Collector of Customs (NSW) v Southern Shipping Co Ltd
107 CLR 279(Judgment by: DIXON CJ)
Between: COLLECTOR OF CUSTOMS (NSW)
And: SOUTHERN SHIPPING CO LTD
Judges:
Dixon CJMcTiernan J
Kitto J
Taylor J
Menzies 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:
DIXON CJ
Section 60 of the Excise Act 1901-1952 (Cth) was placed in that Act in its present form by s. 4 of Act No. 55 of 1952. This was done in consequence of the decision of this Court in Morton v Union Steamship Co of New Zealand Ltd [F1] in which reg. 188 of the Excise Regulations was held beyond the power to make regulations conferred by the Act. Section 60 resembles the regulation in many ways but not sufficiently to make it proper to construe the section by means of the regulation. But the case involves both the meaning of the section and its validity. The facts of the case are perhaps simple enough. Some excisable goods upon which excise had not been paid-cartons of tobacco-were to be shipped from Sydney to Hobart. The defendant's ship was to carry them. She lay at No. 4 wharf, Circular Quay, on which was a store: the wharf and the store were owned by the Maritime Services Board but the wharf was appointed for the purpose of the Customs and no doubt the store was provided by the Board accordingly for the protection of the goods. The consignor (who was the manufacturer) had made an entry of the excisable tobacco for removal to an approved place in Hobart (see s. 58 and reg. 204) and a dispatch note which were duly stamped and the goods released accordingly (see s. 57). But as excise duty remained unpaid and the goods had not been entered for home consumption they were "subject to the control of the Customs". They were delivered to the defendant at the wharf for shipment but pending being placed aboard ship were put in the store. It was Easter 1957 and the store was locked over Good Friday and the Saturday. At some time before 5 a.m. on the Sunday the store was broken into by thieves and forty cartons of tobacco were stolen. The Collector says that the defendant had been entrusted with the goods and at the time of the theft they were in the defendant's possession, custody or control and that under s. 60 (1) the defendant must pay the equivalent of the excise, an amount of PD2,274. The defendant denies that the conditions provided by s. 60 were fulfilled and begins by asserting that it had neither possession, custody nor control and it was not then "entrusted with the goods". One fact upon which the company relies in support of this contention is that, in accordance with usage, if not of the imperative requirements of the Customs, the keys of the store after it had been locked on Thursday night had been lodged in the Customs office. The Customs office itself was locked up overnight and the keys of the store were not available to the defendant. At some place on the wharf there is kept under seal a key of the Customs office in case of emergencies but except by breaking the seal and using this key, the defendant could not gain access to the keys of the store. Section 60 (1) provides that where a person who has, or has been entrusted with, the possession, custody or control of excisable goods which are subject to the control of the Customs (a) fails to keep those goods safely; or (b) when so requested by a Collector, does not account for those goods to the satisfaction of the Collector, that person shall, on demand ... pay to the Commonwealth 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. It seems clear enough that when the consignors delivered the goods to the defendant as a carrier by sea, for doubtless they were "received for shipment" by the defendant as a carrier at the wharf, the possession was entrusted to the defendant. It may be that if, for however brief a period, the defendant lawfully surrendered, or divested itself of the possession, custody or control of the goods, that would mean that the defendant's responsibility under s. 60 was terminated or suspended. Did placing the keys in the Customs office, at all events when it was locked up, work such a suspension or termination? The answer must be that it did not. It meant no more than that for safe keeping the key was placed in the Customs office, not that the Customs were thereby placed in possession of the goods in lieu of the defendant. Then did the defendant "fail to keep the goods safely" within the meaning of par. (a) of the sub-section? That depends on the interpretation of par. (a). "Safely" seems to mean safe from loss or destruction: for the subject is excise duty, not the condition of the goods. The provision is pointed at the loss of goods involving the loss of excise duty. The time of payment of excise duty is at or before entry for home consumption. The hypothesis is that by the loss of the goods duty has been escaped. There must be some doubt whether the destruction of the goods was also contemplated but upon the words of the section destruction is certainly covered. It is said, however, for the defendant that "fail" involves some want of care, some neglect or default. Considering the object of the provision and the place it takes, this ground must "fail". It means to place on the person having possession, custody or control an absolute duty. Having regard to the place of the section it may be that the manufacturer is not included within the section but clearly other persons who are entrusted with the goods, as, for example, under s. 58 (b) or (c), fall within s. 60 and incur what may be called an absolute duty to keep the goods safe from loss or destruction. Perhaps the word "absolute" is too strong for it may be conceded that it is possible to except inevitable casualty-what once was called "Act of God". Paragraph (b) presents difficulties as an alternative but it would seem that it is pointed at cases where it cannot be shown that the goods were lost or destroyed but at the same time they are not produced and their whereabouts is not disclosed. Oddly enough, in the present case the Collector took the view that the goods had not been accounted for to his satisfaction although it seems clear enough that he accepted the statement that they had been stolen in the manner described.
