Federal Commissioner of Taxation v. Biga Nominees Pty. Ltd.

Murphy J

Gobbo J
Southwell J

Supreme Court of Victoria (Full Court)

Judgment date: Judgment handed down 24 March 1988.

Murphy, Gobbo and Southwell JJ.

This is an appeal from an order of Nathan J. [reported at 87 ATC 4913] whereby his Honour ordered that para. 9 of the defence be struck out.

The action is one in which the respondent Biga Nominees Pty. Ltd. (``Biga'') sued the appellant Commissioner of Taxation claiming inter alia a declaration that a forklift truck which Biga claimed to be using for the purposes of operating a railway was exempt from sales tax. The Commissioner pleaded by para. 9 of the defence:

``Further the defendant will object that the endorsement standing as the plaintiff's statement of claim is bad in law and discloses no cause of action on the ground that the plaintiff has no standing to obtain the relief it seeks.''

The endorsement on the writ standing as a statement of claim pleaded inter alia that Biga operated and maintained a railway in New South Wales and that it proposed to acquire a forklift truck for exclusive use in connection with the operation or maintenance of the railway. The Sales Tax (Exemptions and Classifications) Act 1935 (``the Exemptions Act'') Div. XV of the First Schedule, item 119B, in conjunction with sec. 5 of that Act, exempts from liability for sales tax any goods used exclusively in connection with the operation of a railway primarily and principally for use by the public.

Before this Court application was made by Mr Finkelstein Q.C. who appeared with Mr Murdoch for the respondent, to amend the endorsement. That application was not opposed by Mr Batt Q.C. who appeared with Mr Kendall for the appellant Commissioner, and the Court granted that leave. By the amended endorsement, Biga pleaded that Finer Fork Services Pty. Ltd. (``Finer Fork Services'') carried on the business of selling forklift trucks and in June 1985 it entered into an arrangement pursuant to which it sold the forklift truck to The First National Finance Limited (``First National'') and First National thereupon leased the forklift truck to Biga for a term of five years; at the expiration of that term First National might sell the forklift truck to Biga but was not obliged to do so. It was further pleaded that Biga has since June 1985 used the forklift truck exclusively in connection with the operation of its railway and at the end of the term of the lease proposes to purchase the truck. It is further pleaded that the Commissioner wrongfully asserted that no exemption was applicable; and that the Commissioner will require Finer Fork Services or First National to pay sales tax on the sale value of the forklift truck on the basis that it was not exempted, and in that event Biga would become obliged to pay the amount of that sales tax to whoever has paid it to the Commissioner.

Nathan J. [at p. 4917] held that Biga had standing to sue principally for the reason that:

``Biga has both the public interest in securing the proper and fair operation of the sales tax exemption provisions, and a particular and special interest in ensuring that the statutory exemptions available enure to it, being a person whom those exemptions were designed to benefit.''

It would seem that his Honour there meant that Biga had a particular and special interest in securing a public right, namely the proper and fair operation of the sales tax exemption provisions. Be that as it may the case involves a consideration of the questions whether there was here a violation of a public right or duty in respect of which Biga had a right to sue, or a violation of any private right of Biga.

By sec. 4 of the Assessment Act No. 1 the Commissioner ``shall have the general administration of the Act''; similar provision is made in sec. 4 of the Exemptions Act. The

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Exemptions Act sec. 5 provides that sales tax shall not be payable upon exempt goods (as stated earlier the relevant item in the schedule to the Exemptions Act is 119B). Section 70C(2) of the Assessment Act provides that ``the taxpayer shall have the same right to recover from the purchaser the amount of the sales tax payable by him... as he has to recover the price of other payment for, or in respect of the goods''. Mr Finkelstein placed considerable reliance upon this provision, which for all practical purposes ensures that the purchaser will bear the burden of the tax. As will be seen, this was said to show that Biga has a ``special interest'' giving it standing to sue.

