Chippendale Printing Co Pty Ltd v The Commonwealth of Australia & Anor [1996] FCA 80

CATCHWORDS

TAXATION - sales tax - alleged overpayment - application to recover amounts paid under a mistake of law - discussion of principles - interrelationship between common law and statutory refund provisions - whether statutory provisions form a code that excludes common law remedies.

STATUTORY INTERPRETATION - whether certain statutory provisions form a code that excludes common law remedies - whether the presumption of exclusivity arises - whether existing common law rights taken away expressly by statute - whether taken away by necessary implication - whether statutory code and common law intended to co-exist - whether concurrent and alternative rights to repayment available - whether a comprehensive statutory procedure for objection, appeal and review - relevance of legislative scheme being enacted in a piecemeal fashion over a substantial period involving many amendments - relevance of unenacted Bills - whether legislation should be interpreted to avoid a result that would render amending legislation unnecessary or futile - whether amending legislation which merely seeks to remove doubt can be regarded as unnecessary or futile.

Sales Tax Assessment Act 1992 ss51, 53, 55, Schedule 1 Table 3

Sales Tax Assessment Act (No 1) 1930 s26

Sales Tax Procedure Act 1934 ss12C, 12A(1)

Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 88, 92 applied

Precision Pools Pty Ltd v Commissioner of Taxation (1992)

37 FCR 554 at 563, 565 applied

Jax Tyres Pty Ltd v Commissioner of Taxation (1986)

5 NSWLR 329 at 334 applied

Sargood Bros v Commonwealth (1910) 11 CLR 258 considered

Chase Manhattan Bank v Israel-British Bank [1981] 1 Ch 105 considered

Mason v New South Wales (1959) 102 CLR 108 considered

Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 7 considered

State Bank of New South Wales v Federal Commissioner of Taxation [1995] ATC 4,734 considered

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 applied

Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 referred

North Wind Pty Ltd v Proprietors-Strata Plan 3143 [1981]

2 NSWLR 809 considered

Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 2) (1991) 32 FCR 243 at 258 applied

Otto Australia Pty Ltd v Commissioner of Taxation (1991)

28 FCR 477 at 480, 483 applied

James v Federal Commissioner of Taxation (1957) 97 CLR 23 applied

Grain Elevators Board (Vic) v Dunmunkle Shire Corporation (1946) 73 CLR 70 at 85, 86 considered

Hepples v Commissioner of Taxation (No 2) (1992)

173 CLR 492 at 539 considered.

CHIPPENDALE PRINTING CO PTY LIMITED & ANOR v

THE COMMISSIONER OF TAXATION

No NG 650 of 1995

Sheppard, Tamberlin and Lehane JJ

Sydney

26 February 1996

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No. NG 650 of 1995

GENERAL DIVISION )

ON APPEAL FROM A JUDGE

OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CHIPPENDALE PRINTING CO

PTY LIMITED

Appellant

AND: THE COMMONWEALTH OF AUSTRALIA

First Respondent

THE COMMISSIONER OF TAXATION

Second Respondent

CORAM: SHEPPARD, TAMBERLIN and LEHANE JJ

PLACE: SYDNEY

DATED: 26 FEBRUARY 1996

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1 The appeal be dismissed.

2. The appellant pay the respondents' costs of the appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No. 650 of 1995

GENERAL DIVISION )

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CHIPPENDALE PRINTING CO PTY LIMITED

Appellant

AND: THE COMMONWEALTH OF AUSTRALIA

First Respondent

THE COMMISSIONER OF TAXATION

Second Respondent

CORAM: SHEPPARD, TAMBERLIN AND LEHANE JJ

PLACE: SYDNEY

DATE: 26 FEBRUARY 1996

REASONS FOR JUDGMENT

SHEPPARD J: In this matter I have had the advantage of reading the judgments to be delivered by Tamberlin J and Lehane J. I agree in their conclusion that the appeal should be dismissed.

Essentially my reasons for reaching the conclusion which I have are based on the construction of the provisions of the legislation in question. The legislation is referred to in detail in the other judgments and I do not repeat the provisions here. In issue are the provisions of the Sales Tax Assessment Act (No. 1) 1930 and the Sales Tax Assessment Act 1992 which relate to the refund of overpaid sales tax. The provisions of both Acts make it clear that, if an application for a refund of overpaid sales tax is made in respect of an overpaid amount which has been passed on by the taxpayer to
its purchasers, the refund will not be made unless the taxpayer has refunded the amount of the overpayment to those purchasers.

In my view the legislation contains a clear statement of an understandable policy, namely, that a taxpayer who has overpaid sales tax is not to receive a windfall. In other words if he has passed the amount of the payment on to purchasers and has not made refunds to them, he has made no loss even though the tax has been overpaid. He will only be out of pocket if the overpayment has not been passed on and not refunded. Otherwise it will be the purchasers who suffer loss due to the mistake which has been made.

Much of the argument before us was taken up with an interesting consideration of the circumstances in which a common law right to recover moneys for an overpayment of tax could co-exist with a statutory right for that recovery. There was a good deal of consideration given to the question whether the legislation in point contained what might be described as a code thus reflecting an intention on the part of the legislature to oust other forms of recovery. Plainly the matter is one of statutory interpretation. It would seem to me to be an odd state of affairs if the legislature, in the circumstances which exist here, intended to restrict the right to recover under the statute as it has and yet to allow an unrestricted right deriving from the common law to remain available at the same time. I think that the legislation reflects a sufficiently clear intention to warrant the conclusion that it did not intend there to be available for an overpayment such as was made in this case any remedy other than the statutory one for which the legislation provides. That was the view which Burchett J and I expressed in Otto Australia Pty Limited v Commissioner of Taxation (1991) 28 FCR 477; see at 480-1 and 483.

The other question in the case concerns the claim which the appellant has made for a declaration which would have the effect of obliging the Commissioner to make a refund if and when the overpayment of tax was recouped from some or all of the purchasers with whom the appellant dealt. I would reject the claim which has been made. The application for a refund of overpaid sales tax is either one which the Commissioner is obliged to give effect to or it is not. The statutes make it clear that the Commissioner will not be obliged to give effect to the application if the amount of the overpayment has been passed on. It is not appropriate to make a declaration of the kind which is sought.

In the result I would dismiss the appeal with costs.

I certify that this and the two (2) preceding pages are a true copy of the reasons for judgment herein of the Honourable Justice Sheppard.

for Associate

Dated: 26 February 1996

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No. NG650 of 1995 GENERAL DIVISION )

ON APPEAL FROM A JUDGE

OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CHIPPENDALE PRINTING CO

PTY LIMITED

Appellant

AND: THE COMMONWEALTH OF AUSTRALIA

First Respondent

THE COMMISSIONER OF TAXATION

Second Respondent

CORAM: SHEPPARD, TAMBERLIN and LEHANE JJ

PLACE: SYDNEY

DATED: 26 FEBRUARY 1996

REASONS FOR JUDGMENT

TAMBERLIN J:

This is an appeal from a judgment of Lindgren J in which the parties sought answers to two questions, by way of stated case, with respect to the entitlement of the appellant ("Chippendale") to a refund or credit in respect of sales tax paid by it by reason of a mistake of law.

On the facts assumed for the stated case, the amount paid by Chippendale was in excess of that which was required to be paid under the applicable legislation. The claim is made with respect to two periods. The first is from 1 July 1991 to 31 December 1992 ("the first period") and the second is from 1 January 1993 to 30 June 1994 ("the second period"). During the first period the statutory sales tax regime, then relevant, took effect initially in 1930 and was subsequently amended. On 31 December 1992, this regime was replaced by new legislation which was in place during the second relevant period. Questions 1 and 2 in the stated case refer respectively to each of these periods and answers are sought in respect of both the old and new "regimes".

