Commonwealth v Sterling Nicholas Duty Free Pty Ltd

126 CLR 297

---

(Judgment by: WINDEYER J)

Between: COMMONWEALTH
And: STERLING NICHOLAS DUTY FREE PTY LTD

Court:

Judges: Barwick CJ
McTiernan J
Menzies J

Windeyer JOwen J

Subject References:
Trade and commerce
Customs
Prohibition of supply of goods within airport

Legislative References:
Airports (Business Concessions) Act 1959 (Cth) - s 7

Hearing date: SYDNEY 1 December 1971; 2 December 1971
Judgment date: 29 February 1972

MELBOURNE

---

Judgment by:
WINDEYER J

Goods are sold in duty free shops to buyers intending to export them either by sending them from Australia by ship or aircraft or by themselves taking them when they leave Australia by ship or aircraft. The goods must be entered with the Customs for export. They can be lawfully exported if a passed entry be obtained from the Collector. Until exported they remain in the control of the Customs according to the provisions of the Customs Act 1901-1968 (Cth) and can only be lawfully dealt with as the Act and the Customs authorities prescribe. As I understand the Customs laws, goods are not exported by sea until the ship clears its last Australian port and is on the high seas, or by air until the aircraft finally leaves Australian territorial limits and the superincumbent air. But in practice Customs control is considered to end when an aircraft with the goods aboard leaves the ground, and does not come to ground again in Australia before a passenger disembarks at some place abroad, taking with him the goods, or such of them as he has not consumed on the journey. To exercise effective control, in the interests of the revenue, Customs officers must therefore be in a position to see that goods for which an entry has been passed for export by air are in fact put aboard or taken aboard the designated aircraft.

The difficulty which arises in this case is that the Department of Civil Aviation, which controls the international air terminal at Mascot Airport, will not permit the plaintiff, the respondent before us, to deliver at the airport to departing passengers duty free goods for which export entries were duly passed. The airport authorities say that any such deliveries would be unlawful-or at least that they would not be permitted except in a part of the airport building to which the general public has access. As the Customs officers could not exercise supervision there to see that the goods were after delivery to the passenger actually taken aboard the aircraft, Customs will not permit delivery there of goods that remain in its control. I need not, I think, describe the physical arrangements at the airport terminal. Full details are given in the careful judgment now under appeal. The result of the attitudes that the Department of Civil Aviation and the Customs take is that the respondent cannot carry on the business of selling duty free goods at its shop to persons who will in fact take them with them when leaving Australia. The validity of this restriction of the respondent's trade depends upon whether the airport authorities can lawfully refuse to allow the respondent the same facilities as are allowed to another duty free shop of delivering goods in a place and in a manner acceptable to the Customs. The appellant, the Commonwealth, relies upon s. 7 (1) of the Airports (Business Concessions) Act 1959 (Cth) to justify preventing emissaries of the respondent from delivering at the airport goods bought in the respondent's shop.

This provision is as follows:

"7.(1)

Except in accordance with an authority granted under the next succeeding section and the terms and conditions of that authority, a person shall not, within an airport, either personally or by his servant or agent, or as the servant or agent of another person-

(a)

sell, for delivery within the airport, or supply, any goods or services;

(b)

carry on, or solicit for, any business; or

(c)

erect, display or distribute, or communicate by sound, any advertisement or public notice."

The reason why the Commonwealth asserts that the respondent's acts are unlawful is, it appears, that pursuant to s. 8 of the Act the Minister for Civil Aviation, on behalf of the Commonwealth, granted an authority to another company to conduct a duty free shop at the airport and to do there acts that would otherwise be forbidden by s. 7 (1). The company to which this franchise was granted was, it seems, promised that it would be an exclusive franchise. Therefore those in control of the airport wish to keep the servants of the respondent from delivering at the airport to departing passengers goods that are theirs. And the Customs, being in control of the goods, will not permit their delivery except at the airport, under supervision and at the last moment before the departure of the passengers. The airport authorities seek to invoke what is said to be a prohibition in s. 7 (1) of supplying any goods within the airport. The learned trial judge did not uphold this proposition. He made a declaration as follows: ^[F8]

"THIS COURT DOTH DECLARE that Sterling Nicholas Duty Free Pty Ltd is not prohibited by s. 7 of the Airports (Business Concessions) Act, 1959, from delivering at Sydney (Kingsford Smith) Airport to persons about to depart overseas by air, goods sold to those persons in its shop at Nos. 113-115 Oxford Street, Darlinghurst, the title to which goods vested in these persons prior to their delivery at the said Airport."

