Malika Holdings Pty Ltd v Stretton [2001] HCA 14

HIGH COURT OF AUSTRALIA

GLEESON CJ,

McHUGH, GUMMOW, KIRBY AND CALLINAN JJ

MALIKA HOLDINGS PTY LTD APPELLANT

AND

VIRGINIA STRETTON RESPONDENT

Malika Holdings Pty Ltd v Stretton [2001] HCA 14

15 March 2001

M14/2000

ORDER

1. Appeal allowed with costs. 2. Set aside the orders made by the Court of Appeal of the Supreme Court of Victoria on 4 December 1998 and in place thereof, order that the appeal to that Court be dismissed with costs.

On appeal from the Supreme Court of Victoria

Representation:

B J Shaw QC with M A Dreyfus QC for the appellant (instructed by Vann Fisher & Associates)

G T Pagone QC with M M Gordon for the respondent (instructed by Australian Government Solicitor)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Malika Holdings Pty Ltd v Stretton

Customs and excise – Duty – Proceeding by Collector of Customs for recovery of unpaid duty after goods released to owner – Dispute as to whether duty owed – Whether s 167 Customs Act 1901 (Cth) prevents owner of goods from disputing indebtedness other than by paying duty "under protest" and then commencing action against Collector of Customs for recovery of duty.

Statutes – Construction – Presumption that legislation does not erode fundamental rights – Relevance and contents of presumption.

Customs Act 1901 (Cth), ss 153, 165, 167, 273GA(2).

1. GLEESON CJ. I agree that the appeal should be allowed, and with the reasons given by Gummow and Callinan JJ. 2. To ask whether s 167 of the Customs Act 1901 (Cth) ("the Act") constitutes the only means by which a person may challenge the amount and rate of, and the liability of goods to, customs duty invites consideration of the circumstances in which a person might need or wish to make such a challenge. 3. The manner in which the system of imposition of duties of customs operates, and the requirements affecting an entry of goods for home consumption, may well mean that, in most circumstances, a challenge of the kind mentioned will be made by a person who is compelled, in order to have the goods released, either to pay duty under protest pursuant to s 167, or to enter into an agreement upon terms and conditions satisfactory to the Customs authorities. Such an agreement might have the same practical effect as s 167. 4. However, as the facts of the present case illustrate, circumstances could arise in which the authorities are not in such a position of advantage. Because of the chain of events leading up to the dispute, the Collector of Customs found it necessary to commence an action to recover a debt. In part, the action was based upon an agreement made by the appellant. There is a dispute as to the meaning and effect of that agreement. It does not arise in the present appeal. There was also a claim based upon a demand made under s 165 of the Act; but there is a dispute as to whether a valid demand was made. Again, that issue does not presently arise. The statement of claim alleges that the amount of duty payable in respect of the subject goods was $44,540.77 which constitutes a debt due and payable to the Crown. That allegation is to be read in the light of s 153 of the Act. 5. The general rule in adversarial litigation is that it is for the party alleging a material fact, when that fact is put in issue, to prove the fact. In the case of an alleged debt, there may be a statutory provision which facilitates such proof. A familiar example in the area of revenue law is s 177 of the Income Tax Assessment Act 1936 (Cth), which provided that the production of a notice of assessment is conclusive evidence of the due making of the assessment and (except in proceedings on appeal against the assessment) that the amount and all the particulars of the assessment are correct[1]. Or there may be a contractual provision in aid of proof, such as one which makes a certificate conclusive evidence of indebtedness, as in Dobbs v National Bank of Australasia Ltd[2]. Here, the respondent has alleged the debt, but (subject to whatever might be found to be the effect of the agreement earlier mentioned) cannot point to any provision which expressly relieves her of the necessity of proving the allegation, or which facilitates such proof. The argument must be that, by implication, s 167 produces such a result. 6. The argument was not put in those terms. It was submitted that s 167 constitutes a code concerning the manner of disputing liability to duty. It was said that there was no right given by any other provision of the Act to put in issue an allegation that duty was owing to the Collector. Yet, if the Act, in certain circumstances, puts the Collector in a position of having to allege that an amount is due, what need is there of a statutory "right" to dispute such an allegation? Litigants who are met with allegations in civil actions do not need to point to any statutory right to dispute such allegations. The capacity to make and dispute allegations is an ordinary incident of the adversarial process. To say that s 167 is a code concerning disputing liability to duty must, upon analysis, mean that, by implication, s 167 not only provides (as in terms it does) that a taxpayer may take a certain course but, also, that, unless the taxpayer takes that course, an allegation by the Collector that a certain amount of duty is owing must be taken to be proved. 7. That seems to me to throw upon s 167 more weight than it will bear. 8. The provisions of s 273GA of the Act cannot be called in aid in support of the construction of s 167 for which the respondent contends. Those provisions were included in the Act many years after ss 153, 165 and 167. It was not suggested that ss 153, 165 and 167 changed their meaning when s 273GA was included. It follows that, whatever their meaning, it existed before s 273GA was enacted, and s 273GA cannot be used in an attempt to discover that meaning. 9. McHUGH J. Where a dispute arises as to the amount or rate of customs duty payable in respect of goods or the liability of goods to duty, s 167 of the Customs Act 1901 (Cth) ("the Act") permits the owner of the goods (1) to take possession of them after paying under protest the sum demanded and (2) within six months, to bring an action for the recovery of that sum. But what if the owner takes possession of the goods without paying duty and is later sued for the duty allegedly payable? Can the owner challenge the validity of the rate or the accuracy of the amount demanded? That is the issue in this appeal which is brought by the owner of goods against an order of the Court of Appeal of Victoria holding that the owner could not challenge the rate without first paying the sum demanded under protest. 10. In my opinion, in an action by the Collector of Customs to recover the amount of duty allegedly payable in respect of goods, the owner is permitted to challenge the rate or amount of duty or the liability of goods to duty. Moreover, the owner may do so, irrespective of whether or not it has paid the duty under protest under s 167. Because that is so, the appeal must be allowed.