The stated case sets out the agreed facts and an assumption on which it is based. The order which embodies the stated case reads as follows:

"(AN ORDER THAT), the facts in paras (a), (b), (d), (e), (f) and (g) below ("the Agreed Facts") being agreed to by the parties, questions 1 and 2 below be decided separately from any other question in the proceedings on the assumption that the facts alleged by the applicant and referred to in para (c) below are true ("the Assumption"):

(a) The applicant was during the period 1 July 1991 to 31 December 1992 ("the first period") and during the period 1 January 1993 to 30 June 1994 ("the second period") a manufacturer of goods ("the subject goods") which it sold by retail.

(b) In respect of the sales of the subject goods made during each of the first period and the second period the applicant paid sales tax to the second respondent.

(c) The applicant alleges that by reason of a mistake on its part the applicant paid to the second respondent in each of the first period and the second period an amount of sales tax which, by an amount ("the overpaid sales tax"), was in excess of the amount which under applicable sales tax legislation it was required to pay in respect of its sales of the subject goods.

(d) The sales tax so paid by the applicant to the second respondent (including the allegedly overpaid sales tax) was passed on by the applicant to the purchasers of the subject goods and has not been refunded by the applicant to the purchasers to whom it was passed on.

(e) The basis upon which the applicant calculated its sales tax liability in respect of the subject goods was not at the time of payment disclosed or known to the second respondent.

(f) The applicant has made an application to the second respondent under the Sales Tax Legislation applicable during each of the first period and the second period for a refund of the overpaid sales tax.

(g) The applicant has tendered to the Court the undertaking comprised in the Affidavit of 1 March 1995 of Edwin Murrell Gardiner and in paragraph 35 of his affidavit of 30 November 1994, copies of which are attached [the copies are attached to the orders accompanying these Reasons for Judgment - and see below].

1. On the basis of the Agreed Facts and the Assumption, do the provisions of the sales tax legislation applicable to sales of the subject goods during the first period deny to the applicant any entitlement it may have to a refund or to recovery from the respondents or either of them of the overpaid sales tax paid in respect of the subject goods sold by the applicant in the first period?

2. On the basis of the Agreed Facts and the Assumption, do the provisions of the sales tax legislation applicable to sales of the subject goods during the second period deny to the applicant any entitlement it may have to a refund or to recovery from the respondents or either of them of the overpaid sales tax paid in respect of the subject goods sold by the applicant in the second period?"

His Honour, Lindgren J answered the questions in the Stated Case as follows : (1) Yes, (2) Yes.

Statutory Provisions

The relevant legislation during the first period including the Sales Tax Assessment Act (No.1) 1930 ("the 1930 Act"), in particular subss26(1) and (1A) which read:

"26(1) Subject to subsection (1A), where the Commissioner finds in any case that tax has been overpaid by a person, the Commissioner shall:

(a) refund the amount of any tax overpaid; or

(b) apply the amount of any tax overpaid against any liability of the person to the Commonwealth, being a liability arising under, or by virtue of, an Act of which the Commissioner has the general administration, and refund any part of the amount that is not so applied.

(1A) Subsection (1) does not apply in relation to any tax paid by a person unless the Commissioner is satisfied that the tax has not been passed on by the person to another person, or, if passed on to another person, has been refunded to the other person."

Two provisions of the Sales Tax Procedure Act 1934 (Cth) ("the Procedure Act") are relevant.

"12A(1) Notwithstanding the provisions of any Sales Tax Assessment Act (other than provisions relating to objections and appeals) or of any regulations made under such Act, where any person has paid any amount either as sales tax or for sales tax in respect of any goods, ... , that person shall not be entitled to any refund of that amount -

(a) ...

(b) if the amount was paid either before or after [13 December 1934] - upon a prescribed ground as defined in this section, unless tha person finally succeeds in an action, upon that ground, brought, in pursuance of this section, for the recovery of that amount:

... "

The relevant legislation in the second period includes the Sales Tax Assessment Act 1992 ("the 1992 Act"), s51 of which reads:

"51(1) Table 3 sets out the situations in which a claimant is entitled to a credit.

(2) A claimant is not entitled to a credit for an amount of tax for which a credit entitlement has previously arisen (whether for the claimant or another person).

(3) A claimant is not entitled to a credit unless the claim for the credit is lodged within 3 years after the time when the credit arises.

(4) A claim for a credit must be made in the form and manner approved by the Commissioner, and must be accompanied by such supporting evidence as the Commissioner requires."

Table 3, referred to in subs51(1) is set out in Schedule 1 to the 1992 Act. It reads:

"Table 3: Credit Grounds

[1] No.	[2] Summary of ground	[3] Details of ground	[4] Amount of credit	[5] Time credit arises
CR1	Tax overpaid	Claimant has paid an amount as tax that was not legally payable	the amount overpaid, to the extent that the claimant has not passed it on	when the amount became overpaid".

There is no definition of the term "overpaid" in the relevant legislation in respect of either period. However column 3 of Table 3 makes it clear that under the 1992 Act, the expression is intended to mean an amount paid as sales tax that was not legally payable. The same meaning should, in my view, be given to the expression under the previous legislation. This meaning accords with the ordinary meaning of the expression which is ".... a sum of money paid in excess of what is due": the new Shorter Oxford English Dictionary, 1993 reprint at 2053.

It is noted that whereas the duty to refund under subs26(1) of the 1930 Act is predicated on a finding by the Commissioner that sales tax has been overpaid subs51(1) of the 1992 Act is framed in terms of an "entitlement" to a credit. There is no requirement in that Act for any "finding" by the Commissioner that tax has been overpaid.

The word "credit" in s51 means "a credit under Part 4". Those provisions inter alia entitle a claimant to deduct any credit from tax payable or to obtain a refund where the credit exceeds the amount payable.

The Issue

The question raised on this appeal is whether the statutory regimes applicable in respect of each period comprised an exhaustive and exclusive code as to the circumstances and conditions under which a claimant can recover an overpayment of sales tax or whether, alternatively and co-existent with the statutory right and procedures there is a right to a refund under the general law which is not subject to the conditions, limitations or exclusions provided for by the statutory regimes. As there is no express exclusion any such result must be found to arise by "necessary implication".

As appears from paragraph (d) of the case stated, the overpaid sales tax was passed on by the applicant to the purchasers of the goods and has not been refunded by the applicant to the purchasers. In these circumstances, it is common ground that there can be no recovery pursuant to the statutory entitlements conferred by the 1930 Act or the 1992 Act, due to the provisions of s26(1A) and Table 3 of Schedule 1 to the 1992 Act. Recovery of an overpaid amount of sales tax can only be made in circumstances where, or to the extent that, the tax has not been passed on.

The appellant submits that it is entitled to recover a refund at general law apart from the statutory provisions in respect of the tax paid by mistake, whether the mistake is one of fact or law.

The general law right to recover an overpayment made under a causative mistake of law, subject to defences, was first accepted in Australia, in David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353. That decision was given on 7 October 1992. The High Court, there held that under the general law of Australia, moneys paid under a mistake of law can be recovered. It also held that it is a defence to a claim to recover money paid under mistake of law, that the payee has, for example, adversely changed its position in reliance on the payment. Their Honours, Mason CJ, and Deane, Toohey, Gaudron and McHugh JJ, said at 376:

"..... the rule precluding recovery of moneys paid under a mistake of law should be held not to form part of the law of Australia. In referring to moneys paid under a mistake of law, we intend to refer to circumstances where the plaintiff pays moneys to a recipient who is not legally entitled to receive them."

