Federal Court of Australia|1991-06-19|Before: Davies J

Re Kawasaki Motors Pty Limited v Comptroller-General of Customs and Anor [1991] FCA 265; 102 ALR 258 (19 June 1991)

Customs and Excise - whether the Comptroller-General of Customs should pay interest on customs duty repaid to the applicant - whether a liability to repay excess duty under s.163 of the Customs Act - whether a payment under protest in accordance with s.167 of the Customs Act - whether moneys recoverable as moneys had and received by the Commonwealth - whether such a claim was within the ambit of an earlier claim under the Administrative Decisions (Judicial Review) Act - whether an order that duty overpaid be refunded was precluded by s.167 of the Customs Act.

Interest - whether a proceeding seeking an order under s.16(1)(d) of the ADJR Act for the repayment of excess duty is a proceeding "for the recovery of any money" within s.51A(1) of the Federal Court of Australia Act - whether in the making of an order under s.16(1)(d) the Court is limited by the fact that the moneys have been repaid.

Solicitor for the respondents: Australian Government Solicitor

The Comptroller-General of Customs pay to the applicant the sum of $49,735.

The respondents pay the costs of the proceedings as from 20 July 1990.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The remaining issue in these proceedings is whether the Comptroller-General of Customs should be ordered to pay to the applicant, Kawasaki Motors Pty Limited ("Kawasaki"), interest on customs duty which Kawasaki paid on certain goods imported between 19 December 1989 and 23 April 1990. The customs duty was repaid to Kawasaki on 21 August 1990. The applicant seeks interest thereon at the rate of 21% and claims $49,735.26. The rate and quantum are agreed.

2. On 31 July 1984, there was issued a tariff concession order numbered TC 843996 with respect to Ski Craft. On 4 October 1989, the concession order was purportedly revoked. Thereafter, Kawasaki objected to the revocation and sought, inter alia, a further concession order. Goods affected by the revocation were imported by Kawasaki and duty was paid thereon from 19 December 1989 to 23 April 1990. On 11 April 1990, the application by Kawasaki for a concession order was finally refused. On 2 May 1990, these proceedings were commenced claiming, inter alia, that the revocation of the concession order was invalid and seeking an order setting aside that revocation. On 6 July 1990, there was a further purported revocation of TC 8439946 but that is irrelevant for present purposes. On 20 July 1990, I ordered by consent that the revocation of 4 October 1989 of TC 843996 be set aside. That order had the effect of setting aside the revocation ab initio. The order reserved for further consideration the question of the repayment of the duty overpaid and payment of interest thereon. On 21 August 1990, the Collector of Customs repaid to Kawasaki the amounts of duty which had been overpaid.

3. In order to determine the issue as to interest, it is necessary first to examine whether there was a liability to repay the excess duty.

4. Mr Clarrie Stevens, counsel for Kawasaki, put that claim on a number of different bases. Mr Stevens first relied upon s.163 of the Customs Act 1901 (Cth) ("the Act") and reg. 126 of the Customs Regulations ("the Regulations"), which deal with refunds of duty in the circumstances specified in the Regulations. Mr Stevens submitted that there had been a refund of duty under s.163 in accordance with reg. 126(e), in that the duty had been paid under a mistake of fact, the fact of revocation of TC 843996.

5. I reject this submission. It is not shown that the refund was paid under s.163 or that the matter fell within the regulations which deal with the matter. And s.163 provides for the refund of duty, not for the refund of duty with interest. I need not consider whether s.163 confers a discretionary power or imposes a liability because it confers a power which must be exercised if the prescribed criteria are met.

6. Mr Stevens also relied upon s.167 of the Act which provides, inter alia, that if there is a dispute as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, and there is a payment under protest in accordance with the provisions of s.167(3), then the owner of the goods may, in accordance with s.167(4), 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. This provision does not, however, assist Mr Stevens for Kawasaki made no protest in writing in accordance with the terms of s.167(3).

