Alexander Stewart and Sons Limited v Robinson

Alexander Stewart & Sons Limited (the plaintiff) brought an action against Henry Macnamara Robinson, the Acting Collector of Customs at Brisbane (the defendant), seeking a refund of £66 6s. 8d. for alleged overpayment of customs duty. The dispute arose from the plaintiff's importation of lace from France, where the genuine invoice stated the value of the goods as 8301.25 French francs. The plaintiff contended that the equivalent value in British currency for customs duty purposes should have been calculated using the commercial rate of exchange between Australia and France at the date of export, while the defendant argued for the mintage par rate of exchange. The parties agreed to state a special case for the opinion of the High Court of Australia.

The central legal issue before the High Court was the interpretation of section 157 of the *Customs Act 1901-1916*. Specifically, the Court was required to determine what constituted a "fair rate of exchange" for converting a foreign currency value shown on an invoice into British currency for the purpose of assessing ad valorem customs duties. The Court had to decide whether this meant the commercial rate of exchange, reflecting the actual cost to an importer to acquire foreign currency, or the mintage par rate of exchange, based on the intrinsic metallic value of the currencies.

A majority of the High Court, comprising Knox C.J., Isaacs, Rich, and Starke JJ., held that the "fair rate of exchange" referred to in section 157 is the commercial rate of exchange between Australia and the country of export at the date of export. The Court reasoned that the purpose of the section is to ascertain what the goods actually cost the importer in British currency, which is achieved by determining the sum in Australian pounds that would be required to purchase a draft for the invoiced amount in the foreign currency. This commercial rate reflects the practical cost to the importer and is the rate at which money can be provided for payment in the foreign country. The Court rejected the defendant's contention that the mintage par rate of exchange should apply, finding it to be an outdated and impractical measure that did not reflect the real commercial cost of acquiring foreign currency.

The Court ordered that the equivalent value of the goods in British currency for customs duty purposes was to be ascertained at the rate of exchange that actually obtained between Australia and France at the date of export. Consequently, the defendant was ordered to pay the costs of the case and the action. Gavan Duffy J. dissented, finding that the section intended a comparison of intrinsic values of coinages rather than the commercial rate of exchange.