At 385 their Honours said:

"If we accept the principle that payments made under a mistake of law should be prime facie recoverable, in the same way as payments made under a mistake of fact, a defence of change of position is necessary to ensure that enrichment of the recipient of the payment is prevented only in circumstances where it would be unjust."

In its subsequent decision in Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51, the High Court held that it was not a defence, under the general law, to a claim based on unjust enrichment for a refund of overpaid stamp duty, that the tax had been passed on to purchasers and had not been refunded. The submission was made and rejected that in such circumstances, if a refund were to be made, the claimant would receive an windfall to which it was not entitled.

Submissions of the Appellant

1. There is no express provision in the legislation that the statutory provisions constitute an exclusive code so as to preclude an action under the general law. Reference is made to the decision of the Full Court in Comptroller-General of Customs (NSW) v Kawasaki Motors (No.2) (1991) 32 FCR 243. In that case, the Court held that s167 of the Customs Act, 1901 (Cth) provided the only method whereby an action for recovery of overpaid customs duty can be brought, where there is dispute between the owner and the Collector as to liability. The relevant provision was s167(4) which provided:

"167(4) No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times: ...." (Emphasis added).

This language is express and unequivocal.

2. Nor can it be said, in the present case, that the common law remedy has been removed as a matter of necessary implication or clear language.

3. The statement of Spender J in Precision Pools Pty Limited v Commissioner of Taxation (1992) 37 FCR 554 at 565 is directly in point and ought to be applied to the present case. At that page his Honour said in relation to s26 of the 1930 Act:

"First, in my opinion s26, unlike s12A of the Procedure Act, is not expressed in terms limiting a right to recover. It is expressed in terms of facilitating a refund in certain circumstances and conferring a discretion on the Commissioner to refund an amount of tax in certain circumstances. One would expect clearer words if the section were to have the effect of limiting a right under the general law to be repaid moneys either pursuant to an agreement or in circumstances where the payments were not made voluntarily but under compulsion, the recovery being sought as money had and received."

4. As the provisions are remedial in nature, the Court should approach the question on the basis that the provisions were designed to grant rights and not to exclude them.

5. The approach of Lindgren J fails to take into account the developing and fluid nature of the common law. The provisions under consideration should not be read so as to exclude rights which may subsequently be revealed as part of the general law. This submission rests on the consideration that both legislative regimes predated the High Court decision in David Securities (supra), which was delivered on 7 October 1992. That case altered the general law of Australia so as to recognise that money paid under a causative mistake of law could be recovered subject to certain defences and on certain conditions. As this development had not taken place when each of the legislative regimes came into existence they cannot be read as designed to preclude recovery arising from a subsequent development in the general law recognising a right to recovery for money paid under a causative mistake of law. Cf Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322-323, per Brennan J.

6. Any right under the general law to recover overpaid sales tax would be an action by the taxpayer against the Commonwealth of Australia and not the Commissioner of Taxation. Sections 26(1), (1A) and section 12C, of the Procedure Act 1934 restrict themselves to circumstances in which "the Commissioner" is to refund an amount of overpaid sales tax. Hence they do not apply to an action under the general law against the Commissioner.

7. In 1995 a Bill was proposed which included a provision excluding refunds not expressed and provided for. This Bill has never been passed. Notwithstanding this, the appellant submits that the proposed provisions would have been pointless if the pre-existing law was that there was no general law right to recover sales tax and this was to be excluded by the proposed amendments.

8. The circumstance that a comprehensive range of review and appeal procedures were available to a taxpayer under the statutory regimes is not to the point and cannot be invoked to support an argument that the general law right has been excluded.

9. In the alternative, if the statutory regimes constitute a code excluding the common law right, then the taxpayer should be afforded an opportunity to refund to its customers the amount paid on and the court should make orders accordingly. Any argument to the contrary involves, it is said, a "capricious" application of the legislation and should not be accepted, because the taxpayer would be forced to run a commercial risk of refunding the amount passed on to customers in advance of having the entitlement to a refund determined.

Case Law

In Otto Australia Pty Limited v Commissioner of Taxation (1991) 28 FCR 477, the Full Court considered the question whether sales tax passed on to customers in the form of an undisclosed component of the sale price, as opposed to it being specified as a separate element apart from the sale price, could be said to have been "passed on within section 11(1) and (1)(A) of the Sales Tax Assessment (No.5) 1930 (which were in identical terms to subs26(1) and (1A) of the 1930 Act).

Sheppard J considered that the sales tax had been "passed on" and went on to say at 480-481:

"In those circumstances, the Commissioner could not have been satisfied that the tax had not been passed on with the consequence that s11(1) could not have any application."

Burchett J said at 483:

"... I agree with Sheppard J that s11(1A) of the Sales Tax Assessment Act (No 5) 1930 (Cth) provides an insuperable obstacle to the appellant's success."

In that case, the question as to whether there was a co-existent right under the general law to the refund of sales tax, in addition to the right under the legislative scheme was not argued. Nevertheless, the observations of their Honours provide some guidance with respect to the questions presently before the Court.

The judgments of Hill and Heerey JJ In Kawasaki (supra) enunciate, in my view, an appropriate approach to the interpretation of the statutory schemes. In that case, their Honours were considering whether the statutory scheme relating to recovery of an overpayment of import duties under s167 of
the Customs Act 1901 (Cth) precluded an action at general law. At page 263 their Honours said:

"If s167 were but an alternative procedure, it is hard to see, assuming that an action for money had and received could be brought against the Comptroller, why any person would adopt the procedure in s167, which would seem to be greatly more restrictive that applicable at common law. Further, the Comptroller has the advantage of the deeming of the duty to be correct in the statutory context of a s167 action. There would be no such deeming provision applicable to a common law action.

As noted above in the Kawasaki case, s167(4) provided "no action shall lie ... unless the payment is made under protest in pursuance of this section". Accordingly, it was not necessary for the court to consider whether there was an exclusion of an action under the general law, by necessary implication.

The issue before Spender J in Precision Pools Pty Limited v Commissioner of Taxation (supra), relied on by the applicant in this proceeding, was whether an agreement between the Commissioner and the claimant as to the repayment of tax could be enforced. It was decided that the Commissioner was obliged under the agreement to repay the moneys. His Honour's remarks in relation to the operation and effect of s26 of the 1930 Act in relation to recovery rights under the general law were clearly obiter. It appears from his conclusion that he considered the agreement was enforceable independently of statute and was not to be read as "subject to" s26.

In Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70, the House of Lords held that the law of restitution should be reformulated so as to recognise a prima facie right of recovery based solely on payment of money pursuant to an ultra vires demand by a public authority. In that case, tax was paid under regulations without prejudice to the taxpayer's right to recover the sums if the regulations were void. The regulations were subsequently held void and a claim was brought for recovery of the moneys paid. It is significant that, in that case, the taxpayer's claim fell outside the statutory framework governing repayment of overpaid tax so that there was no statutory right to recover. A majority of their Lordships held that the taxpayer was entitled at common law to repayment of the sums from the dates of payment and to interest thereon. In the House of Lords, Lord Goff at 177 said:

"I would therefore hold that money paid by a citizen to a public authority in the form of taxes or other levies paid pursuant to an ultra vires demand by the authority is prima facie recoverable by the citizen as of right. As at present advised, I am inclined to the opinion that this principle should extend to embrace cases in which the tax or other levy has been wrongly exacted by the public authority not because the demand was ultra vires but for other reasons, for example, because the authority has misconstrued a relevant statute or regulation. It is not however necessary to decide the point in the present case, and in any event cases
of this kind are generally the subject of statutory regimes which legislate for the circumstances in which moneys so paid either must or may be repaid." (Emphasis added)

At page 200 Lord Slynn remarked:

"I do not consider that the fact that parliament has legislated extensively in this area means that no principle of recovery at common law can or should at this stage of the development of the law be found to exist. If the principle does exist that tax paid on a demand from the Crown when the tax was the subject of an ultra vires demand can be recovered as money had and received then, in my view, it is for the courts to declare it. In so doing they do not usurp the legislative function. I regard the proper approach as the converse. If the legislature finds that limitations on the common law principle are needed for reasons of policy or good administration then they can be adopted by legislation, e.g. by a short limitation period, presumptions as to the validity..." (Emphasis added)

Lord Keith, dissenting said at 161:

"To give effect to Woolwich's proposition would, in my opinion, amount to very far reaching exercise of judicial legislation. That would be particularly inappropriate having regard to the considerable number of instances which exist of Parliament having legislated in various fields to define the circumstances under which payments of tax not lawfully due may be recovered and also in what situations and upon what terms interest on overpayments of tax may be paid.... It seems to me that formulation of the precise grounds upon which overpayments of tax ought to be recoverable and of any exceptions to the right of recovery, may involve nice considerations of policy which are properly the province of Parliament and are not suitable for consideration by the courts." (Emphasis added)

In the Woolwich case the common law claim was not excluded by any statutory regime. As can be seen some members of the House of Lords referred to the adoption of legislative regimes to cover and control the grounds on which, and the procedures by which, repayments could be claimed. These observations are consistent with the view that a detailed statutory regime may appropriately create, exclude, limit and control the exercise of rights to repayment and to preclude any general law rights to repayment freed of such restraints. Similar remarks were made in the Court of Appeal in that case. Cf 1993 AC at 101F per Glidewell LJ, Ralph-Gibson LJ (dissenting) at 124-125 and 132. Cf also Butler-Sloss LJ at 141-142.

In the present case, it is contended for the appellant that there are two concurrent and alternative rights to repayment, each of which is independently available to the claimant.

In the Royal Insurance case, s111(1) of the Stamps Act 1958 (Vict.) provided:

"Where the [Commissioner] finds in any case that duty has been overpaid, .... he may refund to the company, person or firm of persons which or who paid the duty the amount of duty found to be overpaid." (Emphasis added)

In that case, Royal Insurance paid amounts of tax which it believed to be due under the Stamps Act (Vict) but which were not legally due. The Court held that the Comptroller was bound to refund the amounts mistakenly overpaid under the general law of restitution. The Court held that once it was found that there had been an overpayment s111(1) conferred a discretionary power on the Comptroller to refund money overpaid but created no duty to make a refund. However, there was no residual discretion to refuse a refund under the section once the finding of overpayment had been made and there was a legal liability, subject to general law defences, to refund under the general law. As a result, the remedy granted in that case took the form of a direction to the Commissioner of State Revenue, the Comptroller's successor, to exercise the discretion in favour of the taxpayer and refund the amount in question.

In the present case, it is significant that s26(1) of the 1930 Act is mandatory. It provides that where the Commissioner finds that tax has been overpaid the Commissioner shall either refund or apply the overpaid tax against any liability of the taxpayer. It is not a case of discretion. In its earlier form, prior to the 1984 Amendment, s26(1) was framed in discretionary terms, and the word "may" was used rather than "shall" . The amendment was made by Act No 123 of 1984.

In Royal Insurance there was a converse history. The predecessor to s111(1) provided that the Comptroller of Stamps upon being satisfied that an overpayment was made shall apply to the Treasurer for a refund and the Treasurer shall without further or other authority than the Act refund the amount.
That section was amended to provide for the discretion presently embodied in s111.

The 1992 Act, of course, speaks simply in terms of "entitlement" and there is no question of any finding or discretion being a requisite element under that Act.

The Present Case

Firstly, I will consider the position under the previous legislation.

In his judgment, Lindgren J classifies the overpayments in question as a "mere overpayments" as distinct, for example, from payments made on a demand under colore officii (as in Mason v The State of New South Wales (1959) 102 CLR 108),or payment made pursuant to ultra vires legislation as in Woolwich (supra).

His Honour considered that, in the case of "mere overpayment" used in the above sense, the legislative provisions in force during each period were exhaustive and operated to exclude any general law right of recovery. His Honour did not consider the question whether all types of overpayment were so exhaustively and exclusively covered by the legislation but limited his reasoning to "mere overpayment".

As the question as to the existence of an exclusive code is one of statutory construction it is not appropriate, in my view, to approach the matter on the basis that the legislation constitutes an exhaustive code at least in some overpayment situations, but not necessarily in others. Section 26(1) simply refers to tax which has been "overpaid". There are no words which limit the Commissioner's duty to any particular type of overpayment or any particular circumstances of overpayment. This consideration is, in my view, central to the resolution of the questions posed.

In my opinion, subs26(1) gives a right in all situations in which sales tax has been overpaid. Overpayment means the payment of a greater amount of tax than was lawfully payable. The subsection does not focus on the reasons which give rise to the overpayment, but rather on the circumstance that there has been in fact an overpayment, of tax. If one adopts a literal or natural reading of the words used, free from authority, s26 would operate immediately there has been an overpayment found by the Commissioner. The reason, ground or form of the overpayment is irrelevant. Accordingly, it is appropriate, as a matter of statutory construction, to consider whether the legislation in each period excludes all overpayments and not just whether it excludes one or more classes of overpayment. To properly carry out the statutory construction exercise involved in deciding whether there is an exhaustive and exclusive code it is relevant to consider
whether all overpayments are covered by the legislation and not just whether one or more specific types of overpayment.

As his Honour points out the words "in any case" in subs26(1) support the conclusion that the statutory right is to be given a wide reading. In other words, it is directed to overpayment made in any case or in every case where there has been a greater amount paid than that which is legally due, regardless of the circumstances leading to or the nature of the overpayment.

As subs26(1) always operates whenever there is an overpayment found by the Commissioner, it would clearly include overpayments under a mistake of law, such as the present case. Accordingly, once there is admitted payment under a mistake, the Commissioner is under a duty to refund. Where applicable, s26(1A) provides a defence. The legislature has specifically addressed the circumstances where tax has been passed on and not refunded. In such circumstances, there shall be no recovery under s26(1).

As enacted in 1930, subsection 26(1) provided:

"26-(1) Where the Commissioner finds in any case that tax has been overpaid, he may refund the amount of tax found to be overpaid." (Emphasis added)

The section has been the subject of several amendments but as originally enacted it was sufficiently wide to cover
circumstances where the refund claim was made on the ground of a mistake of fact or law. Indeed, it was wide enough to cover every case or instance of recovery of overpaid tax. To this extent it went beyond the general law in Australia, as it was then understood. On 7 October 1992, the High Court handed down its judgment in David Securities. Until 7 October 1992 then the general law of Australia, as understood and declared by the Courts, did not permit recovery for money paid under a mistake of law.

Two results flow from this. First, it does not matter in the present case for the purpose of considering the effect of the statutory scheme that the general law did not permit recovery of moneys paid under a mistake of law, because the statute always provided, from its inception in 1930, for recovery of overpayment, regardless of the type of overpayment. Second, the statute provided a new and additional remedy which was not then understood to exist under the general law. In creating this additional statutory right, the statute imposed specific conditions, limitations and exclusions in relation to the availability and machinery for exercising that right.

