Goben Pty Ltd v The Chief Executive Officer of Customs
[1997] FCA 228
•9 Apr 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 669 of 1996
)
GENERAL DIVISION )
ON APPEAL FROM JUDGMENTS OF SINGLE JUDGES
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: GOBEN PTY LIMITED
AppellantANDTHE CHIEF EXECUTIVE OFFICER OF CUSTOMS
First respondent
THE CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO) NEW SOUTH WALES
Second respondent
CORAM:BEAUMONT, HILL AND LEHANE JJ.
PLACE:SYDNEY
DATE:9 APRIL 1997
CORRIGENDA
Order 2 of the Minutes of Order should read:
"The appellant pay the first and second respondents’ costs of the appeal and the proceedings before Beazley J.";
Order 4 of the Minutes of Order should read:
"The appellant pay the first and second respondents’ costs of the appeal and the proceedings before Davies J.";
The following Order should be inserted immediately after Order 4:
"5.There shall be no order as to the costs of the New South Wales Attorney-General as intervener."; and
The words “second respondent” should be deleted from the last sentence on page 9 of Hill J.’s Reasons for Judgment and substituted with the words:
"New South Wales Attorney-General”.
CATCHWORDS
CONSTITUTIONAL LAW - alleged inconsistency between State law authorising seizure of tobacco pending hearing of proceedings for offences under that Act and provisions of Customs Act that Customs have control of goods from time of importation until delivered into home consumption - no inconsistency in circumstances of the case.
Constitutional law - inconsistency and consistency of Commonwealth and State laws - statutory construction of State legislation - parallel and concurrent operation of State and Federal statutes - administrative co-operation between the Commonwealth and the States - State revenue raising powers - seizure of goods under the Business Franchise Licences (Tobacco) Act 1987 (NSW) - meaning of “subject to Customs control” - meaning of “taken and kept in custody by the Chief Commissioner - reference to the Federal context when interpreting a statute.
The Constitution - Section 109
Business Franchise Licences (Tobacco) Act 1987 (NSW) - Sections 5, 33 and 58-62
Customs Act 1901 (Cth.) - Sections 4(1), 30, 31, 33, 71E, 81B and 153
Jacobsen v Rogers (1995) 182 CLR 572
Victoria v The Commonwealth (1937) 58 CLR 618
The King v Sutton (1908) 5 CLR 789
CIC Insurance Limited v Bankstown Football Club Limited 141 ALR 618
The State of Western Australia v The Commonwealth (“the native Title case”) (1995) 183 CLR 373
R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1077) 137 CLR 545
Kitano v The Commonwealth of Australia (1973) 129 CLR 151
R v Lyon (1906) 3 CLR 770
Botany Fork & Crane Hire Pty Limited v New Zealand Insurance Company Limited (1993) 44 FCR 27
GOBEN PTY LIMITED v THE CHIEF EXECUTIVE OFFICER OF CUSTOMS & ANOR
NO. NG 669 of 1996
Coram: Beaumont, Hill and Lehane JJ.
Place: Sydney
Date: 9 April 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 669 of 1996
)
GENERAL DIVISION )
ON APPEAL FROM JUDGMENTS OF SINGLE JUDGES
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: GOBEN PTY LIMITED
AppellantANDTHE CHIEF EXECUTIVE OFFICER OF CUSTOMS
First respondent
THE CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO) NEW SOUTH WALES
Second respondent
CORAM:BEAUMONT, HILL AND LEHANE JJ.
PLACE:SYDNEY
DATE:9 APRIL 1997
MINUTES OF ORDERS
THE COURT ORDERS THAT:
That the order of Beazley J made in response to the question:
"Is [s.]58 of the [Tobacco] Act invalid by virtue of the [C]onstitution in its application to goods which [ss.]30, 33 and/or 153 of the Customs Act apply by reason of the inconsistency of those provisions?"
be set aside and substituted with the following:
"In the events which have happened there was no inconsistency within the meaning of s109 of the Constitution between s58 of the Business Franchise Licenses (Tobacco) Act 1987 and any of sections 30, 33 and/or 153 of the Customs Act 1901 (Cth)."
The appellant pay the respondent's costs of the appeal and the proceedings before Beazley J.
The appeal from the judgment of Davies J be dismissed.
The appellant pay the respondent's costs of the appeal and the proceedings before Davies J.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 669 of 1996
)
GENERAL DIVISION )
ON APPEAL FROM JUDGMENTS OF SINGLE JUDGES
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN: GOBEN PTY LIMITED
AppellantANDTHE CHIEF EXECUTIVE OFFICER OF CUSTOMS
First respondent
THE CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO) NEW SOUTH WALES
Second respondent
CORAM:BEAUMONT, HILL AND LEHANE JJ.
PLACE:SYDNEY
DATE:9 APRIL 1997
REASONS FOR JUDGMENT
BEAUMONT J:
INTRODUCTION
By its application dated 27 October 1995 the appellant, Goben Pty Limited, applied to this Court under s.39B of the Judiciary Act 1903 for: (1) an order of mandamus compelling the first respondent, the Chief Executive Officer of Customs, to approve the appellant’s request for permission to move certain tobacco under the first respondent’s control; (2) (alternatively) for an order restraining the first respondent from refusing the request; and (3) (further or alternatively) for an order declaring that the appellant was the beneficial owner of the tobacco.
By its amended statement of claim dated 23 May 1996, the appellant alleged, inter alia, that:
It carried on business as a tobacco wholesaler.
On 11 October 1995, it agreed to buy 38 cartons of tobacco products from a New Zealand corporation.
On 12 October 1995, the tobacco products were delivered by air and road transport to the premises of its bailee, J.A.S. International (Aust.) Pty Limited (“J.A.S.”) (“the appellant’s bond store”), a warehouse to which a licence granted under Part V of the Customs Act 1901 related.
On 19 October 1995, the agent of the second respondent, the Chief Commissioner for Business Franchise Licences (Tobacco) New South Wales, attended at the appellant’s bond store and informed J.A.S. that the second respondent was taking the tobacco products into his custody under s.58 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) (“the Tobacco Act”).
(By s.58(1) of the Tobacco Act, any tobacco in a quantity that exceeds the prescribed quantity, which the Chief Commissioner reasonably believes is evidence of an offence by any person, may be taken and kept in custody by the Chief Commissioner until proceedings for any such offence have been heard and dealt with.)
The tobacco products remained in the appellant’s bond store.
In the premises, the tobacco products were not taken and kept in custody by the second respondent within the meaning of s.58 of the Tobacco Act.
