N1151

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

WS. NO. 340 OF 1991

OPEN BAY TIMBER PTY LIMITED
Plaintiff

-V-

THE STATE
Defendant

Waigani: Brown J.
1991: 6 & 11 September

Customs - Statute - Higher Duty paid under Customs Tariff Act - Act amended to reduce rate of tariff - Retrospective effect - Refund of Customs Duty overpaid - State not absolved from liability to repay Customs Duty - Customs Act Chapter 101 - Customs Tariff Act Chapter 101A - Customs Tariff (Amendment) Act 1990.

The plaintiff pursuant to schedule 3(f) of Customs Tariff Act, paid customs duty to the Collector of Customs from December 1989 to September 1990 for exports of unprocessed logs made after 18 December 1989. Subsequently the Customs Tariff Act was amended by Customs Tariff (Amendment) Act of 1990 which repealed the provisions of Schedule 3(f) of the Customs Tariff Act, reducing the rates of tariff for export of the types of logs belonging to the plaintiff. The amendments were expressed by the Customs Tariff (Amendment) Act to be deemed to come into operation on the 18 December 1989. The plaintiff claims refund of customs duty overpaid.

Held: 

(1) 	The argument that ss 103 and 104 of the Customs Act absolve the State from any liability to repay Customs duty cannot succeed. Section 103 does not apply. It deals with practice relating to classification whilst the claim relates to a change of law directly effecting variation to the dutiable rate. Section 104 does not apply. It relates to particular circumstances and does not impinge on the provisions of the Amending Act.

(2) 	The predominant Act argument cannot prevail.

(3) 	The Customs Tariff (Amendment) Act is expressed to have retrospective effect. Schedule 3 paragraph (f) provides for Determination of Duties at rates applicable on and from the 18 December 1989. The State is legally entitled to duties to that extent and no more. It would be unjust enrichment for the State at the expense of the company were the State to retain money in these circumstances in the face of an express provision reducing the incidents of duty.

Cases Cited:
The following cases are cited in the judgment:
Attorney-General v. Great Easton Railway (1892) C.A. 475.
Mason v. New South Wales (1958/59) 102 CLR 108.
Hues & Veil Pty Ltd v. State of New South Wales (1956) AC 241.

Summons:
The plaintiff by writ of summons claims refund of Customs Duty overpaid pursuant to the Customs Tariff Act Chap 101A which was subsequently amended with a retrospective application reducing the incidents of duty. The defendant denies liability and states that there is no power in the principle Customs Act to authorise a refund in this circumstances.

Mr C Coady, for the Plaintiff
Mr J Ninai, for the State

11 September 1991

BROWN J.: The plaintiff is aggrieved by the refusal of the Collector of Customs to authorise a refund of customs duty which the plaintiff says has been overpaid. By way of statement of claim, the plaintiff recites that from December 1989 to September 1990, various payments in respect of Customs Duty upon exports of unprocessed logs after the 18 December 1989 were made by the plaintiff to the Collector. The payments were made pursuant to the provisions of schedule 3 paragraph (f) of the Customs Tariff Act Ch 101A and the Customs Act Ch 101.

Subsequent to the said payments, the Customs Tariff Act Ch 101A was amended by Customs Tariff (Amendment) Act 1990 which repealed the relevant provisions of schedule 3 paragraph f of the Customs Tariff Act substituting for reduced rates of tariff in respect of exports of the types of logs belonging to plaintiff.

As a consequence the plaintiff alleges that there has been an overpayment of duty in sum of K45,125.12. The plaintiff also claims interest under the Judicial Proceedings (Interest on Debts and Damages) Act and costs of the summons. The defendant denies liability and states that there is no power in the principle Customs Act to authorise a refund in the circumstances. The defendant relies on the provisions of the Customs Act particularly ss 103, 104, and says that the State is absolved from any liability to repay customs duty shown to have been paid.

The amendments which effectively reduce the incidents of Customs Duty found in the Customs Tariff (Amendment) Act 1990 were expressed by that Act to be deemed to come into operation on the 18 December 1989. The plaintiff's liability for customs duty in respect of the exports of logs after the 18 December 1989, the plaintiff says was in accordance with the Customs Tariff (Amendment) Act. The plaintiffs payments consequently in respect of the log exports were in excess of its liability under the Amending Act.

I am satisfied on reading s 103 of the Customs Act does not apply. That section deals with practice relating to classification. This claim does not touch on the Collectors practice but rather relates to the change of law affected by the Customs Tariff (Amendment) Act. It directly relates to a variation to the dutiable rate effective from the 18 December 1989.

