SCI Operations Pty Ltd v Commonwealth of Australia ACI Operations Pty Ltd v Commonwealth of Australia [1996] FCA 754

CATCHWORDS

CUSTOMS AND EXCISE - Commercial Tariff Concession Order (CTCO) under s.269C of the Customs Act 1901 - whether interest should be ordered on duty paid to the Comptroller under 269N of the Customs Act and subsequently refunded to importer - CTCO's to have retrospective operation by express statutory provision - importer liable to pay duty upon importation of product - Comptroller obliged to retain duty paid unless and until CTCO made - whether restitutionary principles apply when determining Comptroller's liability to refund duty - whether liability to refund duty derived exclusively from statutory source - whether availability of action affected by operation of s.167(4) of the Customs Act - obligation to pay duty under protest and commence action within six months of payment where liability to pay duty disputed - no assertion that duty was not payable - action for refund of duty not precluded

INTEREST - claim for interest under s.51A of the Federal Court of Australia Act 1976 - entitlement to refund of duty under s.269N of the Customs Act - date on which cause of action accrues for purpose of calculating interest payable - retrospective operation of Commercial Tariff Concession Orders (CTCO) - CTCO made 3 June 1994 - CTCO deemed to come into effect on 1 September 1987 - whether cause of action may be deemed to accrue on a particular date - whether departure from general rule that interest is payable from date of accrual of cause of action permissible - whether "exceptional circumstances" justify substitution of notional date - whether possibility of importer making "windfall gains" by retrospective liability to pay interest relevant

INTEREST - claim for interest under s.51A of the Federal Court of Australia Act 1976 - orders for interest to be "included in the sum for which judgment is given" - whether Court may make orders for the payment of interest on sums recovered otherwise than by way of judgment - whether Comptroller liable to pay interest on claim awarded to appellant by consent - debt upon which interest calculated unpaid at time proceedings instituted - whether fact that interest is to be included in a judgment prevents application of s.51A(1)(a) - whether procedural provisions may effect "substantive entitlement to interest"

INTEREST - claim for interest under s.51A(1)(b) of the Federal Court of Australia Act 1976 - inclusion in sum for which judgment is given of a lump sum in lieu of interest - whether entitlement to interest to be implied from statutory scheme - judicial discretion with respect to quantum - whether restitutionary principles assist exercise of statutory discretion - whether Commonwealth's use of monies subsequently

2. repaid relevant - Crown's obligation to behave as "model litigant" - obligation to make decisions within reasonable time

RESTITUTION - whether "free-standing" restitutionary cause of action for recovery of interest available - claim for interest on monies obtained by the Commonwealth and subsequently refunded - whether Commonwealth unjustly enriched - whether entitlement to interest as "fair and just compensation" for the enrichment accepted - whether restitutionary principles applicable to exercise of statutory discretion under s.51A(1)(b) of the Federal Court of Australia Act 1976

Federal Court of Australia Act 1976, s.51A(1)(a), (b) Customs Act 1901, ss.167, 269C, 269N

State Bank of New South Wales v Commissioner of Taxation (1995) 132 ALR 653 The Medina Princess [1962] 2 Lloyds Rep. 17 Techno-Impex v Gebr. van Weelde [1981] 1 QB 648 President of India v La Pintada Compania Navigacion S.A. [1985] AC 104 Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 State Bank of New South Wales v Commonwealth Savings Bank of Australia (1984) 154 CLR 579 Melbourne & Metropolitan Board of Works v Bevelon Investments Pty. Ltd. [1977] VR 473 Baltic Shipping Co. v Dillon (1993) 176 CLR 344 Goss v Chilcott [1996] 3 WLR 180 McCauley v Hamilton Island Enterprises Pty. Ltd. (1986) 69 ALR 270 Commonwealth of Australia v Mewett (1994) 126 ALR 391 Downey v Pryor (1960) 103 CLR 353 Commissioners of Inland Revenue v Joicey (No.1) [1913] 1 KB 445 Reg. v Tower Hamlets London Borough Council; Ex parte Chetnik Developments Ltd [1988] AC 858 Blackpool and Fleetwood Tramroad Co. v Bispham with Norbreck Urban District Council [1910] 1 KB 592 The Melbourne Steamship Company Ltd. v Moorehead (1912) 15 CLR 333 Re Federal Commissioner of Taxation; Ex parte Australena Investments Pty. Ltd. (1983) 50 ALR 577 Moses v Macferlan (1760) 2 Burr 1005 Atchison, Topeka & Santa Fe railway Co. v O'Connor (1912) 223 US 280 Haig v The Minister Administering the National Parks & Wildlife Act 1974, New South Wales Court of Appeal, 17 May 1996, unreported Idemitsu Queensland Pty. Ltd. v Agipcoal Australia Pty. Ltd. [1996] 1 Qd R 26

3. Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 WLR 802 Comptroller-General of Customs v Kawasaki Motors Pty. Ltd. (No.2) (1991) 32 FCR 243 Collector of Customs v Gaylor Pty. Ltd. (1995) 127 ALR 641 Ferrier and Knight v Civil Aviation Authority (1994) 55 FCR 28 Do Carmo v Ford Excavations Pty. Ltd. (1984) 154 CLR 234 University of Wollongong v Metwally (1984) 158 CLR 447

JURISDICTION, PRACTICE AND PROCEDURE - matters remitted by High Court to the Federal Court under s.44 of the Judiciary Act 1903 - power of High Court to award interest up to judgment under s.77MA(1) of the Judiciary Act - provision in the same terms as s.51A(1) of the Federal Court of Australia Act 1976 - remitter not to prejudice position of either party State Bank of New South Wales v Commonwealth Savings Bank of Australia (1984) 154 CLR 579 Commonwealth of Australia v Mewett (1994) 126 ALR 391 McCauley v Hamilton Island Enterprises Pty. Ltd. (1986) 69 ALR 270

WORDS AND PHRASES - "included" - whether any requirement for an outstanding debt before interest can be "included" in a judgment for the debt - no pre-condition to application of s.51A(1) that debt, although unpaid when writ issued, remains unpaid thereafter - Y.Z Finance Co. Pty Ltd. v Cummings (1964) 109 CLR 395 No. G85 of 1996 SCI OPERATIONS PTY LIMITED v COMMONWEALTH OF AUSTRALIA No. G86 of 1996 ACI OPERATIONS PTY LIMITED v COMMONWEALTH OF AUSTRALIA BEAUMONT, EINFELD AND SACKVILLE JJ. SYDNEY 28 AUGUST 1996

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA No. G 85 of 1996 BETWEEN: SCI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent No. G 86 of 1996 BETWEEN: ACI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent

CORAM: Beaumont, Einfeld and Sackville JJ. PLACE: Sydney DATE: 28 August 1996 MINUTES OF ORDER THE COURT ORDERS: 1. Appeals allowed, with costs. 2. Set aside the orders made at first instance. In lieu thereof: (a) Declare that, unless good cause (in the form only of a "windfall" defence) is shown to the contrary, the appellants are entitled to an order for interest under s.51A(1)(a), or if this be inappropriate, an order for interest in a lump sum amount to be determined in accordance with the discretion conferred by the provisions of s.51A(1)(b) of the Federal Court of Australia Act 1976; (b) Order that the matters be remitted to a single Judge of the Court to be dealt with in accordance with these reasons and as the justice of the case requires.

2.

(c) Order that the respondent pay the appellants' costs at first instance. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

SCI OPERATIONS PTY LIMITED v COMMONWEALTH OF AUSTRALIA (No. G 85 of 1996) ACI OPERATIONS PTY. LIMITED v COMMONWEALTH OF AUSTRALIA (No. G 86 of 1996) INDEX TO REASONS FOR JUDGMENT

INTRODUCTION 1 THE BACKGROUND TO SCI's APPEAL 2 THE HISTORY OF THE PREVIOUS LITIGATION BROUGHT BY ACI 5 THE MAKING OF THE CTCO ON 3 JUNE 1994 (EFFECTIVE FROM 1 SEPTEMBER 1987) 7 THE INSTITUTION OF PROCEEDINGS IN THE HIGH COURT ON 3 JUNE 1994 7 THE PAYMENTS BY THE COMMONWEALTH TO ACI AND SCI ON 3 JUNE 1994 7 THE REASONING AT FIRST INSTANCE 8 (a) Section 51A 10 (b) Restitution 12 THE GROUNDS OF THE APPEALS 13 CONCLUSIONS ON THE APPEALS 14 (a) Did, or could, s.51A of the FCA Act apply here? 14 (i) Was s.51A still available once the principal amount (i.e. the duty) was paid after issue of the writs but before judgment could be entered? 14 (ii) What was "the date when the cause of action arose" for the purposes of s.51A(1)(a)? 33 (iii) Was s.51A(1)(b) also potentially available here? 34 (iv) "Good cause to the contrary" - a possible "windfall" defence? 55 (v) Other possible defences? 56 (b) Was a claim in restitution (unjust enrichment) under the general law also available? 58 SUMMARY OF CONCLUSIONS 61 ORDERS PROPOSED 62

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) ) GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA No. G 85 of 1996 BETWEEN: SCI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent No. G 86 of 1996 BETWEEN: ACI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent CORAM: Beaumont, Einfeld and Sackville JJ. DATE: 28 August 1996

REASONS FOR JUDGMENT BEAUMONT AND EINFELD JJ. INTRODUCTION These are appeals from a judgment of a Judge of the Court (Wilcox J.) dismissing claims for interest in proceedings remitted to this Court from the High Court. Since the cases are identical in point of principle, and since there is no dispute about the relevant facts, it will be sufficient, for present purposes, to refer, at this

stage, to the background to SCI's appeal as follows. THE BACKGROUND TO SCI's APPEAL By its writ of summons filed in the High Court on 3 June 1994, SCI claimed from the Commonwealth the sum of $5,296,690 "as money had and received by the [Commonwealth] to the use of [SCI] or otherwise", together with interest. The statement of claim filed by SCI in this Court on 7 November 1994 alleged, relevantly, the following: (1) Between September 1987 and March 1992, SCI imported certain resin ("the goods"). (2) Customs duty was from time to time demanded, and paid, in the total sum of $5,457,379.08 in that connection. (3) Without such payments, SCI could not have obtained the release of the goods under the Customs Act ("the Act"). (4) On 3 June 1994 (and before the commencement of these proceedings) a Commercial Tariff Concession Order ("CTCO") was made (to the effect that the goods were free of duty) under s.269C of the Act. (By s.269C.(1) of the Act, it is provided as follows: "269C. (1) Subject to this Part, where the Comptroller, after considering an application under section 269G for the making of an order under this section in respect of particular goods, is satisfied that: (a) goods serving similar functions to the particular goods are not produced in Australia; and (b) goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business; the Comptroller shall make a written order, declaring that the particular goods are goods to which a prescribed item specified in the order applies.") (5) The CTCO was made as a consequence of conditional orders made by a Full Federal Court (see Comptroller-General of Customs v ACI PET Operations Pty. Ltd. (1994) 49 FCR 56). The CTCO specified 1 September 1987 as the date upon which it came into effect. (A retrospective operation is given to a CTCO by the provisions of s.269N: "269N. (1) A concession order (not being an order made under subsection 269P (10) [dealing with revocation of an order and not here material]) in respect of particular goods shall be deemed to have come into effect on such day before the making of the order as is specified in the order. (2) Subject to subsections 269P (7) and (8), [dealing with revocation of an order] a concession order applies in relation to the particular goods to which it relates that are first entered for home consumption on or after the day on which it comes into effect. (3) Subject to subsections (4), (6) and (7), the day to be specified in a concession order for the purposes of subsection (1) is the day occurring 28 days before the day on which the application for the order was made.")

(6) (Further, and in the alternative.) In September 1987, SCI applied to the Comptroller-General of Customs under s.269G of the Act for a CTCO in respect of the goods. By s.269C of the Act, the Comptroller-General was under a duty to make a CTCO where he was satisfied of certain matters. By reason of facts known to him, the Comptroller-General was, by no later than 1 November 1987, under a duty to make a CTCO. (7) The demands for duty made after 1 November 1987 should not have been made and the receipt of duty thereafter was pursuant to wrongful demands, and not authorised by law, and the payments were made involuntarily. (It appears that at a directions hearing held prior to the trial at first instance, it was indicated that (6) and (7), above, would not be pressed.) (8) After the commencement of these proceedings, the Commonwealth paid SCI the sums of (a) $5,457,379.08 and (b) $263,700.07. (Item (a) is the refund of the duty paid. Item (b) is not presently material, being a sum paid by way of interest in respect of the period 15 October 1993 to 31 March 1994 (the latter being the date of the judgment of the Full Federal Court, above) pursuant to an undertaking, given by the Commonwealth on 16 December 1993, to pay interest from 15 October 1993 to the date on which the Full Court gave judgment.) SCI accordingly claimed interest on the amounts paid in the periods (i) 1 September 1987 to 14 October 1993; and (ii) 1 April to 3 June 1994. At first instance, SCI's case was that it was entitled to interest under the provisions of s.51A of the Federal Court of Australia Act 1976, or alternatively, under the general law of restitution. As has been said, Wilcox J. dismissed both proceedings; and SCI and ACI now appeal. THE HISTORY OF THE PREVIOUS LITIGATION BROUGHT BY ACI Reference should also be made, by way of further background, to the very long history of the previous litigation brought by ACI against the Comptroller. On 29 September 1987, ACI applied to the Comptroller seeking a CTCO in respect of the goods. The application was initially refused on 22 August 1988 by a delegate of the Comptroller. This decision was internally reviewed on ACI's application. On 5 July 1989, the initial decision was affirmed, for reasons published on 18 August 1989. ACI sought from this Court judicial review of that decision. In 1990, the matter was heard by Foster J., who ordered review on 18 October 1990, setting aside the decision to refuse to make the CTCO, and ordering that the matter be remitted to the decision-maker for reconsideration in accordance with the reasons for judgment (see ACI PET Operations Pty. Ltd. v Comptroller-General of Customs (1990) 26 FCR 531). Thereafter, the matter was reconsidered by another delegate who, on 9 July 1991, again refused the application. On 3 October 1991, ACI once more sought judicial review of this refusal. On 13 March 1992, it was ordered, by consent, that this decision be set aside. Another delegate then further considered the matter. On 24 July 1992, and again on 29 January 1993, the application was once more refused. ACI further sought judicial review and this dispute was again heard by Foster J. On 15 October 1993, his Honour set aside these decisions and remitted them for reconsideration in accordance with the reasons for judgment (see ACI PET Operations Pty. Ltd. v Comptroller-General of Customs (1993) 118 ALR 114). The Comptroller appealed, and ACI cross-appealed, from these orders to the Full Court. The appeal was dismissed; but the cross-appeal was allowed, setting aside the order of remitter and in lieu thereof ordering that the Comptroller (1) forthwith advertise a limited application for a CTCO pursuant to s.269L of the Act; and (2) in the event that no objections were received within the prescribed time, make the CTCO as from 1 September 1987 up to and including the date fixed by the Comptroller as the production commencement day pursuant to s.269N(3B) (see 49 FCR at 82). THE MAKING OF THE CTCO ON 3 JUNE 1994 (EFFECTIVE FROM 1 SEPTEMBER 1987) As has been noted, as a consequence of the conditional orders made by the Full Federal Court on 3 June 1994, a CTCO was made, specifying 1 September 1987 as the date upon which it came into effect. THE INSTITUTION OF PROCEEDINGS IN THE HIGH COURT ON 3 JUNE 1994 Also on 3 June 1994, as we have seen, both SCI and ACI sued in the High Court for the import duty paid by them respectively between 1 September 1987 and 29 February 1992, together with interest. THE PAYMENTS BY THE COMMONWEALTH TO ACI AND SCI ON 3 JUNE 1994 Later in the day, on 3 June 1994, the Commonwealth paid ACI and SCI an amount equal to the whole of the duty paid by each of them in respect of the period 1 September 1987 and 29 February 1992, together with interest in respect only of that amount of duty for the period covered by the undertaking previously mentioned, that is, 15 October 1993 to 31 March 1994. THE REASONING AT FIRST INSTANCE The learned primary Judge said that it was common ground that the duty demanded at the time of each importation was due and payable; and that no payment had been made under protest. He referred to s.167 of the Act, which is relevantly as follows: "167(1) If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff ... the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section. (2) The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid. (3) A protest in pursuance of this section shall be made by writing on the entry of the goods the words `Paid under protest' and adding a statement of the grounds upon which the protest is made, and, if the entry relates to more than one description of goods, the goods to which the protest applies, followed by the signature of the owner of the goods or his agent. (4) No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times; (a) In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment; ...

... (5) Nothing in this section shall affect any rights or powers under section 163." His Honour then cited s.163, relevantly as follows: "163(1) Refunds, rebates and remissions of duty may be made: (a) in respect of goods generally or in respect of the goods included in a class of goods; and (b) in such circumstances, and subject to such conditions and restrictions (if any), as are prescribed, being circumstances, and conditions and restrictions, that relate to goods generally or to the goods included in the class of goods. (1A) The regulations may prescribe the amount, or the means of determining the amount, of any refund, rebate or remission of duty that may be made for the purposes of subsection (1). ... (2) In this section, `duty' includes an amount paid to a Collector in respect of duty that may become payable." (It will be convenient, for our purposes, to refer now to the Customs Regulations. As at 8 July 1988, for instance, Reg. 126 prescribed, for the purposes of s.163, circumstances under which refunds, rebates and remissions may be made. They included, for example: "126. Where - (a) the goods on which duty has been paid or is payable have deteriorated or been damaged, pillaged, lost or destroyed during the voyage or flight; ...