It is common ground that the various Sales Tax Assessment Acts impose, in circumstances such as are here present, a liability to pay sales tax upon the vendor in the last wholesale sale. The amended endorsement pleads (and for the purpose of these proceedings it must be assumed that Biga can at trial make out the matters pleaded) that here the liability is imposed upon Finer Fork Services. It is common ground that Biga is not now and cannot in the future be directly liable to pay the tax to the Commissioner - in other words, it is not and will not be a taxpayer within the meaning of the Sales Tax Assessment Acts. Were it not common ground, so much is established by
D.F.C. of T. (S.A.) v. Ellis & Clark Ltd. (1934) 52 C.L.R. 85 per Dixon J. at p. 89 and
Brayson Motors Pty. Ltd. v. F.C. of T. 85 ATC 4125; (1985) 156 C.L.R. 651.

It is convenient now to turn to a consideration of the principles of law to be applied when the question of standing to sue arises.

Boyce v. Paddington Borough Council (1903) 1 Ch. 109, Buckley J. in a celebrated dictum, said at p. 114:

``A plaintiff can sue without joining the Attorney-General in two cases: first, where the interference with the public right is such as that some private right of his is at the same time interfered with...; and, secondly, where no private right is interfered with, but the plaintiff, in respect of his public right, suffers special damage peculiar to himself from the interference with the public right.''

That was for many years regarded both in England and in this country as a correct statement of the law.

Onus v. Alcoa of Australia (1981) 149 C.L.R. 27 (``Onus'') at p. 41 Stephen J. observed that the dictum of Buckley J. was "expanded and applied by members of this Court and especially by Gibbs J. in
Australian Conservation Foundation v. The Commonwealth (1978-1980) 146 C.L.R. 493" (``the A.C.F. case''). In the A.C.F. case, Gibbs J. said at pp. 527-528:

``The general principle stated in Gouriet v. Union of Postal Workers, that a private person, who is in the same situation as any other member of the public, has no standing to claim either an injunction or a declaration to enforce a public right or duty, has been consistently applied in this Court.

Although the general rule is clear, the formulation of the exceptions to it which Buckley J. made in Boyce v. Paddington Borough Council is not altogether satisfactory. Indeed the words which he used are apt to be misleading. His reference to `special damage' cannot be limited to actual pecuniary loss, and the words `peculiar to himself' do not mean that the plaintiff, and no one else, must have suffered damage. However, the expression `special damage peculiar to himself' in my opinion should be regarded as equivalent in meaning to `having a special interest in the subject matter of the action'. The words appear to have been understood in this sense by Viscount Maugham in
London Passenger Transport Board v. Moscrop ((1942) A.C. 332; at p. 345), and by Lord Wilberforce and Lord Edmund-Davies in
Gouriet v. Union of Post Office Workers ((1978) A.C. at pp. 482, 514). In this Court, the law was stated in a way that supports that view in
Anderson v. The Commonwealth ((1932) 47 C.L.R. 50). In that case, the plaintiff claimed that an agreement between the Commonwealth and a State restricting the importation of sugar into the Commonwealth was illegal and invalid. He alleged that he was interested in the matter as a member of the public. It was held that he had no locus standi. In a joint judgment delivered by Gavan Duffy C.J., Strake and Evatt JJ., it was said ((1932) 47 C.L.R., at pp. 51-52):

  • `But the Agreement made by the Commonwealth, and its prohibition, affect the public generally and the

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    plaintiff has no interest in the subject matter beyond that of any other member of the public: he has no private or special interest in it. Great evils would arise if every member of the Commonwealth could attack the validity of the acts of the Commonwealth whenever he thought fit; and it is clear in law that the right of an individual to bring such an action does not exist unless he establishes that he is `more particularly affected than other people' (see Brice on Ultra Vires, 2nd ed., p. 366).'

Again, more recently, the majority of this Court applied a similar test in
Robinson v. Western Australian Museum ((1977) 138 C.L.R. 283, at pp. 292-293, 301-303, 327-328). Although, in some cases (such as
Thompson v. Randwick Municipal Council (1953) 90 C.L.R. 449) the formula of Boyce v. Paddington Borough Council is, naturally enough, repeated, the broad test of special interest is, in my opinion, the proper one to apply.