Thereafter on 19 October 1995, the second respondent, by his agent, claiming to be the “owner” of the tobacco products, applied to the Australian Customs Service (hereafter “Customs”) under s.71E of the Customs Act for permission to move the tobacco products from the appellant’s bond store to another licensed warehouse (“the second respondent’s bond store”).
(By s.71E(1) and (2) of the Customs Act, it is relevantly provided that where, as here, goods are “subject to Customs control” (conferred by virtue of provisions of the Customs Act to be mentioned later), an application may be made to Customs by their “owner” for permission to move them. By s.71E(3), an officer of Customs must, by notice in writing, either give permission (absolutely or subject to conditions) or refuse the application.)
(By s.4(1), it is provided that, except where otherwise clearly intended, “Owner” in respect of goods includes any person (other than an officer of Customs) being or holding himself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over, the goods.)
In fact, the appellant, and not the second respondent, was the “owner” of the goods.
Thereafter on 19 October 1995, the first respondent granted the permission sought by the second respondent, knowing (i) that the tobacco products remained at the appellant’s bond store under the control of the appellant’s bailee; (ii) that the appellant was their owner; and (iii) that they “could not lawfully be sold in New South Wales prior to Customs duty being paid and the goods being entered for home consumption”.
(Although not then mentioned in the appellant’s pleading, reference should be made here to the material provisions of s.30 of the Customs Act as they applied to these goods. By s.30(1)(a) (i) and (ii), it is provided that unshipped goods shall be “subject to the control” of Customs from the time of their importation (i) until there has been compliance with a Collector’s permit for their unshipment; and (ii) until they are delivered into home consumption in accordance with (a) an authority to deal under s.71B; or (b) with a permission under s.162A granted on the giving of security or an undertaking for the payment of duty.)
The first respondent’s decision to grant the second respondent’s application under s.71E (“the first decision”) was bad in law because (a) the second respondent was not the “owner”; and (b) the first respondent exercised the power under s.71E(3) improperly and denied the appellant natural justice; and (c) the first respondent “failed to apprehend that s.58 of the [Tobacco Act] is invalid as it is inconsistent with ss.30, 33, 71E and 153 of the Customs Act”. (Emphasis added - this constitutional issue of the inconsistency of Commonwealth and State legislation is the central question in the appeal.)
(By s.33(1) of the Customs Act, it is provided that, except as authorised by that Act, a person shall not move, alter or interfere with goods that are subject to the control of the Customs. The penalty is $50,000.
By s.153, all duties shall constitute Crown debts, charged upon the goods and payable by their owner.)
On or about 19 October 1995, pursuant to the first decision, the tobacco products were moved from the appellant’s bond store to the second respondent’s bond store.
On 25 October 1995, the agent of the appellant applied to Customs under s.71E for permission to move the goods to a licensed warehouse in South Australia.
On 26 October 1995, the first respondent decided to refuse the appellant’s application (“the second decision”) for the stated reason that the second respondent had, in effect, so directed.
The second decision was bad in law (a) for the reasons that the first decision was bad; and (b) because the first respondent exercised his power improperly, and in breach of the rules of natural justice.
The tobacco products have since been stolen from the second respondent’s bond store.
The second respondent is liable to the appellant in damages for the torts of conversion, misfeasance in public office and negligence.
The first respondent is liable to the appellant in damages for the torts of misfeasance in public office and negligence.
In its amended statement of claim, the appellant claimed, inter alia, the following relief: (1) mandamus compelling the first respondent to approve the appellant’s application under s.71E for permission to move the goods; (2) an order enjoining the first respondent from refusing to approve that application; (3) orders quashing the first and second decisions; and (4) damages.
On 29 July 1996, in a reserved judgment (see (1996) 33 ATR 317), Davies J. dismissed the appellant’s application, for reasons to be mentioned later. In his reasons for judgment, Davies J. followed the conclusion of Beazley J. in a judgment given on 24 April 1996 (now reported: see (1996) 65 FCR 180) answering negatively the separate constitutional question raised by the appellant. There are appeals from each of these judgments, Davies J. having granted leave to appeal from the judgment of Beazley J.
THE SEPARATE CONSTITUTIONAL QUESTION
As has been noted, the appellant claimed that s.58 of the Tobacco Act was unconstitutional. Accordingly, Beazley J. ordered that the following question should be determined separately:
"Is [s.]58 of the [Tobacco] Act 1987 (NSW) invalid by virtue of the [C]onstitution in its application to goods which [ss.] 30, 33 and/or 153 of the Customs Act 1901 (Cth.) apply by reason of the inconsistency of those provisions?"
THE SCHEME OF THE TOBACCO ACT
In order to place s.58 in its context, reference should be made to the material provisions of the legislative scheme of which s.58 forms part.
Part 1 (ss.1-6) of the Tobacco Act deals with “Preliminary” matters, including the territorial scope of the Act and the extent to which the Act binds the Crown.
By s.3(3) it is provided that a reference in the Act to the sale of tobacco is reference to a sale in New South Wales.
By s.5 it is stated that:
"This Act binds the Crown in right of New South Wales and, in so far as the legislative power of Parliament permits, the Crown in all its other capacities." (Emphasis added).
Part 4 (ss.27A-33) deals with “Offences relating to the sale of tobacco”.
Section 27A provides for an expanded meaning of “sell” so as to include, inter alia, “(c) have in possession, custody or control for sale”.
By s.28, a person shall not sell tobacco unless the person is the holder of a licence. The maximum penalty is 100 penalty units.
Section 29 prohibits a person from carrying on tobacco wholesaling without a licence. Section 30 prohibits retail activity likewise. In each case, the maximum penalty is 100 units.
Section 33 deals with presumptions arising from the possession of commercial quantities of tobacco as follows:
"If tobacco in a quantity that exceeds the prescribed quantity is in a person’s possession, custody or control, it shall be presumed in any proceedings for an offence under this Part, unless the court is satisfied to the contrary:
(a)that the tobacco is in the person’s possession, custody or control for sale, and
(b)that the person is carrying on tobacco wholesaling."
Part 5 of the Act (ss.34-50) deals with “Licences”.
Section 36 deals with the grant of licences. Section 41 provides for the fees to be paid for licences.
Part 7 (ss.55-62) deals with “Enforcement powers”.
By s.55(1), the Chief Commissioner or any inspector shall have access to all premises, records and documents for any of the purposes of the Act or the regulations.
By s.56(2), the Chief Commissioner, or any inspector, may apply to an authorised justice for a warrant to search any premises in the circumstances there specified. By s.56(3), the justice may, if satisfied that there are reasonable grounds for doing so, issue a warrant. Nothing in s.56 is to limit or restrict any power conferred by s.55 on the Chief Commissioner, or on an inspector (s.56(4)).