(e) duty has been paid through manifest error of fact or patent misconception of the law; (f) after duty has been paid on goods, a by-law or determination is made under Part XVI of the Act, or a Commercial Tariff Concession Order is made under Part XVA of the Act, the effect of which is that duty is not payable on those goods or duty is payable on those goods at a rate which is less than the rate which was applicable when the goods were entered for home consumption; ..." Subsequently, additional circumstances were prescribed. For instance, although not specifically in point here, para.(ea) was added as follows: "(ea) a decision referred to in subsection 273GA(2) of the Act has been reviewed by the Administrative Appeals Tribunal and the Tribunal, or a court on appeal from the Tribunal, has held that the amount of duty payable (if any) is less than the amount of duty demanded in consequence of that decision, or has remitted the matter to a Collector who has accordingly decided that the amount of duty payable (if any) is less than the amount demanded in consequence of that decision ... .")

(a) Section 51A Wilcox J. turned first to consider s.51A of the Federal Court of Australia Act 1976 ("FCA Act"). It provides: "51A. (1) In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either: (a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or (b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest."

His Honour rejected a submission made on behalf of the Comptroller that, by virtue of the use of the word "included" in para.(a) of s.51A(1), this provision enables the Court to allow interest on only so much of the original debt as is included in the judgment. His Honour held, following his earlier decision in State Bank of New South Wales v Commissioner of Taxation (1995) 132 ALR 653, that it did not follow from the fact that the whole of the original debt was paid on the day the proceedings were commenced, that the section had no application. However, his Honour noted that s.51A(1)(a) referred to: "... interest ... on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered". [Emphasis supplied by his Honour]

In rejecting the claim for interest under s.51A, Wilcox J. said: "... it is common ground that the duty was payable when demanded and that the Comptroller General was not obliged to make a refund until the CTCO had been made; indeed he would not have been entitled to do so. How then can it be said that the applicants had a cause of action before the time when the CTCO was made? If they had sued to recover the money before that date, they would have failed. There would have been no basis upon which they could have claimed that they were entitled to a repayment; in other words, they would have had no cause of action." (b) Restitution In refusing this claim also, Wilcox J. said that it was inconsistent with most of the reasoning in Commissioner of State Revenue (Victoria) v Royal Insurance Australia Limited (1994) 182 CLR 51. In Royal Insurance, an insurance company paid to the Comptroller of Stamps amounts which it believed to be due, but in ignorance of legislative amendments by way of exemption. Section 111(1) of the Stamps Act 1958 (Vict.) provided: "Where the Comptroller [of Stamps] finds in any case that duty has been over-paid...he may refund...the amount of duty found to be overpaid."

The Comptroller of Stamps found, pursuant to s.111(1), that duty had been overpaid but decided not to make a refund. It was held, for different reasons to be considered later, that the Comptroller was obliged to refund the amounts overpaid. Wilcox J. said: "...in Royal Insurance the High Court was not directly concerned with interest. But I think it is clear that, with the exception of Mason CJ, the members of the Court reached two conclusions that are fundamentally opposed to the restitution argument put by the applicants in this case. First, they thought that the law of restitution is inapplicable to a situation where payments are made pursuant to an existing legal obligation, but the obligation is retrospectively abrogated. Second, they thought the rights of the parties in such a situation were governed by the relevant statute, not the common law. In the present case, there is power to make a refund, under s.163 of the Customs Act. I need not pause to consider whether that power should be construed as a duty to do so, in appropriate circumstances. Royal Insurance would probably support such an approach; but it is not necessary to consider the point because the duty itself has been refunded. The Customs Act says nothing, relevantly, about interest. Once it is concluded that s.51A does not assist, the applicants have to get an obligation to pay interest from the general law of restitution; and the majority High Court view in Royal Insurance is that it does not apply to a case like this. The restitution argument also fails." THE GROUNDS OF THE APPEALS In each appeal it is submitted that his Honour should have allowed interest on both of the grounds pressed below. In contending that s.51A of the FCA Act applied, it is argued that, by virtue of the retrospective operation given to the CTCO by s.269N of the Act, a cause of action arose in relation to each payment of duty at the time such payment was made. Alternatively, in support of the claim in restitution, it is contended, in each appeal, that the respondent had been unjustly enriched by each payment made by the appellant to the respondent, and the respondent would continue to be so enriched unless ordered to make restitution to the appellant of interest on those amounts, accruing from the date of payments. CONCLUSIONS ON THE APPEALS It will be convenient to deal with the grounds of appeal in turn. (a) Did, or could, s.51A of the FCA Act apply here? (i) Was s.51A still available once the principal amount (i.e. the duty) was paid after issue of the writs but before judgment could be entered? As has been noted, Wilcox J. had previously held, in State Bank, that s.51A authorised an award of interest on moneys that are paid before judgment. In so holding, Wilcox J. declined to follow the decision of Hewson J. to the contrary in The Medina Princess [1962] 2 Lloyds Rep.17. On behalf of the Comptroller, it is now contended that the Medina Princess should have been followed here. The Medina Princess was special in some respects. In an action in rem in Admiralty by seamen for unpaid wages, no defence was delivered, but the wages were paid after the action was commenced. The plaintiffs moved for default judgment for interest under s.3(1) of the Law Reform (Miscellaneous Provisions) Act 1934 (U.K.), which used language very similar to that used in s.51A of the FCA Act.

Hewson J., without reference to authority, said (at 21): "... it seems to me that this Court has no power to order, and there is no discretion in the matter of ordering, interest to be paid unless it has given judgment in respect of the damages or debt. The words of the section are `shall be included in the sum for which judgment is given'. This Court has given no judgment in respect of any sum and, so far as I can see, is not empowered to award interest upon sums which have already been paid and which have not been the subject of its judgment." Moreover, Hewson J. went on (at 21) to hold that there was no "inherent" or "residual" jurisdiction to award interest in those circumstances. In Techno-Impex v Gebr. van Weelde [1981] 1 QB 648, Oliver L.J. (at 675) and Watkins L.J. (at 681) criticised the Medina Princess and discounted its authority. But in President of India v La Pintada Compania Navigacion S.A. [1985] AC 104, like Techno-Impex, a case dealing with the power of an arbitrator to award interest for late payment, Lord Brandon said (at 120-1): "Watkins L.J., in his judgment in the Techno-Impex case... cited the passage from my judgment in The Aldora... which I have myself set out above. He appears, however, to have treated it as laying down some principle far wider than the terms of the passage warrant, or than I intended them to convey. I was not saying that the law and practice of the Admiralty Court allowed it to award interest of any kind in any case in which it might feel that it would be just and equitable to do. In particular, I was not referring in any way either to the question of awarding interest on sums already paid, or to the question of awarding compound interest. I was not doing so for two very good reasons: first, that such questions never arose for decision and, secondly, that it would never have occurred to those taking part in that case, all well experienced in Admiralty law and practice, that any equitable principle of such width as to encompass the award of interest on debts already paid, or the award of compound interest in any case, did, or could ever, have existed. I said that there was no authority for the proposition that the Admiralty Court could award interest on debts already paid. There is, however, an authority against such proposition: that is The Medina Princess... in which Hewson J. held, in a wages action, that he had no jurisdiction to award interest on wages which, by the time he came to give judgment, had already been paid, albeit much later than they should have been paid. That decision was criticised, and its authority discounted, by Oliver and Watkins L.JJ. in their judgments in the Techno-Impex case... . In my opinion, however, The Medina Princess... was, as the law then stood, correctly decided, and your Lordships should take this opportunity of giving it your approval. My Lords, on the footing that the common ratio decidendi of the majority of the Court of Appeal in this case was, for the reasons which I have given, based on two fundamental misconceptions about the scope of the powers which a court exercising Admiralty jurisdiction then had to award interest, it follows that the decision of that majority cannot be supported on the grounds on which it was reached." [Emphasis added] In State Bank, Wilcox J., in deciding not to follow the Medina Princess, said (at 665): "I do not think this court should adopt that view of the significance of the word `included'. It is not clear to me that it would be followed even in England today. In Woolwich the only order was for payment of interest; the capital sums had long since been repaid. Apparently, nobody saw any problem about that, notwithstanding that s 35A of the Supreme Court Act uses the same formula: `included in any sum for which judgment is given simple interest...'."

As will be mentioned below, however, s.35A contains a specific provision on the point, unlike s.51A(1) and its English counterpart considered by Hewson J. Wilcox J. went on to say (at 665): "In any event, whatever the position in England, s 51A(1) is a facultative provision intended to confer power on the court to do justice between parties in relation to pre-judgment interest, a matter of some importance in these days of high interest rates and extensive delays in finalising litigation. The subsection should be interpreted as widely as its language allows. While it is true that an item `included' in another item will usually constitute only part of the latter item, this is not necessarily so. The point may be illustrated by a sporting example. Take a batsman who has the misfortune to score `ducks' in his first three innings in a season, then scores 50 runs in the fourth. If a computation was then made of the team members' aggregates, his 50 runs would be `included' in his aggregate, notwithstanding that it constituted all the runs in the aggregate. Similarly, runs scored by a batsman off the opening ball of an innings are immediately `included' in the team's innings score. In my opinion, as a matter of interpretation, s 51A(1) is available in this case." We agree. In Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70, relied on by Wilcox J. in this context, a building society challenged the validity of transitional provisions in U.K. building society taxation Regulations. But to avoid adverse publicity which might flow if it had been the only building society failing to pay in accordance with the Regulations, and to avoid penalties, it paid instalments as required by the Regulations, but without prejudice to its right to recover those sums if it were correct in its contention that the Regulations were void. On 31 July 1987, in the judicial review proceedings, Nolan J. held that the Regulations were beyond power. Although reversed by the Court of Appeal, the House of Lords restored Nolan J.'s original order. Earlier in July 1984, the building society had commenced separate proceedings against the Revenue claiming the payment of the tax paid, and interest. The Revenue repaid the building society the moneys paid, with interest from 31 July 1987, the date of judgment, on a "voluntary" basis, but refused to pay interest up to the date of judgment. The building society continued its claim for interest up to the date of judgment, not under the provision considered in The Medina Princess, but under the provisions of s.35A of the Supreme Court Act 1981 (U.K.), from the dates on which the instalments had been paid, on the ground that the principal had been repayable on those dates as sums paid pursuant to an unlawful demand. Nolan J. dismissed the claim for interest, but the Court of Appeal, by a majority, reversed his decision. An appeal to the House of Lords was, by a majority, dismissed. Section 35A(1) is as follows: "35A(1)...in proceedings...before the High Court for the recovery of a debt...there may be included in any sum for which judgment is given simple interest...on all or any part of the debt...in respect of which judgment is given...for all or any part of the period between the date when the cause of action arose and - (a) in the case of any sum paid before judgment, the date of the payment... ." [Emphasis added]

The presence of the emphasised provision no doubt explains why it was not disputed by any of the parties in Woolwich, that s.35A(1) could apply, notwithstanding that the taxes had been repaid. Since, by virtue of para.(a) above, s.35A(1) expressly provides for interest to be "included" in the case of a sum paid before judgment, the authority of Woolwich on this particular adjectival aspect should to some extent be discounted. But the presence of para.(a) in s.35A(1) is also an indication that it is possible, contrary to the view of Hewson J., to accommodate pre-judgment interest where the "principal" is paid before judgment within the phrase "included in any sum for which judgment is given... ." In other words, this is not, as was apparently thought in the Medina Princess, an impossibility; the two notions may co-exist or be reconciled. In any event, in our opinion, this aspect of the matter should be regarded as free from any authority binding on this Court for present purposes. As Oliver L.J. noted, Hewson J. cited no authority for his conclusion and appears to have relied on a literal approach to s.3(1). Moreover, the Medina Princess, as also La Pintada, arose in a rather special admiralty context. In our view, the present question should be seen as one of construction of a provision which was plainly intended to be remedial (see the comments by Gibbs C.J. in State Bank of New South Wales v Commonwealth Savings Bank of Australia (1984) 154 CLR 579, made before the introduction of s.51A in 1984; see also the Explanatory Memorandum, Statute Law (Miscellaneous Provisions) Bill (No. 2) 1984 at p.29). As remedial legislation, s.51A ought to be liberally construed (see Pearce and Geddes, Statutory Interpretation in Australia, 4th ed., 1996 at 222). On behalf of the Comptroller, in support of the approach taken in the Medina Princess, reliance is placed upon observations made in the report of the NSW Law Reform Commission on Interest on Certain Debts (LRC 35,1983) as follows (at 38-9): "4.27 Payment of a debt may be made by the defendant to the plaintiff after proceedings have been instituted, without any monies having been brought into court. In such cases the plaintiff may be confronted with a debtor who has ignored demands for payment, and who has waited until the last moment before judgment. Such a debtor may be aware that there is no defence to the claim. Further, the debtor may be advised that there is no point in using the procedures for payment into court as a means of inducing a compromise for less than the full amount of the debt. 4.28. As the law currently stands, a plaintiff receiving such a payment or an offer of payment, without any interest, is in a quandary. If the money is accepted it will not be possible for the plaintiff to obtain judgment for the debt. Since the present provisions conferring discretionary jurisdiction to award interest depend on the obtaining of a judgment it follows that interest cannot presently be recovered under those provisions unless a judgment is obtained." [Emphasis added] No authority was cited for this opening statement, but presumably the Commission had the Medina Princess in mind. The report went on: "4.29 If the plaintiff refuses to accept the payment for the reason that he or she wishes to recover interest, then the consequences may be inconvenient or worse. First, there is likely to be delay and cost to the plaintiff while the matter is set down for hearing. Secondly, there will be uncertainty about the recovery of interest because a defendant pleading payment or tender after action would have an arguable case that interest should not run, at least from the date of the attempted payment. Thirdly, there is the risk that the defendant's financial position will have deteriorated by the time the matter is determined, so that recovery may be frustrated. 4.30 Considerations of justice suggest that a plaintiff who is offered payment or who receives payment after action has been commenced without interest, should be able to accept it without prejudicing a claim for discretionary interest and without the uncertainties described above. The plaintiff will have been kept out of moneys to which he or she was entitled, and will have suffered loss. The position of the defendant would also be strengthened, for by making the payment he or she could confidently expect that interest would cease to run from that moment. The amount in issue would be confined to the period between the accrual of the cause of action and the date of payment. At present such a defendant does not know with certainty whether payment would carry that consequence, the assessment of interest being entirely discretionary. [Emphasis added] 4.31 An alteration of the law to give the courts a discretion to award interest in such cases would not affect the power of the parties to agree upon an accord and satisfaction at the time of payment. It could suit the parties to negotiate a compromise as to interest at that time. For the plaintiff there could be the advantage of early finality and certainty as to the amount recovered. For the defendant there could be the advantage of an opportunity for a final discharge. For each party, there would be the possibility of lessening costs. 4.32 To allow recovery of interest in these circumstances appears to be consistent with the intention of the existing discretionary interest provisions. These provisions presuppose the commencement of proceedings by the plaintiff to recover the principal debt. Once that step has been taken the right of the plaintiff to recover interest, and the liability of the defendant to pay interest, should not depend on the plaintiff obtaining formal judgment for the debt. In our view there is no justification for a difference between the plaintiff who obtains judgment after a hearing and the plaintiff who after commencing proceedings either receives payment of the debt or obtains default judgment without a hearing." With respect, we agree with Wilcox J., and with the view expressed in this report, that justice and the apparent intention of the legislation require, contrary to the opinion advanced in the Medina Princess, that the Court not be deprived of the jurisdiction or power to award interest where the principal amount is paid after the issue of the writ. A liberal approach in this area also accords, at least speaking generally, with authority in other Australian jurisdictions to which reference should next be made. In Melbourne & Metropolitan Board of Works v Bevelon Investments Pty. Ltd. [1977] VR 473, which is cited, with approval later in the N.S.W. Law Reform Commission Report (at 39), a claim for interest in the present circumstances was upheld under s.78 of the Supreme Court Act 1958 (Vict.) as follows: "Upon all debts or sums certain hereafter recovered in any action the judge at the hearing shall upon application unless good cause is shown to the contrary allow interest to the creditor at a rate not exceeding eight per cent per annum from the time when such debt or sum was payable." It was there held that a debt or liquidated demands paid to the plaintiff after the issue of a writ was "recovered in the action"; that is, even though judgment was not entered, Anderson J. arrived at this conclusion by looking to the "substance" of the matter (at 474), rather than its mere form. Such an approach, in essence a purposive rather than literal one, is consistent with other modern statements of high authority in analogous areas in the general law. In Baltic Shipping Co. v Dillon (1993) 176 CLR 344, Deane and Dawson JJ said (at 376): "In particular, the notions of good conscience, which both the common law and equity recognized as the underlying rationale of the law of unjust enrichment, now dictate that, in applying the relevant doctrines of law and equity, regard be had to matters of substance rather than technical form." [Emphasis added] On equity's preference for substance rather than form see, further, Nelson v Nelson (1995) 132 ALR 133 per Deane and Gummow JJ. at 148; and for a recent example of the application of restitution principles in accordance with the substance, rather than the form, of a transaction, see Goss v Chilcott [1996] 3 WLR 180 (P.C.). It is noteworthy here that Lord Goff, (at 188) said that "doubtless judgment would, in the event, be given for the balance with interest at the appropriate rate" (emphasis is added); reference was then made to the Court of Appeal decision in the Westdeutsche Case, to be mentioned further below. If the construction of s.51A(1) is also to depend upon substance rather than form, there can be no justification for holding that the Court, once properly seized of jurisdiction to entertain the claim for interest, somehow loses that power upon the respondent paying the (principal) debt or liquidated sum claimed (see Burgundy Royale Investments Pty. Ltd. v Western Banking Corporation (1989) 18 FCR 212 at 219; compare the converse situation of a failure to apply for prejudgment interest and the Court's power, to be exercised liberally, yet fairly, to permit the judgment to be varied under O.35 r.7, see Kewside Pty. Ltd. v Warman Interntional Ltd. (1990) ATPR 41-012 per French J.) We should say something here about the remitter, if only to put it aside as not significant for present purposes. As has been said, these proceedings were remitted by the High Court to this Court. But nothing, in our view, turns on the remitter for the following reasons. (Nor, it should be acknowledged, does the respondent suggest otherwise.)

