Wing On v Collector of Customs (NSW)
(1938) 60 CLR 97(Judgment by: DIXON J)
Wing On v Collector of Customs (NSW)
Court:
Judges:
Latham CJ
Rich J
Dixon J
Subject References:
Taxation and revenue
Customs duty
Liability of purchaser
Whether restraint reasonable
Legislative References:
Customs Act 1901 - Section 4,; Section 33.
Judgment date: 22 April 1938
Sydney and Melbourne (6 June 1937)
Judgment by:
DIXON J
The evidence shows that when in June and August 1934 and March 1935 the s.s. Marella, trading from Singapore to Australian ports, called at Sydney the defendant company became possessed of parcels of smuggled cigarette papers. Admissions made by the managing director of the company, by name Gock Chew, showed that they had been brought in by someone aboard the Marella and paid for by the company on delivery. The goods were not upon the ships' manifest. Gock Chew said that he bought all the cigarette papers from a Chinese member of the ship's crew, named Jang Sang. He said also that, after buying goods on 2nd October 1934, he became frightened to do business that way and told one, Cecil Gock, who was secretary of the company, that if he liked to carry on business that way he, Gock Chew, would not do so. The date shows that a fourth transaction must have taken place, and the observation coupled with the facts of the case, particularly the payment of a substantial sum in cash for each delivery, indicates that a course of business existed. The smuggled cigarette papers were quickly sold by the defendant company, and customs duty upon them has never been paid. In the judgment under appeal, Starke J. has held that it must be paid by the defendant company.
In support of the company's appeal from that decision, it is contended that the dealings with the goods exposed the company to no civil liability to the Crown for the duty; at worst, it rendered itself liable for a penalty for having smuggled goods in its possession, an offence for which it has been convicted in respect of each of the three transactions. Section 153 of the Customs Act 1901-1935 provides that all duties shall constitute Crown debts charged upon the goods in respect of which the same are payable and payable by the owner of the goods and recoverable at any time in any court of competent jurisdiction by proceedings in the name of the collector. Unfortunately the provision does not say at what time "ownership" must exist to bring about liability. Consistently with the terms of the provision, the "owner" in the statutory sense who is to pay may be the "owner" at the time of the importation, or the owner for the time being, or each successive owner from and at the time of importation until the duty is paid or the goods are entered for home consumption. "Owner" is defined by s. 4 to include "any person (other than an officer of customs) being or holding himself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods."
The appeal was argued as if its determination required us to decide as a general proposition whether a liability to pay customs duty falls upon a person who, having no part in the introduction into Australia of the goods, obtains property or possession by a transaction either with the smuggler or someone claiming under him taking place after the smuggling is complete.
Further, the argument appeared to involve the view that if such a person was liable for the duty, it could make no difference that he was a bona fide purchaser for value, so long as the goods remained in point of law subject to, that is, liable to, the control of the customs, because they had not been entered for home consumption.
I think that the facts I have stated raise a narrower question. It is evident that some connection existed between the defendant company and the importation of the goods. It is not possible to say exactly what the relation was. The defendant may have given a specific order for the goods, or it may be that the company had done no more than raise a reasonable expectation that if such goods were brought to them, having escaped duty, then they would buy them. But it is sufficiently plain that under some understanding the goods were brought to the defendant company uncustomed and that they were at once resold, all with the intention of defeating the revenue. The duties in respect of the goods so dealt with are declared by s. 153 to be Crown debts charged upon the goods in respect of which the same are payable. The goods were still legally subject to the control of the customs, that is, liable in law to the exercise of physical control by the officers of the revenue and to be dealt with so as to insure payment of the duty. The goods were the subject of forfeiture and sale, and, in the event of any sale by the collector, the proceeds would have been applied in payment of the duty. When s. 153 charges the duty upon the goods, it means, I think, to impose a specific charge upon the goods which shall bind all persons taking them, at all events unless they are bona-fide purchasers for value.
In the present case the defendant company acted with the intention of defeating the charge and realized the goods and pocketed the proceeds, except as to forty-one packets seized by the customs. Without entering upon any wider question as to the meaning and extent of the application of the provision that the duty shall be payable by the owner, it appears to me that it at least means that, after the charge has attached, every person whose title to the goods is subject to the charge shall be liable to pay the debt and cannot defeat the liability by selling the goods and applying the proceeds to his own use.
For these reasons I think the appeal should be dismissed.