By s.57(1), the Chief Commissioner may, by notice in writing, require any person to do either or both of the following - (a) to furnish information; (b) to attend and give evidence before the Chief Commissioner or other officer - for the purpose, inter alia, of inquiring into that person’s, or any other person’s, liability under the Act; and the Chief Commissioner may require the production of records or documents relating to such information.
Section 58, which is central to the litigation, is in these terms:
"58 Seizure of tobacco
(1) Any tobacco:
(a)in a quantity that exceeds the prescribed quantity, and
(b)which the Chief Commissioner reasonably believes is evidence of an offence by any person,
may be taken and kept in custody by the Chief Commissioner until proceedings for any such offence have been heard and dealt with.
(2)When taking the tobacco, the Chief Commissioner shall tender a receipt to the person from whom it is taken.
(3)(Repealed)
(4)This section does not confer on the Chief Commissioner any right of access to premises in addition to the right conferred by section 55 or by a warrant under section 56."
By s.59(1), the Chief Commissioner may apply to the Supreme Court for an order in respect of tobacco taken and kept in custody under s.58. The Supreme Court may require the Chief Commissioner to give notice of the application to a person who the Court has reason to believe has an interest in the tobacco (s.59(3)). A person having an interest in any tobacco is entitled to appear and to adduce evidence (s.59(4)). The Court may, by order, empower the Chief Commissioner to sell the tobacco and to pay the proceeds of sale into Court (s.59(5)(a)). Alternatively, the Court, at the request of any person appearing to have an interest in the tobacco may fix the value of the person’s interest and order the Chief Commissioner, on payment into Court by that person of an amount equal to that value, to deliver tobacco, having a value equal to that amount, to that person (s.59(5)(b)).
By s.60(1), if the court finds an offence under Part 4 proven, and finds that any tobacco taken and kept in custody under s.58 was in any person’s possession, custody or control for sale in the course of committing, or for the purpose of committing the offence, the court may, by order, declare that the tobacco (or its liquidated value) be forfeited to the Crown. Any tobacco so forfeited may be disposed of by the Minister on behalf of the Crown (s.60(2)).
By s.61, on the application of a person claiming to be entitled to any tobacco taken, or to any money paid into court under s.58 or s.59, the Supreme Court - (a) if it is of the opinion that proceedings for forfeiture are not likely to be taken, or (b) with the Chief Commissioner’s consent - may order that the tobacco (or money) be delivered (or paid) to a person appearing to the Court to be entitled to it.
Section 62 is in the following terms:
"62 Return of tobacco by Chief Commissioner
(1)Nothing in this Part prevents the Chief Commissioner from at any time causing any tobacco taken and kept in custody under section 58 to be delivered to a person who the Chief Commissioner considers is entitled to it.
(2)No proceedings shall be taken against the Chief Commissioner as a consequence of the return of any tobacco in accordance with this section."
THE DETERMINATION OF THE SEPARATE QUESTION BY BEAZLEY J.
Beazley J. determined this question in the negative, holding that there was no inconsistency for the purposes of s.109 of the Constitution.
Her Honour was of the opinion (at 189) that the “control” of the Customs mentioned in s.30 of the Customs Act means “the power to direct or regulate what may be done with the goods”. It does not mean or require that Customs have “physical possession”.
Beazley J. was also of the view (at 189, 192) that the phrase “taken and kept in custody of the Chief Commissioner” in s.58(1) of the Tobacco Act does not require that there be a physical taking or movement of the goods. On the other hand, her Honour held that the prohibition in s.33 of the Customs Act “is directed to physical movement or alteration of or interference with the goods”.
Beazley J. said (at 192):
"On the construction I have placed upon the phrase ‘take and keep in custody’, the custody to which s 58 refers may mean that the goods remain in the same place as they were when they were ‘taken’. The Chief Commissioner may move the goods if granted authority to do so under s 71E. If the goods were moved without the permission of Customs under s 71E, the Chief Commissioner would thereby have committed an offence: see R v Sutton (1908) 5 CLR 789. That does not make s 58 inconsistent with s 30 or with s 33 of the Customs Act."
THE PROCEEDINGS BEFORE DAVIES J.
The final hearing of the proceedings took place, as has been noted, before Davies J. who dealt with issues in addition to the separate question dealt with by Beazley J.
There was no real room for dispute about the facts, which his Honour found as follows:
The appellant, which did not hold a licence under the Tobacco Act to sell tobacco products by wholesale in New South Wales, imported into Australia a quantity of cigarettes having a Customs value of $22,728.26. The goods arrived at Mascot on 12 October 1995 and were placed in the warehouse of J.A.S. in Sydney, being a warehouse licensed under s.79 of the Customs Act.
On 12 October 1995, the appellant’s agent copied an entry for home consumption under s.71A of the Customs Act.
On 16 October 1995, the goods were passed by Customs as “Ready for Payment”.
Before the duty was paid, a delegate of the Chief Commissioner, Mr Terence Serrao, became aware of a statement in writing dated 9 October 1995, by a retailer of tobacco carrying on business in Sydney, which stated that the retailer had purchased, and would continue to purchase, tobacco from the appellant.
Mr Serrao, on becoming aware that the goods imported by the appellant exceeded the “prescribed quantity” defined in s.3(1) of the Tobacco Act, formed the view that, in the absence of a licence under the Tobacco Act, the tobacco was evidence of an offence by the appellant, and that it should be seized under s.58 of the Tobacco Act.
The seizure was effected on 19 October 1995 when officers of the Chief Commissioner, including Mr Serrao, entered the licensed warehouse of J.A.S. and placed on the packages containing the tobacco labels identifying them as having been seized by the Chief Commissioner. At the time, a receipt was given to employees of J.A.S.
On 19 October 1995, an application was lodged with Customs on behalf of the Chief Commissioner, seeking permission, under s.71E of the Customs Act, to move the goods to another licensed warehouse in Sydney operated by Interport Pty Limited (“Interport”). On the same day, Customs granted the permission and the goods were then moved to Interport’s warehouse.
On 25 October 1995, the appellant’s Customs agent applied under s.71E of the Customs Act for authority to trans-ship the goods under Customs’ authority to a bond store in South Australia. The application was refused by Customs on the ground that the goods were held in Interport’s warehouse for the second respondent, and that the second respondent had stated that, until the question of offences under the Tobacco Act had been resolved, the goods were to remain in his custody.
Subsequently, most of the goods “were stolen or otherwise disappeared” (“whilst the goods were in the custody of the Chief Commissioner”).