Upon the issue of the writs in the High Court on 3 June 1994, the provisions of s.77MA(1) of the Judiciary Act 1903 conferred upon the High Court the power to award interest up to judgment in the same terms as s.51A(1) of the FCA Act, so that, at that point of time, each of the appellants had the right to claim interest in accordance with this provision. The proceedings were subsequently remitted to this Court under s.44 of the Judiciary Act. By s.44(3) it is provided that, on remitter to a court (a) that court has jurisdiction in the matter; and (b) subject to any directions of the High Court, further proceedings in the matter shall be as directed by that court. But the settled course of authority makes it plain that remitter could not prejudice either side's position. In the Commonwealth Savings Bank Case, above, Gibbs C.J. said (at 586): "The purpose of a remitter under s.44 is simply to relieve this Court of the necessity to hear cases that might more conveniently be heard elsewhere, particularly where the litigation involves the trial of issues of fact. The Court should not, by making a remitter, alter the rights of the parties." In McCauley v Hamilton Island Enterprises Pty. Ltd. (1986) 69 ALR 270, Mason J. said (at 275-6): "... the Federal Court...relevantly stands in the jurisdictional shoes of this [High] court by virtue of a remitter under s.44... ." In Commonwealth of Australia v Mewett (1994) 126 ALR 391, Foster J., after citing Mason J. and Gibbs C.J., said (at 402): "Accordingly, it is clear that in determining what law is to be applied in relation to Mewett's claim in this court, it is necessary to determine what law would have been applied in the High Court if no remitter had taken place. This does not mean, of course, that this court must apply the purely procedural rules of the High Court rather than its own. Once the remitter has occurred, this court must deal with the case in accordance with its own procedures in relation to interlocutory steps and the hearing." Since no relevant differences in procedure exist, i.e. since s.77MA(1) of the Judiciary Act and s.51A of the FCA Act are in the same terms, it must follow that nothing here turns upon the circumstance that the proceedings were remitted to this Court from the High Court; in particular, the rights of the parties were not thereby altered. I propose next to consider the claim for interest at each relevant stage of the litigation. It is convenient then to consider first the position at the time when writs were issued in the High Court. At that stage, in the language of s.77MA(1) of the Judiciary Act (or s.51A(1) of the FCA Act), the necessary ingredients were present here, that is to say, there were: (1) proceedings for the recovery of money; and (2) in respect of a cause of action that arises after the commencement of the section. It will be recalled that the statute then provides that, upon application (and that requirement was undoubtedly satisfied), unless good cause is shown to the contrary, the Court shall make one or other of the orders in para.(a) or (b). For immediate purposes, paras.(a) and (b) are, in material respects, to the same effect. It will suffice to refer to (a), relevantly as follows: "... (a) order that there be included in the sum for which judgment is given interest...for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered... ." It will be recalled that the essence of the reasoning in the Medina Princess was that the absence of a "judgment" was fatal. But, as there, it is not expressly stated in our local provision that there must be a "judgment" for the recovery of the (principal) debt, as distinct from a "judgment" for the interest. By s.4 of the FCA Act, "judgment" is defined to mean "a judgment, decree or order, whether final or interlocutory, or a sentence". In our view, a judgment, or order, even if for interest only or for costs only, is nonetheless a "judgment" within s.4, and within s.51A(1). It is true that s.51A(1) states that the amount of the interest must be "included" in the judgment, but it is necessary to consider what, if anything, follows from this. The current dictionary (Macquarie, 2nd ed.) definitions of the verb "include" are:

"1. to contain, embrace, or comprise, as a whole does parts or any part or element. 2. to place in an aggregate, class, category, or the like. 3. to contain as a subordinate element, involve as a factor." The Shorter Oxford English Dictionary (3rd ed.) offered these meanings: "Include 1. trans. To shut or close in; to shut up, confine. ... b. To enclose (in an area) ... 2. To contain, comprise, embrace: a. as a member of an aggregate, or a constituent part of a whole ... b. as a subordinate element, corollary, or secondary feature ... 3. To place in a class or category; to embrace in a general survey; to reckon in a calculation etc. ... 4. To bring to a close. ..." In Y.Z. Finance Co. Pty. Ltd. v. Cummings (1964) 109 CLR 395, Kitto J. explained the meaning of the verb "includes" (at 401-2): "I agree in the conclusion that sub-s.(2) of s.24 exhaustively prescribes the ambit of the word `security' for the purposes of the section. It is expressed as a statement of what the word `security' in the section `includes'. Unlike the verb `means', `includes' has no exclusive force of its own. It indicates that the whole of its object is within its subject, but not that its object is the whole of its subject. Whether its object is the whole of its subject is a question of the true construction of the entire provision in which the word appears. The well-known statement of Lord Watson in Dilworth v Commissioner of Stamps... should not be taken so literally as to reduce the inquiry in a case like the present to an inquiry into the meaning of the word `includes'. Strictly speaking, that word cannot be equivalent to `means and includes'. But a provision in which it appears may or may not be enacted as a complete and therefore exclusive statement of what the subject expression includes. A provision which is of that character has the same effect as if `means' had been the verb instead of `includes'. The question whether a particular provision is exclusive although `includes' is the only verb employed is therefore a question of the intention to be gathered from the provision as a whole." [Emphasis added] The present statutory context indicates, as one would expect, that, ordinarily, a judgment would deal with at least the debt and interest. Other items, such as costs, may also be dealt with, but this need not be pursued. Where both the debt and interest are dealt with in, or are part of, or factors in, a judgment, it would accord with the dictionary meaning of "include" to say that interest is "included" in the judgment. But if, in its formal dimensions, the judgment does not need to speak about the debt because it has since been paid, does it follow, as appears to have been held in Medina Princess, that s.51A(1) can have no application? Section 51A(1) is, we think, capable of application in such circumstances, at least where, as here, the debt had not been paid at the time of, i.e. after, the institution of the proceedings. In other words, as a matter of statutory construction, it is not a pre-condition to the application of s.51A(1) that the debt, although unpaid when the writ was issued, remains unpaid thereafter. Put differently, the form of the judgment, that is, the machinery employed as a means to an end, should not be allowed to dictate the outcome of the substantial question whether, on the overall merits of the situation, interest should be allowed. There is ample authority to this effect. In Downey v Pryor (1960) 103 CLR 353, Kitto J. explained why mere machinery provisions should not usually dictate substantive outcomes (at 361-2): "No doubt the introduction, into a provision conferring a right, power or authority (it will suffice to speak of an authority), of words requiring that in exercising the authority a prescribed method (to use the word in a comprehensive sense) shall be observed, may have either of two results. Upon consideration of the words themselves, the context, and the nature of the provision, the intention may appear that a prescribed method is of the essence of the authority, so that there is no authority capable of exercise at any given time unless at that time a valid prescription of a method is in force... . But on the other hand the meaning may be that the authority is to be subject to a power in the Executive to regulate its exercise and that in the reference to the prescribed methods the words `if any' are to be implied... . In the latter class of cases, a person exercising the authority must observe any method which is prescribed for the time being; but if none is prescribed the authority is exercisable by any appropriate method. Illustrations of this kind of provision may be found in Commissioners of Inland Revenue v Joicey [No. 1]... and Moate v Dartnell... ." [Emphasis added] In Commissioners of Inland Revenue v Joicey (No. 1) [1913] 1 KB 445, a case mentioned by Kitto J., a statute provided that any person aggrieved by the decision of a referee under the Act may appeal to the High Court "within the time and in the manner and on the conditions directed by the Rules of Court". Some Rules were made under the section, but did not apply to the case at hand, an appeal by the Revenue. It was held that the right of appeal was absolute, and not affected by the omission from the Rules of complete, exhaustive, or appropriate provisions as to the procedure upon an appeal by the Commissioners. Hamilton L.J. said (at 455): "...the words are not `any person aggrieved . . . . may appeal . . . . so soon as the time, manner, and conditions of such appeal shall have been directed by Rules of Court'. The right of appeal is mentioned first; the mode of appeal afterwards. It is one thing to say that when the rules have been issued appellants must conform to them as a condition of the enjoyment of the right of appeal. It is another to say that till the rules have been issued no right of appeal exists at all. The reasoning of Holt C.J. in Ashby v White... adopted by the House of Lords, in the passage beginning `if the plaintiff has a right he must of necessity have a means to vindicate and maintain it,' is strong to shew that as soon as it is clear that the Legislature has given a right of appeal it is available to the subject quocunque modo, unless the rest of the enactment clearly negatives this corollary." [Emphasis added] This reasoning is properly analogous here. That is, the substantive entitlement to interest should not be governed by the absence of appropriate machinery (in the form of the judgment). This result can be achieved, as Kitto J. pointed out, by construing s.51A(1) so as to mean that interest may be "included" in the sense of being a part of a judgment which also orders the payment of the debt "(if any)". If it be needed, a further example, in the present context, of a necessary adaptation being made to address the special circumstances of the case at hand, as part of the proper process of statutory interpretation, is provided in another aspect of Bevelon, above. It will be recalled that s.78 of the Supreme Court Act provided that interest be allowed by the Judge "at the hearing" upon debts or sums certain recovered in the action. The plaintiff there moved for summary judgment. It was submitted for the defendant that upon a summons under O.14 for summary disposal there was no "hearing", so that s.78 was unavailable. Rejecting the submission, Anderson J. said (at 476): "The rule provides for summary judgment in an action to which, in effect, there is no defence, but to reach that determination the judge has to consider the evidence before him and to satisfy himself of the validity of the plaintiff's claim to the same degree and extent, save for procedural short cuts allowed by the rule, as he would have been required to do had there been a hearing in open court with oral evidence and all the requirements of a full trial. Other rules in O.14 emphasize the judicial, deliberative nature of the proceedings. If a plaintiff succeeds on an O.14 application, the order is for leave to enter judgment and the formal entry of judgment is a ministerial act, so that no further judicial deliberation is necessary. However, what has happened, in my opinion, is that there has been a hearing appropriate to the nature of the proceedings and in a form required by the Rules. There has been a determination of the issue between the parties and it is evident to me that what transpires before the judge in such circumstances takes place `at the hearing'. Indeed, if the hours of argument before me in this case did not constitute a hearing, it is hard to imagine what would." [Emphasis added] Once substance is preferred to form, it follows that the entitlement to interest under s.51A(1) cannot be conditional upon the debt, unpaid at the time of issue of the writ, remaining unpaid at the time of entry of judgment. It follows that we agree with Wilcox J. in State Bank, and in the present case, on this point. It further follows that we cannot accept the correctness of the Medina Princess on this aspect. In fairness to Hewson J., it should be noted that the approach of the courts here and in England to the award of interest, has shifted considerably since 1962 when the Medina Princess was decided (see, e.g. Hungerfords v Walker (1988) 171 CLR 125 per Mason C.J. and Wilson J. at 141-3; and for an illustration of an implication of an entitlement to interest being made in a statute in modern times, see Shaikh v Bolton M.B.C., Court of Appeal (U.K.), 24 May 1966, unreported). (ii)What was "the date when the cause of action arose" for the purposes of s.51A(1)(a)? In our view, s.51A(1)(a) should be treated as picking up the date when, by the operation of the relevant legal processes, the cause of action, notionally, or in truth, arose. In other words, it is possible here, given the retrospective operation of s.269N, to construe s.51A(1)(a) as referring to a cause of action arising, retrospectively, in September 1987, rather than on 3 June 1994. A retrospective perspective for the purposes of s.51A(1)(a) would accord with the intent of the scheme of the Customs legislation. That is to say, s.51A(1)(a) should be interpreted so as to refer to the date when the cause of action arose, or should be treated as having arisen. Such a minor gloss upon the provision is, we think, permissable as reflecting the intention of the legislation, given its remedial character. Such an interpretation is also consistent with authority, for instance, the reasoning of the N.S.W. Court of Appeal in Collector of Customs v Gaylor Pty. Ltd. (1995) 127 ALR 641. There, Handley J.A. said (at 646): "The decision of the AAT (or a court on appeal) in favour of the importer in such a case does not complete the plaintiff's cause of action but merely removes a procedural defence. ...[D]ecisions of the House of Lords... establish that such procedural defences do not postpone the accrual of causes of action either for limitation purposes or for determining the period for which interest can be awarded under provisions such as s 94 of the Supreme Court Act 1970 (NSW). A further analogy is to be found in the principle that causes of action for malicious prosecution and wrongful arrest are complete when the acts complained of occur, and if necessary damage is suffered, although the plaintiff cannot succeed unless the prosecution later terminates in his favour, or the relevant conviction or order is set aside... ." It follows, in our opinion, that potentially, that is, in the absence of good cause to the contrary in the limited sense later explained, s.51A(1)(a) was available here. (iii) Was s.51A(1)(b) also potentially available here? It will be recalled that, under this limb, the Court or a Judge may, without proceeding under (a), "order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest." No mention, or at least no specific mention, is made of the accrual of the cause of action as the time from which interest runs. It should be said at the outset that we agree with Wilcox J. that the procedures laid down by s.167 of the Act can have no application to a claim for interest under either limb of s.51A(1). Section 51A(1) is a free-standing provision operating independently of s.167 (see Gaylor above; note also that, in any event, s.167(5) excludes refund situations under s.163). Moreover, where, as is possible here, there may be a doubt whether, in the exercise of the judicial discretion, it is proper to proceed under para.(a) of s.51A(1), it is, we think, appropriate for the Court or a Judge to invoke para.(b). Under the latter branch of the provisions of s.51A(1), the Court or a Judge is given, with respect to quantum, a very broad discretion. Of course, the judicial discretion is to be exercised in a principled, rather than an arbitrary, fashion, that is, "according to the rules of reason and justice, not according to private opinion" (see The Queen v Anderson; Ex parte Ipec Air Pty. Ltd. (1965) 113 CLR 177 per Kitto J. at 189). In the exercise of the discretion under this limb, it would be legitimate to take into account, as relevant to the fairness and equity of the situation, the objective circumstances, first, that the Commonwealth had the benefit of the payments made by the appellants from September 1987 onwards, and retained that amount until 3 June 1994, nearly seven years later in the case of some payments, notwithstanding that from September 1987, the appellants had continuously sought a CTCO; and secondly that, as this Court has held after a series of judicial interventions, the CTCO ought to have been made retrospective to September 1987. Moreover, there is now a formidable body of high authority to support the proposition that, in the present circumstances, the statutory discretion under para.(b) ought to be exercised in favour of the taxpayers, in the absence of any exceptional feature (i.e. "good cause to the contrary"). In Royal Insurance, Mason C.J. said (at 65): "In Reg. v Tower Hamlets London Borough Council; Ex parte Chetnik Developments Ltd. [1988] AC 858 the House of Lords dealt with a discretionary power to refund in particular circumstances rates paid when not payable and not recoverable otherwise than by means of an exercise of the discretionary power. Lord Bridge of Harwich expressed the principle invoked by the House of Lords in these terms...: `Parliament must have intended rating authorities to act in the same high principled way expected by the court of its own officers and not to retain rates paid under a mistake of law ... unless there were, as Parliament must have contemplated there might be in some cases, special circumstances in which a particular overpayment was made such as to justify retention of the whole or part of the amount overpaid.'

