Re The Totalisator Administration Board of Queensland

Judges:
McPherson J

Court:
Supreme Court of Queensland

Judgment date: Judgment handed down 9 March 1988.

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McPherson J.

This is an application by The Totalisator Administration Board of Queensland (``TAB''), which is a body corporate incorporated by statute and having functions which are, I am sure, known to everyone. In the course of performing those functions it produces printed material and documents in various forms. Some of it is used for administrative purposes; some of it consists of items such as betting slips used by the Board's customers to indicate what are called their ``investments''; there are also race lists and form guides for horse and greyhound racing events.

The Commissioner of Taxation claims that those and other materials produced by the TAB are liable for sales tax under the Sales Tax Assessment Act (No. 1) 1930, as amended, as goods manufactured in Australia by it and sold or treated as stock for sale, etc. The TAB accordingly issued an originating summons seeking a declaration that TAB is not now, and has not at any time since February 1982, been liable to pay sales tax under the (No. 1) Act on material printed by it. The explanation of the reference to February 1982 is that, by letter dated 8 February of that year addressed to the respondent Commissioner, TAB objected to paying sales tax on the materials in question; it advised its intention to claim a refund in respect of past payments; and also that in future it would lodge returns and pay the tax under protest at least until appeals in
Nimrod Theatre Company Ltd. v. F.C. of T. 84 ATC 4310; 85 ATC 4092, were determined. The Commissioner responded by letters written in the course of that year in which he expressed a different opinion of TAB's liability. Since then TAB has continued to lodge returns, and claims to have paid under protest sales tax amounting now to $408,514.80 on materials printed by it.

On the summons coming on in chambers, Mr Logan of counsel for the Commissioner raised the question of the jurisdiction of the Supreme Court to determine the subject matter of the application. I am indebted to him for his careful and concise submissions. From these it appears that after the enactment of the (No. 1) Act in 1934, and until recently, the means of challenging assessments under that Act were very limited. Section 12A of the Sales Tax Procedure Act 1934, as amended (``the Procedure Act'') provides one method of doing so, which, briefly stated, is that a person may under subsec. (2) and (3) of that subsection pay an amount of sales tax under protest, and then bring an action against the Commonwealth in any court of competent jurisdiction, State or Federal, to recover the amount so paid. The combined effect of those provisions is to confine the protest to a ``prescribed ground'', defined in sec. 12A(4) of the Act, and to payments made within six months before the date on which the action is brought. There are other limitations on the power of recovery which it is not necessary to specify here.

A second method of disputing an assessment has been available since 1 July 1986, which was when sec. 25AA of the Sales Tax Assessment Act (No. 1) 1930, inserted by Act No. 48 of 1986, came into effect. Section 25AA(1) enables a taxpayer to request the Commissioner to make an assessment in respect of a specified act, transaction or operation done or effected by the taxpayer. Within 60 days of service of notice of the Commissioner's assessment, the taxpayer may under sec. 40(1) lodge written objections against the assessment.

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A taxpayer dissatisfied with the Commissioner's decision on the objection may then under sec. 41 request a reference of the decision to either the Administrative Appeals Tribunal or the Federal Court. Previously the reference was to the Supreme Court, but the Federal Court was substituted by the Jurisdiction of Courts (Miscellaneous Amendments) Act 1987 (No. 23 of 1987), effective from 1 September 1987.

Finally, before 1 July 1986, a taxpayer, although unable to require an assessment by the Commissioner, was able to precipitate an assessment by failing to lodge a return and inviting the Commissioner to ``default assess'' him under sec. 25(2A) of the (No. 1) Act. In that event the taxpayer became liable to the sales tax in question ``excepting so far as he establishes an objection that the assessment is excessive''. There was then a procedure for objection, reference to a Board of Review, and appeal to a Supreme Court Judge and beyond: see sec. 41-42.

It is right to say that TAB used none of these methods of disputing its liability to sales tax. Perhaps it is more accurate to say that it has brought none of them to completion, preferring instead to adopt the procedure invoked here of applying for a declaration on originating summons under O. 64 r. 1B, or it may be r. 1BB, of the Rules of the Supreme Court. The question is whether it is entitled to do so.

No suggestion is made that the matter raised by the summons does not fall within the terms of one or other of those rules, which speak respectively of determination of a question of construction of a ``statute'', and of determination of a question of law upon which the right of a person depends. Mr Logan's submission is, however, that the power of this Court to make the declaration sought has either been excluded by the Federal legislation referred to; or that, in view of the procedures, particularly of assessment and appeal now available which take such matters into Federal jurisdiction, this Court should not or will not as a matter of discretion make the declaration sought.