The question whether a private person has standing in particular circumstances has been considered in many cases, which will be found discussed by Professor Heydon in Stein, Locus Standi, pp. 39-40, 45-54 and in Whitmore and Aronson, Review of Administrative Action, pp. 330-337, 480. It is not necessary for me to consider the manner in which the principle which I have stated should be applied in circumstances which do not now arise, and it would not be profitable to do so, because, as Mason J. said in Robinson v. Western Australian Museum ((1977) 138 C.L.R., at pp. 327-328), the `cases are infinitely various and so much depends in a given case on the nature of the relief which is sought for what is a sufficient interest in one case may be less than sufficient in another'.''

Mason J. said at p. 547:

``I also agree with Gibbs J. that, apart from cases of constitutional validity which I shall mention later, a person, whether a private citizen or a corporation, who has no special interest in the subject matter of the action over and above that enjoyed by the public generally, has no locus standi to seek a declaration or injunction to prevent the violation of a public right or to enforce the performance of a public duty.

Depending on the nature of the relief which he seeks, a plaintiff will in general have a locus standi when he can show actual or apprehended injury or damage to his property or proprietary rights, to his business or economic interests (as to which see
New South Wales Fish Authority v. Phillips ((1970) 1 N.S.W.R. 725)) and perhaps to his social or political interests.''

In Onus, Gibbs C.J. said at pp. 35-36:

``The principle which has been settled by the courts does attempt a reconciliation between these considerations. That principle was recently stated in Australian Conservation Foundation Inc. v. The Commonwealth ((1980) 146 C.L.R. 493). A plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public; if no private right of his is interfered with he has standing to sue only if he has a special interest in the subject matter of the action ((1980) 146 C.L.R., at pp. 530-531, 537, 547-548). The rule is obviously a flexible one since, as was pointed out in that case, the question what is a sufficient interest will vary according to the nature of the subject matter of the litigation.''

Stephen J. said at p. 42:

``the distinction between this case and the A.C.F. case is not to be found in any ready rule of thumb, capable of mechanical application; the criterion of `special interest' supplies no such rule. As the law now stands it seems rather to involve in each case a curial assessment of the importance of the concern which a plaintiff has with particular subject matter and of the closeness of that plaintiff's relationship to that subject matter.''

Aickin J. at pp. 49-56 carefully examined the authorities, before concluding that since there was a plea that ``special damage'' had been suffered by the plaintiffs, it could not be said that they lacked standing. His Honour had observed that ``special damage'' did not necessarily involve pecuniary loss. A fortiori, special damage is suffered when, as here, pecuniary loss is alleged.

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Davis v. Commonwealth (1986) 61 A.L.J.R. 32 at p. 35 Gibbs C.J. said:

``The question that then arises is whether it is at least arguable that the fact that the plaintiffs are Aborigines, or are taxpayers, if proved, will be sufficient to give them standing to challenge the validity of the Act. The traditional view is that a member of the public has standing to bring an action challenging the validity of an Act of Parliament only if he establishes that the statute affects his private rights or interests or, on a rather more liberal view of the matter, only if he establishes that he is more particularly affected than other people. A recent discussion of the question is to be found in Robinson v. Western Australian Museum (1977) 138 C.L.R. 283 at 292, 301-302, 315, 327, 344-345. An analogous question, what interest is sufficient to enable a plaintiff to bring an action to prevent the violation of a public right or to enforce the performance of a public duty, was more recently considered in Australian Conservation Foundation v. The Commonwealth (1980) 146 C.L.R. 493 and
Onus v. Alcoa of Australia Ltd. (1981) 149 C.L.R. 27. The view of the majority in each of those cases was that a person has standing to bring an action of that kind if he has a special interest in the subject-matter of the action, but that a mere intellectual or emotional concern would not suffice to give locus standi:''