Much the same comment may be made about s.111." Earlier in his speech in Chetnick, Lord Bridge (at 876) had referred, inter alia, to a statement by Bray J. in Blackpool and Fleetwood Tramroad Co. v Bispham with Norbreck Urban District Council [1910] 1 KB 592 as follows: "Then the justices have found as a fact that the respondents have been overpaid by the appellants Ł460 8s., that is, an amount exceeding that claimed in respect of the 1908 rate. In my opinion the respondents were bound in equity to apply that sum, which they had been overpaid, in payment of the 1908 rate..." [Emphasis added] Lord Bridge went on to say (at 876):

"In both these passages I take the words `in equity' to be used in the same sense as that in which they were used by James L.J. in Ex parte James... as explained by Vaughan Williams L.J. in In re Tyler... i.e. as referring not to an equity enforceable in a suit or action, but to a moral principle which the court could expect to be observed by a public body such as a rating authority. I say this because I know of no general principle that money paid under a mistake of law which is irrecoverable may nevertheless found a defence of equitable set off against a later claim by the recipient of the money mistakenly paid." Under the rule in Ex parte James, an officer of the court will not be permitted by the court to take advantage of his or her strict legal rights "if this has the effect of unjustly enriching the estate at the expense of an innocent claimant" (see McPherson's Law of Company Liquidation, 3rd ed., J. O'Donovan, at 266). The application of the rule in bankruptcy is sometimes complex (see, e.g. Downs Distributing Company Proprietary Limited v Associated Blue Star Stores Proprietary Limited (In Liquidation) (1948) 76 CLR 463 at 476; Re Roberts (1976) 12 ALR 730 per Riley J. at 734-5; Re Douglas (1987) 75 ALR 97 per Pincus J. at 103; Hartogen Energy Limited (In Liquidation) v The Australian Gas Light Company (1992) 36 FCR 557 per Gummow J. at 571-6). But in the present context, the position of the Crown itself, especially given its default in failing to make the CTCO, should also be taken into account. Otherwise the Crown would be taking, or be seen to be taking, advantage of its own default, whereas it is well established that the Crown must act, and be seen to act, as a model litigant. For instance, in The Melbourne Steamship Company Limited v Moorehead (1912) 15 CLR 333, Griffith C.J. said (at 342): "The point is a purely technical point of pleading, and I cannot refrain from expressing my surprise that it should be taken on behalf of the Crown. It used to be regarded as axiomatic that the Crown never takes technical points, even in civil proceedings, and a fortiori not in criminal proceedings. I am sometimes inclined to think that in some parts - not all - of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken."

On securing "good administration", see also Kelson v Forward (1996) ALD 303 per Finn J. at 326-7. It is also pertinent to note that there is an obligation on all decision-makers (and of course the courts themselves are not exempt from this obligation) to ensure that they not only address the correct legal question, but do so within a reasonable time. A decision excessively delayed is a bad decision. The fact that nearly seven years passed here before the CTCO was (properly) made is a material factor to be taken into account in considering whether, in fairness, the taxpayers should receive some compensation in the form of an appropriate allowance for interest, or whether, on the other hand, the Revenue should, in effect, retain the benefit of a substantial interest-free loan. Thus, in Re Federal Commissioner of Taxation; Ex parte Australena Investments Pty. Ltd. (1983) 50 ALR 577, Murphy J. said (at 578): "The first question is whether the Commissioner has a public duty to allow or disallow within a reasonable time. The Commissioner suggested that the duty to `consider the objection' under s 186 of the Act, at its highest, is a duty to give diligent and honest consideration to objections. He contended that there is no time limit, reasonable or otherwise, in which he is required to determine an objection. Where time limits have not been specified in other sections of the Act a reasonable time has been implied... . Without a time limit any duty would be illusory. I interpret s 186 of the Act as requiring the Commissioner to allow or disallow an objection in whole or in part within a reasonable time."

Applying the reasoning of Murphy J. here, it follows that the right to apply for a CTCO will be "illusory" unless it is dealt with in a reasonable time. Where, as here, despite the continuing best efforts of the appellants over a period substantially in excess of a reasonable time, the respondent neglected to make the CTCO, it is not sufficient for the respondent to repay the duty on a retrospective basis. The statutory right to apply for a CTCO on a retrospective footing will remain illusory, unless the appellants are adequately compensated for the loss of the use of the moneys they have paid in the intervening period. Prima facie at least, it must follow, we think, as a matter of fairness and justice, that interest should be paid in the present extraordinary circumstances. In the circumstances, and given especially the observations of Lord Bridge and of Mason C.J. in comparable contexts, it is not necessary to consider whether s.64 of the Judiciary Act makes any difference here (see Susan Kneebone, "Claims against the Commonwealth and States and their instrumentalities in Federal Jurisdiction: Section 64 of the Judiciary Act" (1996) 24 Federal Law Review, 93 at 121, 131). But if further illustrations be needed of modern examples of the courts being willing to imply an entitlement to interest out of a statutory scheme, reference could be made to Wardens and Commonalty of the Mystery of Mercers of the City of London v New Hampshire Insurance Co. [1991] 1 WLR 1173 and to Shaikh's case, above. As to the liberal position in equity in this area, a modern application is provided by Biala Pty. Ltd. v Mallina Holdings Limited [1994] 13 WAR 11 per Ipp J. at 83-5. These illustrations, in similar situations, demonstrate that the justice system should now take a more liberal attitude to claims for pre-judgment interest than may previously have been the case. From what date should interest generally be allowed? In Ferrier v CAA (1994) 127 ALR 472, it was held, in a preference context (at 530-2), that an award of interest under s.51A(1) should not commence before the cause of action accrued, but should commence from the date of the demand. In the present case, this date was, effectively, September 1987 when the appellants first sought the CTCO and, consequently, freedom from duty. That was, ultimately, the date fixed, albeit retrospectively, as the time from which the appellants' goods were freed from tax. High authority in this country, in England and in the United States in similar circumstances, dealing with the general law principles of restitution or unjust enrichment, indicates that it is fair and just and in accordance with natural justice and equity, that interest of the kind now claimed should ordinarily be awarded under a statutory provision along the lines of s.51A(1)(b). There is no reason, in the absence of the existence of an exhaustive statutory statement to the contrary, that is, a "code" situation, why those general law principles, anchored as they are in the true merits of the situation, should not provide at least some guidance in the exercise of the discretion given by s.51A(1)(b). There is nothing in s.51A(1) which would exclude those principles from consideration to some extent at least. In Woolwich, in the Court of Appeal, a member of the majority, Glidewell L.J., cited authoritative observations of Lord Mansfield ([1993] AC at 79-80) and Holmes J. ([1993] AC at 92) which are pertinent here and should be restated now. In Moses v Macferlan (1760) 2 Burr. 1005, Lord Mansfield said, in a familiar observation (at 1012): "... [Restitution] lies for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express or implied;) or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances. In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case is obliged by the ties of natural justice and equity to refund the money." In Atchison, Topeka & Sante Fe Railway Co. v O'Connor (1912) 223 U.S. 280, Holmes J. said (at 285-6): "It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the state's collection of its revenues, an action at law to recover back what he has paid is the alternative left. Of course we are speaking of those cases where the state is not put to an action if the citizen refuses to pay. In these latter he can interpose his objections by way of defence, but when, as is common, the state has a more summary remedy, such as distress, and the party indicates by protest that he is yielding to what he cannot prevent, courts sometimes perhaps have been a little too slow to recognize the implied duress under which payment is made. But even if the state is driven to an action, if at the same time the citizen is put at a serious disadvantage in the assertion of his legal, in this case of his constitutional, rights, by defence in the suit, justice may require that he should be at liberty to avoid those disadvantages by paying promptly and bringing suit on his side. He is entitled to assert his supposed right on reasonably equal terms." [Emphasis added] In Woolwich in the House of Lords, Lord Goff said (at 171-2): "The justice underlying Woolwich's submission is, I consider, plain to see. Take the present case. The revenue has made an unlawful demand for tax. The taxpayer is convinced that the demand is unlawful, and has to decide what to do. It is faced with the revenue, armed with the coercive power of the state, including what is in practice a power to charge interest which is penal in its effect. In addition, being a reputable society which alone among building societies is challenging the lawfulness of the demand, it understandably fears damage to its reputation if it does not pay. So it decides to pay first, asserting that it will challenge the lawfulness of the demand in litigation. Now, Woolwich having won that litigation, the revenue asserts that it was never under any obligation to repay the money, and that it in fact repaid it only as a matter of grace. There being no applicable statute to regulate the position, the revenue has to maintain this position at common law. Stated in this stark form, the revenue's position appears to me, as a matter of common justice, to be unsustainable; and the injustice is rendered worse by the fact that it involves, as Nolan J. pointed out [1989] 1 WLR 137, 140, the revenue having the benefit of a massive interest-free loan as the fruit of its unlawful action." [Emphasis added] Lord Browne-Wilkinson said (at 197):

"In the present case, the concept of unjust enrichment suggests that the plaintiffs should have a remedy. The revenue demanded and received payment of the sum by way of tax alleged to be due under regulations subsequently held by your Lordships House to be ultra vires. The payment was made under protest. Yet the revenue maintains that it was under no legal obligation to repay the wrongly extracted tax and in consequence is not liable to pay interest on the sum held by it between the date it received the money and the date of the order of Nolan J. If the revenue is right, it will be enriched by the interest on money to which it had no right during that period. In my judgment, this is the paradigm of a case of unjust enrichment." [Emphasis added] Moreover, although Royal Insurance is relied on strongly by the respondent here, there is nothing in Royal Insurance which is inconsistent with the approach taken in Woolwich. It is true that Royal Insurance was concerned with a disputed claim for the repayment of the duty, a matter not arising here since it was eventually repaid without a court order; and that Woolwich involved, as here, only the question of interest. But the same underlying notions of natural justice and the equity of the situation were applied in both these cases once the true legal position was, ultimately, clarified.

In Royal Insurance, Mason C.J. said (at 67): "In one respect, Royal's belief at the time of payment was not mistaken: in the case of the cost-plus policies, payments were made when there was a legal liability to pay them. Only subsequently and retrospectively was an exemption granted. But the retrospective operation of s.2(4) of the 1987 Act enables one to say that, in the light of the law as it was enacted with retrospective effect in 1987, the payments of duty were made under a mistake as to the legal liability to pay them. In David Securities it was accepted that...: `the payer will be entitled prima facie to recover moneys paid under a mistake if it appears that the moneys were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the moneys or that the payee was legally entitled to payment of the moneys. Such a mistake would be causative of the payment.' And, prima facie, that is all that is required where, as here, the recipient has no legal entitlement to receive or retain the moneys. The recipient has been unjustly enriched." [Emphasis added] It is true that, in finding a purely statutory entitlement to a refund, Brennan J. (Toohey and McHugh JJ. concurring) distinguished (at 90) the circumstances in Woolwich, where payments had been made under statutory provisions that were held to be invalid. But the reasoning in Woolwich was not criticised. Moreover, on the approach taken by Brennan J., s.51A(1) may be seen as the equivalent of s.111, that is, as the source of the appropriate remedy. Dawson J. held (at 102) that the statute imposed an obligation upon the Revenue to make a refund, not merely a discretion to do so if it were so minded. Dawson J. said (at 101-2): "The confined grounds upon which an administrative decision may be reviewed by a court would preclude the substitution of a decision based upon restitutionary principles. Of course, a court would require the discretion to have been exercised having regard to the scope and purpose of the relevant legislation and to be within the confines formulated in Associated Provincial Picture Houses Ltd. v Wednesbury Corporation... with regard to reasonableness. But that is something different from an application of the common law relating to restitution. That may be seen from the decision in Reg. v Tower Hamlets London Borough Council; Ex parte Chetnik Developments Ltd.... where it was held that the purpose of legislation, which conferred a discretion upon a borough council to refund overpaid rates, extended to the repayment of rates paid under a mistake of law. The exercise by the council of its authority was, however, discretionary notwithstanding that it was to be governed by the scope and purpose of the legislation in question, as well as the principle of reasonableness as applied to administrative discretions. True it is that Lord Goff of Chieveley pointed out that the general principles of the law of restitution should be of assistance in the exercise of the discretion, but it is clear that he did not regard those principles as necessarily determining the outcome." [Emphasis added] Likewise, in the present context, it may be said that general law restitutionary principles assist, without entirely governing, the exercise of the statutory discretion as to quantum conferred by s.51A(1)(b). As has been noted, there is, in the present circumstances, a prima facie (i.e. unless good cause to the contrary is shown) entitlement to interest under s.51A(1)(a); but there remains a judicial discretion to proceed under para.(b), rather than para.(a), where appropriate; and there is a further discretion to order a lump sum by way of interest in an amount that is fair and just in the circumstances. Additional support for the approach taken in Woolwich may be found in the decision of Wilcox J. in State Bank. His Honour there ordered interest under s.51A where, as his Honour put it, it was necessary to do justice between the parties. Wilcox J. referred (at 659-660) to a number of cases, including Rodger, Carnie and Gilman v Comptoir D'Escompte de Paris (1871) LR 3 PC 465 and Sibley v Grosvenor (1916) 21 CLR 469. In both, pre-judgment interest was awarded where moneys had been previously paid under a court order later set aside (Rodger) or paid before later rescission for fraud (Sibley). Wilcox J. said (at 660): "...it seems to me that the decided cases suggest the existence of a general principle that, in ordering a payment of money by way of restitution, a court has power to include something by way of interest, where this is necessary to do justice between the parties. Rodger and Sibley can only be explained on that basis." [Emphasis added] With respect, we agree. Haig v The Minister Administering The National Parks & Wildlife Act 1974, NSW Court of Appeal, 17 May 1996, unreported, is yet another example of this approach. There, property of the appellant was resumed under the Public Works Act 1912 (NSW) on 11 January 1985 for incorporation in the Kosciusko National Park. On 31 October 1988 the Land & Environment Court (Bignold J.) awarded $395,500 compensation under s.124 of the Public Works Act. The Minister appealed, but on 7 August 1989 paid the appellant the balance of the compensation then payable and statutory interest. In 1990, the Court of Appeal held that s.125 was applicable and the matter was remitted for compensation to be assessed under that section. In May 1994, Bignold J. assessed compensation at $208,000. The appellant appealed and the respondent cross-appealed. In 1995, the Court of Appeal upheld the cross-appeal and determined the compensation payable at $191,000. In accordance with s.126(1) of the Public Works Act, the respondent paid the compensation originally assessed by Bignold J. with statutory interest and sought restitution of overpaid compensation with interest. It was held that the Court may make orders for restitution after the formal entry of orders; that a successful appellant is entitled to restitution of amounts overpaid pursuant to the judgment reversed; and that justice required repayment of overpaid compensation with interest at the statutory rates since 7 August 1989. Handley JA (Priestley and Clarke JJA concurring) also relied on Rodger, above. Handley JA said: "The plain fact is that since 7 August 1989 Mr Haig has had the benefit and use of the overpayments to which in the event he was not entitled which he must now refund. Mr Haig submitted that the Court should not order interest to be paid retrospectively, but this is contrary to long established authority. In Rodger... at 475-6 Lord Cairns said: `It is contended, on the part of the respondents here, that the principal sum being restored to the present petitioners, they have no right to recover from them any interest. It is obvious that, if that is so, injury, and very grave injury, will be done to the petitioners. They will by reason of an act of the Court have paid a sum which it is now ascertained was ordered to be paid by mistake and wrongfully. They will recover that sum after the lapse of a considerable time, but they will recover it without the ordinary fruits which are derived from the enjoyment of money. On the other hand those fruits will have been enjoyed, or may have been enjoyed, by the person who by mistake and by wrong obtained possession of the money under a judgment which has been reversed. So far therefore as principle is concerned, their Lordships have no doubt or hesitation in saying that injustice will be done to the petitioners, and that the perfect judicial determination which it must be the object of all courts to arrive at, will not have been arrived at unless the persons who have had their money improperly taken from them have the money restored to them, with interest, during the time that the money has been withheld.' [Emphasis added] Accordingly Mr Haig must be ordered to refund the overpayment with interest from 7 August 1989 until judgment." Again, we agree, with respect. The clarification by this Court in 1994 of the obligation to make the CTCO retrospective to September 1987, may be seen as comparable. Rodger's Case was approved by the Full High Court in The Commonwealth v McCormack (1984) 155 CLR 273 at 277 (see also, in this area, National Australia Bank Ltd. v Bond Brewing Holdings Ltd. [1990] 1 VR 386 and Idemitsu Queensland Pty. Ltd. v Agipcoal Australia Pty. Ltd. [1996] 1 Qd R 26 where Rodger's Case was again considered and applied. In Idemitsu, after a full review of the authorities in this context, Fitzgerald P. said (at 42): "The Commonwealth v McCormack is the most recent pronouncement of the High Court on the adjustment of the rights of the parties following on appeal. It involves (276-277) express indorsement of the two Privy Council decisions to which reference has been made and also of Heavener v Loomes, which it is said `espoused the principle' of Rodger v The Comptoir D'Escompte de Paris. Further, the High Court in The Commonwealth v McCormack accepted a successful appellant's entitlement to restitutio in integrum. At 276, the joint judgment quoted with approval a dictum of Lord Field in his dissenting judgment in Cox v Hakes... where his Lordship said: `Restitutio in integrum is the right of every successful appellant.' The full ramifications of this doctrine have not yet been worked out, and it is unnecessary for present purposes to consider judgments other than money judgments; for example, a winding up order, final injunction in a nuisance action or judgment for possession of business premises as instanced by Brooking J. in National Australia Bank Ltd v Bond Brewing Holdings Ltd. Nor is it necessary to characterize the amount to which a successful party is entitled as damages or to identify the infringement of some right at an earlier stage of the proceedings. The theory behind the relevant doctrine is one of compensation to adjust the position of the parties to achieve a just result. [Emphasis added] Further, while an erroneous money judgment that has been satisfied will commonly involve more than the repayment of the principal sum, the policy considerations underpinning the successful party's entitlement will limit what is recoverable from the unsuccessful party, just as remoteness of damage and the obligation to mitigate loss impose limitations on the damages which are recoverable in other areas of the law. This choice avoids the risk that a successful party may be disadvantaged by the unsuccessful party's poor business acumen or perhaps even its failure to invest at all." Again, with respect, we agree. See also Mason and Carter, Restitution Law in Australia (1995), discussing (at 952-5) the recoverability of interest from the date of payment, making the point that it does not matter that the restitutionary cause of action arose at a later point of time. Finally, for completeness, reference should be made to the very recent decision of the House of Lords in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 WLR 802. In a common law action for money had and received arising out of an ultra vires interest rate swap agreement, it was held that the bank was entitled to recover simple interest under s.35A of the Supreme Court Act. A claim for compound interest was, by a majority rejected, but entitlement to simple interest was not seriously disputed. In the present case, the quantum of interest will, as we propose, be a matter for the discretion of a single Judge of the Court. But in Westdeutsche, observations were also made as to the date from which pre-judgment interest is payable. Lord Browne-Wilkinson said (at 839): "The date from which interest is payable The Court of Appeal held that compound interest was payable by the local authority on the balance for the time being outstanding, such interest to start from the date of the receipt by the local authority of the upfront payment of Ł2.5m. on 18 June 1987. Although, for the reasons I have given, I do not think the court should award compound interest in this case, I can see no reason why interest should not start to run as from the date of payment of the upfront payment. I agree with the judgment of Leggatt L.J. in the Court of Appeal... that there is no good ground for departing from the general rule that interest is payable as from the date of the accrual of the cause of action." Leggatt L.J., in the passage cited by Lord Browne-Wilkinson, had said: "It is common ground that interest will generally be awarded from the date of accrual of the cause of action: see B.P. Exploration Co. (Libya) Ltd. v Hunt... . The three exceptions envisaged by Robert Goff J. were (1) when the position of the defendant demands it, (2) when the conduct of the plaintiff does so, and (3) when it would be unjust in all the circumstances to award interest from the date of loss. Mr. Philipson does not suggest that it would be unjust to apply the normal rule, nor does he contend that the bank was blameworthy, although he does point to the fact that so long as the bank believed the contract to be enforceable they pressed the council to comply with it. But the council neither paid the net balances of interest as they fell due nor tendered repayment of the sum of Ł2.5m. Mr. Philipson relies on Lord Wilberforce's comment in General Tire & Rubber Co. v Firestone Tyre & Rubber Co. Ltd.... : `In a commercial setting, it would be proper to take account of the manner in which and the time at which persons acting honestly and reasonably would pay.' But that was said in the context of a commercial practice under which royalties in respect of use before grant of a patent are not expected to be paid before grant, from which it followed that it was appropriate to award interest only from the date of grant. No such practice inhibits the award of interest in this case from the date when the council would first have had to pay it if the money had been borrowed." [Emphasis added] In our opinion, this reasoning is analogous here and is capable of application in the exercise of the broad discretion conferred by s.51A(1)(b). In other words, the actual date of accrual of the cause of action will be the general rule for fixing the date from which interest will be payable, but, in the case of para.(b), exceptional circumstances, such as those described by Goff J. and present here, would, in the exercise of that discretion, justify the substitution of another, notional date, being the date as from which the respondent, if it had acted reasonably, would have refunded the duty. Under the order we propose, it will, again, be a matter for a single Judge to decide whether to do this. Our point is that there is power to do so, if it be appropriate. As has been earlier noted, Wilcox J. in this matter rejected a claim for interest under para.(a) of s.51A(1), but did not appear to address para.(b). In our view, if justice is to be done between the parties, it is fair to take into account in the appellants' favour, in considering whether s.51A(1)(b) should be applied, these circumstances: (1) The appellants at all material times (i.e. since September 1987) contended to the Comptroller, with justification, that their goods should be freed of duty under a CTCO. (2) The Customs were always in a position of advantage vis-a-vis the appellants.