7. Mr Stevens then submitted that the moneys were recoverable as moneys had and received by the Commonwealth to the use of Kawasaki, having been wrongly demanded by the Collector of Customs in the circumstance that liability to make the payment was disputed by Kawasaki.

8. In their points of defence, the respondents allege that the duty was not paid under protest. However, in a letter from the Australian Government Solicitor dated 15 January 1991, it was conceded "that up to 6 July 1990 the first respondent (the Comptroller-General of Customs) denied the entitlement of the applicant to enter Jet Ski Watercraft other than upon payment of duty at the rate of 21%." No formal protest was made but it is clear from letters sent by Kawasaki's customs agent dated 22 November 1989 and 15 January 1990 that Kawasaki was dissatisfied with the purported revocation of the concession order. In the letter dated 22 November 1989, which went to the Tariff Concession Branch, Kawasaki's customs agent said:-

"Currently our research has shown that no order has been completed by

the local producer and there are no saleable products available to

the public for scrutiny or purchase. The Jet Ski market is already a

multi million dollar market in Australia with consistent market

growth. It is not surprising that a local producer could emerge.

However, surely the individual consumer should be entitled to be able

to walk into a shop of his choice and choose between the Imported

product and the locally produced product, having all information on

both, before he is forced to pay 21% increase for the imported product.

At this point in time, particularly because of the lack of

information known about the locally produced product, we question

whether the proper and fair tests were applied by the Tariff

Concession Branch on the local producer to justify the revocation of

this Concession.

It is simply inequitable to revoke such a Concession based on

apparent written and verbal details from the local producer and

no-one else."

In these circumstances, the duty was demanded ex colore officii, in the light of Kawasaki's protest against what was being done. See Mason v State of New South Wales [1959] HCA 5; (1959) 102 CLR 108; Cam and Sons Pty Ltd v Ramsay [1960] HCA 82; (1960) 104 CLR 247; Bell Bros Pty Ltd v Shire of Serpentine-Jarrahdale [1969] HCA 63; (1969) 121 CLR 137.

9. Mr Stevens submitted that this claim for repayment of the duty was within the ambit of the claim brought under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") for the setting aside of the purported revocation on 4 October 1989 of TC 8439946. Mr Stevens submitted that an order for the payment of the customs duty which had been overpaid could be made under s.16(1)(d) of the ADJR Act which empowers the Court to make, inter alia,

"(d) an order directing any of the parties to do, or to refrain from

doing, any act or thing the doing, or the refraining from the

doing, of which the Court considers necessary to do justice

between the parties."

Mr Stevens also relied upon the general power of the Court conferred by s.23 of the Federal Court of Australia Act 1976 (Cth) "to make orders of such kinds, .... as the Court thinks appropriate" and upon the incidental or accrued jurisdiction of the Court discussed in cases such as Philip Morris Inc v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457; Fencott v Muller (1983) 152 CLR 570.

10. The incidental or accrued jurisdiction of the Court seems to add nothing to Kawasaki's claim. I accept, for present purposes, that there may be a case where that jurisdiction would permit a dispute to which s.167 of the Customs Act relates to be brought in this Court as a "Commonwealth Court of competent jurisdiction". But in the present case, no such proceedings could have been brought. Kawasaki did not, by its actions, satisfy the requirements of s.167(3).

11. Moreover, an owner cannot fail to comply with s.167(3) and nevertheless bring proceedings for the recovery of the duty as money had and received or as money paid under protest or as money paid under a mistake of fact or otherwise. Section 167 specifies how such disputes are to be resolved. So s.23 of the Federal Court of Australia Act does not assist.

12. The claim for the recovery of the excess duty could therefore only succeed if it fell within the ambit of the proceedings brought under the ADJR Act. Even then, the question remains whether an order for the repayment of the moneys would be precluded by s.167 of the Customs Act when the procedure laid down by that section had not been adopted.