For the Commissioner, Mr Batt submitted that the Commissioner is a public officer performing statutory duties and exercising statutory powers and that the case does not concern an alleged violation of a public right or the enforcement of performance of any public duty. Rather, it was said this is a case concerning the liability to taxation of one person (Finer Fork Services) and not Biga. It was said that the case concerns only a private right of Finer Fork Services as the last wholesale vendor or perhaps First National as the lessor. Reliance was placed upon
Bennett Honda Pty. Ltd. v. Borg Warner Acceptance Corp. and Anor 85 ATC 4364; (1985) 7 F.C.R. 31, a decision of Morling J., and the correctness of which was fully debated below and before this Court. In that case Borg Warner entered into an arrangement with bennett Honda for the sale by the former to the latter of motor cycles by a ``floor plan financing'' arrangement, it being intended that Bennett Honda would sell the motor cycles by retail sales. The agreement between the parties provided that Bennett Honda would reimburse Borg Warner for any sales tax paid by the latter. Bennett Honda sued Borg Warner and the Commissioner of Taxation seeking, inter alia, an injunction restraining the Commissioner from continuing to demand sales tax from Borg Warner, Morling J. held that the legislation did not confer upon Bennett Honda any standing whereby it could claim an injunction against the Commissioner and further it could not be said that the Commissioner had interfered with any private right of the applicant. His Honour distinguished Onus and the A.C.F. case. At ATC p. 4370; C.L.R. p. 39 his Honour said:

``The claim for injunctive relief against the Commissioner is beset by different, but equally formidable, difficulties. The applicant seeks to restrain the Commissioner from demanding sales tax at the higher rate from Borg Warner. I am unable to perceive the basis upon which such an injunction could properly be granted. The applicant claims that it is adversely affected, albeit indirectly, by the demand made upon Borg Warner by the Commissioner. But in law, the assessment was made against Borg Warner alone. I have not been referred to any authority which would support the proposition that, in these circumstances, Bennett Honda Retail has any entitlement in its own right to injunctive relief. This is not a case of the type, of which Onus v. Alcoa of Australia Ltd. (1981) 149 C.L.R. 27 is an example, where a member of the public sues to prevent the violation of a public sues to prevent the violation of a public right or to enforce the performance of a public duty. In such a case a plaintiff has standing to bring an action if he has an interest in the subject matter beyond that of any other member of the public - Australian Conservation Foundation v. The Commonwealth (1979) 146 C.L.R. 493 at 530-531, 537, 547-548 and Onus (supra) at 35-36 per Gibbs C.J. The present case is one in which there is no violation of a public right and in which no private right of Bennett Honda Retail is interfered with. This being so, and no standing being conferred upon it by the sales tax legislation, it has no standing to obtain

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injunctive relief against the Commissioner. Only a taxpayer who is dissatisfied with an assessment made by the Commissioner is given the right to object to the assessment - vide subsec. 41(1) of the Sales Tax Assessment Act (No. 1) 1930. The applicant is not, for relevant purposes, a taxpayer.''

Mr Finkelstein submitted that Bennett Honda was wrongly decided. It was further said that the report indicates the possibility that Morling J. was not referred to a number of relevant authorities, and the possibility even that the matter of standing had not been argued. We think those possibilities exist: but the principal question is whether Morling J. was right in holding that there was ``no violation of a public right and in which no private right of Bennett Honda Retail is interfered with''.

This question lies at the heart of the matter now before the Court. Mr Finkelstein's primary submission was that there was here a public right - the right to have the Commissioner administer the various Acts fairly and in accordance with the law, including of course, the provisions exempting goods used for a public railway. It was further said that the Commissioner was under a duty to the public so to administer the Acts; here, since the Act (sec. 70C(2)) imposed a liability on Biga in respect of the tax, albeit not a direct liability to pay the tax to the Commissioner, then a ``special interest'' was established. Mr Batt submitted that Bennett Honda was correctly decided, and that here the Commissioner owed the relevant duty not to the public, but to the Crown.

Clearly enough, a statutory obligation was imposed upon the Commissioner to grant exemptions (sec. 5 of the Exemption Act). The Commissioner would be in breach of that obligation if he collected or indeed attempted to collect tax which was not payable. Is that a breach of a public duty, or is it merely a duty owed to the Crown?