The first aspect of the matter is, as I perceive it, whether the sales tax legislation referred to has expressly or by implication excluded jurisdiction to grant relief in a matter arising under that legislation. As to that, it is necessary to begin with the proposition that this Court is the Supreme Court for Queensland and its dependancies: see Supreme Court Act 1867, sec. 2. It is therefore the superior court of the State having all the jurisdiction which that description implies. It is true that sec. 2 of the Supreme Court Act does not in terms refer to this Court as a ``superior'' court; that expression appears only in the marginal note to the section. But the use of the word ``Supreme'' is itself sufficient to designate ``the highest Court of Judicature in the State'': see
Parkin v. James (1905) 2 C.L.R. 315 at p. 329; for, as is accepted by Griffith C.J. in the passage of his judgment from which these words are taken, the word ``Supreme Court'' is not used merely as an adjective of quality. Thus, in the case of Alberta, established as a Province of Canada in 1905, the local legislature in 1907 created a Supreme Court, which was in virtue of that fact held by the Privy Council in
Board v. Board (1919) A.C. 956 at pp. 963-964, to be a supreme and superior court of record. Its constitution, jurisdiction and powers were similar to those of State Supreme Courts in Australia.

Once one identifies a superior court of general jurisdiction, the result is to attract to it the traditional presumption that ``nothing shall be intended to be out of the jurisdiction of a Superior Court, but that which specially appears to be so'': see
Peacock v. Bell (1667) 1 Wms. Saund. 69 at p. 74; 85 E.R. 81 at pp. 87-88, cited by Dawson J. in
D.M.W. v. C.G.W. (1982) 151 C.L.R. 491 at p. 509. See also
Cameron v. Cole (1944) 68 C.L.R. 571 at p. 585. Hence, in Board v. Board (supra), affirming (1918) 2 W.W.R. 633, the Supreme Court of Alberta was held to possess and to have power to exercise jurisdiction in divorce traceable to a Dominion statute providing for divorce, even though there was no legislation expressly vesting in the Supreme Court of Alberta any jurisdiction in divorce. As was said by Viscount Haldane in that case ((1919) A.C. 956 at pp. 962-963);

``The right to divorce had, before the setting up of a supreme and superior Court of record in Alberta, been introduced into a substantive law of the Province. Their Lordships are of opinion that, in the absence of any explicit and valid legislative declaration that the Court was not to exercise jurisdiction in divorce, that Court

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was bound to entertain and to give effect to proceedings for making that right operative. Had the Legislature of the Province enacted that its tribunals were not to give effect to the right which the Dominion Parliament had conferred in the exercise of its exclusive jurisdiction, a serious question would have arisen as to whether such an enactment was valid. But not only is there no such enactment but, on the mere question of construction of the language of the Provincial Act of 1907, their Lordships are of opinion that a well-known rule makes it plain that the language there used ought to be interpreted as not excluding jurisdiction. If the right exists, the presumption is that there is a Court which can enforce it, for if no other mode of enforcing it is prescribed, that alone is sufficient to give jurisdiction to the King's Courts of justice. In order to oust jurisdiction, it is necessary, in the absence of a special law excluding it altogether, to plead that jurisdiction exists in some other Court. This is the effect of authorities, such as the well-known judgment of Lord Mansfield in Mostyn v. Fabrigas and the judgment of Lord Hardwicke in Earl of Derby v. Duke of Athol. They are collected in the admirable opinion of Stuart J. in the Supreme Court in the present case, from whose reasoning, as well as from the arguments employed by the other learned judges there, their Lordships have derived much assistance. They also desire to add that independently of the rule just referred to, there is another principle of construction which would, in their opinion, have been, by itself, sufficient to dispose of the question whether the words of the Act of 1907 excluded matrimonial jurisdiction. That Act set up a Superior Court, and it is the rule as regards presumption of jurisdiction in such a Court that, as stated by Willes J. in
London Corporation v. Cox (1867) L.R. 2 H.L. 239, 259, nothing shall be intended to be out of the jurisdiction of a Superior Court, but that which specially appears to be so.''

Again, it must be said that the Supreme Court of Queensland is not expressly declared a court of general jurisdiction; but the divisional heading to sec. 20 and 21 of the Supreme Court Act 1867 is ``Common Law and General Jurisdiction'', and sec. 21 invests the Court with ``the same jurisdiction power and authority as the Supreme Courts of Common Law and the High Court of Chancery in England''. Its status as a court of general jurisdiction is therefore indistinguishable from that of the Alberta Supreme Court considered by the Privy Council in Board v. Board.

