Mason v New South Wales

Husband and wife inter-state carriers sued New South Wales to recover fees paid for permits under the State Transport (Co-ordination) Act 1931 NSW, later held invalid as against inter-state trade under s 92 of the Constitution. By majority the High Court held the payments were compulsory, not voluntary: the Act's offence, penalty and seizure provisions, combined (for most judges) with evidence of active enforcement, left the plaintiffs no real free choice — as Kitto J. put it, "quite enough compulsion... from the terms of the Act itself" to force payment.

The plaintiffs, husband and wife residents of Victoria, bought a truck and an inter-state carrying business in April 1953, and from 1 June 1953 the male plaintiff regularly carried goods between Victoria and New South Wales. The vendor had told him that carriers were advised to pay for permits under protest, and showed him s 47 of the State Transport (Co-ordination) Act 1931 NSW, under which an authorised officer could seize a vehicle suspected of an offence against the Act. For every journey he applied for and paid for a permit under s 22, usually protesting verbally that the charge was unconstitutional and sometimes endorsing his cheque "paid under protest". He was stopped by inspectors checking permits on a number of occasions and once saw another carrier's vehicle held for want of a permit. All the payments, totalling £5,467 0s 7d, were made between the High Court's decision in Hughes and Vale Pty Ltd v State of New South Wales on 16 April 1953, which upheld the Act's application to inter-state carriers, and the Privy Council's reversal of that decision on 17 November 1954.

Were the fees the plaintiffs paid for permits under a statute later held invalid as applied to inter-state trade paid voluntarily, and so irrecoverable, or under compulsion, and so recoverable in an action for money had and received?

Judgment was entered for the plaintiffs in the sum of £5,467 with costs.

Dixon C.J. inferred that, since the Act had been enforced against inter-state carriers since 1935 with no slackening while the Privy Council appeal was pending, the plaintiffs' vehicle would have been stopped and seized had they tried to carry goods without a permit. He held they paid "unwillingly and only because they apprehended on reasonable grounds" that this would happen, so a common count for money had and received was made out.

Kitto J. found the compulsion in the Act itself, not in specific official threats: the offence provisions, the £500 penalty and the s 47(2) power to seize and detain a vehicle meant "the plaintiffs had quite enough compulsion upon them from the terms of the Act itself, apart altogether from anything that may have been said or done by officers of government." Windeyer J., by contrast, held that the plaintiffs had to show more than the bare terms of the statute — that "the Crown by its servants was exercising, or threatening to exercise, powers under the statute in such a way as to constitute compulsion in law" — and held a payment is voluntary only when the payer, even knowing himself not liable, is nonetheless "intending finally to close the transaction". He found the plaintiffs paid under a reasonable apprehension, created by the defendant's servants, that, if they did not, by paying, obtain permits, "the use of the roads would be denied them by seizure of their vehicle." Menzies J. reached the same conclusion on the evidence. The Court also rejected arguments that recovery was barred because charges were passed on to customers, or because payment depended on parliamentary appropriation, a point answered by ss 64-66 of the Judiciary Act.

Fullagar J. said he did not think he could "usefully add anything substantial to the judgments" of Menzies and Windeyer JJ. He found the evidence, though "scanty", was enough to show the payments were made "in order to avoid a very real risk that a refusal to pay would be followed by action which could be ruinous to the plaintiffs." Taylor J., applying "the principles discussed by my brothers Menzies and Windeyer", independently found it inescapable that the plaintiffs paid in a "well-founded belief" that, unless they paid, seizure of their vehicles was at least probable, because the officers administering the Act had made this reasonably apparent to hauliers generally, and because the possibility of seizure was "a power which was readily available" presenting "a real threat to the plaintiffs' rights."

McTiernan J. would have dismissed the action. He held that the plaintiffs "must prove affirmatively that they paid under compulsion in order to succeed" and found no evidence that any officer threatened to seize their vehicle or demanded payment before Mason applied for each permit. Protest was not enough on its own. "Payment under protest is consistent with voluntary payment." Because Mason, "on his own initiative", carried out every step of obtaining each permit, the payments were his "own free choice", made as a business necessity to keep his profitable inter-state trade running while the Privy Council appeal was pending.