The policy of the sales tax legislation in so far as it deals with exemptions, is, as Mr Finkelstein submits, to enable consumers to obtain goods more cheaply than would be the case if sales tax was payable. The benefit of the exemption, it may reasonably be anticipated, may well be enjoyed by, in time, users of the railway. The question whether the railway falls within the exemption provisions - whether it is used principally by the public - is in issue and will doubtless be the subject of evidence at the trial. Certainly it is not to be assumed that Biga will be the only beneficiary of the exemption.

It is clear that the Commissioner was under a duty to administer the relevant legislation properly and fairly - see per Lord Scarman in
R. v. I.R. Commr ex parte National Federation of Self-Employed and Small Businesses (1982) A.C. 617 (``the Fleet Street Casuals case'') at p. 652. As we have said, Mr Batt characterised the duty of the Commissioner to administer the sales tax legislation properly and fairly as a duty owed to the Crown, but not to the public generally. There is a deal of authority against that proposition.

R. v. Commissioner for Special Purposes for Income Tax, ex parte Dr Barnado's Homes National Incorporated Association (1920) I.K. 26 questions were raised relating to exemptions from income tax of income received by a charitable institution. It was held that the legislation imposed an obligation upon the Commissioner to allow an exemption, an obligation which the courts would enforce by mandamus. At p. 38 the Earl of Reading C.J. quoted Lord Esher M.R. in
Reg. v. Commissioners for Special Purposes of the Income Tax 21 Q.B.D. 313 313 where at p. 317 the Master of the Rolls said:

``With regard to the question whether mandamus will lie, I am of opinion that the case falls within the class of cases, where officials having a public duty to perform, and having refused to perform it, mandamus will lie on the application of a person interested to compel them to do so. To my mind that is a far-reaching and most salutary provision of the common law.''

In the Dr Barnado's Homes case mandamus was granted to compel the Commissioner to allow the exemption. The judgments deal primarily with the questions whether the Commissioner was a servant of the Crown not amenable to mandamus, and whether costs should be ordered against the Commissioner. However the case stands as authority for the proposition that here, the Commissioner has a public duty to perform, and mandamus would go at the suit of a ``person interested''.

In Wade's Administrative Law, 4th ed. the learned author says at p. 597:

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``The prerogative remedy of mandamus has long provided the normal means of enforcing the performance of public duties by public authorities of all kinds.''

At p. 599, it is said that Lord Holt and Lord Mansfield ``favoured the free use of the writ for the enforcement of public duties of all kinds...'' It was said that in that case ``the duty was public only in the sense that it was a duty to exercise a charitable trust''.

And at p. 600:

``Modern Government is based almost exclusively on statutory power and duties vested in public bodies and mandamus is the regular method of enforcing the duties... today the majority of applications for mandamus are made at the instance of private litigants complaining of some breach of duty by some public authority... within the field of public law the scope of mandamus is still wide and the court may use it freely to prevent breach of duty and injustice.''

In de Smith's Administrative Law, 4th ed., Prof. Evans (1980) the learned author says at p. 540:

``Mandamus lies to secure the performance of a public duty, in the performance of which the applicant has a sufficient legal interest... The duty to be performed must be of a public nature... To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute.''

In Appendix 1 (``The Prerogative Writs: Historical Origin'') at p. 592 it is said that by the early years of the 18th century, mandamus ``would go, on the application of a party aggrieved, to compel the performance of a wide range of public or quasi public duties, performance of which had been wrongfully refused''.

The cases dealing with mandamus, in so far as they relate to the exercise of the discretion to grant relief, are not of much assistance, because, here the question of standing is not resolved by the exercise of discretion, which becomes relevant only when standing is established (Onus, per Brennan J. at p. 75). But they are helpful in determining whether in this case the allegation is one of a breach of a public duty.

In the A.C.F. case Aickin J. at p. 508 assumes that a plaintiff ``adversely affected to an extent greater than the public generally'' may maintain an action for an injunction or declaration in respect of the breach by a statutory authority ``in respect of matters of public law''.

At p. 524 Gibbs J. referred to the duty of a minister in administering the affairs of his department as a public duty (but one not owed to any particular person or persons). At p. 526 his Honour referred to the allegation of a public wrong, and to the Foundation seeking to enforce ``the public law''.