I have set out in full the passage from that decision because it states another principle of jurisdiction which may be relevant here; that is that in the absence of statutory provision expressly excluding the jurisdiction of a superior court, a plea to its jurisdiction is insufficient without a valid averment of the existence of such jurisdiction in another court. See Mayor of London v. Cox (1866) L.R. 2 H.L. 239 at p. 263, per Willes J. In the present case, the alternative jurisdiction is said to be in the Federal Court; but there is no general vesting of jurisdiction in that Court, as there might have been ``in matters arising under'' the sales tax legislation; nor is there in terms any provision, which I have been referred to expressly making the jurisdiction vested in that Court exclusive. Section 9 of the Administrative Decisions (Judicial Review) Act 1977 excludes State courts from reviewing a ``decision'' of an administrative character by a Commonwealth officer; but in
Nomad Industries of Australia Pty. Ltd. v. F.C. of T. 83 ATC 4480; (1983) 2 N.S.W.L.R. 56, Rogers J. held, for reasons which his Honour there gave, that the Commissioner's view as to the existence or otherwise of a liability imposed by sales taxation legislation was not a ``decision'' with sec. 9 of that Act, nor was a declaration as to the applicability of the relevant statutory provision a ``review'' of the conduct of that officer within the meaning of sec. 9. I consider I ought to follow that decision. Cf. also Nomad Industries of Australia Pty. Ltd. v. F.C. of T. 86 ATC 4036, which was the subsequent decision of Hunt J. in the Supreme Court of New South Wales granting the declaration sought in that case.

There being no express exclusion of the jurisdiction of the Supreme Court in this matter, the question remains whether there is any implied exclusion of jurisdiction. On this aspect Mr Logan relied upon
Barraclough v. Brown (1897) A.C. 615, and
Argosam Finance Co. Ltd. v. Oxby (1965) Ch. 390, in which the former decision was applied. In Barraclough v. Brown a declaration was sought in the High Court of Justice that a ship owner was liable for

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expenses of wreck removal from a river vested in the plaintiffs as conservators. Section 47 of the Act, regulating their functions conferred on the plaintiffs the right to sue for removal expenses in a court of summary jurisdiction. The House of Lords held, not only that there was no cause of action apart from that contemporaneously created by the statute, as to which jurisdiction was vested in the court of summary jurisdiction; but also that the jurisdiction of the High Court to make a declaration as to the liability of the owner was ``the substance of... one of those matters exclusively committed to the jurisdiction of the summary court'' ((1897) A.C. 615 at p. 622). Lord Watson, in whose speech this passage appears, also said that both liability and assessment of the amount of expenses were matters which the legislature had ``by plain implication'' enacted that no other court had authority to entertain or decide.

It is possible, as has been done on some occasions, to explain the decision as applying a principle that where by statute a new right is created it is enforceable only by the means and before the tribunal, if any, specified for that purpose in the statute. The decision was in that sense applied by Plowman J. and, as I read their judgments, by Lords Denning M.R. and Diplock L.J. in Argosam Finance Co. Ltd. v. Oxby (supra). It was a case in which a taxpayer by action in the High Court in England sought a declaration as to the deductibility for income tax purposes of certain trading losses. The question of their deductibility was a matter committed by the relevant provisions of sec. 341 of the Finance Act 1958 (U.K.) to the General or Special Commissioners appointed under that or earlier revenue legislation. Plowman J. whose decision was affirmed on appeal considered that the right of the taxpayer to a tax deduction was one ``which has no existence apart from that section, and that the same section at the same time prescribes a particular method of enforcing it, with the result that the right cannot be asserted by other means'' ((1965) Ch. 390 at p. 409).

There are differences between that case and the present, notably that legislation imposing sales tax creates, qua the applicant in this case, not a right but a liability; that, historically speaking, the procedures for challenging the liability did not come into existence contemporaneously with the imposition of the liability; and that they are, in any event, not capable of comprehending the whole question extending over the whole period which is in issue between the parties in this case. The procedure by assessment and objection was introduced by amendment only on 1 July 1986; and that of payment under protest and recovery by action, although it was available from a much earlier time, enables only such payments to be recovered as were made during the preceding six months before action. I notice, too, that the editor of de Smith's Judicial Review of Administrative Action, 4th ed., at pp. 500-503, suggests that the tendency to regard jurisdiction as ousted is noticeably stronger where the appointed tribunal has already made its determination.