(3) By contrast, the appellants were always, in the words of Holmes J., in a position of "serious disadvantage" vis-a-vis the Customs. (4) The Customs legislation, specifically s.269N, always contemplated, in a case such as this, that, once made, and it should here have been made, the CTCO would operate retrospectively and the duty paid would be refundable. It may be asked why, in those circumstances, should the Crown, in the language of Lord Goff in Woolwich, be entitled to a massive interest-free loan? As a matter of substance, if not also of form, equity and fairness prima facie require, we think, that Customs not be unjustly enriched by failing to allow appropriate interest to the appellants. In the result, in our view, the appellants have also demonstrated a prima facie entitlement to have the discretion given by s.51A(1)(b) exercised in accordance with restitutionary principles. It should be declared, pursuant to s.51A(1), that unless good cause is shown to the contrary (a defence which we explain below), the appellants are entitled to an order for interest under s.51A(1)(a), or if this be inappropriate an order for interest in a lump sum amount to be determined in accordance with the discretion conferred by the provisions of s.51A(1)(b).

(iv) "Good cause to the contrary" - a possible "windfall" defence? It should be stated here that when we refer to a "prima facie" entitlement, and when we propose that interest be ordered "unless good cause is shown to the contrary", we have in mind here only one possible disentitling circumstance and that is the "passing on the burden of the tax" or "windfall gain" defence considered in Royal Insurance (per Mason C.J. at 69-79; per Brennan J. at 90-1). Mason C.J. concluded his consideration of this aspect as follows (at 78-9): "In the present case, that reasoning leads me to the conclusion that the Commissioner would have no defence to a restitutionary claim by Royal to recover the mistaken payments of duty. Even if it had been established that Royal charged the tax as a separate item to its policy holders so that it was a constructive trustee of the moneys representing that separate charge when it made the payments to the Commissioner, it would have been entitled to recover from the Commissioner, provided that it satisfied the court that it will account to its policy holders. The courts below, unlike Judge Learned Hand in 123 East Fifty-Fourth Street, did not draw an inference that the tax was charged as a separate item to the policy holders. And, in any event, it has not been suggested that the court should draw such an inference. It then follows, in the light of my earlier conclusion that the discretion under s.111 is to be exercised in accordance with the principles of the law of restitution, that the discretion was exercised erroneously. On the basis on which the case was fought in the courts below, subject to consideration of the two issues still outstanding, Royal was entitled to recover the overpayments in conformity with the law of restitution." This aspect was not explored before us, or at first instance, and it is possible that it is not material for the reasons given by Sackville J.; but it should be reserved for consideration by a single Judge. (v) Other possible defences? At the same time, it should be noted here that, for the reasons given by Mason C.J. in Royal Insurance (at 68), we would not regard suggestions of "disruptions of public finances" as an answer to a claim under s.51A(1). We should also add that we cannot accept the submission advanced on behalf of the Comptroller that "the circumstance that the payments of duty were lawfully held by the respondent" before the making of the CTCO is a "good cause" for the Court to refuse to award under s.51A(1). As I have said, these matters go to the form, rather than to the substance, of the relationship between the parties and, in the exercise of the statutory power in accordance with well-established restitutionary principles, such formal matters are entitled to little, if any, weight when the object of the exercise is to provide an outcome that is fair and just to both sides. Not only were these formal matters, but they must also be viewed in context. As Holmes J. reminded us, the fact that the taxpayer is at a disadvantage in these kinds of situations, should be taken into account. Once the appellants made their application for the CTCO, the process of deciding whether a CTCO should be made lay entirely within the respondent's control. The fact that nearly seven years before this could be achieved was certainly no fault of the appellants. On the contrary, the Court should not at all embrace a situation where the Crown, as the model litigant, should be seen to take advantage of its own default. A further argument advanced on behalf of the respondent should be noticed. It was said that the operation of s.269N, conferring "a statutory benefit in the form of a retrospective exemption from customs duty" is part of a "statutory code"; and the argument runs, since the "code" makes no mention of payment of interest, only of refund of duty, the silence of the code on the question of interest should be taken as a legislative indication that a court could never have the power to award prejudgment interest. Reliance is sought to be placed upon the reasoning of the majority in Royal Insurance. We cannot accept any part of the argument. We agree that no specific mention of the payment of any interest is made in the Customs legislation. But it does not follow that s.51A(1), or the general law principles of restitution, or unjust enrichment, can have no application here. Indeed, the reasoning in both Woolwich and of Mason C.J. in Royal Insurance is to the contrary. It is true that the other members of the High Court found a remedy in the terms of the stamp duty legislation itself. But this is not to say, as the respondent's argument should suggest, that if the legislation did not so provide, that a provision such as s.51A(1), or restitutionary principles, could never apply. It hardly needs to be added that, in any event, the taxpayer succeeded, not failed, in Royal Insurance and that no question of entitlement to interest arose there. (b) Was a claim in restitution (unjust enrichment) under the general law also available? In the circumstances, we will not consider at any length this alternative general law claim, having already found that s.51A(1)(b) is prima facie at least, available and that the s.51A(1(b) discretion may be exercised taking into account restitutionary principles. But it should at least be said that the reasoning of Wilcox J. in State Bank, which was also an action remitted by the High Court to this Court, appears to be analogous to the present case in all material respects, and should be applied here. The circumstances in State Bank were that a dispute arose as to the Bank's liability to pay sales tax on printed material used by it. The Bank discontinued payment of tax. After institution of recovery proceedings by the Commissioner, the Commissioner accepted the Bank's proposal that the Bank pay the amounts of the sales tax due into a special account established under Pt. IX of the Audit Act 1901. The litigation having terminated in the Bank's favour, the Commissioner refunded the moneys paid into the account. The Bank sued in the High Court, as here, for interest on the monies refunded. In upholding the State Bank's claim for interest, Wilcox J. relied upon the explanation of the relevant concept by Deane J. in Pavey & Mathews Pty. Ltd. v Paul (1987) 162 CLR 221 (at 263) as follows: "What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or `enrichment' actually or constructively accepted." [Emphasis added] Wilcox J. held that the Bank was, "as a matter of general principle", entitled to interest on the "restitution principle applied in Woolwich" (at 662). He said (at 662): "It would be unrealistic to overlook the pressure placed on a commercial organisation by a demand for payment of tax and unfair to attach critical importance to the fact that, by agreement, the taxpayer made payments to a fund, rather than directly to the Commissioner. [Emphasis added] I hold that, as a matter of general principle, subject to any special circumstances or agreement and independently of any statutory provision, interest may be awarded in a case like the present. However, both the awarding and the quantum of interest are dependent upon the circumstances of the case, so it will be necessary for me to consider the argument of the respondents arising out of the 1984 agreement in determining what interest (if any) may be awarded, on a restitution basis, in this case." We agree entirely with his Honour's liberal approach in that case and we cannot accept that it should be distinguished, in principle, from the present case. As we have said, to place critical significance upon the circumstance that the appellants observed the formal requirements of the statutory scheme and paid duty until the eventual making of the CTCO (almost seven years after the appellants had applied for it - and with every justification, as the series of decisions of this Court established), would be to allow form to dominate substance and to obscure the real merits; and this is taking place in an area where, as Deane J. reminded us, the law's objective is to provide a "fair and just" outcome. There is nothing in Woolwich or in Royal Insurance to the contrary, as earlier discussed. Indeed, they and the other authorities previously mentioned prima facie at least support, in principle, the grant of restitutionary relief in a case such as this. The actual and specific application of restitutionary principles under the general law is, of course, another matter. It is preferable, we think, given the availability of the broad statutory discretion conferred by s.51A(1), especially para.(b), to proceed under that alternative, rather than to pursue the general law claim to its ultimate conclusion.

SUMMARY OF CONCLUSIONS In summary, the modern liberal approach to s.51A(1) and to the application of restitution principles in that context adopted by the learned primary Judge in State Bank should have been applied here also. So far as the majority decision in Royal Insurance depended upon the construction of the Victorian Stamp legislation, it is distinguishable. Further, on no view should Royal Insurance, where the taxpayer succeeded, be seen, as Wilcox J. did, as decisively against the present taxpayers. If anything, the reasoning of all the Justices, especially Mason C.J., is in their favour. We should add that, before writing these reasons, we had the benefit of reading the judgment of Sackville J. Regrettably, we must differ from his Honour's approach. If the general economic considerations there mentioned have created a problem for the Executive, it is a problem that would not have arisen if the Executive had addressed the appellants' application for a CTCO promptly and correctly. True, the amount of interest that may be awarded could be substantial, but this flows inevitably from the size of the amounts of duty paid and the long period needed before, with the retrospective effect that the Customs legislation itself provided, the situation was ultimately corrected. As a matter of fairness and equity, it is difficult to see how, in those circumstances, the Executive can resist a claim for a reasonable amount of interest, unless it can make good a "windfall gain" defence. An outcome that the Revenue should obtain, over a long period, the benefit of the use of the money paid by the appellants, taking also into account the inevitably depreciating effects of inflation on the value of the capital monies to be repaid, would likewise contradict the policy of the law of encouraging good administration, previously mentioned. Unless there is a real risk of liability for interest, there will be no actual incentive for the Customs to act within a reasonable period in addressing in the correct way the question whether a CTCO should be made. If the Comptroller's argument is to be accepted as good in the case of a failure to act for nearly seven years, as here, the same argument would, logically, be open to him, if unjustified delay even substantially exceeded this period. We have great difficulty accepting that this could be correct legal policy. ORDERS PROPOSED We propose the following orders: 1. Appeals allowed, with costs. 2. Set aside the orders made at first instance. In lieu thereof: (a) Declare that, unless good cause (in the form only of a "windfall" defence) is shown to the contrary, the appellants are entitled to an order for interest under s.51A(1)(a), or if this be inappropriate, an order for interest in a lump sum amount to be determined in accordance with the discretion conferred by the provisions of s.51A(1)(b) of the Federal Court of Australia Act 1976; (b) Order that the matters be remitted to a single Judge of the Court to be dealt with in accordance with these reasons and as the justice of the case requires. (c) Order that the respondent pay the appellants' costs at first instance. I certify that this and the preceding sixty-two (62) pages are a true copy of the Reasons for Judgment herein of their Honours Justice Beaumont and Justice Einfeld. Associate Dated: 28 August 1996

IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA No. NG 85 of 1996 BETWEEN: SCI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent

No. NG 86 of 1996 BETWEEN: ACI OPERATIONS PTY LIMITED Appellant AND: COMMONWEALTH OF AUSTRALIA Respondent

CORAM: BEAUMONT, EINFELD, SACKVILLE JJ. PLACE: SYDNEY DATE: 28 AUGUST, 1996. REASONS FOR JUDGMENT SACKVILLE J:

The judgment of Beaumont and Einfeld JJ. sets out the background to the appeal and refers to much of the relevant legislation. I shall not repeat what their Honours have said on these matters, but it will be necessary to refer in some detail to the facts and the legislation in the course of my reasoning.

Introduction The parties accepted that the present case is governed by Part XVA of the Customs Act 1901 (Cth) (the "Customs Act"), as it stood prior to the amendments effected by the Customs Legislation (Tariff Concessions and Anti-Dumping) Amendment Act 1992 (Cth) (the "1992 Act"). The 1992 Act, which took effect from 1 November 1992, repealed the old Part XVA and replaced it with a new Part XVA. The new Part XVA provides for what are now called Tariff Concession Orders ("TCOs") and incorporates proposals made by the Industry Commission in its report, The Commercial Tariff Concession and By-Law Systems (AGPS, Report No.9, March 1991, pp.108) (the "IC Report"): see the Second Reading Speech of the Minister in relation to the 1992 Bill, Cth Parl. Deb., HR, 7 May 1992, 2665-2669. The new legislation, in substance, retains many of the key provisions of the old Part XVA. In particular, s.269S(1) of the new Part XVA, like s.269N(1) of the old Part XVA, provides that a TCO is generally taken to have come into force 28 days before the TCO was lodged. Thus the issues raised in this case are relevant to the new legislation. Historical Background Part XVA, in its pre-1992 form, provided for a system of Commercial Tariff Concession Orders ("CTCO's"). This system was introduced by the Customs Amendment Act 1983 (the "1983 Act"). In order to shed light on the objects of the statutory scheme adopted in 1983, it is helpful to examine briefly the historical background to the system of CTCO's. Counsel did not refer to this background, but I think it provides the context in which the legislation is to be construed. The 1983 Act was largely, although not entirely, based on a report of the Industries Assistance Commission, The Commercial By-Law System (AGPS, July 1982) (the "IAC Report"): see the Second Reading Speech of the Minister in relation to the 1983 Bill, Cth Parl. Deb., HR, 11 May 1983, 401. The IAC Report pointed out that concessional duties for certain types of imports, had been a feature of the Australian Customs Tariff since Federation: IAC Report, 10. The rationale behind the concessional arrangements was that importers should not have to pay protective duties where there is no local production to protect. For further history of concessional duties, see Cooper, Customs and Excise Law (1984), paras. 1034-1038. The Customs Act, both before and after 1983, conferred power on the Comptroller-General of Customs ("the Comptroller") to make by-laws for the purposes of particular items of the Customs Tariff: s.271. The Comptroller was also empowered to make determinations that an item of the Customs Tariff should apply or be deemed to apply to particular goods: s.273. A by-law could have retrospective effect, if the by-law so specified: s.273B(1)(b)(i). A determination under s.273 could also apply to goods already entered for home consumption: s.273(3). The concessional system, before 1983, operated by means of by-laws and determinations. These applied concessions to goods for which no suitable equivalent, produced or manufactured in Australia, was reasonably available (the so-called "SERA criteria"): IAC Report, 5. One of the key provisions was Item 19 of Schedule 2 of the Customs Tariff Act 1965 (Cth), which provided a concession for "[g]oods, as prescribed by by-law...being goods a suitable equivalent of which that is the produce or manufacture of Australia is not reasonably available". Many by-laws had general application and, once promulgated, could be used by any firm importing goods subject to the concession: IAC Report, 13. Ad hoc by-laws could also be made. These were limited to individual importers and were not widely publicised: IAC Report, 87. The IAC observed that a number of criticisms had been made of the by-law system. These included lack of certainty; the absence of public scrutiny; high administrative costs; and the application of inappropriate criteria in making by-laws or determinations: IAC Report, 11-12. The IAC referred only briefly to the issue of the retrospective operation of concessions. The report noted that the then current procedures permitted applications for by-laws up to 12 months after goods had been ordered (and sometimes longer) and that 13% of by-law applications related to goods which had already entered Australia. The IAC expressed concern about the cost and potential for abuse of retrospective applications: IAC Report, 103-104. The IAC recommended, inter alia, repeal of Item 19 of Schedule 2 and the phasing out of ad hoc by-laws. It proposed a system whereby the Minister would grant concessional entry of goods, if an applicant established that no goods were produced in Australia which served similar functions to those for which concessional entry was sought. The IAC's recommendations were based on two general principles: "(i) Once the primary criterion has been met, the issue of a commercial by-law should be mandatory unless there are positive reasons for refusal on specified grounds. This contrasts with the current situation where the issue of a commercial by-law covering the goods which meet the SERA criteria is discretionary. (ii) Every commercial by-law should be issued on an open access basis. Particular goods should be eligible for concessional entry on the basis of the application of the proposed criteria to the description of the goods. Goods should not be subject to different rates of duty depending on the use or user of the goods, short-term fluctuations in the Australian demand for the goods and/or the supply of Australian-made goods": IAC Report, 121.