THE REASONING OF DAVIES J.
Davies J. (at 318) was of the view that, although Customs had statutory “control”, Customs “does not [under the Customs Act] enter into the possession, custody or control of the goods, as those words are understood in ordinary parlance. That is clear enough from the definition of ‘owner’... in s.4(1).” The Customs Act places no restriction upon dealings in goods under the “control” of Customs. Property rights to possession, custody or control may pass. However, the Customs Act requires that until the goods are delivered into home consumption in accordance with an authority to deal or other permission, the goods must be placed in a licensed warehouse and may not be moved without the authority of Customs. The Act seeks to ensure that goods which are imported for home consumption are not released until duty is paid or is secured. The term “the control of Customs” comprehends the totality of the rights conferred by the Act upon Customs. Ordinarily, his Honour held, the rights exercised by Customs in “controlling” the goods are those rights which are expressed in other provisions of the Act, rather than something that flows from the term “control” itself. An important element of the statutory concept of “control” is found in the prohibition against moving, altering or interfering with goods.
On the question whether Mr Serrao had reasonable grounds for believing that the goods held by J.A.S. were evidence of an offence by the appellant under the Tobacco Act, Davies J. was of the view that the expression “possession, custody or control” where used in s.33 of the Tobacco Act (in aid it will be recalled, of a presumption that a person is carrying on tobacco wholesaling), had “a wide denotation”. It may comprehend both an agent who has actual corporeal control, and the person on whose behalf the goods are held. The custody or control need not be exclusive. The present context (s.33 of the Tobacco Act) indicated that the person having the “possession, custody or control” of goods “for sale” and thus presumptively carrying on tobacco wholesaling (where the prescribed quantity was exceeded) was the appellant, rather than the warehouse proprietor.
Davies J. rejected the appellant’s submission, that it was beyond the power of the Customs to permit the goods to be moved under s.71E(1) on the application of the second respondent because the second respondent was not their “owner”, as s.81B(2) required. His Honour said (inter alia) ) (at 324):
"Moreover, a provision such as s.35A (1B) of the Customs Act, which uses the phrase ‘the person to whom the permission [under s.71E] was given’, shows that the words ‘the owner’ in s.71E do not refer to one specific person but rather to the range of persons falling within the description of ‘owner’ in s.4(1).
It follows that Customs was not limited in the exercise of the discretion conferred by s.71E to approving an application lodged by the person who was expressed to be the owner of the goods in the entry for home consumption. The Chief Commissioner claimed to have taken the subject tobacco into his custody. He was a person having control of the goods and was an ‘owner’ as defined in s.4(1) of the Customs Act. In my opinion, the officers of Customs were entitled to treat the Chief Commissioner as, relevantly, the ‘owner’, especially as the step to be taken was merely that of moving the goods to another licensed warehouse, the licensee of which was an agent of the Chief Commissioner."
In rejecting the appellant’s argument that goods in Customs’ control could not be “taken and kept in custody by the Chief Commissioner” whilst under that control, because they could not be moved without Customs’ permission, Davies J. said (at 322):
"The matters put forward under this head have already been debated before and rejected by Beazley J.... A constitutional question concerning inconsistency between s.58 of the Tobacco Act and ss.30, 33 and/or 153 of the Customs Act was posed for her Honour’s consideration. Her Honour considered that there was no inconsistency. It was put to me that the real issue of the proceedings was, however, not one of inconsistency but of the true meaning of s.58 of the Tobacco Act. It was submitted that goods could not be taken and held in custody by the Chief Commissioner when they were both subject to the control of Customs and could not be moved without the permission of Customs.
As I am in agreement with the approach taken by Beazley J, I need not determine whether her Honour’s findings strictly cover the issue which is before me. Her Honour considered that the goods could be ‘taken and kept in custody’ for the purposes of s.58 of the Tobacco Act without there being any movement of the goods or interference with the goods which required the permission of Customs. I agree with her Honour. The taping and marking of the packages was not an interference with the goods: McNeill v Whitton (1915) 20 CLR 573."
Davies J. went on to say (at 324):
"The statement of claim raises the argument, along with many others, that, before acting under s.71E, Customs was bound to afford to Goben an opportunity to present reasons why its goods should not be moved and had not done so. I accept that there is, in general, a duty to accord to the proprietor of goods, under whose direction goods have been placed in a licensed warehouse, an opportunity to express a view as to whether the goods should be moved to a different warehouse at the behest of another who is not his agent. See Kioa v West (1985) 159 CLR 550 at 584; Johns v Australian Securities Commission (1993) 178 CLR 408. However, as Brennan J said in Kioa v West at 615, the content of the principles of natural justice may be reduced to nothingness by the circumstances in which a power is exercised. See also Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 21 per Mason CJ.
In the present case, as the power was exercised to assist the Chief Commissioner to keep securely in his custody goods taken under s.58 of the Tobacco Act, it would have been entirely inappropriate to give prior notice to Goben or to its agent of the removal, for the effectiveness of the seizure might have been frustrated. In the circumstances, the content of the duty was reduced to nothingness."
Davies J. proceeded to hold that no ground of judicial review of Customs’ administrative decision-making process had been made out. His Honour said (at 325):
"In the result, I am not satisfied that there was any error in the course taken under s.58 of the Tobacco Act, including the seeking of and the grant of permission to move under s.71E of the Customs Act, or for any unlawful conversion by the Chief Commissioner of the goods.
After the goods had been passed as ready for payment on 16 October 1995, all that remained to achieve the authority to take the goods into home consumption was the payment of the duty. This could have been done at any time. The grant of the permission to move, under s.71E, in no way inhibited Customs from clearing the goods under s.71B."
Davies J. accordingly dismissed the application.
THE APPELLANT’S GROUNDS OF APPEAL
By its notices of appeal, the appellant contends that Beazley J. and Davies J. should have held that s.30 of the Customs Act was inconsistent with s.58 of the Tobacco Act.
The appellant also relies on the following as subsidiary grounds of appeal against the judgment of Davies J.:
"4.The learned Trial Judge erred in failing to find that the Second Respondent had interfered with the goods being the tobacco products to the detriment of the Appellant.
5.The learned Trial Judge erred in holding that s.58 of the Tobacco Act authorised the taking of the tobacco products by the Second Respondent.
6.[Not pressed].
7.The learned Trial Judge erred in holding that the duty on the First Respondent to afford the Appellant the opportunity to be heard before the tobacco product was transported by the Second Respondent was reduced to nothingness."
