Collector of Customs v Wallace Laboratories Pty Ltd [2002] FCA 1341

FEDERAL COURT OF AUSTRALIA

Collector of Customs v Wallace Laboratories Pty Ltd [2002] FCA 1341 CUSTOMS & EXCISE –whether the respondent failed to "account" to the satisfaction of a Collector under Excise Act 1901 (Cth) s 60 – scope of judicial review – procedural aspects. Excise Act 1901 (Cth) ss 60; 162C(1)(e) Avon Downs Pty Limited v The Federal Commissioner of Taxation (1949) 78 CLR 353 applied Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 cited COLLECTOR OF CUSTOMS V WALLACE LABORATORIES PTY LIMITED NO. N 320 OF 2001 BEAUMONT J 31 OCTOBER 2002 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 320 OF 2001

BETWEEN: COLLECTOR OF CUSTOMS

APPLICANT

AND: WALLACE LABORATORIES PTY LIMITED

RESPONDENT

JUDGE: BEAUMONT J

DATE OF ORDER: 31 OCTOBER 2002

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The matter be stood over for further argument at a date to be fixed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 320 OF 2001

BETWEEN: COLLECTOR OF CUSTOMS

APPLICANT

AND: WALLACE LABORATORIES PTY LIMITED

RESPONDENT

JUDGE: BEAUMONT J

DATE: 31 OCTOBER 2002

PLACE: SYDNEY

REASONS FOR INTERLOCUTORY JUDGMENT (ON ISSUES TENDERED BY PARAGRAPH 3 OF THE AMENDED DEFENCE DATED 6 AUGUST 2002) BEAUMONT J:

Introduction 1 These reasons should be read in conjunction with my reasons dated 30 May 2002, and those dated 21 and 22 October 2002 (see [2002] FCA 659; [2002] FCA 1339 and [2002] FCA 1340). 2 The parties have now addressed the issues of fact and law tendered by par 3 of the defence as follows: "3. In respect of paragraph 11 of the Applicant's Further Amended Statement of Claim: (i) The Respondent says as follows: (a) The quantity of 9,801.16 litres of alcohol referred to in paragraphs 10 and 11 in the Applicant's Further Amended Statement of Claim was said to be a purported shortfall in the recorded use of the 21,600 litres of spirit supplied to the Respondent and referred to in paragraphs 6 and 7 and the 8,800 litres of spirit supplied to the Respondent and referred to in paragraph 6A and 7A of the Applicant's Further Amended Statement Of Claim; (b) The purported shortfall was allegedly arrived at by Compliance Officers from Customs, being servants of the Applicant, who conducted an audit of the records kept by the Respondent on 22 September 1998; (c) The Respondent by letter dated 29 October 1998 denied any shortfall and, through its solicitors, made several requests for the Applicant to supply particulars of the audit so that the cause of the discrepancy could be ascertained. (d) In associated proceedings brought by a servant of the Applicant in the Local Court against the Respondent for the retention of certain goods and business records seized by Customs officers during the aforesaid audit, the said servant of the Applicant undertook to the Respondent to supply the particulars of the audit; (e) Notwithstanding several requests made in writing by the Respondent through its legal advisers, and the undertaking given by the servant of the Applicant, no such particulars were supplied prior to the commencement of these proceedings; (f) During the audit, the Customs officers seized the Respondent's invoice books, sales records and other business records. The bulk of these records were not returned until after the Applicant made the demand referred to in paragraph 12 in the Applicant's Further Amended Statement of Claim. (ii) The Respondent claims that by virtue of the matters referred to in paragraph 3(i) above, it was not open to the Applicant, acting reasonably on the known facts in the circumstances, to come to the view that the Respondent had failed to account to the Applicant's satisfaction for the quantity of alcohol referred to. (iii) The Respondent claims further and in the alternative by virtue of the matters raised in paragraph 3(i) above that the [A]pplicant did not afford the Respondent a reasonable opportunity to comply with the request referred to in paragraph 10 of the Applicant's Further Amended Statement of Claim prior to the issue of the letter of demand referred to in paragraph 12 of the Applicant's Further Amended Statement of Claim. (iv) The Respondent i[n] any event denies failing to account for the said 9,801.16 litres of alcohol. (v) The Respondent does not in any event admit any state of dissatisfaction, unsatisfaction or non-satisfaction in the Applicant, or any other collector in the Applicant's employ. (vi) The Respondent does not in any event admit the rate of Excise duty." 3 It will be seen that par 3 raises several questions, some of fact, some of law, others of mixed fact and law. 4 It will be recalled that par 3 is pleaded in answer to the first cause of action alleged. Paragraph 11 of the defence is pleaded in answer to the second cause of action alleged. Whilst the history of the events said to give rise to these causes of action differ, par 11 raises, to all intents and purposes, the same points of principle as par 3.