The IAC recommended that commercial by-laws should not apply retrospectively from the time of clearance of goods, unless the applicant could demonstrate that the failure to apply at the time of clearance was due to the conduct of the administering department. The Statutory Scheme The key provisions of Part XVA of the Customs Act, as in force at the times relevant to this case, have been set out in the judgment of Beaumont and Einfeld JJ. However, some points should be noted. An importer could apply to the Comptroller for a CTCO in respect of particular goods specified in the application: s.269G(1). Where an application was made, the Comptroller was obliged to make the CTCO (subject to the other provisions in Part XVA) if satisfied of the two conditions set out in s.269C(1). These conditions were as follows: "(a)goods serving similar functions to the particular goods are not produced in Australia; and (b)goods serving similar functions to the particular goods are not capable of being produced in Australia by any person in the normal course of business;" The effect of s.25(1) of the Customs Tariff Act 1987 (Cth), when read with Item 5 of Schedule 4 to that Act, was that goods which were the subject of a CTCO were free of duty. The Comptroller was not to make a CTCO unless he or she had published a notice in the Gazette identifying the application and inviting persons who opposed the making of the CTCO to specify those reasons: s.269L(a). The Comptroller was bound to take those reasons into account: s.209L(b). Once made, s.269N(1) provided that the CTCO was

"deemed to have come into effect on such day before the making of the order as is specified in the order". Subject to certain exceptions, the day to be specified was that occurring 28 days before the making of the application: s.269N(3). Section 269N is critical to the present case. A CTCO applied in relation to goods specified in the order that were first entered for home consumption on or after the day on which the CTCO came into effect: s.269N(2). The effect of the statutory scheme was that any importer of goods included in a CTCO - not merely the applicant for the CTCO - could take advantage of the order. Thus, goods which were the subject of a CTCO, and which were imported after the date the CTCO was deemed by s.269N(1) to have come into effect, were free of duty. The 28 day period specified in s.269N(3) was consistent with the IAC's recommendation that the scope for retrospective orders should be curtailed. The Industry Commission, in its 1991 report, stated that the rationale underlying the 28 day period was to allow time for an importer to lodge an application after imported goods had been cleared by Customs and duty paid: IC Report, 137. The Industry Commission commented that, in the normal course of events, the average time between lodgment of an application and approval of a CTCO was six months: ibid. It is important for the purposes of the present case to appreciate that the fact that the Comptroller was satisfied of the two matters specified in s.269C(1) did not necessarily mean that a CTCO would be made. The Comptroller had a discretion to refuse to make a CTCO if, in his or her opinion, the making of the order would be likely to have a substantially adverse effect on the market for any goods produced in Australia: s.269E(1). The Comptroller was also to refuse to make a CTCO if the Minister determined that the order was not in the national interest: s.269E(1C) (inserted by the Customs and Excise Legislation Amendment (No.4) Act 1990 (Cth)). Thus, an applicant for a CTCO had a number of potential hurdles to overcome before the application could succeed. Furthermore, a CTCO could be revoked by the Comptroller if, for example, circumstances had changed and a fresh application for a CTCO (had one not already been made) would have failed: s.269P(1). A revocation order came into effect on the date it was made: s.269P(3). Part XVA itself made no express provision for the refund of duty paid by an importer of goods the subject of a CTCO in relation to goods imported after the date the CTCO was deemed to have come into effect. However, s.163(1) of the Customs Act, which predated Part XVA (and which remains in force) provided as follows: "(1) Refunds, rebates and remissions of duty may be made: (a) in respect of goods generally or in respect of the goods included in a class of goods; and (b) in such circumstances, and subject to such conditions and restrictions (if any), as are prescribed, being circumstances, and conditions and restrictions, that relate to goods generally or to the goods included in the class of goods." Section 163(1A), which was inserted into the Customs Act by the Statute Law (Miscellaneous Provisions) Act (No.2) 1984 (Cth), provided as follows: "The regulations may prescribe the amount, or the means of determining the amount, of any refund, rebate or remission of duty that may be made for the purposes of subsection (1)." Section 163(1B), which was inserted by the Customs and Excise Legislation Amendment Act 1987 (Cth) specified the circumstances in which a Collector was required to refuse to consider an application for refund of duty. (The word "Collector" in the Act refers to any principal officer of Customs, or to an officer doing duty in the matter in relation to which the expression is used: s.8(1).) At the time the 1983 Act was passed, reg.126 of the Customs Regulations, which was promulgated in 1974, specified a number of circumstances in which refunds, rebates and remissions were to be made. Regulation 126(f) was amended in 1983 (Statutory Rules 1983, No. 92), to read as follows (the amendments are in bold): "126(1) Each of the following circumstances is prescribed for the purposes of section 163 of the Act, namely where: ... (f) after duty has been paid on goods, a by-law or determination is made under Part XVI of the Act, or a Commercial Tariff Concession Order is made under Part XVA of the Act, the effect of which is that duty is not payable on those goods or duty is payable on those goods at a rate which is less than the rate which was applicable when the goods were entered for home consumption".

This amendment to reg.126(f) was clearly intended to coincide with the enactment of Part XVA of the Customs Act. The amendment made specific provision for the case where an importer had paid duty on goods, but a CTCO had been made, which had the effect of reducing the rate of duty payable in respect of those goods. The IC Report The operation of Part XVA of the Customs Act was reviewed by the Industry Commission in the 1991 IC Report. The following points (among many others) emerge from that report: l In 1989/90 the value of imports into Australia was approximately $55 billion, of which about 11.5% entered duty free under CTCOs. The total savings in duty under the Commercial Tariff Concession Scheme was around $962 million (IC Report, 51). l Although the average time between lodgment of an application and approval was about six months, in some cases the delays could be protracted and the process could take years (IC Report, 138). l Refunds of duty to importers could sometimes result in windfalls to importers, depending on whether the duty paid had been passed on by the importer to Australian customers. In one case a refund of $48.3 million had been made to importers who (according to Customs) had passed on the cost of the duty to their customers (IC Report, 138). l The Industry Commission proposed that the most appropriate approach to the problem of delay was to establish time limits for processing applications. The Industry Commission's recommendations included provision for the deemed refusal of an application where the Comptroller failed to make a decision within a specified time (IC Report, 141). l The Industry Commission did not address the question of whether interest should be paid to importers to whom refunds are made. So far as appears from the report, no importer making submissions to the Commission suggested that interest should be payable in respect of duty refunded in consequence of the making of a CTCO. The Proceedings The CTCO in the present case was made by a delegate of the Comptroller on 3 June 1994, in belated response to an application made on 29 September 1987. The CTCO related to polyethylene terephthalate (PET) resin for use in the production of plastic bottles for the packaging of carbonated beverages. It specified 1 September 1987 (28 days before the application was made) as the day on which it came into effect. By virtue of s.269N(1) of the Act, the CTCO was deemed to have come into effect on that date. On the same day as the Comptroller's delegate made the CTCO, the present appellants each filed a writ in the High Court claiming specified sums ($5,296,690 for SCI Operations Pty Ltd ("SCI") and $6,111,998 for ACI Operations Pty Ltd ("ASCI")) "being money payable by [the Commonwealth] to the [applicant] as money had and received by [the Commonwealth] to the use of the [applicant] or otherwise." The statements of claim were substantially identical in form. The appellants pleaded their case for a refund of the duty paid in respect of the PET resin in alternative ways. First, they pleaded the making of the CTCO and the fact that it came into effect on 1 September 1989, a date prior to the importation of the resin. They alleged that the effect of the CTCO was that the duty or rate of duty in respect of the goods was "Free", with effect from 1 September 1987. The statements of claim did not specifically identify the source of the Commonwealth's liability to refund the duty on the basis of these facts. It may have been intended to rely on a cause of action based on unjust enrichment of the Commonwealth. However, the pleading is also consistent with reliance on a statutory cause of action for the refund of duty, based on s.269N(1) of the Customs Act. The alternative claim rested on an allegation that the Comptroller should have been satisfied of the matters specified in s.269C of the Customs Act no later than 1 November 1987 (that is, just over two months after the application for a CTCO was made on 29 September 1987). Accordingly, the demands for customs duty made after 1 November 1987 should not have been made and the receipt by the Commonwealth of customs duties paid after that date "was pursuant to wrongful demands and not authorised by law". The appellants claimed that they were entitled to recover those payments as money had and received by the Commonwealth or on restitutionary principles. The appellants also sought interest on the sums claimed by them. It appears that 3 June 1994 was a very busy day. Not only did the Comptroller make the CTCO and the appellants file the High Court writs, but the Commonwealth refunded to the appellants the whole of the duty paid by them in respect of PET resin imported during the period 1 September 1987 to 29 February 1992 (the latter being the "production commencement day" on which the CTCO ceased to have effect: see s.269N(3B)). The Commonwealth also paid interest on those sums in respect of the period from 15 October 1993 to 31 March 1994. However, it did so only because of undertakings given in connection with the earlier proceedings in this Court. The proceedings instituted by the appellants in the High Court on 3 June 1994 were duly remitted to this Court. The appellants pressed their claims to interest for the remainder of the period from payment of duty until the hearing. Although neither counsel referred to it, the evidence before the trial judge makes it clear that the appellants' customers bore part, if not all, the additional cost of manufacturing the plastic bottles attributable to the customs duties paid in respect of the PET resin. Mr Van Vugt of SCI deposed that customers were required to bear increases in the cost of production, including price increases for the cost of PET resin. A review was conducted every six months and the customers were charged the percentage increase in the cost of raw materials, including increases in customs duty. The evidence of Mr Walker of ACI was to similar effect. The evidence of Mr Van Vugt and Mr Walker also indicates that ACI and SCI reimbursed to their customers the duty refunded by the Comptroller, after deducting a percentage (3% to 5%) to cover out of pocket expenses, including advisers' and auditors' fees. Mr Van Vugt and Mr Walker stated that ACI and SCI, respectively, intended to reimburse their customers, should the companies succeed in obtaining interest in consequence of the present proceedings. The Appellants' Contentions Dr Griffiths, who appeared for the appellants, put their case on two bases. He contended, first, that the Court had power under s.51A(1)(a) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act") to award interest to the appellants, for the period between each payment of duty and the date the Commonwealth refunded the duty (except for the period for which the Commonwealth had already paid interest). This contention rested on the proposition that the effect of s.269N(1) of the Customs Act was to deem the appellants' cause of action to have occurred on the dates when duty was paid. In the alternative, Dr Griffiths argued that the appellants had a restitutionary claim for interest, based on the principles of unjust enrichment. Such an entitlement should be acknowledged as a common law right, independent of the limitations on the discretionary jurisdiction to award interest under provisions such as s.51A. Dr Griffiths accepted that the second submission took the Court into uncharted waters, but he relied on the analysis of Mr Mason and Professor Carter in Restitution Law in Australia (1995), Ch.28. Dr Griffiths argued that a restitutionary claim for interest was available in the present case. In view of the retrospective operation of s.269N(1), it was unjust for the Commonwealth to retain the benefit of moneys paid to it in respect of duties between the date of payment and the date the CTCO was made. These moneys were properly to be seen as belonging to the appellants and the Commonwealth was unjustly enriched by having the benefit of the moneys during that period. The Nature of the Entitlement to Recover Duties In my view, the appropriate starting point is to analyse the nature and source of the appellants' entitlement to recover the customs duty paid by them in respect of PET resin, during the period September 1987 to February 1992. Until that is done, it is difficult to determine whether s.51A of the Federal Court Act applies to the present case, or whether restitutionary remedies are available to the appellants. Although the case as pleaded by the appellants rested on the contention that a CTCO should have been made in respect of PET resin no later than 1 November 1987, the appellants did not persist with that contention before the trial judge; nor did they do so on the appeal. Their argument is simply that they are entitled to interest on the amount of refunded duty from the date of the original payments, either by reason of s.51A or the general law of restitution. That argument in no way depends on any allegation that the Comptroller failed to make the CTCO by a particular date; nor does it depend on any contention that the appellants were subjected to unwarranted delays, for example, because the Comptroller incorrectly refused to make a CTCO until ordered by the Court to do so. As I understood his argument, Dr Griffiths did not dispute three propositions: l First, the appellants were liable to pay duty on the PET resin when it was imported. This obligation arose under s.132(1) of the Customs Act and s.21 of the Customs Tariff Act 1987 (Cth). l Secondly, the Comptroller was both entitled and obliged to keep the amounts paid by way of customs duty unless and until a CTCO was made (which in this case occurred on 3 June 1994). l Thirdly, it was only on 3 June 1994 that the Comptroller became bound to refund the duty to the appellants, even though the obligation related to all duty paid in respect of PET resin from September 1987 to February 1992. Of course, Dr Griffiths maintained that these propositions were not inconsistent with the appellants' arguments. It follows from the propositions accepted by Dr Griffiths that this case is very different from one in which a taxpayer pays taxes or duties, but is subsequently found never to have been liable to make the payments and that the revenue was never entitled to retain them. Cases of the latter type include the payments found to be made under a mistake of law in Commissioner of State Revenue (Victoria) v Royal Insurance Australia Ltd (1994) 182 CLR 51, at 83 (categories (i) and (ii)(b)); the customs duty paid under protest in Collector of Customs v Gaylor Pty Ltd (1995) 35 NSWLR 649 (NSW CA); and the instalments of tax paid by the building society in Woolwich Equitable Building Society v Inland Review Commissioners [1993] AC 70. It also follows that the case is different from one in which interest is ordered on moneys paid pursuant to a court order set aside on appeal. As Lord Cairns said (at 475) in Rodger, Carnie and Gilman v Comptoir D'Escompte de Paris and the Chartered Bank of India, Australia, and China (1871) LR 3 PC 465, the justification for awarding interest in these circumstances is that the fruits of the judgment "will have been enjoyed, or may have been enjoyed, by the person who by mistake and by wrong obtained possession of the money under a judgment which has been reversed".

