Collector of Customs (NSW) v Southern Shipping Co Ltd
107 CLR 279(Judgment by: TAYLOR J)
Between: COLLECTOR OF CUSTOMS (NSW)
And: SOUTHERN SHIPPING CO LTD
Judges:
Dixon CJ
McTiernan J
Kitto J
Taylor JMenzies J
Windeyer J
Owen J
Subject References:
Trade and commerce
Excise
Goods subject to control of Customs
Stolen from wharf
Claim by Collector for amount which would have been payable
Legislative References:
Excise Act 1901 (Cth) - s 60
Judgment date: 4 May 1962
SYDNEY
Judgment by:
TAYLOR J
As appears from the case stated the plaintiff claims from the defendant, pursuant to s. 60 (1) of the Excise Act 1901-1952, the sum of PD2,274 9s. 2d., that being the amount equal to the amount of the excise duty which would have been payable in respect of forty cartons of manufactured tobacco which had been delivered to the defendant if they had been entered for home consumption on the day on which the plaintiff's demand for that sum was made. In fact, the goods in question were not in the possession or custody or under the control of the defendant when the demand was made. They had been stolen some little time previously from the "dead-house" on the wharf where they were stored whilst awaiting shipment to the manufacturer's bond store in Hobart. There is no question that the goods were excisable goods and that, at the time of the theft, they were, within the meaning of s. 61 of the Act, subject to the control of the Customs. Further it is common ground that the validity of the plaintiff's claim depends upon whether at that time the defendant had, or had been, "entrusted with the possession, custody or control" of the goods and, thereupon, whether, within the meaning of s. 60 (1), the defendant failed to keep the goods safely, or, whether, upon being requested by the plaintiff so to do, it did not account for them to the satisfaction of the Collector.
The goods were part of a consignment which had been removed from the Sydney factory of the manufacturer, pursuant to s. 56, and delivered by the latter to the defendant for carriage by its vessel to Hobart. They were so delivered and accepted by the defendant on 18th April 1957 and were placed by the defendant's servants or agents in what is called the "dead-house" on No. 4 wharf at West Circular Quay. The defendant's vessel, s.s. "Karuah", is said to have been allotted to this berth by the Maritime Services Board and the keys to the gate of the wharf and the key to the "dead-house" were handed to the defendant in order that it might avail itself of the use of the wharf facilities. In fact, the s.s. "Karuah" occupied the berth from 17th April 1957 to 23rd April 1957. Whether loading or unloading operations were proceeding when the goods in question were brought to the wharf and placed in the "dead-house" does not appear but it is clear that the defendant took delivery of the goods and placed them in the store which the Maritime Services Board had made available for its use and which, in fact, it used not only for the storage of goods subject to the control of the Customs but also for the safe-keeping of other goods which were thought to be particularly valuable or particularly susceptible to pillage.
