Collector of Customs (NSW) v Southern Shipping Co Ltd
107 CLR 279(Judgment by: MENZIES J)
Between: COLLECTOR OF CUSTOMS (NSW)
And: SOUTHERN SHIPPING CO LTD
Judges:
Dixon CJ
McTiernan J
Kitto J
Taylor J
Menzies JWindeyer 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:
MENZIES J
Case stated pursuant to s. 18 of the Judiciary Act 1903-1960. Before turning to the case which McTiernan J. stated upon the trial of this action wherein the plaintiff, as Collector of Customs for the State of New South Wales, on behalf of the Commonwealth of Australia seeks to recover the sum of PD2,274 9s. 2d. pursuant to s. 60 of the Excise Act 1901-1952, it is desirable to say something of a general nature about the scheme of the Commonwealth Excise Act.
The main purpose of the Act is to ensure the payment of duty upon excisable goods as they go into home consumption and, to achieve this, excisable goods are subjected to Customs control from the point of manufacture until either they are delivered for home consumption or they are exported to parts beyond the seas (ss. 54-57 and 61). Excisable goods not exported go normally into home consumption, and before an entry for home consumption is passed to release the goods from Customs control, duty must be paid (s. 59). This is the principal way of collecting excise duties. Excisable goods, however, may disappear between manufacture and either exportation or entry for home consumption; accordingly, conformably with the main purpose of the Act, duty may, under special provisions to meet any such contingency, be exacted in any case where the Collector is not satisfied that the missing goods have not gone outside Customs control into home consumption. This is, as it seems to me, the general effect of ss. 60 and 62, but for the purpose of this case it is necessary to look more closely at s. 60.
This section took the place of s. 60 of the Excise Act 1901-1949 and reg. 188 which had been held invalid in Morton v Union Steamship Co of New Zealand Ltd. [F11] The earlier s. 60 was complementary to s. 58 (b) and (c)-which provided for entries authorizing the removal of goods to an approved place or for exportation-and required the manufacturer of the goods to give security before the passing of any such entry. Regulation 188 (1) was as follows: "Every person who has the control or custody of excisable goods, while such goods are in course of removal, or are in transit coastwise, or are in or at an approved place, or until delivery for home consumption or exportation to parts beyond the seas, shall be responsible for the safe keeping of such goods while they are in his control or custody, and shall account for such goods to the satisfaction of the Collector." Section 60 (1), as it now stands, is as follows: "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 in writing made by the Collector, 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."
Comparing the existing provision with those which it replaced, it is to be observed that the former liability of the manufacturer to give particular security has disappeared and the obligation to pay to the Commonwealth falls in either of the cases mentioned upon the person who either has, or has been, entrusted with the possession, custody or control of the goods. In this setting it is hardly likely that the words "keep ... safely" refer to protecting the goods from damage or destruction or anything of that nature; for the safety with which the section is concerned is that the goods-subject as they are to the control of Customs-do not get out of Customs control into home consumption without the payment of duty; similarly, the account of the goods that is required is an account which shows an authorized relinquishment of possession, custody and control or, despite an unauthorized loss of possession, custody and control, that the goods have not got into home consumption without the payment of duty or that, notwithstanding the failure to keep the goods safely, Customs control over them is still effective. It follows that excisable goods which have been stolen from a local store cannot be said to have been "kept ... safely" and that it could not be a satisfactory account of the missing goods to say merely that they have been stolen, or even that they have been stolen notwithstanding that the person whose duty it was to keep them safely had taken reasonable care to protect them from theft. The words "fails to keep ... safely" do not require any fault on the part of the person concerned beyond proof that the goods have not been kept safely in the sense indicated. In many cases the failure to keep the goods safely will inevitably mean that no satisfactory account for them can be given but, notwithstanding this, I do not regard pars. (a) and (b) of s. 60 (1) as necessarily cumulative provisions. They are expressed as alternatives and goods which might in fact have been kept safely enough may nevertheless not be accounted for satisfactorily merely because the person with, or entrusted with, possession, custody or control simply refuses to account for them at all. Of course it hardly needs to be said that if the goods have not been kept safely but an account for them is given to the satisfaction of the Collector, that would end the matter, for in such a case there would not be any demand by the Collector.
Turning now to the case stated, it appears that possession, custody and control of 295 cartons of tobacco had been entrusted, by the manufacturer to the defendant by the delivery of the tobacco to it at No. 4 wharf, Circular Quay, Sydney, where the defendant's ship, s.s. "Karuah", was berthed, for shipment thereon to Wills Sales Bond, Hobart, in accordance with Customs authority which had been obtained. The defendant, with the approval of the Customs, stored the tobacco in what is called "the dead house" adjoining the wharf. When the defendant obtained the berth at No. 4 wharf from the Maritime Services Board of New South Wales, it received the gate keys and the key of the dead house, and it was the usual practice whenever work ceased for the key of the dead house to be deposited in the Customs office at Nos. 4 and 5 wharves. On 18th April 1957 the key of the dead house was so deposited by the defendant's watchman and it was while that key was in the Customs office that thieves broke into the dead house and stole 40 cartons of tobacco which have not been recovered and upon which duty, had the tobacco been entered for home consumption, would have been PD2,274 9s. 2d. that is, the amount the Collector claims from the defendant in the action.