13. On the first of these points, it is clear that there was a matter in issue between the parties, the validity of the revocation of 4 October 1989 which arose for determination under the ADJR Act. Not only was the relief sought in respect of the purported revocation of TC 8439946 a matter to which the ADJR Act applied, but the relief sought in respect thereof was relief in the nature of "review" as defined in s.9(2) of the ADJR Act, the jurisdiction to give which relief was removed from the courts of the States by s.9(1) of the ADJR Act. Thus, the crux of the claim made by Kawasaki had to be determined by the Federal Court in proceedings brought under the ADJR Act. A court of a State had no jurisdiction in respect thereof.

14. It should next be noted that the claim for the recovery of the overpaid duty was a claim which was part and parcel of the dispute involving the revocation of TC 8439946. There had been a series of acts, including the purported revocation of the concession order and the demand for additional duty consequent thereon which Kawasaki wished to dispute. The issues and the facts were so interconnected that there was in reality one dispute, concerning which the Federal Court had, in my opinion, jurisdiction under the ADJR Act. In its orders made on that dispute, the Federal Court had jurisdiction and power under s.16(1)(d) of the ADJR Act to order that the sum of duty found to have been wrongly demanded in reliance on the invalid revocation be repaid. An order that the duty overpaid be refunded would not be an order in the nature of damages. It would be an order giving practical effect to the order by way of judicial review that the revocation decision be set aside. See eg. Park Oh Ho v Minister for Immigration and Ethnic Affairs [1989] HCA 54; (1989) 167 CLR 637 at 645.

15. The question then is whether the making of such an order as to the refund of duty would be precluded by s.167 of the Customs Act. There is no doubt that the dispute as to duty could be said to be a dispute "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 words used by s.167(1). Mr Stevens submitted to the contrary and submitted that the effect of a concessional tariff order was that goods falling within the order were not liable to duty. But the opening words of s.167(1) are wide enough to encompass a dispute arising as to the application of a tariff concession order.

16. However, s.167(1) provides that, in the event of such a dispute:-

"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."

Although there are strong arguments which favour the contrary view, I am of the opinion that s.167, read as a whole, does not deal with a dispute of the kind which arose in the present case, which is a dispute which must be determined, not under the ordinary provisions of the Customs Act but by the Federal Court under the ADJR Act. As s.167 deals with a different subject matter, it does not exclude the making of an order for the refund of overpaid duty under s.16(1)(d) of the ADJR Act or limit the power of the Court to make an order under that section, if it is appropriate to do so, notwithstanding that no protest in writing in accordance with s.167 was made.

17. Thus, we arrive at the point that Kawasaki was entitled to claim in these proceedings, as it did, an order for the refund of the overpaid duty. Whether such an order should be made was one of the questions reserved by the consent order of 20 July 1990. I am satisfied that, had the duty not subsequently been refunded by the Collector to Kawasaki, I would have made an order requiring that the overpaid duty be refunded to Kawasaki. No order was required as, after the making of the order of 20 July 1990, the Collector of Customs refunded the overpaid duty to Kawasaki. There had earlier, during January to April 1980, been lodged by Kawasaki applications for refund of the duty seeking refunds under reg. 126. In these proceedings, it was not contended by Mr Alan Robertson, counsel for the Comptroller, that the refunds were made on those applications.

18. We now come to the question of interest. Section 167, in its 1901 form, provided that an order for the refund of excess duty should include interest at 5% on the excess. Wollaston on Customs Law, in his notes on this original section at p 116, even added "Sometimes the Customs admits an error in charging before action and returns the deposit. In such case the Department will pay interest if payment is included in the terms of settlement." However, s.167 no longer contains a provision for interest and the practice referred to by Wollaston has ceased.

19. But interest is ordinarily included when a court orders that excess duty should be repaid by the Collector to an owner. See s.94 of the Supreme Court Act 1970 (NSW). Such interest is ordinarily ordered to be paid when a court determines a dispute brought before it in accordance with s.167 of the Customs Act. In Dahlia Mining Co Ltd v Collector of Customs (1989) 17 NSWLR 688, Giles J. ordered that duty overpaid should be refunded to the owner with interest.