THE APPELLANT’S CONTENTIONS
The appellant’s contentions are to the following effect:
The second respondent’s power to seize the goods is derived entirely from s.58 of the Tobacco Act. The provisions of ss.58-62 operate as an exhaustive statement of the course to be taken in relation to tobacco to which s.58 is applicable. Section 58 contemplates that the Chief Commissioner, if exercising the powers conferred thereunder, is to take into his possession the tobacco in question. The term “taken and kept in custody by the Chief Commissioner” is a composite expression also used in ss.59(1), 60(1)(a)(ii) and 62(1). The Chief Commissioner’s discretion is not to “take and, if the Chief Commissioner chooses, keep in custody” the tobacco. Rather, if the Chief Commissioner decides to exercise the power, the Chief Commissioner must “take and keep in custody” the tobacco.
The discretion conferred by s.58(1) is that of the Chief Commissioner, and not that of any other person.
The related provisions of ss.59-62 also make it apparent that the “tak[ing] and keep[ing] in custody”, to which s.58(1) refers, is the acquisition of physical custody of the goods (see the references to “delivery” of the tobacco in s.59(5)(b)(ii), s.61 and s.62(1); and the reference to “return” of the tobacco in s.62(2)).
The scheme established by ss.58-62 is inconsistent with the powers of Customs pursuant to the relevant provisions of the Customs Act. In this regard:
(a)The discretion given to the Chief Commissioner under s.58(1) is not expressed to be limited in any way. To read s.58(1) with the Customs Act means that words such as “In the case of goods subject to the control of Customs, if the Customs grants permission” have to be added to s.58.
(b)The concept of “taken and kept in custody by the Chief Commissioner” is not divisible into two parts. The judgments appealed from treat the phrase as if it were “taken and (and in the case of goods subject to the control of Customs, if the Customs agrees) kept in custody”.
(c)The terms of ss.59-62 do not easily identify the way such provisions are to operate in the case where goods are under the control of Customs. They are inconsistent with the rights of the Customs under ss.30 and 33 of the Customs Act. To make the provisions of ss.59-62 operate in such a case it is necessary to amend them by adding words excluding the position of Customs or otherwise clarifying the position. The terms of ss. 59-62 contemplate that any relevant discretions will reside in the Supreme Court, the Minister or the Chief Commissioner, and in no other person.
Inconsistency may arise in a number of ways, but as Dixon J. said in Victoria v. The Commonwealth (1937) 58 CLR 618 (at 630):
"When a State law, if valid, would alter, impair or detract from the operation of the law of the Commonwealth Parliament, then to that extent it is invalid."
Applying this test, i.e. treating s.58 as operative, it authorizes the Chief Commissioner to “take and keep in custody, without reference to any other person,” tobacco which the Customs Act says is not to be moved or interfered with, except under the authority of the Customs Act. The operation of the State law according to its terms would “alter” or “detract” from the operation of the Customs Act, particularly s.33.
The provisions of s.30(1) of the Customs Act refer to goods which are subject to the control of Customs from the time of importation to the happening of an event referred to in s.30(1). As O’Connor J. said in The King v. Lyon (1906) 3 CLR 770 (at 784):
"... the whole policy of the Customs Act... is that, from the time of importation until the time of paying duty, the customs shall not lose control of the articles imported. That is indicated directly in section 30, which provides that imported goods shall be subject to the control of the customs from the time of importation until deliver for home consumption or exportation."
The term “control of the Customs” is one of wide ambit and has statutory emphasis in s.33(1), which specifically provides that, except as authorised by the Customs Act, a person shall not move, alter or interfere with goods that are subject to the control of customs. The concept “interfere with” appears to refer to physical interference: Wilson v. Chambers & Company Pty Limited (1926) 38 CLR 131 at 137, 145, 149 and 151).
Both Beazley J. and Davies J. concentrated unduly, it is submitted, on the meaning, in the abstract, of “control of the Customs”. A central element of such control, to which insufficient weight was given, was s.33. The particular case was, in any event, one where s.33 dealt with the very subject with which s.58 purported to deal.
The provisions of the Customs Act are clearly intended to “cover the field” in relation to possession and disposition of goods under the control of the Customs; but, in any event, there is a direct inconsistency between ss.30 and 33 of the Customs Act and s.58 of the Tobacco Act, because the operation of s.58 would impair or detract from the operation of ss.30 and 33.
In holding that the appellant was not entitled to notice of the second respondent’s intention to seize its goods, Davies J. assumed, incorrectly, the valid operation of s.58.
CONCLUSIONS ON THE APPEAL
It will be convenient to consider the grounds of appeal in turn.
(a)Is the scheme established by ss.58-62 of the Tobacco Act inconsistent with ss.30 and 33 of the Customs Act?
The first step is to ascertain the true meaning and operation of the relevant provisions of the Tobacco Act. Specifically, do the general words of s.58(1), properly construed, apply to goods under the control of Customs?
The importance of context and the purpose of legislation in the modern approach to statutory interpretation was explained by the High Court recently in CIC Insurance Limited v. Bankstown Football Club Limited 141 ALR 618, where Brennan CJ., Dawson, Toohey and Gummow JJ. said (at 634):
"It is well settled that at common law, apart from any reliance upon s.15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses “context” in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statue being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent."
The Tobacco Act repealed the Business Franchise Licences (Tobacco) Act 1975 (NSW) (“the 1975 Tobacco Act”). In moving the second reading of the Bill for the 1975 Tobacco Act, the Minister (Mr Coleman) said (NSW Parliamentary Debates 1975, 3rd series, Vol.119 at 1757-8):
"The purpose of the bill is to provide for the licensing of wholesalers and retailers of tobacco and the payment by them of licence fees, assessed, where applicable, on sales turnover in a preceding period. As honourable members are aware, this is one of the measures decided upon by the Government to help bridge the gap between revenue and expenditure in this year’s Budget. The background to the measure has already been explained by the Premier and Treasurer in his budget speech and by my predecessor at the introductory stage. There is little I need add except to stress that the decision to go ahead with the new licensing scheme was reached only after every avenue of cutting costs and reducing expenditures had been explored. The proceeds, estimated at $19.5 million this year and $29.5 million in a full year, will be applied towards the costs of running essential community services such as schools and hospitals."
In moving the second reading of the Bill for the Tobacco Act, the Minister (Mr Debus) said (NSW Parliamentary Debates, 1987, 3rd series, Vol.196 at 11265):
"Business franchise licence fees on tobacco and petroleum products raise more than $1 billion for the Australian States and are crucial to the structure of State finances. In New South Wales these fees will raise a total of $366 million in 1986-87, which is about 9 per cent of total State taxation receipts. It is therefore essential to the financial well-being of New South Wales that these revenue bases be protected from avoidance and evasion practices."
