High Court Decides No General Right of Recovery of Customs Duty


High Court Decides No General Right of Recovery of Customs Duty

On 2 April 2014, the High Court of Australia put to rest any prior belief that there is a general right of recovery outside of the refund provisions of the Customs Act 1901 (“Customs Act”).

The High Court dismissed the appeal in Thiess v Collector of Customs & Ors [2014] HCA 12 finding that with the exception of two statutory provisions, section 167(4) of the Customs Act bars all actions for the recovery of duty paid to Customs, even if the dispute did not arise at the time the duty was payable.

This decision meant that Mr Thiess was unable to recover the $543,919 in duty and GST he mistakenly paid to Customs when the incorrect weight of his yacht was declared, preventing him from entering the goods duty-free (to which he was entitled under the correct weight).

Section 167(1) prescribes that if a dispute arises in relation to the payment of duty or liability as to the goods, then the owner of the goods can pay the amount demanded by Customs “under protest” at the time of payment.

Despite Mr Thiess’ argument that no “demand” had been made and no dispute had arisen at the time of payment, the High Court found that a demand in fact had been made by the automatic calculation of the duty based on the information provided (albeit incorrectly) at that time.

Accordingly, outside the provision for recovery of the amount paid “under protest” in section 167(2) of the Customs Act or the refund provisions under section 163 of the Customs Act, there is no right of recovery of duty and GST paid incorrectly.

Now, where no dispute has arisen at the time of payment and where the Customs Act has not prescribed for a refund the relevant circumstance, owners appear to have no right to recovery. Perhaps the best way for owners to protect themselves would be to pay for all goods “under protest” from now on?