See also The Commonwealth v McCormack (1984) 155 CLR 273, at 277; National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386; Idemitsu Queensland Pty Ltd v Agipcoal Australia Pty Ltd [1996] 1 Qd R 26 (Qd CA), esp. at 32 ff, per Fitzgerald P.; Haig v The Minister Administering the National Parks and Wildlife Act 1974, NSW CA, 17 May 1996, unreported. In the present case, there was no mistake; nor did the Comptroller act wrongly in demanding and receiving payment of the customs duties in 1987. It should also be noted that, if the appellants are entitled to succeed in their claim, so is any importer of goods who is able to rely on a CTCO which is made after the date of importation but is deemed to take effect before that date. This is so whether or not the importer applied for the CTCO and whether or not there was any delay in the making of the CTCO. As I have said, the appellants' case does not depend on the delay or erroneous decision-making involved in resolving their claim to a refund of duties paid by them. The Source of the Appellants' Entitlement The entitlement of the appellants to recover the duty paid by them derives, in my opinion, from the terms of s.269N(1), which deemed the CTCO to have come into effect on 1 September 1987, a date prior to the importation of the PET resin. As I have said, Part XVA of the Customs Act did not explicitly provide for refunds of duty paid by an importer after the date a CTCO (relating to the goods imported) was deemed to have come into effect. In the absence of any specific statutory mechanism providing for the Comptroller (or a Collector) to refund the duty, it would not be difficult to construe s.269N(1) of the Customs Act as imposing a liability on the Comptroller to refund the duty, a liability enforceable by action against the Comptroller: Commissioner of State Revenue v Royal Insurance, at 90. To adapt the words of Cole JA in Gaylor, at 652, it is not to be lightly inferred that the legislature intended that an importer of goods should be without a remedy to compel the Comptroller to refund duty paid on goods imported after a CTCO relating to those goods was deemed to have come into effect. However, in 1983, when Part XVA was introduced, the Customs Act did address the question of remedies for the refund of overpaid duty. Section 163 provided that refunds of duty could be made in respect of goods generally, or in such circumstances and subject to such restrictions (if any) as were prescribed. In 1983, as I have pointed out, reg.126(f) was amended to provide that the circumstances prescribed in s.163 included the case where a CTCO was made after duty had been paid on imported goods, and the effect of the CTCO was that duty was not payable in respect of the goods. Commissioner of State Revenue v Royal Insurance The effect of this statutory scheme must be assessed in the light of the reasoning of the majority of the High Court in Commissioner of State Revenue v Royal Insurance. There the Court was concerned with s.111(1) of the Stamps Act 1958 (Vic.) ("the Stamps Act"). That section provided as follows: "Where the Comptroller finds in any case that duty has been over-paid...he may refund to the company, person or firm...which or who paid the duty the amount of duty found to be overpaid." Section 166D of the Stamps Act provided a standing appropriation for the amounts which the "Comptroller...becomes liable to pay...in accordance with the provisions of this Act". Brennan J. (with whom Toohey and McHugh JJ. agreed) held (at 87) that the effect of this statutory scheme was that the Comptroller, having made a finding that an overpayment had occurred, had a power to make a refund. No enforceable obligation to make the refund arose merely from a finding by the Commissioner (the statutory successor to the Comptroller) that an overpayment had been made. Such a duty did arise, however, if the Commissioner was under an antecedent liability to make a refund. His Honour held (at 88) that the remedy of mandamus was available to compel the Commissioner to perform her duty to make a refund. "Where the Commissioner is liable to refund an amount overpaid and has power to do so, a refusal to exercise the power can be judicially reviewed in accordance with the approach stated by Earl Cairns L.C. in Julius v Lord Bishop of Oxford [(1880) 5 App.Cas. 214, at 222-223]: 'there may be something in the nature of the thing empowered to be done, something in the object for which it is to be done, something in the conditions under which it is to be done, something in the title of the person or persons for whose benefit the power is to be exercised, which may couple the power with a duty, and make it the duty of the person in whom the power is reposed, to exercise that power when called upon to do so.' The Commissioner is a public officer vested with a power to be exercised for the purpose, inter alia, of discharging her liabilities. When the power exists and the circumstances call for the fulfilment of a purpose for which the power is conferred, but the repository of the power declines to exercise the power, mandamus is the appropriate remedy even though the repository has an unfettered discretion in other circumstances to exercise or to refrain from exercising the power. Mandamus will go where there is a duty to pay money. In this case, there is no residual discretion in the Commissioner to refrain from making a refund in exercise of her powers under s.111(1) once she finds that there has been an overpayment and there is a legal liability to refund the amount found to have been overpaid." As to the circumstances in which an authority conferred by statute must be exercised, see also Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106, at 133-135, per Windeyer J. (with whom Barwick CJ agreed); Mitchell v The Queen (1996) 134 ALR 449 (H Ct), at 457; Royal Insurance Australia Ltd v Comptroller of Stamps (Vic.) [1992] ATC 4399 (S Ct Vic/FC), especially the judgment of Marks J. at 4401 ff. Brennan J. next considered whether there was any liability to refund moneys overpaid by Royal. One category of overpayments concerned premiums paid by Royal in 1985, in accordance with a statutory liability to do so, but which, by virtue of the retrospective operation of an amendment in 1987, were deemed not to have been due and owing (this was referred to by the Court as item (ii)(a)). His Honour approached this category of over-payment as follows (at 89-90): "However, there was no mistake affecting the payment of the amount in item (ii)(a). When paid, the Comptroller was entitled - indeed, she was bound - to retain it. But, by force of the operation attributed to the 1987 amendment, the Commissioner is retrospectively disentitled to retain what was paid as stamp duty under the Act as it had stood before the 1987 amendment commenced. What effect in law does the 1987 amendment have? If the 1987 amendment is to be effective retrospectively, the rights and liabilities of the Commissioner and those who overpaid money must be so altered as to place them in the same position as they would have been in had the Act not imposed the stamp duty abolished by the 1987 amendment during the period of the retrospective operation of the 1987 amendment. In other words, the Commissioner is bound to refund the amount paid by way of stamp duty exigible under the Act during the period of the retrospective operation of the 1987 amendment. It is only by creating a right to a refund of stamp duty already paid that retrospective effect can be given to the 1987 amendment. The Commissioner's liability thus arises directly from the provisions of the Taxation Acts Amendment Act 1987. I see no reason to treat the Commissioner's liability to refund the amount in item (ii)(a) as other than statutory. There is no occasion to invoke notions of common law restitution in order to discover a cause of action entitling a payer to a fund. It follows that, prima facie, all of the amounts claimed by Royal are recoverable. The Commissioner's liability to refund would have been enforceable by action if it were not for s.111(1) but, as that provision is clearly intended to prescribe the means by which the Commissioner's liabilities should be discharged, mandamus is the appropriate remedy to compel the Commissioner to refund overpayments which she is legally liable to refund." At the end of the first paragraph of this extract, Brennan J. added the following footnote (at 90, n.96): "This case is quite different in principle from Air Canada v British Columbia, [1989] 1 S.C.R. 1161; (1989) 59 D.L.R. (4th) 161 and Woolwich Equitable Building Society v Inland Revenue Commissioner, [1993] A.C. 70, where payments had been made under statutory provisions that were held to be invalid." The scheme of the Customs Act is not identical to that of the Stamps Act. But it seems to me to follow from the second of the two extracts from Brennan J.'s judgment that the liability of the Commissioner in the present case "arises directly from" s.269N(1). As his Honour said, it is only by creating a right to a refund of customs duty paid that retrospective effect can be given to the terms of s.269N(1). Furthermore, it follows from the judgment that the exclusive source of the liability of the Commissioner to refund duty is s.269N(1) of the Customs Act. Brennan J. referred to there being "no occasion" to invoke common law notions of restitution to discover a cause of action entitling the payer to a refund. I interpret his Honour as holding that common law notions of restitution had no part to play in establishing the Commissioner's liability to refund the stamp duty, retrospectively abolished by the 1987 legislation. Dr Griffiths submitted that the judgment should be interpreted as simply making no comment on the availability of restitutionary remedies, rather than as excluding such remedies where retrospective legislation creates a right to a refund of taxes or duties previously paid pursuant to a valid demand. I do not think that this is the correct interpretation of Brennan J.'s judgment. The footnote quoted above clearly suggests that his Honour was intending to rule out a cause of action based on common law restitution, in the particular circumstances of the case before him. Moreover, Brennan J. expressly rejected the contention (accepted only by Mason CJ) that the moneys in category (ii)(a) had been paid by Royal under a mistake, such as would attract restitutionary remedies. In my view, Brennan J. was attributing the source of the Commissioner's liability to refund the stamp duty exclusively to the retrospective provision of the 1987 legislation. See also the judgment of Dawson J., at 99-102. Consequences of Commissioner of State Revenue v Royal Insurance The consequences for the present case of Commissioner of State Revenue v Royal Insurance are twofold. First, the Comptroller's liability to refund the duty paid by the appellants in respect of PET resin, once the CTCO was made in June 1994, derived exclusively from a statutory source. The liability did not rest on any common law notions of restitution, but flowed from the terms of s.269N(1) of the Customs Act. To adapt Brennan J.'s observations, it was only by creating a right to a refund of duty that retrospective effect could be given to s.269N(1) of the Customs Act. The present case is different from Collector of Customs v Gaylor, Supra. There, an importer, who had paid customs duty under protest ultimately succeeded before the Administrative Appeals Tribunal in establishing that the goods were not dutiable. Section 273GA(7) of the Customs Act provides that, in these circumstances, the duty deemed to be payable is that determined by the Tribunal. The New South Wales Court of Appeal held that the importer was entitled to claim the duty improperly demanded on the basis of orthodox restitutionary principles. In Gaylor the importer plainly had a pre-existing claim for money had and received, since there was never any liability to pay duty on the goods. The Court saw nothing in s.273GA to suggest "a legislative intention to remove from a person, from whom moneys had wrongly been demanded, the right to sue for their recovery": at 662, per Cole JA; see also at 653, per Clarke JA; at 655, per Handley JA. In the present case, no duty had ever been wrongly demanded from the appellants. They were liable to pay and did pay the duty imposed on PET resin at the time they imported the goods. Secondly, if the Comptroller (or Collector - it is unnecessary to distinguish between the two) had refused to refund the customs duty paid by the appellants, they could have obtained an order for mandamus to compel the Comptroller to perform his or her duty. I appreciate that the scheme of the Customs Act is not identical to that of the Stamps Act considered in Commissioner of State Revenue v Royal Insurance. Nonetheless, the two enactments are sufficiently similar for the principles outlined by the High Court to apply. Section 163(1)(b) of the Customs Act contemplated that regulations would prescribe specific circumstances in which the power to refund duty would be exercised. These included circumstances in which the Comptroller was subjected to a statutory duty to refund duty. Regulation 126(f) specified circumstances that were clearly intended to provide importers with a remedy to enforce the liability imposed on the Comptroller by s.269N(1) of the Customs Act. In Julius v Lord Bishop of Oxford, Lord Selborne said this (at 235):

"The question whether a Judge, or a public officer, to whom a power is given by such words [as 'it shall be lawful'], is bound to use it upon any particular occasion, or in any particular manner, must be solved aliunde, and, in general, it is to be solved from the context, from the particular provisions, or from the general scope and objects, of the enactment conferring the power." See also Finance Facilities Pty Ltd v Federal Commissioner of Taxation, at 134-135, per Windeyer J. The statutory context strongly suggests that the Comptroller was obliged to exercise the power conferred by s.163(1)(b) in the circumstances prescribed by reg.126(f). The remedy of mandamus was available to enforce that duty.

This does not necessarily mean, however, that mandamus is the exclusive remedy available to importers seeking a refund of duty in consequence of the retrospective effect of a CTCO. In Commissioner of State Revenue v Royal Insurance, Brennan J. considered (at 90) that s.111(1) of the Stamps Act was clearly intended to prescribe the means (by which I understand his Honour to have meant the exclusive means) by which the Commissioner's liability to refund stamp duty could be discharged. Thus mandamus was the appropriate remedy, rather than an action against the Commissioner to recover the stamp duty. In the present case, the position is by no means as clear. Regulation 126(f) is not, of course, part of the Customs Act. In the absence of reg.126(f), s.163, relevantly, would merely confer a power to make refunds of duty "in respect of goods generally or in respect of the goods included in a class of goods": s.163(1)(a). It may be that ss.163 and 269N(1), when read together, should be regarded as imposing a duty on the Comptroller to exercise the power conferred by s.163, at least where a CTCO was made having the effect provided for in s.269N(1). An alternative view is that, regardless of the presence or absence of reg.126(f), s.269N(1) created a right to a refund of duty where a CTCO was made. That right would be enforceable directly as a statutory cause of action, without the need for the importer to invoke the complexities and limitations associated with the remedy of mandamus. The alternative view would receive some support from the reasoning in Collector of Customs v Gaylor, although that case was concerned with the relationship between ss.167 and 273GA of the Customs Act. I do not think that it is necessary to resolve this question in the present case, although I am inclined to the view that the appellants did have a cause of action for recovery of the duty, based on s.269N(1). In my opinion, it makes no difference to the appellants' claim for interest whether the remedies available to them were limited to mandamus, or whether they included a statutory cause of action for recovery of the duty paid. I prefer to leave this issue to a case which clearly presents it for resolution. Did s.167(4) Preclude a Cause of Action? Mr Gageler, who appeared for the Commonwealth, relied on an alternative argument to support his submission that the appellants were precluded from bringing an action at common law to recover the duty paid in respect of PET resin. He submitted that such an action was foreclosed by s.167(4) of the Customs Act. It is not necessary to consider this submission in relation to a common law action, since I have already concluded that such an action was not available to the appellants by reason of the decision in Commissioner of State Revenue v Royal Insurance. However, s.167(4) may have a bearing on the availability of a statutory cause of action based on s.269N(1) of the Customs Act. Section 167, insofar as relevant, provides as follows: "(1)If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff, ... the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section. (2) The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid. ... (4) No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times: (a) In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment; or ... (5) Nothing in this section shall affect any rights or powers under section 163." The history and operation of s.167 were considered at length in Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No.2) (1991) 32 FCR 243 (FCA/FC). In that case Hill and Heerey JJ. held that (at 263): "s.167 represents the only method whereby an action for recovery of overpaid Customs duty can be brought where there is a dispute between the owner and the Collector as to liability or matters affecting liability and that it operates to exclude the availability of any alternative common law remedy."