In my view, the effect of the Act in 1930 was to transform all common law rights as then understood, into statutory rights and to exclude the common law rights. The 1930 Act went further. It added new and broader statutory rights which went beyond the common law. In particular, it gave a statutory right to recover for a mistake of law. As a result, not only was the field of recovery at common law for overpayments made by mistake, or for any other reason comprehensively "covered", but the section went beyond this and created new rights and controlled these rights by specific statutory exclusions, limitations and procedures set out in the legislation.

The Procedure Act is also important. Section 12B expressly limits the right to a refund of sales tax where the action is not brought in accordance with the time limit set out in the section.

Also directly applicable to a claim for a refund under subs26(1) is s12C of the Procedure Act which directs the Commissioner not to make a refund for an overpayment of tax, unless within 3 years from the date of payment he finds that a person has made an overpayment of tax, or unless a written request is made, and a return lodged with the Commissioner within 3 years. The time period runs from the date on which the tax was overpaid.

Although the above provisions were enacted after the 1930 Act, nevertheless they impose specific conditions and limitations on the recovery of overpaid sales tax which is provided for by subs26(1) and they form an important part of the statutory regime in force at the time and the overpayments were made.

It is clear that s26(1A) is designed to preclude recovery of overpaid sales tax to the extent that the sales tax has been passed on and has not been refunded.

The detailed express and specific provisions would be unnecessary if a claimant was entitled to claim a refund of overpaid sales tax under the general law right, freed of the specific constraints referred to above. The Court will be reluctant to apply such an interpretation where there is a viable and reasonable alternative interpretation which avoids this result.

It must be borne in mind that the obligation to pay sales tax and the procedures by reference to which such tax is to be assessed, paid, collected and adjusted, arises from statute and not from agreement or from the general law. The subject matter of the tax is a statutory debt. The whole regulatory framework is legislative and not consensual in character. Against this background it is not inappropriate that the statutory regime should be interpreted to cover the field and not allow actions under the general law where the result would be to bypass carefully formulated legislative controls.

The 1930 Act in its original form provided,in Part VII,for procedural machinery by way of objection, review and appeal in respect of some decisions by the Commissioner which a taxpayer wished to challenge. As originally enacted in 1930, these provisions (ss40-44) did not provide for a challenge to a s26(1) decision not to make a refund. However, as the result of a series of amendments, the review and appeals structure originally set out in Part V11 of the 1930 Act was replaced in 1986 as result of the Taxation Boards of Review (Transfer of Jurisdiction) Act 1986 (Cth), which provided a comprehensive procedure in relation to include a decision not to make a refund under s26(1). This regime, was later superseded by the provisions of Part IVC of the Taxation Administration Act 1953 (Cth) ("the Administration Act"), inserted by Act No. 216 of 1991. That Part provided for an elaborate system of review which included inter alia decisions of the Commissioner, relating to a taxpayer's claim for credit under s51 of the 1992 Act.

An extensive summary of the relevant objection, review and appeal procedures is set out in the judgment of Lindgren J and it is not necessary to repeat them. Suffice it to note, that there have been at all relevant times, detailed specific statutory review procedures in place to define and regulate the way in which challenges can be made and pursued in respect of decisions made by the Commissioner which included decisions relating to claims for the refund of amounts of sales tax which have been overpaid.

The existence of these entitlements, conditions and procedures also lends support to the conclusion that the legislative regime under the 1930 Act as amended was intended to be exhaustive as to the way in which, and the basis on which, claims for refunds of overpaid sales tax could be obtained. It is unlikely, to say the least, that these procedures and entitlements, would be cast in such a comprehensive and detailed form, if it was envisaged that alternative rights under the general law could also be availed of with the consequence that the procedural machinery was bypassed.

In my view, it is permissible to take account of the statutory objection, appeal and review machinery as it stood at the time when the tax was overpaid, in order to ascertain whether the legislation was intended to cover the field and exclude any alternative avenues of recovery under general law.

Having regard to the above considerations I am of the opinion that in the first period the general law right of recovery was by necessary implication excluded by the statutory regime then in place.

Second Period

Under the 1992 Act, the conclusion that the statutory regime is exclusive and exhaustive of a general law right to a refund of sales tax, in my view, is even clearer than under earlier legislation. The 1992 provisions were also enacted at a time when there was no acknowledged common law right of recovery for mistaken overpayments. The 1992 Act was assented to on 30 September 1992, 7 days before the High Court decision in David Securities. The 1992 Act is exclusive in its express terms and embodies an exhaustive statement of recovery rights in circumstances. (Section 51(1) refers to Table 3 which sets out "the" circumstances in which a claimant is entitled to a credit). This is the language of exclusion and not of collateral or alternative remedy. Like the earlier legislative scheme, s51(1) focuses on the fact of overpayment and is not concerned with the type or nature of the overpayment. It is designed to cover all instances of overpayment. It defines limits and defences. Moreover, it does not require the Commissioner to make a finding nor does it provide for any exercise of discretion by the Commissioner. Section 51(1) speaks in terms of "entitlements". Further, in relation to disputes or challenges the detailed appeal and procedures set out in the Administration Act apply.

General

As the term "overpayment" used in s26(1), as originally enacted is sufficiently extensive to cover all types of overpayment, it is not necessary to enter into a discussion of the appropriate judicial effect of the decision in David Securities, which might otherwise arise as a result of the fact that it was not until 7 October 1992, 7 days after the 1992 Act came into force on 30 September 1992, that the general law of Australia first acknowledged a right to recover an overpayment arising from a causative mistake of law in certain circumstances and subject to certain defences.

There is no substance, in the argument that the 1930 and 1992 Acts only apply to a claim against the Commissioner, whereas the general law right applies to a claim against the Commonwealth. Authority makes it clear that the Commissioner is acting as an officer of the Commonwealth and therefore nothing turns on this suggested distinction. Cf James v Federal Commissioner of Taxation (1957) 97 CLR 23 at 35.

In the judgment under appeal, his Honour declined to exercise his discretion to grant a declaration based on an undertaking by the claimant to refund in certain circumstances. It is not necessary to consider whether his Honour was correct in so doing, as it is common ground that the only matter presently before this Court is whether his Honour was correct in the answers which he gave to the questions in the Stated Case.

The appellant advanced an argument based on Clause 130A of the proposed Bill which was not passed, entitled "Taxation Laws Amendment (Budget Measures) Bill 1995. Clause 130A(1). This clause proposed that if the Commonwealth would be liable to refund a payment of an amount paid as sales tax that was not legally payable and the liability would arise because of the common law or for any other reason, then the Commonwealth should not be liable to refund the payment. It is submitted that this provision would have been unnecessary if Parliament considered that there was no common law right. There are two answers to this. First, a Bill which has not been passed can be of no assistance in determining the construction of an Act of Parliament. Second, such a provision is equally consistent with an intention to declare and clarify pre-existing law and not to change it.

Conclusions

In my view, the statutory regimes in place in the first and second period are exhaustive and exclude any rights at general law to recover overpaid tax in the present case.

Accordingly, I would dismiss the appeal with costs.

I certify that this and

the preceding twenty-eight

(28) pages are a true copy of the

Reasons for Judgment herein of

his Honour Justice Tamberlin.