In moving the second reading of a Bill for amendments to the Tobacco Act in 1989, the Premier and Treasurer, Mr Greiner, said (NSW Parliamentary Debates, 1989, 3rd series, Vol.207 at 7314):
"The principal purpose of these bills is to strengthen enforcement provisions in order to stamp out evasion of licence fees. Under the current provisions, it is an offence to sell tobacco or petroleum products without a licence. In addition, in any proceedings for an offence of selling without a licence, goods in excess of the prescribed quantity are presumed, unless the court is satisfied to the contrary, to be in a person’s possession for sale. Tobacco which is evidence of an offence may be seized and held until proceedings for the offence have been completed, and in certain circumstances the court may order forfeiture of the tobacco. However it is not an offence for a unlicensed person to be in possession of tobacco or petroleum products for the purpose of sale, and in order to prove an offence of unlicensed selling, there must be direct evidence of a sale having been made.
In addition, tobacco may only be seized as evidence of the offence of selling without a licence if the goods were actually sold by an unlicensed person. This reduces the likelihood of a successful prosecution and limits the usefulness of the offence provisions as a deterrent. This severely restricts the effectiveness of the seizure power because most sales of illicit tobacco are carried out in ways and at times which are designed to avoid detection. To overcome these problems the bills insert in the two Acts a definition of ‘sell’ which includes having goods in possession, custody or control for sale. A similar definition appears in the Poisons Act. In addition, a person who has possession, custody or control of more than the prescribed quantity of tobacco or petroleum products, shall be presumed in any proceedings for an offence to be carrying on a business of wholesaling, unless the court is satisfied to the contrary."
These specific objects and purposes, and the foregoing specific context of State revenue raising, ought, in my view, to be taken into account in construing the Tobacco Act. There should also be taken into account the adjectival character of Part 7 of the Tobacco Act generally and of s.58(1) in particular, in that the power of the Chief Commissioner to seize is clearly intended to be exercised incidentally to the bringing of proceedings for an offence, and to be exercised temporarily, that is, only until the proceedings have been dealt with. In other words, s.58(1) ought to be viewed as procedural and incidental, rather than substantive, in its operation. It is a machinery provision to be invoked in aid of the collection of State revenue. It is not itself a provision for the imposition of tax or for the raising of revenue. Section 58(1) is subsidiary in that sense.
Another specific aspect of the context which the State legislature should be regarded as having taken into account in enacting s.58(1) is the limited scope of the common law powers of search and seizure independently of a warrant (see Gillies, The Law of Criminal Investigation, Ch.6; Allitt v. Sullivan (1988) VR 621 per Brooking J. at 634-5).
As well, the Federal context ought, in my opinion, be taken into account in interpreting a State statute of the present kind. Aspects of the Federal context of which the State legislature should be taken to have had regard in enacting s.58(1) include the circumstances that in our Federation, it is accepted, and expected, that the States may raise revenue for their own purpose, that is, speaking generally, the Commonwealth and State taxation powers are concurrent and independent powers (see State of Victoria v. The Commonwealth (Second Uniform Tax Case) (1957) 99 CLR 575 per Dixon CJ. at 614; P H Lane, A Manual of Australian Constitutional Law, 6th Ed. at 82, 367).
At the same time, in enacting the Tobacco Act, the State legislature must also be taken to have been aware of the circumstance that, by virtue of the provisions of s.90 of the Commonwealth Constitution, the power to impose a tax on goods by way of a customs duty resided exclusively in the Federal Parliament.
As has been noted, s.5 of the Tobacco Act purported to bind the Crown in right of New South Wales (as to which no question arises) but also, so far as the legislative power of the State Parliament permitted, the Crown in all its other capacities. Section 5 thus recognises, correctly, that there are limits on the capacity of the State Parliament to “bind” the Crown in its other capacities, relevantly, the Crown in right of the Commonwealth (see Commonwealth v. Bogle (1953) 89 CLR 229 per Fullagar J. at 259-260; Leslie Zines, The High Court and the Constitution, 4th Ed. at 353-366).
In Jacobsen v. Rogers (1995) 182 CLR 572, Mason CJ., Deane, Dawson, Toohey and Gaudron JJ. said (at 590-1):
"The power of the Commonwealth parliament to enact s.10 of the Crimes Act was not questioned before us. Plainly the Commonwealth has power to aid the investigation and prosecution of offences, the creation of which is incidental to the execution of its legislative powers. Nor are the circumstances such, in our view, as to raise any presumption that the Commonwealth did not intend the legislation to bind the States. It is true that In re Richard Foreman & Sons Pty. Ltd.; Uther v. Federal Commissioner of Taxation, Dixon J. said: ‘A federal system is necessarily a dual system. In a dual political system you do not expect to find either government legislating for the other.’ An expectation is somewhat less than a presumption and, as the next sentence of Dixon J.’s observation indicates, is not always realized: ‘But supremacy, where it exists, belongs to the Commonwealth, not to the States.’ Moreover, that case was concerned with the ‘question of State legislative power affecting to control or abolish a federal fiscal right’. It is in that context that Dixon J. made his remarks."
Their Honours went to on say (at 591-2):
"The question of Commonwealth immunity from State legislation is a difficult one which has not yet been fully resolved, but it is clear that the States, acting pursuant to the powers which they possess under the Constitution, are not subordinate to the federal government. Of course, the Commonwealth in the exercise of its paramount legislative power may restrict the effect of State legislation upon its operations. But it has always been recognized that the Commonwealth may be affected by State laws of general application. A law authorizing the issue of search and seizure warrants may be such a law, particularly when it binds the occupier of premises subjected to a warrant only by relieving those to whom the warrant is issued from tortious liability. Under s.52 of the Constitution the Commonwealth has exclusive legislative power with respect to Commonwealth places, but State laws apply pursuant to s.4(1) of the Commonwealth Places (Application of Laws) Act 1970 (Cth). It is, however, unnecessary in this case to determine the effect of State legislation of a kind similar to s.10."
Brennan J. said (at 593-4):
"The question whether a statute ‘binds’ the Crown depends upon the circumstances including the terms of the statute, its subject matter, the nature of the entity in respect of which the question of applicability of the statute arises, the nature of the mischief to be redressed, the general purpose and effect of the statute and the nature of the activities of the Crown which would be affected if the Crown be bound."
See also the statement of general principle by McHugh J. at 601.
Relevantly for present purposes, the question, one of construction of s.58(1) at this stage, is whether the State Parliament should, or should not, be taken to have intended that the Tobacco Act would impair, or detract from, the operation of the scheme for the imposition and collection of, customs duties established by the Commonwealth Parliament in the execution of its exclusive legislative power in that area.