Much argument before his Honour and much argument before us revolved round the word "supply" and what is connoted by supplying goods. In my view this was to introduce an irrelevant consideration. Admittedly the extent of the prohibition in par. (a) of s. 7 (1) is debatable-clarity has been sacrificed to the brevity of a compendium. For my part, although others take a different view, I read this provision distributively or some would say reddendo singula singulis. As I read it, it states that "a person shall not ... sell any goods or supply any services". To read it as meaning a person shall not sell or supply any goods or sell or supply any services makes it I think worse than clumsy: it means that one has to decide what is meant by a sale of services. That in law is an unusual expression. When used it seems that it does not mean rendering services for reward but selling the services of one's servants so as to put them under the buyer's orders. But a prohibition against supplying services without authority at an airport is I think understandable. It connotes, I think, some undertaking regularly carried on, presumably for reward-such as providing porterage for passengers' baggage, booking accommodation for incoming travellers, arranging transport, or taking photographs. Merely helping someone with his suitcases would not, I think, be supplying a service, nor would driving him to or from the airport. As to goods, admittedly there is not the same difficulty with "sell or supply" as twins. But here "supply" stands alongside "sell for delivery". Presumably it does not mean deliver or "deliver" would have been used. In any event the prohibition must be read as it is written not distorted; and to my mind only by reading it distributively as I suggest can it be given a plain meaning. I therefore reject the proposition that we are here concerned with what is meant by supplying goods. However, as others do not see the case in this way, I shall make a few observations on the assumption that it is an offence to "supply any goods" within an airport. What then does supply there mean?

A good general definition of the word "supply" was given by Sugerman J. in Andaloro v Wyong Co-operative Dairy Society Ltd where his Honour said: ^[F9]

"'Supply', as applied to a commodity, commonly denotes the furnishing or providing of that commodity by one person who has it to, or for, another person who requires it; and it is usually evidenced by delivery by the one and acceptance by the other."

In common parlance a supplier of goods is ordinarily a person who owns them and who by delivery transfers the ownership to another either for reward or gratuitously. But I do not think that the concept must be narrowed, as the learned trial judge narrowed it, to a delivery of something the ownership of which has not already passed to a recipient. The word is, I think, of wider import. Property in a thing bought may have passed from seller to buyer, yet the supply of it is only completed by delivery. The concept of supply is not to be made dependent upon the distinction between goods bargained and sold and goods sold and delivered. Delivery is ordinarily an essential element in the supply of a thing. But that does not mean that anyone who delivers a thing to another is a supplier of it. A carrier who, as an independent contractor, carries goods from one person to another is not the supplier of them. And yet the sender of them has not supplied them until they are delivered.

In the context in which the word "supply" appears in s. 7 (1) it connotes, to my mind, some form of repetitive conduct. Doubtless a man who goes to see a friend off on an aircraft and at the airport furnishes him with a supply of reading matter, writing paper and cigarettes for the journey supplies him with goods. But I cannot think that by doing so he renders himself liable to a penalty of $200. The Act, as I read it, is directed to activities that are performed as incidents of a business. But by sending a servant to the airport to deliver goods there the respondent does not carry on business there. It carries on its business in Oxford Street. By delivering goods at the airport it completes a transaction of supplying them but it does not supply them "within an airport", for only the last incident of the transaction, delivery, was done there.

Therefore, I consider that the action of the respondent in sending goods that had been purchased in its shop to the airport for delivery there to departing passengers was not an offence under s. 7 (1). Of course, the airport is a Commonwealth place and the Commonwealth can control activities there. But I am unable to follow the reasoning by which the airport authorities seek to hamper the Customs and refuse to allow the respondent to effect deliveries of goods, that it is lawfully entitled to deliver, in conditions which will enable the Customs authorities to exercise due supervision.

The learned judge who heard the matter in the Supreme Court made two declarations. We do not, I think, have to consider whether the case was one in which a declaration was an appropriate form of relief. The Commonwealth is concerned to know what are its substantive rights and those of the respondent. It is not concerned in a purely adjectival and procedural question in the Supreme Court. Moreover, I think that it was open to the Supreme Court to entertain the suit for declarations. Injunctions might have been sought. Of the learned judge's two declarations the first should, I think, stand. In so far as it suggests that a condition of the right is that the property in the goods must have passed to the buyer before delivery it is I think needlessly restrictive; but not on that account invalid. The second declaration prescribes the manner of delivery in a way designed by his Honour to enable adequate Customs supervision. Such a declaration may be said to accord with the inherent power of a court of equity to mould the form of an injunction. But it appears to me to descend to too much detail in the conduct it prescribes. A procedure can be devised which will not prevent the respondent making deliveries at the airport of goods sold in its shop and which will not hamper Customs officers in carrying out their duty to protect the revenue. All that would be necessary would, it seems, be to allow the respondent similar facilities to those now allowed to its competitor. I would hope this could be left to the good sense of the two Departments concerned, not laid down by detailed dictation from the Court.

I would therefore dismiss the appeal with costs, confirm the first declaration of the Supreme Court and discharge the second declaration as unnecessary.