Associate:

Date: 26 February 1996

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY )

GENERAL DIVISION ) No. NG650 of 1995

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: CHIPPENDALE PRINTING CO PTY LIMITED

Appellant

AND: THE COMMONWEALTH OF AUSTRALIA

First Respondent

THE COMMISSIONER OF TAXATION

Second Respondent

CORAM: Sheppard, Tamberlin and Lehane JJ

PLACE: Sydney

DATE: 26 February 1996

REASONS FOR JUDGMENT

LEHANE J: The appellant (to which I shall refer as Chippendale) seeks to recover from the respondents certain amounts which it paid to the second respondent (to whom I shall refer as the Commissioner) as sales tax. Chippendale claims that the Commissioner (or the first respondent, to which I shall refer as the Commonwealth) is obliged to repay the amounts in question because they exceeded the amount owing by Chippendale to the Commissioner for sales tax, having been paid by Chippendale under a misapprehension of the extent of its liability to tax: that is, under a causative mistake of law.

Questions for separate determination

Lindgren J ordered that two questions be decided separately from any other question in the proceedings. His Honour's order for separate decision made on 5 May 1995, as varied by orders made by his Honour on 4 August 1995, is as follows:

AN ORDER THAT, the facts in paras (a), (b), (d), (e), (f) and (g) below ("the Agreed Facts") being agreed to by the parties, questions 1 and 2 below be decided separately from any other question in the proceedings on the assumption that the facts alleged by the applicant and referred to in para (c) below are true ("the Assumption"):

(b) In respect of the sales of the subject goods made during each of the first period and the second period the applicant paid sales tax to the second respondent.

(e) The basis upon which the applicant calculated its sales tax liability in respect of the subject goods was not at the time of payment disclosed or known to the second respondent.

The affidavits referred to in the order are those of the managing director of Chippendale; the relevant paragraphs of the affidavits comprise undertakings that if it is found that overpayments of sales tax have been made, but that it is "a pre‑condition of Chippendale receiving a refund" that it has first refunded the amounts which it has passed on, Chippendale will refund the amounts passed on "before it receives the refund from the Commissioner".

Lindgren J answered each of the questions for separate decision "yes" and refused, in the exercise of his discretion, to make a declaration as to overpayment or as to the amount of any entitlement (i.e. to a refund from the Commissioner) which
Chippendale might be found to have if it should first refund the amounts of overpaid tax which it had passed on. Accordingly, his Honour dismissed Chippendale's application.

Chippendale now appeals against his Honour's decision.

The legislation

Paragraph (a) of the order for separate decision refers to two periods. The significance of that is that the sales tax legislation applicable until the end of the first period was then replaced by new legislation, principally the Sales Tax Assessment Act 1992 (to which I shall refer as the 1992 Act): the 1992 Act applied throughout the second period.

The principal provision relevant to this appeal, applicable during the first period, is s 26 of the Sales Tax Assessment Act (No. 1) 1930 (to which I shall refer as the No. 1 Act); s 12C of the Sales Tax Procedure Act 1934 (the Procedure Act) is relevant also. Sub‑sections 26(1) and (1A) of the No. 1 Act are as follows:

26(1) Subject to sub‑section (1A), where the Commissioner finds in any case that tax has been overpaid by a person, the Commissioner shall --

(a) refund the amount of any tax overpaid; or

(b) apply the amount of any tax overpaid against any liability of the person to the Commonwealth, being a
liability arising under, or by virtue of, an Act of which the Commissioner has the general administration, and refund any part of the amount that is not so applied.

26(1A)Sub‑section (1) does not apply in relation to any tax paid by a person unless the Commissioner is satisfied that the tax has not been passed on by the person to another person, or, if passed on to another person, has been refunded to the other person.

Sub‑section 12C(1) of the Procedure Act reads:

12C(1)Where the Commissioner finds that any person has made an overpayment of tax, the Commissioner shall not make any refund to that person in respect of that overpayment unless he so finds --

(a) within a period of three years; or

(b) on consideration of a claim in writing for that refund lodged with the Commissioner within a period of three years,

from the date upon which the overpayment was made.

For the second period, the crucial provision is s 51 of the 1992 Act, which is as follows:

51(1) Table 3 sets out the situations in which a claimant is entitled to a credit.

51(2) A claimant is not entitled to a credit for an amount of tax for which a credit entitlement has previously arisen (whether for the claimant or another person).

51(3) A claimant is not entitled to a credit unless the claim for the credit is lodged within 3 years after the time when the credit arises.

51(4) A claim for a credit must be made in the form and manner approved by the Commissioner, and must be accompanied by such supporting evidence as the Commissioner requires.

The item in Table 3 referred to in sub‑s (1) is:

[1]

No.

[2]

Summary of ground

[3]

Details of ground

[4]

Amount of credit

[5]

Time credit arises

CR1

Tax overpaid

Claimant has paid an amount as tax that was not legally payable.

the amount overpaid, to the extent that the claimant has not passed it on

when the amount became overpaid

The 1992 Act then provides that a credit to which a taxpayer is thus entitled may be deducted from tax payable in respect of a later return (s 53); the Commissioner may apply any credit not so deducted against a liability of the taxpayer for sales tax or under any other Act of which the Commissioner has the general administration (para 55(a)); and the Commissioner must refund any excess to the taxpayer (para 55(b)).

Though the new legislation differs significantly in form from the old, it is apparent that its substantial effect is very similar. Each obliges the Commissioner to make a refund in circumstances where it applies (subject to the rights of offset for which it provides); each denies an entitlement to a refund (or credit) unless a claim is made within three years from the date of the overpayment (or, in the case of the old legislation, the Commissioner finds within that period that the overpayment has been made); neither applies to an amount which has been passed on (unless, in the case of the old legislation, the amount passed on has in turn been refunded). Whereas the new legislation operates where there has in fact been an overpayment, the old
legislation applied "where the Commissioner finds in any case that tax has been overpaid", but that, I think it is now clear, makes no practical difference: Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51.

It will be noticed that whereas the old legislation does not define "overpayment of tax", Table 3 tells us, for the purposes of the new legislation, that "tax overpaid" refers to the fact that the "Claimant has paid an amount as tax that was not legally payable". Lindgren J held, and I agree, that the new statutory definition expresses equally what the old legislation meant by the term "overpayment". It may be noted that it includes both a payment exceeding an amount of tax actually due and a payment made, as tax, where no amount of tax was actually due: Precision Pools Pty Ltd v Commissioner of Taxation (1992) 37 FCR 554 at 563; cf Jax Tyres Pty Ltd v Commissioner of Taxation (1986) 5 NSWLR 329 at 334.

Interrelationship between common law and statutory refund provisions

It is, I think, quite clear that there have, at all times that matter for present purposes (that is, since immediately before the No. 1 Act was first enacted), been circumstances in which (disregarding the effect of the legislation), where an overpayment was made to a taxing authority, the common law would grant a remedy for the recovery of the amount overpaid. So, for example, in Sargood Bros v Commonwealth (1910) 11 CLR 258 O'Connor J said:

Where an officer of Government in the exercise of his office obtains payment of moneys as and for a charge which the law enables him to demand and to enforce, such moneys may be recovered back from him if it should afterwards turn out that they were not legally payable even though no protest was made or question raised at the time of payment. Payments thus demanded colore officii are regarded by the law as being made under duress.

