respect of the goods or as to the liability of the goods to duty. This is so notwithstanding that the demand erroneously purported to be made pursuant to s 165 of the Customs Act. In our view, there can be no doubt that the demand did trigger a dispute between the parties. As Mr Cavanough pointed out, the existence of the dispute was confirmed by the parties themselves in the deed of 1 April 1999. The dispute was 'crystallised' by the appellant paying under protest the amount of duty that had been demanded: Re Datacraft (Aust) Pty Ltd and Collector of Customs (1982) 4 ALD 557, at 560, per Davies J (AAT). 59 The AAT thus had jurisdiction under s 273GA(2) of the Customs Act to review 'the decision to make that demand and … any other decision forming part of the process of making, or leading up to the making of, that first-mentioned decision'. The demand of which s 273GA(2) speaks is the demand for payment of duty that triggers a dispute. The AAT was not confined to a consideration of whether a demand was validly made under s 165. As was said in Collector v Gaylor, the purpose of the proceedings before the AAT is to determine whether or not the Collector was obliged to repay to the owner the whole or part of the sum paid under protest. The AAT determined in this case that the Collector was not so obliged. 60 The fact that the demand was not a valid demand under s 165 is not to the point in the present proceedings. Section 165 is a provision that authorises the CEO to make a demand for the payment of duty short levied, provided the demand is made within 12 months from the date of the short levy. Mr Walker lacked delegated authority to make a demand under s 165 in respect of duty short levied. Had this in truth been a case of short levied duty, the absence of a valid demand under s 165 within the time limit would have prevented the Collector from recovering from the appellant the amount said to have been short levied. Although it is not necessary to decide, the absence of a valid demand under s 165 also may have warranted the AAT, assuming its jurisdiction had been properly invoked pursuant to s 273GA(2), determining that the Collector could not recover the amount of the duty said to be short levied and thus determining that the proper duty payable in respect of the goods concerned was nil. 61 But this was not a case of short levied duty, even though Mr Walker apparently thought it was and even though the case seems to have been conducted before the AAT and the primary Judge on the basis that it was. The demand was not made in consequence of a mistake by the Collector independently of misinformation supplied by the owner. The demand was made because of Customs' claim that the goods had been incorrectly entered. The Collector was therefore not debarred by s 165 or any other provision from recovering the duty payable in respect of the goods imported by the appellant. Nor was there any impediment to the AAT determining the amount of duty properly payable by the appellant, given that a dispute had arisen and that Mr Walker in fact demanded payment of the amount of duty due in respect of the goods. 62 It follows that for reasons slightly different from those relied on by the primary Judge, his Honour was correct to conclude that the AAT's decision to demand payment of $435,372.20 in duty was not materially affected by any error of law. This is so notwithstanding that the AAT was incorrect (as the primary Judge held) in finding that the CEO had validly delegated authority to Mr Walker to demand payment of short levied duty pursuant to s 165 of the Customs Act.

a point not raised 63 In Malika, at 302, McHugh J said that: '[h]istorically, s 167 operated on the assumption that the payment under protest had to be made before the goods were released to the owner … The demand of which s 167(1) spoke, therefore, was a demand made before the goods were released to the owner. It was not a demand made at any time by the Collector …' 64 If s 167(1) applies only to disputes arising by reason of a demand made before release of the goods, the section could not have been satisfied in the present case (since the demand for payment of duty was made after release of the goods). Neither party, however, sought to rely on McHugh J's observations, although Mr Cavanough drew attention to them in argument. If s 167(1) is limited in the manner suggested by McHugh J, the AAT presumably would not have had jurisdiction to deal with the application to it. 65 None of the other judgments in Malika specifically addresses this issue, although the judgment of Gummow and Callinan JJ would seem to suggest that there is no implied limitation on s 167(1) of the kind suggested by McHugh J. (Had their Honours held that view, they presumably would have added a fourth condition to the three that must be satisfied before an owner can bring an action contemplated by s 167(2).) With great respect to McHugh J, the language of s 167(1) in its current form does not support such an implied limitation. 66 It is true that historically s 167 was concerned with establishing a procedure to allow goods to be released to the owner upon payment under protest of the amount of duty demanded by Customs. It is also true that s 167(1) in its original form specifically stated that upon payment of a deposit equivalent to the amount of duty demanded the owner was entitled, upon making proper entry, to delivery of the goods. But s 167, following its amendment in 1910, contains no such reference. The general language of s 167(1) is wide enough to cover any dispute of the kind identified in the provision, including a dispute which arises after the goods have been released. This construction of s 167(1) has the advantage that a dissatisfied owner, upon payment under protest of the amount demanded as duty, can seek review of the relevant decision in the AAT, rather than defending proceedings brought by the Collector in a court of competent jurisdiction.

conclusion 67 The appeal must be dismissed, with costs. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and Justices Sackville and Sundberg.

Associate: Dated: 1 December 2004 Counsel for the Appellant: MA Dreyfus QC with J Slonim

Solicitor for the Appellant: Louis Gross & Associates

Counsel for the Respondent: AL Cavanough QC with J Lenczner

Solicitor for the Respondent: Australian Government Solicitor