Restitution Discussion Group Archives
| Sender: |
Charles Mitchell |
| Date: |
Tue, 16 Jan 2007 09:52:31 |
| Re: |
Restitution and unlawful taxes in the SCC |
Dear Neil
The thesis that claims to recover money paid as tax which
is not due should be mediated exclusively through public law actions and
should not form the subject matter of private law actions, was recently
rejected by the HL in Deutsche
Morgan Grenfell plc v IRC [2006] UKHL 49. The most cogent arguments
that such claims should be determined by reference to public law principles
have
been made by Rebecca Williams, whose book
on the subject we await with keen interest. For a flavour of her approach
you can read her commentary on the
CA's decision in DMG. The SCC decision strongly suggests
that counsel in DMG missed a trick when he failed to put these
arguments to the court in the HL, which largely confined itself to rejecting
the empty formalistic reasoning of the CA.
Best wishes P.S. I am copying this to Rebecca in case she wants to
add anything.
At 11:22 16/01/2007 +1100, Neil Foster
wrote:
Dear Colleagues;
I'd be interested to hear from colleagues
who know about the law of unjust enrichment, their views on the decision
of the Supreme Court of Canada in Kingstreet
Investments Ltd. v. New Brunswick (Department of Finance),
2007 SCC 1 (11 Jan, 2007).
The SCC unanimously holds that, where
a Province has exacted money through an unlawful indirect tax (a liquor
tax where the price was presumably passed on the drinking public), the
suppliers who pay the tax can recover the full amount of the tax paid,
along with interest, but only for the last 6 years (due to the limitation
statute). A defence of "passing on" the tax (ie that the suppliers
in fact had passed on the tax to consumer) was rejected, and the tentative
views put forward in an earlier Australian case, Commissioner
of State Revenue (Victoria) v. Royal Insurance Australia Ltd.
(1994) 182 C.L.R. 51, by Brennan J in the HCA, that customers could
presumably recover the amounts they paid from the suppliers, seems to
have been accepted.
{In fact Australian colleagues will
recall that almost precisely the same issues arose after the High Court's
decision in Ha
v NSW (1997) 71 ALJR 1080 that State alcohol, cigarette and
petrol taxes were invalid under s 90 of the Australian Constitution.
Unlike the Canadian SC in Re
Eurig Estate, [1998] 2 S.C.R. 565 (referred to in Kingstreet
at [25]) the HC held that it could not "suspend" its declaration
of invalidity or engage in prospective over-ruling. For whatever reason
the SCC does not refer to Ha and its sequels - see Roxborough
v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 where
retailers were held to be entitled to recover the tax paid, and Campbells
Cash and Carry Pty Limited v Fostif Pty Limited; Australian Liquor Marketers
Pty Limited v Berney [2006] HCA 41 (30 August 2006) where a
"class action" on behalf of various retailers as upheld as
valid. As will be seen, 10 years later there still seems to be a lot
of work for lawyers in the wake of the HC decision!}
Is the decision of the SCC in Kingstreet
relevant to private law? That is precisely one of the interesting aspects
of the decision. The SCC effectively seems to say that this issue is
not to be dealt with under the private law of "restitution",
but is subject to special rules derived from constitutional principles-
[32]-[40]. Strikes me that there are a lot of interesting issues there
to do with the connections between "public" and "private"
law.
Charles
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