However, this does not matter because the defendant incurred a liability under s. 60 (1) (a). It incurred the liability subject to the question whether s. 60 is a valid enactment. It is contended for the defendant that s. 60 is invalidated by s. 55 of the Constitution. It is argued that it is a law imposing taxation. As it was enacted by No. 55 of 1952 that would mean under the first limb of s. 55 that the other provisions of that Act, not the provisions of the Excise Act 1901, would be "of no effect". That, of course, would not relieve those liable to the supposed tax under s. 60. But the argument goes on to maintain that s. 60 is invalidated by the second limb of s. 55 of the Constitution. It is said that being a law imposing taxation it must deal with one subject of taxation only, unless it is a law imposing a duty of excise or a law imposing a duty of customs. Naturally, customs is put on one side. The denial of its being a law imposing duties of excise rests upon the view that s. 60 does not impose a pecuniary liability on the goods, whether in respect of production, manufacture or distribution. It is said its very hypothesis is that the goods have disappeared. The impost cannot enter into the price; it cannot be an indirect tax; it is levied because the goods have not been kept safely or cannot be accounted for. Therefore it is not an excise. Yet, it is said, it is a tax. Being a tax it is nevertheless imposed in respect of more than one subject of taxation, that is to say, every variety of goods lost or destroyed or disappearing which falls within the Excise Act. These varieties or descriptions of goods are, so it is contended, different subjects of taxation within the very hypothesis of s. 55 which excepts duties of excise and of customs from the prohibition that laws imposing taxation should deal with one subject of taxation only. That is the argument.
But is s. 60 a law imposing taxation? It certainly imposes a liability to pay an amount estimated to be equal to the amount of some particular excise duty. Sub-section (2) of s. 60 says it is to be a debt due to the Commonwealth and may be sued for and recovered in a court of competent jurisdiction by proceedings in the name of the Collector. Sub-section (4), however, says that the section does not affect the liability of a person arising "under or by virtue of any other provision of this Act or of a security given under the Act". Probably this does not mean that when a payment has been made under s. 60 to the Collector by a person held responsible under that provision for failing to keep the goods safely or to account for them, excise may be recovered from somebody else. All it does is to make the liability under s. 60 collateral and not substitutional for the liability which may have been incurred under other provisions. But on a complete view of s. 60 it seems rather to be a provision for the protection of the revenue, not a primary imposition of taxation. The distinction between a sum of money which can be made recoverable as protection to the revenue and the actual imposition of tax may appear a fine one, but as Moore v The Commonwealth [F2] shows, it is a critical one for the purpose of s. 55 although probably not for any other purpose. Under s. 51 (ii.) of the Constitution the power with respect to taxation extends to enable legislation to be passed for the protection of the revenue that arises from the tax imposed. It is immaterial whether this act is ascribed to s. 51 (xxxix.) or, as is perhaps preferable, is regarded as necessarily involved in the subject matter of the power itself. It must be remembered that the conditions prescribed by s. 60 (1) involved factors which go to safekeeping and to possession, custody and control, and perhaps the movement of the goods from the manufacturer. It is not based on primary notions of liability to tax. It is a secondary liability and is based on the hypothesis that the tax is escaped. It is indeed an ancillary measure and not itself a tax.
It follows that the questions in the case stated should be answered: I (a), (b) and (c) Yes. I (d) unnecessary to answer. II Yes. III No.