Chandler & Co v Collector of Customs

Chandler & Co. appealed to the High Court of Australia against a decision of the Supreme Court of Victoria concerning the classification of imported pictures for customs duty purposes. The dispute centred on whether these pictures, printed on paper by mechanical processes and used for advertising, were subject to duty under Item 122 of the Customs Tariff 1902, or exempt under special exemption (k).

The legal issues before the High Court were whether the imported pictures, described as chromographs and photogravures, constituted "pictures (not being advertising)" within the meaning of exemption (k), or if they were dutiable as "manufactures of paper, unframed, for advertising purposes" under Item 122. The court was required to determine the correct interpretation of these tariff provisions, particularly the phrases "not being advertising" and "for advertising purposes," and how the intended or actual use of the goods should be considered in their classification.

A majority of the High Court, comprising O'Connor, Isaacs, and Higgins JJ., held that where goods are made liable to customs duty based on their purpose, the principal or predominant use of those goods determines their classification. Applying this principle, they found that the pictures, despite being visually appealing, were primarily used for advertising purposes, with advertisements often printed on their margins or mounts. Consequently, they were considered to fall within Item 122 and were not covered by exemption (k). Griffith C.J. and Barton J. dissented, arguing that for goods to be classified as "for advertising purposes," there must be an inherent quality in the goods themselves that demonstrates their special fitness for that purpose, rather than relying on their potential or predominant use. They also interpreted "pictures (not being advertising)" to mean pictures that do not advertise in their imported state. The judgment of Hodges J. in the Supreme Court was affirmed.