Upon these facts there can be no question that the goods came into the possession of the defendant. But the key of the "dead-house" did not at all times remain in its possession. In accordance, it is said, "with the usual practice" this key was left in the Customs office on the wharf during meal breaks and from the cessation of work at the end of each working day until the commencement of work on the next working day. Nevertheless, a duplicate key of the Customs office was left on the wharf under the seal of the Customs in order that it might be available for use in case of emergency during the absence from the wharf of the Customs staff. The theft of the goods took place at sometime between midnight on Saturday 20th April 1957 and 5 a.m. on Sunday 21st April 1957 and during the whole of this period the key of the "dead-house" was in the possession of the Customs. It is upon this circumstance that the defendant founded the contention that during this period the goods were not in its possession or custody or under its control. Each time the key of the "dead-house" was placed in the Customs office, it is contended, the possession, custody and control of the goods passed from the defendant to the plaintiff and, presumably, on each occasion when the key was taken from the Customs office possession, custody and control was re-assumed by the defendant. The additional point is made, that according to the provisions of the Act, the goods were at all times "subject to the control of the Customs" and it is asserted that delivery of the key to the Customs office operated to transfer actual possession, custody and control. To my mind the solution of this problem-if there be one-is a question of fact rather than of law. No doubt the delivery of the key of a room or a shed may constitute constructive delivery of the goods which it contains. But such a result depends upon the accompanying intention of the parties and there is nothing in the admitted facts to suggest that the key of the "dead-house" was placed in the Customs office with any such intention. It is, I think, impossible to spell out from the facts that the defendant intended to relinquish, or that the plaintiff intended to assume, possession of all the goods in the "dead-house", free or otherwise, on each occasion when the key was deposited in the Customs office. We are not told anything about the origin or purpose of the so-called "usual practice" but there is nothing to suggest that the lodging of the key in the Customs office represented anything more than an additional precaution to ensure the safe custody of excisable goods whilst in the ship-owner's possession and during periods when work was not being carried on and, perhaps, when its staff were absent from the vicinity of the wharf. That being so, I am of opinion that the first question ought to be answered by saying that upon the facts appearing in the case stated the goods in question were in the possession, custody and control of the defendant at the time when they were stolen.
The next question is whether upon the facts stated the defendant failed to keep the goods safely or, having been requested by the Collector so to do, did not account for them to his satisfaction. A good deal of the argument on this aspect of the case turned upon the expression in s. 60 (1) (b)-"does not account for those goods to the satisfaction of the Collector"-and it was contended that if the defendant satisfied the Collector that the goods had been stolen this constituted an accounting for the goods. This, it seems to me, is equivalent to saying that the defendant fulfilled his obligation to account for the goods if, in effect, he established that, without any default on his part, the goods had ceased to be in his possession. No doubt, if he showed that he had parted with them in a manner authorized by the Act, as for example, by delivering them to the manufacturer's bond store in Hobart, this would be an accounting. Such an explanation would trace the goods from his possession to that of the manufacturer in accordance with the provisions of the Act. But merely to establish that he had lost the goods by theft at the hands of some unknown person is not to account for the goods; it is, merely, to account, for their disappearance. If it were otherwise then it seems plain that a person who has been entrusted with the possession of excisable goods might account for them by a recital of facts which showed that he had, within the meaning of s. 60 (1) (a), failed to keep them safely. What this expression means in the context of this clause is of prime importance and the defendant was at pains to establish that the obligation to keep goods safely is not, as it was said, absolute; the expression, it was asserted, connotes a failure on the part of the custodian to observe some unspecified standard of care with respect to their safety. Unless some such standard was predicated there could not, it was said, be a "failure". But as Jordan C.J. said in Ingram v Ingram: [F6] "the meaning of the word `fail' depends upon the context in which it is found. In some contexts it may mean simply the omission to do the thing in question, irrespectively of any reason which may have existed for his not doing it: Miedbrodt v Fitzsimons; [F7] R. v Southwark Borough Council; Ex parte Southwark Borough Market Trustees. [F8] In other cases it may mean an omission to do the thing by reason of some carelessness or delinquency on his part, but not omission caused by impossibility for which the person in question is not responsible: cf. Loates v Maple. [F9] In other cases, it may mean omission to do the thing, but so that omission caused by impossibility arising from some causes is included and from others is excluded". [F10] In the case of s. 60 (1), however, the obvious purpose and object of the