In my view, when the language of s.58(1) is read in its overall context and considered in all of the foregoing aspects, it should be interpreted as not to have been intended to impair, or detract from, the Commonwealth’s exclusive domain of the collection of customs duties and the scope of the apparently unqualified language of s.58(1) should be read down accordingly. It follows, in my view, that no question of s.109 inconsistency can arise in the present context (see Allders International Pty Limited v. Commissioner of State Revenue (1996) 140 ALR 189 per McHugh, Gummow and Kirby JJ. at 225-6; cf. State Authorities Superannuation Board v. Commissioner of Taxation (W.A.) (1996) 140 ALR 129 per Brennan CJ., Dawson, Toohey and Gaudron JJ. at 135).
Put differently, it should be presumed that the State Parliament intended that the Tobacco Act should operate in parallel and concurrently with the operation of the Customs Act. Specifically, it is reasonable to assume that the State Legislature did not intend to interfere with the well-known concept of the control by Customs of goods liable to customs duty as a means of ensuring that the duty will be collected. Against that background, the operation of s.58(1) should be read down so as not to impair, or detract from, Customs’ control of goods (cf. Botany Municipal Council v. Federal Airports Authority (1992) 175 CLR 453 at 466). It may be that the reading down should go further but this need not be finally decided for present purposes (see Trade Practices Commission v. Manfal Pty Limited and Others (1990) 27 FCR 22; Re Pollack; Ex parte Deputy Commissioner of Taxation (1991) 103 ALR 133; Allders International Pty Ltd v. Commissioner of State Revenue (1996) 140 ALR 189 per McHugh, Gummow and Kirby JJ. at 225-6).
This outcome accords with the reality of the Federal compact. As Mason CJ., Deane, Dawson, Toohey and Gaudron JJ. said in Jacobsen v. Rogers, above, (at 587):
"In one sense, it may be said that when a search warrant is obtained on behalf of the Crown in respect of Crown premises, the Crown is consenting to the search and seizure which the execution of the warrant entails and there is no occasion to question the force of the section to bind the Crown. But that is to ignore the reality of the situation in which the Crown bears not one, but many aspects. As was observed in the Engineers’ Case, executive power ‘is exercisable by different agents in different localities, or in respect of different purposes in the same locality, in accordance with the common law, or the statute law there binding the Crown’."
In any event, the scope of the control exercised by Customs is sufficient to ensure that there is no collision in the administration of the Customs Act on the one hand, and the Tobacco Act on the other. The nature of Customs’ control was explained by Davies J. in his reasons as has been mentioned. I agree with that analysis. As Mason J. said in Kitano v. The Commonwealth (1974) 129 CLR 151 (at 170):
"Goods subject to the control of Customs are not as such in the possession of the Customs (see s.35A). The provisions of the Act which spell out what is involved in the control of the Customs include those ‘giving the customs a right of examination (ss.32, 49(3)), forbidding any movement, alteration or interference except by authority of a Customs officer (s.33), requiring ‘for the purpose of securing the due importation of goods’ that they be entered and unshipped (s.49(3)), and making elaborate provisions for ensuring that the unshipping is subject to adequate safeguards for the revenue (ss.36-41, 68-77)’ (Collector of Customs for the State of Victoria v. Wilh Wilhelmsen Agency Pty. Ltd., per Kitto J.)."
In my opinion, as a matter of construction of the Customs Act, whether Customs’ control is looked at generally or in a specific aspect (as for instance, in the grant of permission under s.33 of the Customs Act to move goods), it was inherent in Customs’ statutory control of the goods to grant assent to the action taken by the second respondent in the present case in his exercise of the temporary powers granted him by s.58(1) of the Tobacco Act.
It follows, in my view, that there was no constitutional inconsistency.
It may be noted that an analogous question has arisen of the operation, in the customs area, of Commonwealth postal legislation which precludes the mail being examined except in special circumstances by officers specially appointed. E.J. Cooper, in Customs and Excise Law (1984), points out (at 119) that it appears that this has involved “an uneasy administrative compromise”. Whether or not it is fair to describe the circumstances of the present case in these terms, it is obviously possible to resolve any difficulties of this kind by co-operative action. Many examples of a joint or co-operative action between the Commonwealth and the States in other areas may be given, where conflict, and thus inconsistency, are avoided at the administrative level.
It should, however, be acknowledged there was not always a spirit of Federal co-operation in this area. The King v. Sutton (1908) 5 CLR 572 , was a proceeding by Customs for the recovery of pecuniary penalties for breaches of, inter alia, s.33 of the Customs Act. The defendant was a carrier who held a contract from the Government of New South Wales for the carriage of its goods from the Sydney wharves. Goods, which had been purchased in England and imported into the Commonwealth by the State of New South Wales, were landed at the wharf. Although Customs demanded duty, the State refused to enter the goods, or to pay duty. The defendant, acting on the State’s instructions, removed the goods from the wharf without the permission of Customs, in what Robert Garran described as “the battle of Darling Harbour” (Prosper the Commonwealth (1958) at 179). An argument for the State that the provisions of the Customs Act placing under the control of Customs, even duty-free goods, did not bind the State, was rejected, and it was held that the defendant had committed a breach of s.33. The case may be distinguished from the present circumstances. Here, Customs and the State co-operated with each other, and the State’s actions under s.58(1) of the Tobacco Act were carried out with the knowledge and acquiescence of Customs.
The end to which control is given to Customs should be borne in mind in the present connection. As O’Connor J. said in The King v. Lyons, above, (at 784):
"The object of [s.30]... is obvious; if once goods go into home consumption, that is, into circulation, it becomes almost impossible to trace them. The only security the customs authorities could have in such a case for the payment of duty would be in most cases the personal security of the importer. Therefore it is, if the Act is to be effective, that all through the dealings with the goods, from the time they are first imported until duty is paid, they must be kept under customs control."
That is, the ultimate object is to protect the Commonwealth revenue; but this aim is not inconsistent or incompatible with the attainment by the State of its objective of collecting its own revenues.
In Sutton’s Case, above, Isaacs J. (at 812) emphasised the need to avoid reducing the public administration of the Customs Act to a chaotic condition by the use, as in that case, of physical force, and resulting in “open conflict”. Such force was not used here. There was no physical seizure, but only a constructive one. It appears now settled that physical action is needed to offend s.33 (see Wilson v. Chambers, above, at 137, 145, 149 and 151). Moreover, as has been noted, the constructive seizure and the movement of the goods were done with Customs’ acquiescence.