Equally, relief would be available in accordance with common law principles in a case where money was paid as tax under a mistake of fact: e.g. if a taxpayer applied the right principles in calculating tax due but made an error in the calculation or, overlooking the fact that the tax due had already been paid, mistakenly paid it again (compare Chase Manhattan Bank v Israel-British Bank [1981] 1 Ch 105). Plainly there has been an expansion since 1930 of the range of circumstances in which the common law will grant relief. For example, the "duress" category of case may fairly be said to have expanded substantially as a result of the decision of the High Court in Mason v New South Wales (1959) 102 CLR 108 and may, perhaps, have expanded further following Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 7 (see e.g. State Bank of New South Wales v Federal Commissioner of Taxation [1995] ATC 4,734). Secondly and more strikingly, up to a time very shortly after the 1992 Act was passed it had been thought that a payment made under a mistake of law might not be recovered where there were no other circumstances attracting relief: that, however, is of course no longer the case (David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; Royal Insurance, supra).

Thus, in 1930, there were circumstances in which, statute apart, the common law provided a remedy for the recovery by a taxpayer of overpaid tax; there were other circumstances, in which tax might have been overpaid, where the common law provided no remedy. In 1996 there is a considerably expanded range of circumstances in which the common law (statute apart) provides such a remedy; there is no doubt still a range of circumstances, considerably diminished, in which it does not.

Are the statutory provisions a code?

It is, I think, common ground - and, in any event, it seems to be clear - that if both the Agreed Facts and the Assumption are true Chippendale is entitled, but for any effect the legislation may have on its entitlement, to recover the overpayments to which the Assumption relates (David Securities; Royal Insurance); and, particularly, (apart, again, from whatever effect the legislation may have) Royal Insurance establishes that the Commissioner cannot resist Chippendale's claim on the ground that the amounts overpaid have been passed on to customers of Chippendale and not refunded to them. The crucial question on this appeal is whether the sales tax legislation, old and new, deprives Chippendale of that entitlement: that is, whether the provisions relating to refunds and credits, which I have set out, provide exhaustively for the circumstances in which, and the conditions on which, a taxpayer may recover from the Commissioner (or the Commonwealth) an amount overpaid as tax, to the exclusion of common law remedies for its recovery. If the provisions are, in that sense, a code, Chippendale cannot recover the amounts claimed (and assumed, for
the purposes of the questions to be separately determined) to have been overpaid: they were passed on to customers and have not been refunded.

Lindgren J held, as the Commissioner had submitted, that the provisions excluded any entitlement of Chippendale to recover the assumed overpayments at common law. His Honour held that, in the case of an overpayment made by a taxpayer as a result of a unilateral mistake of law on the part of the taxpayer not known to, caused by or contributed to by the Commissioner (a type of overpayment which his Honour described as a "Mere Overpayment"), the legislation, both old and new, should be read as providing an exclusive means of obtaining a refund and as, by necessary implication, excluding common law remedies. His Honour found it unnecessary to decide whether the provisions operated exhaustively in relation to overpayments resulting from other causes, e.g. demand colore officii. Because David Securities was decided after the enactment of the 1992 Act, and because before that decision it was generally thought that there was no common law right of recovery of a payment made under a mistake of law, his Honour found it:

... reasonable to think that when sub‑ss 26(1) and 1(A) of the No. 1 Act and s 51 of the 1992 Act were enacted, Parliament was intending to create a code of taxpayers' rights in respect of Mere Overpayment - a situation in which, according to the general understanding he had no right of recovery under the general law. It provides no basis for attributing a different intention to the legislature that since 7 October 1992, a taxpayer has had, subject to defences, a cause of action for refund or recovery of money paid under a causative mistake of law ...

The situation is distinct from the existence of a common law right and the subsequent creation of a right by statute ...

I have difficulty, with respect, in seeing how the provisions, which operate generally in relation to overpayments, may be seen as an exhaustive code in relation to some categories of overpayment (i.e. those for which at the time the provisions were enacted the common law provided no remedy) but not necessarily in relation to others. Mere Overpayment is, no doubt, a striking example because the decision in David Securities marked a clear and significant change in the common law as it was thought to be. But other examples are available, which may illustrate the difficulty I have with his Honour's approach.

As I have said, the principle that recovery was available of money paid under a demand made colore officii was, by 1930, well established. It is at least arguable that the decision of the High Court in Mason marked a significant change in those principles (see Keith Mason and J W Carter, Restitution Law in Australia, 1995, at 768, 769). It could hardly be thought, however, that the provisions of the pre 1992 legislation (at least until its first amendment following the decision in Mason) co‑existed with common law remedies in relation to demands made colore officii as previously understood, but excluded such remedies based on any extension of the principles resulting from Mason. Similarly, the decision of the House of Lords in Woolwich was published on 20 July 1992, a little more than two months before the 1992 Act received the Royal Assent. Woolwich also represents, if followed in Australia (as seems likely: see e.g. State Bank of New South Wales v Federal Commissioner of Taxation, supra), a significant extension of common law remedies available in cases of overpayment: it could hardly be suggested, I should think, that a
common law remedy based on Woolwich would be excluded by the refund provisions of the No. 1 Act but might co‑exist with those of the 1992 Act.

In short, in my view the refund provisions of both sets of legislation either form an exhaustive code excluding common law remedies for all overpayments to which they relate or are not codes of that nature so that they do not exclude a common law remedy for an overpayment caused by a mistake of law any more than they exclude one for an overpayment caused by a mistake of fact. Whether the provisions form such a code must, then, be decided on the footing that at the time when the first of them was enacted, and ever since, the common law provided remedies for the recovery of some at least of the overpayments to which the provisions relate. It is therefore, I believe, unnecessary to enter into some of the interesting and difficult questions canvassed in argument, including those concerning the juridical nature of development (or change) of the common law by judicial decision or the precise application to the provisions with which we are concerned of the principles of statutory construction discussed by the High Court in Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319.

It follows also, in my opinion, that it is not appropriate to apply the presumption of exclusivity that arises where a statute creates a new right and specifies the remedy (North Wind Pty Ltd v Proprietors-Strata Plan 3143 [1981] 2 NSWLR 809 and cases there cited). The presumption described by the majority of the Full Court in
Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No 2) (1991) 32 FCR 243 at 258 may be more relevant:

Where a common law right exists and subsequently a right is created by statute, it may be accepted that the statute will be presumed not to take away the common law right unless that right is taken away expressly or by necessary implication.

In this case, as in Kawasaki, common law rights are not expressly denied. The question is whether they are excluded by necessary implication.

There is little directly relevant authority. In Precision Pools, supra, at 565 Spender J said:

First, in my opinion s 26, unlike s 12A of the Procedure Act, is not expressed in terms limiting a right to recover. It is expressed in terms of facilitating a refund in certain circumstances and conferring a discretion on the Commissioner to refund an amount of tax in certain circumstances. One would expect clearer words if the section were to have the effect of limiting a right under the general law to be repaid moneys either pursuant to an agreement or in circumstances where the payments were not made voluntarily but under compulsion, the recovery being sought as money had and received.

Because of the view he took as to the character of the payments concerned, however, those remarks were unnecessary to his Honour's decision. In Otto Australia Pty Ltd v Commissioner of Taxation (1991) 28 FCR 477 Sheppard J and Burchett J, at 480 and 483 respectively, expressed themselves in terms which seem consistent only with a view that a provision equivalent to s 26 of the No. 1 Act excluded common law
remedies; it may be that comments of Lockhart J in the same case at first instance ((1990) 25 FCR 257 at 263, 264) indicate a similar view. The formation of that view was not, however, necessary to the decision either of Lockhart J at first instance or of the majority of the Full Court.