20. In this Court, s.51A(1) of the Federal Court of Australia Act provides:-

"(1) In any proceedings for the recovery of any money (including

any debt or damages or the value of any goods) in respect of a

cause of action that arises after the commencement of this section,

the Court or a Judge shall, upon application, unless good cause is

shown to the contrary, either

(a) order that there be included in the sum for which judgment is

given interest at such rate as the Court or the Judge, as the

case may be, thinks fit on the whole or any part of the money

for the whole or any part of the period between the date when

the cause of action arose and the date as of which judgment is

entered; or

(b) without proceeding to calculate interest in accordance with

paragraph (a), order that there be included in the sum for

which judgment is given a lump sum in lieu of any such interest."

21. This section should be read widely, for it establishes a general principle of policy which the Court should apply in its orders. It is not to be read in any narrow or technical way. In my view, an application which seeks, inter alia, an order under s.16(1)(d) of the ADJR Act for the repayment of excess duty, is a proceeding "for the recovery of any money" within the terms of this section. I am therefore satisfied that an order made under s.16(1)(d) of the ADJR Act directing a party to do any act or thing "which the Court considers necessary to do justice between the parties" may include an order for the payment of interest in accordance with the general policy established by s.51A.

22. The question of interest is not a question of jurisdiction or power but a question of when and in what circumstances it is appropriate that an order should include an order dealing with interest. I refer, for example, to the discussion in Daniell's Chancery Practice, 8th Ed. at pp 901-4 where statutory provisions and principles of common law and equity are discussed, in accordance with which interest should be awarded or in accordance with which an award of interest may be discretionary.

23. An order under s.16(1)(d) of the ADJR Act is a discretionary order, but the discretion must be exercised in accordance with legal principles and on proper grounds.

24. Mr Robertson submitted that s.51A of the Federal Court of Australia Act could not apply for the refund has been paid. He submitted that this Court does not have the power to make an order with respect to interest save in accordance with s.51A. Mr Robertson pointed to the provisions of s.94(1A) of the Supreme Court Act which specifically deals with the circumstance that moneys have been paid prior to the order of the Court.

25. In my opinion, in the making of an order under s.16(1)(d) of the ADJR Act, this Court is not limited by the fact that the moneys have been repaid. I accept that, if the excess duty had been refunded and accepted in settlement of the claim made by Kawasaki, that would be a matter precluding the making of the order. But that circumstance did not exist. Kawasaki had claimed an order for the refund of the overpaid duty and for interest thereon and those questions were specifically reserved for the consideration of the Court by the order of 20 July 1990. The refund of the duty after that time was not a payment made in settlement of Kawasaki's claim but simply another step which occurred in the course of administration. Kawasaki's claim for interest remained alive. In order to do complete justice between the parties, I should therefore make an order in the nature of interest from the time of payment until the time of repayment.

26. In accordance with the ordinary practice of this Court when sitting in New South Wales, the interest rate adopted by the Supreme Court of New South Wales should be applied. In the present case, the relevant rate of interest for the period when the moneys were held by the Collector was 21%, calculated at $49,735. That interest rate and the calculation are agreed.

27. I shall therefore order that the Comptroller-General of Customs pay to the applicant the sum of $49,735. I shall also order that the respondents pay the costs of the proceedings as from 20 July 1990.

Decisions (Judicial Review) Act 1977

Court of Australia Act 1976

Decisions (Judicial Review) Act 1977

Court of Australia Act 1976

Decisions (Judicial Review) Act 1977

Court of Australia Act 1976

Re Kawasaki Motors Pty Limited v Comptroller-General of Customs and Anor [1991] FCA 265; 102 ALR 258

At a glance

Court

Decision date

Before

Source

Judgment (45 paragraphs)

Re Kawasaki Motors Pty Limited v Comptroller-General of Customs and Anor [1991] FCA 265; 102 ALR 258 (19 June 1991)

Parties

Legislation Cited (9)

Cases Cited (7)