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Open Bay Timber Pty Ltd v The State [1993] PNGLR 246 (11 September 1991)

PNG Law Reports 1993

[1993] PNGLR 246 - Open Bay Timber Pty Ltd v The State 

[1993] PNGLR 246

N1151

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OPEN BAY TIMBER PTY LTD

V

THE STATE

Waigani

Brown J

6 September 1991

11 September 1991

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 Ch 101 - Customs Tariff Act Ch 101A - Customs Tariff (Amendment) Act 1990.

EQUITY - Unjust enrichment.

Facts

The plaintiff, pursuant to Sch 3 of Customs Tariff Act, paid duty to the Collector of Customs from December 1989 to September 1990 for exports of unprocessed logs after 18 December 1989. Subsequently, the Act was amended by Customs Tariff (Amendment) Act 1990, which revised the provisions of Sch 3, 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 retrospectively on 18 December 1989. The plaintiff claims a refund of customs duty overpaid. The State denies liability and contends there is no power in the principal act, the Customs Act, to authorise a refund. It relies on ss 103 and 104 of the principal act, which it claims absolves it of liabiity to repay customs duty.

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 1990 is expressed to have retrospective effect. Section (a) provides for determination of duties at rates applicable on and from 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 to retain moneys in these circumstances in the face of an express provision reducing the incidence of duty.

Cases Cited

Attorney-General v Great Eastern Railway (1872) 7 Ch 475.

F Hoffmann-La Roche & Co v Inter-Continental Pharmacenticals Ltd [1965] Ch 795.

Hughes & Vale Pty Ltd v New South Wales [1955] AC 241.

Mason v New South Wales [1959] HCA 5; (1959) 102 CLR 108.

Counsel

C Coady for the plaintiff.

B Ninai for the defendant.

11 September 1991

BROWN J: The plaintiff is aggrieved by the refusal of the Collector of Customs (hereafter, Collector) 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 18 December 1989 were made by the plaintiff to the Collector. The payments were made pursuant to the provisions of Sch 3 of the Customs Tariff Act Ch 101A and the Customs Act Ch 101.

Subsequent to the payments, the Customs Tariff Act Ch 101A was amended by Customs Tariff (Amendment) Act 1990 (Act 15 of 1990, hereafter the amending act). This repealed the relevant provisions of Sch 3 items 21, 21A, 21B, and 21C of the Customs Tariff Act, substituting reduced rates of tariff in respect of exports of the types of logs belonging to the plaintiff.

As a consequence, the plaintiff alleges that there has been an overpayment of duty in the sum of K45,125.12. The plaintiff also claims interest under the Judicial Proceedings (Interest on Debts and Damages) Act Ch 52 and costs of its summons. The defendant denies liability and states that there is no power in the principal Customs Act to authorise a refund in the circumstances. The defendant relies on the provisions of the Customs Act, particularly ss 103 and 104, saying that the State is absolved from any liability to repay customs duty shown to have been paid.

The amendments which effectively reduced the incidence of customs duty were deemed by section (a) of the amending act to come into operation on 18 December 1989. The plaintiff's liability for customs duty in respect of the exports of logs after 18 December 1989, the plaintiff says, was in accordance with the amending act. The plaintiff's payments, consequently, in respect of the log exports were in excess of its liability under the amending act.

I am satisfied that s 103 of the Customs Act does not apply. That section deals with practice relating to classification. This claim does not touch on the Collector's practice but rather relates to the change of law affected by the Customs Tariff (Amendment) Act 1990. It directly relates to a variation to the dutiable rate effective from 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 impinge on the provisions of the amending act. I am further satisfied that the provisions of the Claims By and Against the State Act Ch 30 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 State's refusal to refund the money overpaid.

While Mr Ninai's arguments do not find favour, the plaintiff still has to satisfy me that the State should repay.

Mr Coady says that in October 1989 round logs attracted export duty at the flat rate of 10% and that in November 1989 that flat rate was to be amended by gradation 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, which was certified on 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 one, were less than the flat 10%. By virtue of the amending act, it 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 promise.

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 Eastern Railway (1872) 7 Ch 475 that where a general act is followed by a specific act, on this specific issue, that later act is superior to the former act. Mr Coady says the obligation to payees is found in the Customs Tariff Act s 4. He argues that retrospectivity is found in the express provision of the amending act, which deemed that section to come into operation on 18 December 1989. He refers me to case law, particularly the commentary in Halsbury's Laws 4 edn vol 44 para 922 and the general principles set forth in F Hoffman-La Roache & Co v Inter-Continental Pharmaceuticals Ltd [1965] Ch 795.

I am mindful of the fact that para (f) of the amending act expressly provides for determination of duties at rates applicable as from 18 December 1989 and, hence, the State is legally entitled to duties to that extent and no more from that date. In fact, monies 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 colore officii. This is not such a claim as that dealt with, for instance, in Mason v New South Wales [1959] HCA 5; (1959) 102 CLR 108. In that case, the plaintiff sought, by an action for assumpsit, to recover permit fees paid to the State pursuant to s 22 of the State Transport (Co-ordination) Act 1931. All such fees had been collected before the Privy Council in Hughes & Vale Pty Ltd v New South Wales [1955] AC 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. The Privy Council 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 113). The facts of this case can be distinguished for there is no argument that any of the customs legislation is invalid. Rather, the amending legislation had the Governor-General's assent on 25 July 1990, whereupon the amending act was deemed to have come into operation on 18 December the previous year. There has been no hiatus between the repeal of sections of the Customs Tariff Act and the coming into operation of the amending act. Rather, the opposite has occured. For the reasons set forth before in the history, the amending act has retroactive application. Again, there is no invalidity of legislation. The amending act reduced the incidence of duty in all but one instance. Why then should the State retain the difference between what has been paid and that which, 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 unjust enrichment for the State, at the expense of the company, where the State has retained monies in these circumstances in the face of an express provision in the amending act reducing the incidence of duty. The plaintiff's case has been made out. I accordingly order that:

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

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

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

4.       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 the plaintiff: Chris Coady & Associates

Lawyer for the defendant: Solicitor General