In any event, I consider myself bound by the view expressed by Gibbs J. in
Forster v. Jododex Aust. Pty. Ltd. (1972) 127 C.L.R. 421 at pp. 435-436, that, although the jurisdiction of the Court may be ousted by statute, ``the right of a subject to apply to the court for a determination of his rights will not be held to be excluded except by clear words''. His Honour was there concerned with the jurisdiction of the Supreme Court of New South Wales to make a declaratory order or decree with respect to the validity of applications for exploration licences, a matter committed by the Mining Act 1906 (N.S.W.) to the jurisdiction of the mining warden. On that point Walsh J. (127 C.L.R. at p. 427) thought that ``as a general rule and in the absence of some special reason for intervention, the special procedures laid down by statute should be allowed to take their course, and should not be displaced by the making of declaratory orders concerning the respective rights of the parties under the statute''. In the end, however, his Honour did not dissent from the decision of the other members of the High Court that the appeal in that case should be dismissed. The other Justices of the Court on that occasion were Mason J., who agreed with Gibbs J. on the point here in issue (see 127 C.L.R. at p. 450); McTiernan J., who concurred in the reasons for Mason J. (127 C.L.R. at p. 427); and Stephen J., who also agreed with the reasons of Gibbs J. on the question of jurisdiction (127 C.L.R. at p. 448).

When this decision is combined with other factors, I do not consider that the jurisdiction of this Court to make the declaration sought can

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be said to have been impliedly ousted by the sales tax legislation and the procedures it affords for challenging a liability for sales tax. The jurisdiction of the Supreme Court has not ``in clear words'' been excluded. The two Nimrod cases [84 ATC 4310; 85 ATC 4092] show that the jurisdiction existed in respect of sales tax liability arising before 1 July 1986; and, although an adequate statutory procedure for challenging the Commissioner's assessment has now been introduced, Parliament did not see fit either to exclude the jurisdiction of the Supreme Court to make appropriate declarations in matters arising under the sales tax legislation, or else to confer such jurisdiction, either exclusively or generally, upon the Federal Court or any other tribunal. The existence of courts of general jurisdiction has obvious advantages for litigants in a Federal system in which jurisdiction is becoming increasingly fragmented; it ought therefore not to be too readily or lightly assumed that the legislature has intended that advantage to be frittered away. Even if its function is to operate only as a ``backstop'' form of authority to other tribunals, it remains a useful means of preventing development of jurisdictional voids in which no court or tribunal, Federal or State, has any jurisdiction, to the lasting detriment of the administration of justice in Australia.

Having said that, I am at this stage prepared only to declare that this Court is not deprived by the provisions of the Sales Tax Assessment Act (No. 1) 1930, as amended, or of the Sales Tax Procedure Act 1934, as amended, of jurisdiction to make the declarations sought in the summons issued by the applicant TAB. The exigencies of a busy chamber day made it impossible in the time available to hear submissions on the substantive point in issue, which is whether the applicant's printed material, or its activities in producing it, attract a liability to pay sales tax under the (No. 1) Act. I should, however, stress that, although I have held that jurisdiction to make the declaration subsists in this Court and has not been ousted, the question remains whether as a matter of discretion it should be exercised. In Forster v. Jododex Aust. Pty. Ltd. (supra) at p. 438, citing with approval a statement of Lord Radcliffe in
Ibeneweka v. Egbuna (1964) 1 W.L.R. 219 at p. 225, it was said of the power to grant a declaration that it ``should be exercised with a proper sense of responsibility and a full realization that juridical pronouncements ought not to be issued unless there are circumstances that call for their making''. Into that question or discretion there may enter a number of factors some of which have been touched upon in a different context here; such as whether the applicant TAB ought to have pursued other remedies available under the sales tax legislation for having the point in issue determined; whether the six month limitation imposed by sec. 12A of the Procedure Act is a circumstance which weighs in favour of or against the applicant in making or withholding the declaratory relief sought; and so on. The relevance and weight of such matters will, I consider, properly arise for consideration by the Judge who determines this application when it comes to a hearing in the ordinary civil jurisdiction of this Court. I do not wish to be taken here to be saying anything which might be thought to limit his discretion in that determination. All I am deciding is, as I have said, that this Court has not been deprived of jurisdiction to make such a declaration by any of the legislation referred to.

The summons will be adjourned to a date to be fixed. I will entertain an application for such directions for bringing it to a hearing as the parties may suggest. The costs of the hearing before me including the appearance to hear judgment will be costs in the matter of the summons.