Mason J. at p. 547 characterised the action as one brought to prevent a public wrong.

Although the case of Onus was much debated before this court, it does not provide much assistance on the question whether the Commissioner in the present case owed a duty to the public. As Gibbs C.J. observed at p. 35 in Onus:

``The case is therefore one in which two private citizens who cannot show that any right of their own has been infringed bring an action for the purpose of restraining another private citizen (Alcoa) from breaking the criminal law by acting in contravention of s. 2 of the Relics Act.''

However the case is authority for the proposition that where legislation is enacted for the benefit of the public at large, then public rights are created: see per Gibbs C.J. at p. 35: Aickin J. at p. 49.

In the Fleet Street Casuals case the House of Lords considered the question whether the National Federation of Self-Employed and Small Businesses Ltd. had standing as having sufficient interest in the cause within the meaning of R.S.C. O.53. The Federation claimed to be entitled to judicial review of a decision of the Commissioners to enter into an agreement with printing employers and unions pursuant to which the Commissioners would not pursue employees who had been evading tax by accepting employment under false names, the consideration being the adoption of procedures which would ensure that future taxes (and taxes in respect of the previous year) would be collected. The House unanimously decided that the Commissioners had not behaved ultra vires or improperly, that theirs

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was a management decision properly arrived at in the exercise of their managerial discretion. The speeches repay study, for they deal with the nature of the duty owed by the Commissioners. However, it is to be observed that an important ratio was that the income tax arrangements between a taxpayer and the Commissioners were strictly confidential and unlike ratepayers, no taxpayer had the right to know of or interfere in those arrangements.

The present case, of course, concerns sales tax, the imposition of which is not only not confidential, but in practice, set out in relevant sale documents for interested persons to see.

Lord Wilberforce said at p. 633:

``As a matter of general principle I would hold that one taxpayer has no sufficient interest in asking the court to investigate the tax affairs of another taxpayer...''

His Lordship went on to observe that the question whether there could ever be a case where such a challenge could be launched would depend upon an examination, upon evidence of what breach of duty or illegality is alleged.

Lord Wilberforce said at p. 631 that a good working rule though perhaps not an exhaustive one, was to be guided by the definition of the statutory duty and ``to enquire whether expressly or by implication, this definition indicates - or the contrary - that the complaining applicant is within the scope or ambit of the duty''.

His Lordship noted (p. 632) that the Commissioners were not immune from judicial review, being an administrative body with statutory duties with which a taxpayer to whom the duty was owed could seek to force compliance.

However his Lordship concluded after referring to the rights of ratepayers to object, that ``the structure of the legislation relating to income tax, on the other hand, makes clear that no corresponding right is intended to be conferred upon taxpayers''.

Lord Diplock at p. 641 referred to ``the liberal attitude of the courts in granting access to legal remedies for those complaining of failure of public officers to perform their duties''. His Lordship went on to observe at p. 644 that a citizen should not be ``prevented by updated technical rules of locus standi'' from seeking orders to compel the performance by public bodies of their statutory duty.

Lord Fraser of Tullybelton said at p. 646 that the correct approach in determining standing is:

``to look at the statute under which the duty arises, and to see whether it gives any express or implied right to persons in the position of the applicant to complain of the alleged unlawful act or omission.''

In our opinion, it is relevant here to note again that sec. 70C(2) imposes upon the purchaser the obligation to pay to his vendor the amount of the sales tax.

A principal submission by the Lord Advocate, for the Commissioners, was that the latter owed no general duty to taxpayers to collect all due taxes. Lord Scarman analysed the nature of the duty (pp. 650-651) and the remedies for breach. Lord Scarman went on to say:

``But I do not accept that the principle of fairness in dealing with the affairs of taxpayers is a mere matter of desirable policy or moral obligation. Nor do I accept that the duty to collect `every part of inland revenue' is a duty owed exclusively to the Crown... I am persuaded that the modern case law recognises a legal duty owed by the revenue to the general body of the taxpayers to treat taxpayers fairly.''

A fortiori, there is a duty to treat them in accordance with law.