I am further satisfied that s 104 of the Customs Act does not apply. That section is expressed to relate to particular circumstances and does not in any way imping on the provisions of the Amending Act. I am further satisfied that the provisions of the Claims By and Against the State Act (relating to contract or tort) do not preclude a claim against the State for repayment of duty overpaid. I am not satisfied that this Act helps me find a raison d'etre for the States refusal to refund the money overpaid. While Mr Ninai's arguments do not find favour, the plaintiff still has to satisfy me the State should repay.

Mr Coady says that in October 1989 round logs attracted export duty at the rate of 10% flat and that in November 1989, that flat rate was to be amended by gredation of charges as proposed in the Parliamentary session. Exporters of Round Logs continued to pay duty at the earlier 10% flat rate pending certification of the Customs Tariff (Amendment) Act 1990 (Act 15/1990) (which was certified on the 25 July 1990). The amendments related to various gradations introduced in the previous Budget Session and repealed the previous standing rates, imposing fresh rates which, with the exception of (1), were less than the flat 10%. By virtue of paragraph A(f) the amending legislation was stated to "be deemed to have come into operation on the 18 December 1989". In other words it corresponds with the Parliamentary Budget Session promises.

Neither party in these proceedings disputes the gradations, the rate or the amount of the alleged overpayment.

Mr Coady says that the claim may be categorised as one for money had and received by the defendant for the use of the plaintiff. He says that the predominant Act argument cannot prevail. I agree with him. In any event ss 103 and 104 of the predominant Act, the Customs Act, have no application. Mr Coady referred me to the principle found in the Attorney-General v. Great Easton Railway (1892) 7 C.A. 475 "where a General Act is followed by a Specific Act then on this specific issues that later Act is superior to the former Act". Mr Coady says the obligation to payees is found in the Tariff Act s 4. He argues that retrospectivity is found in the express provision of the Act declared to come into operation on the 18 December 1989. He refers me to Case Law particular the commentary in Halsbury 4th Edition Volume 44 at p. 922 and the General Principles set forth in Hoffman LaRoche and Inter Continental Pharmacies (1965) Chanc. 795.

I am mindful of the fact that paragraph (f) of the Amending Act expressly provides for Determination of Duties at rates applicable as and from the 18 December 1989 and hence the State is legally entitled to duties to that extent and no more from that date. In fact moneys have been overpaid as a natural consequence of complying with the then existing Tariff Act which was not repealed until the Amending Act affected it.

I need not find payment under protest to support as it were, a claim by the plaintiff that the overpayment of duty was demanded by the Collector of Customs colore officii. This is not such a claim as that dealt with for instance in Mason v. New South Wales (1958/59) 102 C.L.R. 108. In that case the plaintiff sought, by an action for assumpsit to recover permit fees paid the State pursuant to s 22 of the State Transport (Co-ordination) Act 1931, all such fees had been collected before the Privy Counsel in Hues & Veil Pty Ltd v. State of New South Wales (1955) A.C. 241 held that the relevant portions of the Act could have no valid application to persons in the position of the plaintiff Mason who was an inter-state carrier. Their Lordships of the Privy Counsel took the view that the "legislation was invalid in so far as it purported to apply to inter state carrying" (per Dixon CJ at p. 114, 115). The facts of this case can be distinguished for there is no argument any of the Customs Legislation is invalid, rather the amending legislation which had the Governor General's assent on the 25 July 1990 whereupon that Amending Act, was deemed to have come (by virtue of clause (f)), into operation on the 18 December the previous year. There has been no hiatus between the repeal of the Tariff Act and the coming into operation of the Amending Act, rather the opposite for the reasons set forth before in the history, the Amending Act has retroactive application. Again there is no invalidity of legislation, rather the Amending Act reduced the incidents of duty in all but one instance. Why then should the State retain the difference between what has been paid and that, since the coming into operation of the Amending Act, should have been paid. Counsel for the State has not addressed this question at all. I am satisfied it is in fact unjust enrichment for the State, at the expense of the company, where the State has retained moneys in these circumstances in the face of an express provision in the Amending Act reducing the incidents of duty. The plaintiff's case has been made out. I accordingly order -

1. 	That the defendant pay to the plaintiff the sum of K45, 125.12;

2. 	That the defendant pay to the plaintiff interest on the said sum at the rate of 8% per annum from the 28 May 1991 up until the date of judgment pursuant to the Judicial Proceedings (interest on debts) Act;

3. 	That the defendant pay the plaintiff's costs of this action to be taxed if not agreed;

4. 	That the time within which this order shall be entered shall be abridged to the time of settlement by the Registrar which shall take place forthwith.

__________________________________________________________

Lawyer for plaintiff: Mr Coady
Lawyer for defendant: Mr B. Ninai