These facts seem to me to establish that the possession, custody and control of the goods which were stolen had been entrusted to the defendant, and that possession, custody and control remained with the defendant up to the time of the theft, notwithstanding the deposit of the key of the dead house with the Customs. It seems that this latter conclusion is not necessary to establish the defendant's liability but, since the matter has been argued, I would say that I am not prepared to treat the deposit of the key as effecting a transfer of possession, custody or control of the tobacco from the defendant to the Customs. To do so would be quite unrealistic, especially as the defendant could always obtain for its use the key of the dead house by using a key of the Customs office which was available to it. There is nothing to show that the deposit of the key of the dead house, as often as it happened, was intended to affect the defendant's rights or obligations as the person to whom possession, custody and control of the goods had been entrusted; or that, there being Customs control of the goods wherever the key was, Customs while the key was deposited in the Customs office took over possession, custody and control of the goods in the sense in which those words are used in s. 60.
Accordingly, upon the construction of s. 60 (1) which I have adopted, the defendant both having, and having been entrusted with, the possession, custody and control of 295 cartons of tobacco, failed to keep safely, in the sense of s. 60 (1), 40 of those cartons and, when called upon by the Collector to account for them, did not do so in any manner that could be regarded as satisfactory. I consider, therefore, that upon the provisions of the Excise Act as they stand, questions I (a) (b) (c) and (d) and II should be answered affirmatively, but this does not conclude the matter for, after the case had been stated asking questions I and II, the defendant obtained an order adding a further question, III-"Whether the said s. 60 is invalid on the ground that it is beyond the powers of the Parliament of the Commonwealth and/or contrary to the provisions of s. 55 of the Commonwealth Constitution." It is to this question that I now turn. To consider the question it is necessary to go back to the Excise Act 1952, which brought s. 60 into the excise legislation. It comprises four sections: the last, with which we are particularly concerned, repeals ss. 59 and 60 of the Excise Act 1901-1949 and inserts the present ss. 59 and 60 in their stead. Section 1 merely deals with the title and citation of the Act and the Excise Act as amended; and s. 2 substitutes for earlier sections two machinery sections which deal with duties of excise but do not impose taxation. Section 3, which repeals s. 54 of the Excise Act 1901-1949 and inserts the present s. 54 in its stead, according to the accepted view, does not impose taxation. Section 54 is as follows: "The manufacturer of excisable goods, or, where the owner of excisable goods enters them for home consumption, the owner of the goods, shall pay to the Collector, in accordance with this Act, the excise duty on those goods." If, therefore, s. 60 imposes taxation but the other provisions brought into the Act by the Excise Act 1952 deal with something other than the imposition of taxation, the effect of the first provision in s. 55 of the Constitution-"Laws imposing taxation shall deal only with the imposition of taxation, and any provision therein dealing with any other matter shall be of no effect"-would render those other provisions of no effect but would leave s. 60 standing. At the other end of the scale, if s. 60 does not impose taxation, then s. 55 of the Constitution, which has no application except in relation to laws that impose taxation, cannot in any way affect the validity of the Excise Act 1952 or any part of it. The only intermediate position which I can see would be to treat s. 60 as imposing taxation (not duties of excise) and some of the other provisions in the Excise Act 1952 as dealing with the imposition of taxation (duties of excise) so that, notwithstanding the application of the first part of s. 55 to so much of the Act as does not deal with the imposition of taxation, there would be room left for the operation of so much of the second part of s. 55 as provides that a law imposing taxation shall deal with one matter of taxation only with the resulting invalidity of the whole of the Excise Act 1952 because it would impose one tax and deal with another matter of taxation.
I have, however, reached the conclusion that if s. 60 does impose taxation, the tax that it imposes is a duty of excise. I am disposed to think, in keeping with what I have called "the accepted view" that treats a law such as s. 54 as not imposing taxation, that s. 60 is a law of the same character because its operation depends upon the Excise Tariff defining excisable goods and imposing the duties to be paid thereon. It is, moreover, as has already been pointed out, an ancillary provision. If, however, s. 60 should be regarded as itself imposing taxation, I think that the taxation which it imposes is an excise duty and that it is of no importance that what is payable thereunder is therein described as "an amount equal to the amount of the excise duty which, in the opinion of the Collector, would have been payable" in a particular hypothetical case. Assuming that s. 60 itself imposes taxation and taking one illustration of its operation, what is payable is an amount calculated by reference to the value of excisable goods subject to Customs control and not accounted for by a person to whom possession, custody or control of the goods had been entrusted upon the authority of the Customs. What is payable by reason of such a provision, if it imposes taxation, seems to me to fall well within the conception of a duty of excise. However the matter be looked at, therefore, I do not think that s. 55 of the Constitution invalidates s. 60. Consequently, the third question in the case stated should be answered No.