Obiter as they may be, I think with respect that the observations of the members of the Full Court in Otto are right and should be followed. Let it be assumed (contrary, of course, to the fact) that at all times the common law provided a remedy for the recovery of all categories of overpayments to which s 26 of the No. 1 Act relates. If s 26 did not constitute a code, the result would be that (except, perhaps, in cases where a defence was available to a common law action which did not affect the duty to make a refund under the statute) the taxpayer might in every case require the Commissioner (or the Commonwealth - it makes no difference, I think) to refund the amount overpaid even if it had been passed on to another person and not refunded to that other person and even if the period specified in s 12C(1) of the Procedure Act had expired.

It may be retorted, of course, that the assumption is wrong and that the section provided for refunds in a number of cases in which no remedy was provided by the common law so that there was a substantial class of overpayment for which the statute provided the only available remedy. That, however, to my mind does not assist Chippendale: a statute which provides a new remedy where none is available at common law is presumed, as we have seen, to be intended to provide an exclusive
remedy and, to the extent that there are overlapping common law remedies available in cases to which the statute applies, it is all the more improbable that those remedies are intended to co‑exist with the statutory remedies - for instance, that while there might be no refund of an overpayment made under a mistake of law where the overpayment had been passed on or application for the refund was made more than three years after the overpayment, an overpayment made under a demand colore officii was recoverable whether or not the overpayment had been passed on and an overpayment caused by a mistake of fact might be recovered in proceedings commenced at any time within six years.

Particularly, sub‑s 12C(1) explicitly requires the Commissioner not to make a refund of any overpayment unless one of the specified conditions is met. I do not think that that provision is consistent with an intention on the part of the Parliament that there should continue to be a separate common law right to recover, against the Commissioner or the Commonwealth, certain overpayments whether the conditions are met or not; and given the correspondence of language between that provision and s 26, I do not think it is possible to read s 12C as exhaustive and s 26 otherwise. Similar comments might be made in relation to s 12A, referred to by Lindgren J at page 8 of his judgment, though not directly applicable to the overpayments with which this case is concerned.

Chippendale submitted that the pre-1992 provisions should not be regarded as one coherent legislative scheme; that they had been enacted piecemeal over a substantial
period (particularly, the relevant provisions of the Procedure Act had been added some four years after the original enactment of the No. 1 Act) and the provisions had been amended many times. But if the suggestion was that in order to determine whether the provisions constitute an exhaustive code one should look at the form they took when first enacted in order to see whether then they formed such a code, and that one should next consider separately each addition and amendment in order to ascertain whether it converted to a code provisions which previously were not exhaustive (or, I suppose, vice versa), that seems to me an extraordinarily artificial process and one which is not warranted by any authority to which we were referred or of which I am aware. I think it is appropriate to look, as I have attempted to do, at the legislation as a whole as in force at the time of the events to which it must be applied.

Clearly, of course, there is no difficulty about reading the new legislation as a whole, as it applies to credits and refunds. Its effect is so clearly substantially the same as that of the old legislation that I think inevitably the same conclusions must follow. Perhaps, as Lindgren J suggests, sub‑s 51(1) of the 1992 Act contains a particular indication of an intention to provide a code in its reference to "the situations" in which a claimant is entitled to a credit. Conversely, I do not think that the reference to "credits", and to refunds only in the context of what the Commissioner is required to do only with any remaining balance of a credit, suggests (as was submitted on behalf of Chippendale) that the new regime and common law rights of recovery of overpayments are to co‑exist: clearly enough, the "credit" regime is simply a statutory
mechanism for the refund to a taxpayer (in certain cases by application against other obligations of the taxpayer) of amounts overpaid as tax.

Royal Insurance

Royal Insurance, in my view, provides support for the conclusions I have reached. That case dealt with a provision (s 111 of the Stamps Act 1958 (Vic)) which gave the Commissioner a discretion to make a refund where she found that duty had been overpaid. In the proceedings orders were sought compelling the Commissioner to exercise her discretion in favour of Royal Insurance, which had overpaid duty. Common law relief was not sought. The effect of the judgment of Brennan J, with whom Toohey and McHugh JJ agreed and whose judgment therefore represents the views of the majority of the Court, is that the Commissioner could be compelled to exercise her power under the section in circumstances where the general law would create a duty to refund the overpaid amount (182 CLR at 88) but that (at 92) the section had "transformed the cause of action into a right to performance by the Commissioner of her duty to exercise her power to refund". In other words, though the circumstances (and the only circumstances) in which the Commissioner might (and should) exercise her discretion under the section were those where the common law would impose a legal obligation to make a refund, the claimant's only recourse was an action to compel the appropriate exercise of the discretion, not an action against the Commissioner (or the Crown) to recover the overpaid duty at common law.

Objection and appeal provisions; relevance of amending bill

There are two other matters which I should mention before leaving this aspect of the case. The first is the provisions for objection and appeal which at least since 1986 had applied to decisions of the Commissioner in relation to refunds, formerly under s 26 of the No. 1 Act and now under s 51 of the 1992 Act. Lindgren J relied on those provisions as additional support for his conclusion that the statutory provisions provide an exhaustive code in relation to the refund of overpayments. Although, given the views which I have expressed, it may not particularly matter, I doubt that the presence of a statutory scheme for objection and appeal, which has a general operation covering a field of which refund decisions form a small part, significantly advances the argument. The question is whether the sole recourse of a taxpayer for recovery of overpayments is by enforcement of the statutory obligation of the Commissioner to make a refund or whether, on the other hand, the taxpayer may in certain circumstances adopt the alternative course of suing the Commissioner - or the Commonwealth - at common law. That question requires a construction of the statutory provisions for refund: if the process of construction pointed to the conclusion that the taxpayer might elect between those alternative remedies, there seems to me nothing odd about the consequence that, whereas the pursuit of one alternative led to a process of review and appeal in accordance with the statutory scheme, the other led to the usual process of appeal from the decision of the court in which proceedings against the Commissioner - or the Commonwealth - were taken.

Secondly, it was argued on behalf of Chippendale that in construing the refund provisions we might take account of the Taxation Laws Amendment (Budget Measures) Bill 1995, which, if it had been enacted, would have provided that the statutory refund provisions are indeed a code and eliminated the possibility of an action at common law to recover overpayments of sales tax. It is of course perfectly true that the Bill proceeds on the footing that, but for its enactment, common law remedies at least might be available. No doubt, as Chippendale submitted, an amending Act can be taken into account in the interpretation of the prior legislation, at least to avoid a result that would render the amending legislation unnecessary or futile: we were referred to Grain Elevators Board (Vic) v Dunmunkle Shire Corporation (1946) 73 CLR 70 at 85-86 and to what must be regarded - in my view - as the substantially qualified approval of that proposition expressed by McHugh J in Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 at 539. But if the Bill had been enacted, it would, I think, have given little assistance: the mere removal of doubt should not be regarded as either unnecessary or futile. In any event, I do not think that a Bill which was not enacted, or its explanatory memorandum or debate relating to it, assists us in construing either the No. 1 Act or the 1992 Act.

Conclusion

For those reasons I agree with the answers given by Lindgren J to the two questions ordered to be separately decided.

No question now arises in relation to the declaratory relief sought by Chippendale and refused by his Honour.

Accordingly, I would dismiss the appeal with costs.

I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.

Associate:

Dated: 26 February 1996

Heard: 30 November 1995

Place: Sydney

Decision: 26 February 1996

Appearances:Messrs DH Bloom QC and JT Svehla of counsel instructed by Cowley Hearne appeared for the applicant.

Mr AH Slater QC, Ms RM Henderson and Mr I Mescher of counsel instructed by the Australian Government Solicitor appeared for the respondents.

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