However, their Honours appeared to have accepted (at 264) that if no dispute had arisen as to the amount or rate of duty, or as to the liability of any goods to duty, the limitations imposed by s.167(4) did not apply. See also Collector of Customs v Gaylor, at 655, per Handley JA. In this case, there was no dispute as to the duty payable in respect of PET resin at the time of importation, in the sense that the appellants did not claim at the time that the duty was not payable. Moreover, the appellants have never asserted that duty was not payable at the time of importation; indeed they have been careful, no doubt mindful of s.167, to avoid such an assertion. Their claim is that the making of the CTCO in June 1994 conferred an entitlement to a refund of duty, although they rely on the retrospective effect of the CTCO. In my opinion, this is not a situation to which s.167(4) is directed. Section 167 is concerned to ensure that an importer who wishes to dispute liability to pay duty at the time of importation follows the stringent statutory procedure. An importer who has applied or intends to apply for a CTCO is not entitled to dispute liability to duty at the time of importation (unless there is some independent ground for doing so). The importer's entitlement to a refund depends solely on subsequent events, which may not occur (if they occur at all) until well outside the six month period for instituting proceedings provided for in s.167(4)(a). If s.167(4) applied to such a case, the importer would be required to commence proceedings before an essential element in the cause of action had occurred and before it was known whether it would occur. I do not think that this is the intention of the statutory scheme. The present case is different from Comptroller-General v Kawasaki Motors. There, the issue was the liability of an importer to pay duty in respect of goods imported after the date of a purported revocation of a CTCO. The contest related to the importer's liability to pay duty at the time of importation. The same was true in A & G International Pty Ltd v Collector of Customs, S Ct Vic, Ormiston J., 22 December 1995, unreported. In the latter case, Ormiston J. made some observations about the interrelationship between s.167(1) and s.167(4) which may require some qualification to take account of a case such as the present. It follows from what I have said that, if the appellants are otherwise entitled to rely on a statutory cause of action based on s.269N(1) of the Customs Act, they are not precluded by s.167(4) from pursuing such a claim. Application of s.51A of the Federal Court Act Section 51A of the Federal Court Act provides as follows: "(1)In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either: (a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or (b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest." As I have previously noted, the appellants pleaded their case for refund of duty paid by them in alternative ways. First, they relied on the retrospective effect of s.269N(1) of the Customs Act. Secondly, they pleaded a case based on the alleged failure of the Comptroller to make the CTCO within a specified time of the application having been lodged. The second pleaded cause of action was not pressed in relation to the claim for interest. The appellants, in the present proceedings, did not seek an order for mandamus directed to the Comptroller. Nor did they seek review of any decision made by the Comptroller or, for that matter, any other relief under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act"). For the reasons I have given, it was open to the appellants to bring proceedings seeking relief in the nature of mandamus (or at least it would have been open, had the Commonwealth not refunded the duty so promptly). Had the appellants sought an order for mandamus, or relief under the ADJR Act, on the present state of the authorities, this would not have assisted them in their claim for interest under s.51A of the Federal Court Act. In Comptroller-General v Kawasaki Motors Pty Ltd, Hill and Heerey JJ. rejected an argument that an application for an order under s.16(1)(d) of the ADJR Act for the repayment of overpaid duty was a proceeding "for the recovery of any money" within s.51A of the Federal Court Act. Their Honours said this (at 266-267): "The present proceedings, brought for judicial review, were not proceedings for the recovery of money. They were proceedings seeking judicial review of an administrative decision.... In Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637, the question arose in the Supreme Court of New South Wales whether s.94 of the Supreme Court Act 1970 (NSW), for present purposes similar to s.51A of the Federal Court of Australia Act, authorised the payment of interest where proceedings had been brought for the winding up of a company consequent upon the non-issue of shares after payment of the subscription moneys for them. The moneys were ultimately repaid without order of the court. The Court of Appeal was of the view that there had been no breach of fiduciary duty in the circumstances of the case. It was held that proceedings for winding up were not proceedings for the recovery of money. Rather, the proceedings referred to in s.94 (the same may be said of the proceedings referred to in s.51A) must be proceedings which, per Meagher JA (at 649) '...if the plaintiff be successful, will result in a judgment in his favour to recover a sum of money'. ...Section 16(1)(d), even if authorising an appropriate order, would not have authorised an order for the entry of judgment for the overpaid Customs duty in favour of the respondent. At best, it would have authorised only an order directed to the Comptroller for the repayment of the duty." This reasoning would lead to the conclusion that a claim for mandamus directed to the Comptroller would not constitute proceedings for the recovery of money, for the purpose of s.51A of the Federal Court Act. For the reasons I have given, it was not open to the appellants to rely on restitutionary remedies to claim a refund of the duty paid by them in respect of the PET resin. However, as I have indicated, it may have been open to them to rely on a statutory cause of action deriving from the terms of s.269N(1) of the Customs Act. The statements of claim are open to the interpretation that the appellants pleaded such a cause of action. Even so, the appellants' claim to interest, insofar as it is founded on s.51A of the Federal Court Act, in my opinion faces an insuperable difficulty. Section 51A only authorises an award of interest from the date the cause of action arises: Ferrier and Knight v Civil Aviation Authority (1994) 55 FCR 28 (FCA/FC), at 91-93. In the present case, in my opinion, the cause of action of the appellants did not arise until 3 June 1994, the date of the making of the CTCO. The duty was refunded the same day, so that no entitlement to interest arises. As Wilson J. said in Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234, at 245, the concept of a cause of action "is simply the fact or combination of facts which gives rise to a right to sue". The appellants had no right to sue unless and until a CTCO was made. Had the appellants sought to recover the duty immediately after it had been paid, and before the CTCO had been made, they would have failed. The making of the CTCO was an essential element in the appellants' case, since it was the order that gave rise to the entitlement to recover the duty paid in respect of the PET resin. The appellants recognised as much by specifically pleading the making of the CTCO on 3 June 1994 in their statements of claim. The appellants sought to meet this difficulty by contending that the retrospective operation of s.269N(1) of the Customs Act meant that the appellants' cause of action was complete at the time of the making of each payment of duty. Dr Griffiths submitted that s.269N(1) was intended to deem past facts to be different than those that actually occurred. The effect of the sub-section was to deem the appellants' cause of action to have been complete when each payment of duty was made. In Commissioner of State Revenue v Royal Insurance, the majority of the High Court held that the retrospective abolition of stamp duty on certain transactions by the Victorian Parliament did not convert payments of duty into payments made under a mistake of law. Dawson J. (at 100) cited the observations of Deane J. in University of Wollongong v Metwally (1984) 158 CLR 447, at 478: "A parliament may legislate that, for the purposes of the law which it controls, past facts or past laws are to be deemed and treated as having been different to what they were. It cannot, however[,] objectively... expunge the past or 'alter the facts of history'." This passage indicates that it is open to the Commonwealth Parliament to provide that a CTCO shall not only be deemed to come into effect from a particular date, but that the importer's cause of action shall be deemed, for the purposes of other laws of the Commonwealth, to have accrued on the same date. However, s.269N(1) says nothing about when the importer's cause of action is deemed to have accrued for the purposes of the Federal Court Act or, for that matter, other Commonwealth legislation. It is one thing for legislation to provide that a CTCO should be deemed to have come into effect retrospectively on a particular date. It is quite another for it to provide that, contrary to the fact, the importer's cause of action is deemed to have arisen on the same date. The purpose underlying the enactment of s.269N(1) of the Customs Act in 1983 was simply to ensure that importers who had paid duty in respect of goods subsequently covered by a CTCO would be entitled to a refund of the duty paid by them at the time of importation. Section 269N(1) was not directed to the quite separate question of determining when the importer's cause of action accrued. The background to the enactment of Part XVA supports the view that s.269N(1) was not intended to create an entitlement to interest as from the date of payment of the duty. The IAC report, which preceded the enactment of Part XVA in 1983, did not suggest that importers should be entitled to interest, despite the fact that the earlier system of concessional duties had operated, in part, through retrospective by-laws. The 1991 IC report, although prepared after the enactment of the old Part XVA, pointed out that some importers had benefited from the retrospective operation of CTCOs. Far from being kept out of their money pending the refund of duty, they passed on the cost of the duty to customers and did not necessarily give their customs the benefit of any refund subsequently obtained. Doubtless, this was a factor in enacting a statutory scheme which did not (and still does not) provide for interest to be paid in respect of customs duty refunded following the making of a CTCO. Compare, for example, the Sales Tax Assessment Act (No.1) 1930 (Cth), s.26(1A) and the Sales Tax Assessment Act 1992 (Cth) s.51(1), Sched.1, Table 3, CR 1, which make the refund of overpaid sales tax passed on to customers dependent upon the taxpayers refunding the overpayment to the customers. In the present case, the evidence suggests that the appellants intend to pass on any refund of duty (less expenses) to their customers. However, there would be no requirement that they do so. Nor would any other importer obtaining a refund by reason of a CTCO be required to pass on the saving to customers. I appreciate, of course, that there is no "windfall gain" defence to an action based on unjust enrichment: Commissioner of State Revenue v Royal Insurance, at 90. But the possibility of windfall gains is of some importance in ascertaining whether the Parliament intended to expose the Commonwealth retrospectively to a liability to pay interest. It follows that the appellants cannot rely on s.51A of the Federal Court Act to support their claim for interest in the present case. Interest on Moneys paid Before Judgment The trial judge held, applying his own decision in State Bank of New South Wales Limited v Commissioner of Taxation (1995) 132 ALR 653 (FCA/Wilcox J.), at 665, that s.51A of the Federal Court Act authorises the award of interest on moneys paid before judgment. Mr Gageler challenged the correctness of State Bank v Commissioner of Taxation, referring to The Medina Princess [1962] 2 Lloyd's Rep. 17, at 19; President of India v La Pintada Cia Navigacion SA [1985] AC 104; New South Wales Law Reform Commission, Interest on Certain Debts (Community Law Reform Program Second Report, 1983) at 14, 38. In view of the conclusion I have reached it is not necessary to consider Mr Gageler's submission. Restitution The appellants' alternative argument rested on the proposition that an entitlement to interest on restitutionary principles should be acknowledged as a common law right, independent of the limitations of the discretionary jurisdiction to award interest under statutory provisions such as s.51A of the Federal Court Act. The appellants relied on the arguments put forward by Mr Mason QC and Professor Carter in their comprehensive and challenging work, Restitution Law in Australia (1995). In Chapter 28 of that work, Mr Mason and Professor Carter argue in favour of a "free-standing" restitutionary cause of action to recover interest. Although the entire chapter repays careful study, the key passages appear in para.2807 (at 950-951): "It will be seen that the current law of interest leaves significant gaps, enabling those who owe money (whether under restitutionary causes of action or otherwise) to be enriched at the expense of the person owed the principal sum. The current state of the law may not recognise a general common law right to recover interest on restitutionary claims, but the possibility of development has been noted. Given the limitations of the statutory jurisdiction to award interest, and the non-universal scope of equity's more expansive jurisdiction, it is appropriate to consider whether the common law is capable of development as regards interest upon restitutionary claims... . We consider that the unjust enrichment principle itself supports a free-standing cause of action to recover interest. The discretion to award statutory interest, with all its limitations, would then have little relevance in this field. Entitlement to interest should be seen as a right. The argument, which is in our view supported by most Australian decisions in this area, is as follows. For the same reason as the law recognises that the receipt of money is an incontrovertible benefit, the law should recognise that the capacity to use money over time is a distinct and additional benefit. Where it is unjust that the person who had the use should pocket the fruits (being the interest earned or capable of being earned), there should be an independent restitutionary right vested in the person at whose expense that enrichment occurred. This right should not derive from a fictional or tortured fiduciary relationship between the payer on the one hand and the payee or some third party (such as the directors of the payee) on the other. It is independent in the sense that it is unaffected by the nature or legal origin of the so-called principal debt, and it exists whether or not the principal debt is repaid. The right is not subject to the limitations of statutory interest. In particular, its award is not subject to the exercise of a statutory discretion. The jurisprudential basis of the right is the unjust enrichment principle. The principle is satisfied because the debtor's use of the plaintiff's money [in the sense of what is owed to the plaintiff] involves an independent enrichment at the plaintiff's expense. The unjust factor is that which supports the debt to which the interest claim is necessarily appendant, coupled with the absence of justification for the defendant pocketing the benefit of having had the plaintiff's money between the time when the obligation arose and the disgorgement of the principal. In most, if not all cases, this will also correspond with the principle that the plaintiff should be compensated for the loss of the use of what in one sense or another is the plaintiff's money. In this way, in this context at least, the law of interest is freed from its confused and tangled state, where the historical vagaries of common law, equity and statute prevail, rather than underlying principle." It is to be noted that this analysis seizes upon the injustice of the defendant using the "plaintiff's money", that is, money owed to the plaintiff. The authors accept that the claim to interest is "necessarily appendant" to a debt, in the sense of an independently owed obligation: see at 949-950. Mr Mason and Professor Carter point out (at 951) that a claim for interest may arise in circumstances where no question of fault is involved, as is the case with direct restitutionary claims such as the recovery of money paid under a mistake of law (David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353) or under a judgment subsequently reversed (Government Insurance Office of New South Wales v Healy (No.2) (1991) 22 NSWLR 380). The authors also point out (at 951-953) that the general law permits interest to be awarded in certain circumstances from the date of payment of the money by the plaintiff to the defendant, even though the plaintiff's cause of action accrues after that date. An example is a payment made under a contract which is voidable by reason of misrepresentation. While the restitutionary cause of action arises only upon rescission, a successful plaintiff may receive interest upon the sums paid as from the date of payment to the defendant: Jad International Pty Ltd v International Trucks Australia Ltd (1994) 50 FCR 378 (FCA/FC), at 392-393; see also Lexane Pty Ltd v Highfern Pty Ltd [1985] 1 Qd R 446, (S Ct Qd/McPherson J.) at 461-462. Even so, Mr Mason and Professor Carter acknowledge (at 951) that "the valuation of the plaintiff's monetary recovery of interest necessarily presumes the defendant's obligation to pay a capital sum as and from the date of receipt from the plaintiff."

It is fair to say that the law of restitution is in a rapidly developing phase. The High Court has acknowledged the "unifying legal concept" of unjust enrichment: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, at 256-257; David Securities v Commonwealth Bank, at 375. But, as Lindgren J. has pointed out in a recent paper, it is still necessary for a plaintiff to identify a recognised category of unjust enrichment, such as payment under a mistake or pursuant to the provisions of an invalid statute: K. Lindgren, "Recent Developments in the Law of Restitution" (Paper delivered at Judges' Conference, Darwin, Jan. 1996), at 20-21. Even though the categories are not closed, it is perhaps doubtful whether the law has yet reached the point suggested by Mr Mason and Professor Carter. However, even if the law does recognise a free-standing cause of action to recover interest (as distinct from a series of individual categories, in which the defendant is recognised as having been unjustly enriched at the plaintiff's expense), the question remains whether the appellants can bring themselves within the principle enunciated by Mr Mason and Professor Carter. To do so, they need to establish that the Commonwealth was unjustly enriched at their expense, by retaining the customs duty in the interval between the date of payment and the date the CTCO was made. In other words, they need to show that the Commonwealth had the use of "their money" during that period. In the case of a decision which, by virtue of an enactment, has retrospective effect, the answer must depend upon the proper construction of the statute. I do not construe s.269N(1) of the Customs Act as intended to produce the result that, once a CTCO is made, the Commonwealth is deemed to have retained money to which the appellants were always entitled. This is not the same question as determining when the appellants' cause of action occurred, but the issues are similar. As I have indicated, the purpose of providing for CTCOs to have retrospective effect was to ensure that the importers of goods subject to a CTCO (whether or not they had applied for the CTCO) could recover duty paid in respect of the goods. The legislative intent was not to treat importers of such goods as being in the same position as, say, an importer unlawfully required to pay duty at the time of importation of the goods. The statutory scheme had to balance a number of competing considerations. As was said in Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No.1) (1991) 32 FCR 219 (FCA/FC), at 241, per Hill and Heerey JJ., the regime of customs duties, including CTCOs, involves "social, political and economic considerations affecting the whole Australian community". The statutory scheme had to take account of such matters as the fact that all importers of goods subject to a CTCO (and not merely the applicants) could claim a refund; that the "concession orders" were worth hundreds of millions of dollars annually; that not all importers would pass on the benefit of the concessions to customers; that ordinarily the lapse of time between an application and the making of a CTCO was relatively short; and that the scheme would involve administrative costs. Section 269N(1) might have been expressed in more precise language had the draftsman adverted specifically to the question of interest. But the language used does not seem to me to evince an intention, not revealed in the IAC report or, for that matter the Parliamentary debates, to expose the Commonwealth to a liability to pay interest to each and every importer of goods under the concessional scheme. What was intended was that the making of the CTCO would create an entitlement of the importer of goods to recover any duty paid on those goods after the date of the application. The entitlement was not to arise unless and until a CTCO was made. For these reasons, I do not think it can be said that the Commonwealth was unjustly enriched at the appellants' expense by the fact that the duties were not repaid until the date the CTCO was made. The foundation for a restitutionary claim, even on the broad approach enunciated by Mr Mason and Professor Carter, has not been established. The inability of the appellants to claim interest may be thought to create an injustice, because their application for a CTCO was delayed for a number of years. The unfortunate history of the present case suggests very strongly that there should at least be some provision for interest where the decision-making process miscarries (assuming that there is no other remedy available). But, as I have already said, the argument put forward by the appellants is not based upon a case of excessive delay or erroneous decision-making. It relates to all cases where CTCOs are made and are deemed to have come into force as from an earlier date.

Some Additional Observations Since preparing these reasons for judgment, I have had the advantage of reading in draft the judgment of Beaumont and Einfeld JJ. Since I am differing from their Honours' conclusions, I should make four brief additional observations in relation to s.51A(1)(b) of the Federal Court Act. In doing so, I note that their Honours rely on s.51A(1)(b) only as an alternative ground in support of their conclusion that the appeal should be allowed. First, as thier Honours point out, the trial judge did not appear to address the possible application of s.51A(1)(b) of the Federal Court Act to this case. The reason would seem to be that the point was not argued before him. In any event, it was not raised before us. Dr Griffiths specifically stated that "the issue that is at the heart of the section 51A argument is the question of when the appellants' primary cause of action in respect of the payment of duty arose". (Ts of Argument, 17.) These observations indicate that Dr Griffiths accepted that interest could not be awarded under s.51A(1) from a date prior to the accrual of the relevant cause of action. It seems to follow that he accepted that s.51A(1)(b) could carry the matter no further, in this respect, than s.51A(1)(a). Be that as it may, I think the suggested construction of s.51A(1)(b) raises a number of issues that warrant close consideration. These include the significance of the opening words of s.51A(1)(b), namely, "without proceeding to calculate interest in accordance with paragraph (a)...". In my respectful view, these words suggest that s.51A(1)(b) is intended to be a subsidiary provision, permitting a quantification of interest in the form of a lump sum, in lieu of the more detailed calculations required by s.51A(1)(a). If this view is right, s.51A(1)(b) is not an independent source of power to allow interest to be awarded regardless of when the relevant cause of action arose. I should add that the Full Court in Ferrier and Knight v CAA did not appear to regard s.51A(1)(b) as an independent source of power of this kind. A further issue is the significance of the words "in respect of a cause of action" in s.51A(1). At first blush, it may be difficult to reconcile these words with the view that interest can be awarded under s.51A(1)(b) when it is "fair and just" or in accordance with "natural justice and equity", at least where the result is to require payment of interest prior to the date of accrual of any cause of action. Secondly, in my respectful opinion, care must be exercised in translating references to the "considerations of justice" or fairness from one context to another. It is one thing, for example, to hold that interest can be awarded in respect of payments made pursuant to a judgment which is subsequently overturned on appeal. Considerations of justice and fairness undoubtedly support the conclusion that an appellant should have restored that which "was wrongly taken from him and given to the respondent" (National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386, at 597, per Brooking J.), by reason of the erroneous judgment. It is, however, another thing to determine that, as a matter of construction, s.51A(1)(b) confers a power to award such interest as is fair and just, independently of whether the initial payment (in this case the customs duty) was erroneously made and regardless of the date on which the payee's cause of action accrued. Compare the remarks, in a different context, of Deane J. in Muschinski v Dodds (1985) 160 CLR 583, at 616. Thirdly, few would dispute a preference for substance over form. But in the present context an important element in determining the "substance" of the appellants' entitlement to recoup customs duties paid is the intention of the legislation creating that entitlement. Accordingly, in my view, it is necessary to determine whether Parliament intended that the making of a CTCO should place all taxpayers importing the relevant goods in the same position as a taxpayer from whom taxes were unlawfully demanded and received. For reasons I have explained, I do not think that was Parliament's intention. Finally, as I have already said, it is no part of the appellants' case that the Executive failed to address their claims "promptly and correctly". If the appellants succeed, all importers recovering duties paid prior to the making of a CTCO will be entitled to interest, regardless of whether it was or was not possible to process their applications more speedily. Conclusion The appeals should be dismissed with costs. I certify that this and the preceding 47 pages are a true copy of the Reasons for Judgment of the Honourable Justice Sackville. Associate: Dated: 28 August, 1996 Heard: 16 May, 1996 Place: Sydney Decision: 28 August, 1996 Appearances: Dr J.E. Griffiths, instructed by Blake Dawson Waldron, appeared for the applicant. Mr S.J. Gageler with Dr J.G. Renwick, instructed by the Australian Government Solicitor, appeared for the respondent.