After disagreeing with the view that a distinction should be recognised between the duty of a rating authority and the duty of a taxing authority, Lord Scarman went on to hold (pp. 652-653) that ``a legal duty of fairness is owed by the revenue to the general body of taxpayers''.

Lord Roskill referred (p. 659) to the concession, properly made by the Lord Advocate, that the appeal raised a question involving the performance by the Commissioners of a public duty. His Lordship went on to observe that:

``I find it difficult to see how it can be said that there is no jurisdiction of the court to allow relief... by way of judicial review. The appellants are, and must as a public body charged with the performance of a public duty... be amenable to the general

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law and liable to possible correction if their... statutory duties are not lawfully discharged.''

And at p. 662 his Lordship said:

``But once that body is admitted to be, as the appellants are admitted to be a statutory body charged with the performance of a public duty, then it is clear that there is jurisdiction to grant an order of judicial review in a proper case.''

None of their Lordships thought that that was a ``proper case'', principally for the reason, as we have said, that generally speaking, no income taxpayer has the right to interfere in confidential transactions between the Commissioners and another taxpayer.

The dicta of Lord Scarman referred to above are, if we may respectfully say so, not without difficulty in application, or indeed, in concept. Whilst it would be difficult to quarrel with such a view as a matter of philosophy, it does not follow that in law there is a public duty owed by an equivalent such as the Commissioner of Taxation so that, subject to special interest being shown, any taxpayer may have standing to pursue proceedings in respect of any other taxpayer's assessments or exemptions. Moreover, it is an equally large step also to extend the duty and a correlative right to non-taxpayers. With great respect, it would seem to be more appropriate to analyse the particular legislation in question and to endeavour to ascertain, having regard to the structure of that legislation, whether there may be identified particular duties either to the public at large or to particular sections of the public.

We are satisfied in the present case that there is a duty owed to persons such as the present respondent and that that duty is sufficient, both in its content and in the width of the persons to whom it is owed, that it can properly be described as a public duty. We are of this opinion because the legislation contemplated a category of persons who, though not taxpayers, would be directly affected by the legislation. Again we refer in particular to the provisions of sec. 70C of the Sales Tax Act and the obligation there imposed on the taxpayer in relation to the purchaser from it. As has already been indicated, that purchaser is the subject of the particular provisions in subsec. (2) which gives the taxpayer the right to recover from the purchaser the amount of the sales tax payable by him and stated upon the invoice, a right which is co-extensive with the right of the taxpayer to recover the price or other payment for or in respect of the goods. If there is then added to that provision the existence of categories of exemptions along with the fact that the Act does not provide any mechanism for resolving any dispute as to the purchaser's obligation to pay tax or to secure the benefit of any appropriate exemption, it can be found that the Commissioner owes a duty in relation to the proper enforcement of the taxation and exemption provisions, not merely to the taxpayer but to the direct purchaser so affected. To describe the duty here owed by the Commissioner as a public duty does not necessarily involve a finding that there is an equivalent public right residing in each member of the public as against the Commissioner. It may be that certain statutes by their nature create duties that may be properly described as being public duties and that such a conclusion is essentially based on the content of the duty rather than the identity of the person to whom the duty is owed. It is in our view unnecessary to adopt such a conclusion in this case for the reasons we have indicated, as Biga in our opinion has made out the essential ingredients to establish its standing to proceed with its action.

Biga's obligation as the direct purchaser to pay the tax gives it an interest clearly greater than ordinary members of the public. We note in passing that in the Fleet Street Casuals case, counsel for the Commissioner conceded that if some commercial disadvantage had been demonstrated the Federation would have had standing. There is an obvious commercial disadvantage in being obliged to disgorge the amount payable in sales tax. The question whether the exemption applies involves the affairs and activities of Biga, and not Finer Fork Services or First National, whichever be the taxpayer. It is right that Biga should be a party to any proceedings relating to the exemption, and Biga ought not to have to rely upon the taxpayer to take proceedings.

The appeal must be dismissed.


1. The appeal should be dismissed.

2. The appellant pay the respondent's cost of the appeal.

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