provision makes it clear that the defendant's argument must be rejected. The provision is not designed to inflict a penalty upon a bailee for some breach of duty imposed by the bailment; it is a provision which is designed to ensure that the excise revenue shall not suffer if excisable goods, by some irregular means, find their way into home consumption. So much is clear from the provisions of the Act itself. Section 60 (1) is to be found in Pt VI of the Act and that part purports to relate to Payment of Duty, Removal of Excisable Goods from Factories, and Excise Control. By s. 54 the manufacturer of excisable goods, or, where the owner of excisable goods enters them for home consumption, the owner of the goods, is bound to pay the excise duty which is imposed by the Excise Tariff. The duty must paid before an entry for home consumption is passed (s. 59) and no excisable goods may be removed from a factory without an entry made and passed authorizing their removal (s. 56). But they may be removed pursuant to an entry for exportation or for removal to an approved place. However a manufacturer may become liable to pay excise duty in respect of goods which have never been entered by him for home consumption. This liability may arise under s. 62 if it appears, on taking stock of excisable goods manufactured by a manufacturer, that duty has not been paid on the full quantity of excisable goods on which duty ought to have been paid. In such a case the manufacturer is bound to pay to the Collector "the amount of the deficiency unless such deficiency is accounted for to the satisfaction of the Collector". But if excisable goods are moved from a factory to an approved place, as these were, can it be said that the excise duty may be recovered from the manufacturer if, whilst in the lawful possession of some person, they are stolen? Proof of the removal with the authority of the Customs and of the necessary transfer of possession would I think account for the deficiency within the meaning of s. 62. The expression "unless such deficiency is accounted for to the satisfaction of the Collector" is not without its difficulties but the manufacturer would, at least, fulfil the requirements of the section if he showed that with the approval of the Customs, he had relinquished possession of excisable goods to a carrier for removal to an approved place. In these circumstances it is I think proper to conclude that the obligation placed upon the carrier by s. 60 (1) is at least analogous to that initially resting upon the manufacturer. That is to say, that whilst he is in possession of the goods it is his responsibility alone to ensure that the goods do not irregularly find their way into home consumption. It is in this sense that he is bound to keep the goods safely and to account for them. That being so he may escape liability if he is still in possession of the goods or if he can account for them by showing that they did not pass into home consumption from his hands. That he may do by showing that he has parted with possession of them in some authorized manner or, I should think, by showing that the goods whilst in his possession have been destroyed. The agreed facts clearly show a failure on the part of the defendant to keep the goods safely in this sense and, that being so, the only other question which remains for consideration is that which arises upon s. 55 of the Constitution.
The foundation of this argument is to be found in the words of s. 60 (1) which, in the circumstances specified by the sub-section, purport, in terms, to create an obligation to pay, not the excise duty, but "an amount equal to the amount of the excise duty ... ". This, it is said, is a new impost and not the duty imposed by the Excise Tariff and, that being so, the amending Act by which the sub-section was introduced-Act No. 55 of 1952 - offended against s. 55 of the Constitution. It would, of course, be of no avail to the defendant to show that this Act offended only against the first paragraph of s. 55 and, accordingly, it was sought to invoke the provisions of the second paragraph. The tax, it was said, was not a duty of excise and the Act dealt with more than one subject of taxation. Alternatively, it was contended that, if the tax was properly to be regarded as a duty of excise, the amending Act did not deal with duties of excise only. There are fallacies in this argument but it is unnecessary to explore them. Section 60 (1) is not, in my view, a law which imposes taxation and the initial step in the defendant's argument is, at the most, only superficially attractive. What the sub-section is designed to secure is the collection of the duty imposed by the Excise Tariff and in order to achieve this it was necessary, for the purposes of the sub-section and in the absence of an entry for home consumption, that some provision should be made for ascertaining the value of the goods as at some specified date. This the section does by providing that what shall be paid shall be "an amount equal to the amount of the Excise duty which, in the opinion of the Collector, would have been payable on those goods if they had been entered for home consumption on the day on which the Collector made the demand". Of course, the same result might have been achieved simply by requiring payment of the amount of excise duty which, in the opinion of the Collector, would have been payable if the goods had been entered for home consumption upon some specified day. But the difference in terminology is, in my view, of no constitutional significance and the provision, as it stands, is a provision dealing with the collection of the charge imposed by the Excise Tariff.
For these reasons questions (a), (b) and (c) in the case stated should be answered in the affirmative. It is, I think, unnecessary to answer question (d).