I agree with Beazley J. that the present case may also be seen as analogous to Victoria v. The Commonwealth (1937) 58 CLR 618 where the State and the Commonwealth both legislated for the removal of wrecks. In concluding (at 630) that “upon its proper construction [the Commonwealth] Act does not exclude the operation of... [the] State law..., unless at all events some step is taken by the Commonwealth authorities to exert the power given by [the Commonwealth Act]”, Dixon J. there said (at 631):
"There is no reason for treating [the Commonwealth Act] as intending to do more than confer a concurrent or parallel power to enforce the removing of wrecks. No doubt there would be or might be an inconsistency if simultaneous attempts by Commonwealth and State authorities to remove the same wreck were possible. But that means, not that the Federal enactment is an exhaustive statement of what power to compel the removal of wrecks shall exist, but that it confers a power to remove wrecks the exercise of which is intended to be exclusive."
Dixon J. added (at 632):
"...if Federal and State authorities both went to work upon the same wreck and began to remove it by different and incompatible means, one would have to give way to the other. The facts of the present case do not raise this or any other similar conflict..."
It follows, in my view, that properly construed, s.58(1) of the Tobacco Act should be seen as a valid exercise of the States’ power to legislate “within their respective areas and subject matters” (see The Engineers’ Case (1920) 28 CLR 129 at 155; Leslie Zines, The States and the Constitution, a paper given at the Supreme Courts and Federal Court Judges Conference, January 1997 at 10-11).
Approaching the present question as essentially one of statutory construction of the State legislation (cf. Deputy Commissioner of Taxation v. Moorebank Pty Limited (1988) 165 CLR 56 at 61, 63), reading the general words of s.58(1) down along the lines suggested, and having regard to the scope of Customs’ control and the co-operative attitude here of Commonwealth and State, there is in truth no conflict of laws or in administration.
The challenge on the ground of suggested constitutional inconsistency should be rejected.
(b)Did the second respondent unlawfully interfere with the appellant’s goods to its detriment?
To some extent, although a separate ground of appeal, this overlaps with the inconsistency argument.
As has been seen, s.33(1) prohibits “interference” with goods the subject of Customs’ control, except as authorised by the Customs Act. Contravention of this section is made an offence. Questions may arise as to the standing of the appellant to raise this matter in civil proceedings, at least where it has not paid customs duty. But it is not necessary to pursue these questions since, in my view, no contravention of s.33 has been demonstrated.
It is true that the second respondent purported to effect what amounted to a constructive seizure of the goods for the temporary purpose of ensuring their safe custody pending the determination of the Tobacco Act proceedings. But, as has been said, this was done with the permission, or acquiescence, of Customs. The symbolic seizure was not anything done in derogation of Custom’s rights of control over the goods, or of any of Customs’ other rights. When viewed in the general context earlier discussed, including their Federal context, the statutory rights of the State to enforce the collection of its revenue should not be seen, necessarily or otherwise, as something inconsistent with the rights of Customs to enforce the collection of its duty through the medium of the exercise of its control over the goods. Both Commonwealth and State revenue raising powers may be exercised independently, in parallel and concurrently. Whether Customs’ permission to the second respondent to effect a constructive seizure is treated as an incident of Customs’ control, or as implicitly authorised by the Customs Act for the purposes of s.33(1), is immaterial. However viewed, the symbolic, temporary seizure, in aid of collection of the State revenue was permitted by Customs. That grant of permission was, in my view, within the power, or competence, of Customs.
Nothing of any significance appears to turn on the circumstance that the goods were moved, with Customs’ agreement, from one licensed warehouse to another. This appears to have been raised in ground 6 of the grounds of appeal, but is no longer pressed.
In my opinion, no grounds for judicial review, and no civil causes of action in this connection, have been demonstrated.
(c)Was the appellant entitled to be given prior notice of the second respondent’s intention to seize the goods?
As has been noted, this ground of appeal (7) depends upon acceptance of the appellant’s earlier argument that s.58(1) of the Tobacco Act could not validly operate in this area. Since I cannot accept that argument, it must follow, in my view, that there is no reason for interfering with the decision of Davies J. in this connection.
RESULT OF THE APPEALS
For reasons different in some respects from those given at first instance, I propose that the appeals be dismissed, with costs.
I certify that this and the preceding thirty eight (38) pages are a true copy of the reasons for judgment herein of Justice Beaumont
Associate:
Date : 9 April 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 669 of 1996
)
GENERAL DIVISION )
ON APPEAL FROM JUDGMENTS OF SINGLE JUDGES
OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:GOBEN PTY LIMITED
Appellant
AND:THE CHIEF EXECUTIVE OFFICER OF CUSTOMS
First Respondent
THE CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO) NEW SOUTH WALES
Second Respondent
CORAM: BEAUMONT, HILL AND LEHANE JJ
PLACE: SYDNEY
DATED: 9 APRIL 1997
REASONS FOR JUDGMENT
HILL J:
I have had the opportunity of reading in draft form the reasons for decision of Beaumont J and am thus spared the necessity of setting out the factual background to the present appeal and the relevant statutory provisions. For this I am grateful.
The sole issue is the consequence, if any, of the application of s109 of the Constitution 1900 (Cth) ("the Constitution") on the facts of the case to s58 of the Business Franchise Licences (Tobacco) Act 1987 (NSW) ("the Tobacco Act") in the light of the provisions of ss30, 33 and 153 of the Customs Act 1901 (Cth) ("the Customs Act").
No doubt it is a necessary first step in the inquiry to construe the relevant provisions of the Tobacco Act, just as it will be necessary to construe the relevant provisions of the Customs Act, to determine whether there is any inconsistency and the extent of it. That being said, the provisions of s58(1) of the Tobacco Act are not ambiguous, whether read alone or by reference to their context, even if the context is to be read in the widest sense as suggested in the passage from the reasons for judgment of the Full High Court of Australia in CIC Insurance Limited v Bankstown Football Club Limited (4 February 1997, unreported), to which Beaumont J has made reference.
Section 58(1) of the Tobacco Act is framed in wide terms. It empowers the Chief Commissioner for Business Franchise Licences (Tobacco) ("the Chief Commissioner"), in a case to which the sub-section is made applicable, to take tobacco and keep it in custody pending the hearing of proceedings for the offence in respect of which the tobacco is to be used in evidence. It was not suggested by the Chief Commissioner that that section as a matter of interpretation should be read down so as not to apply to goods under the control of the Australian Customs Service ("Customs"). Nor, indeed was it argued, as Beaumont J has held, that it should be interpreted so as not to impair or detract from the power of the Customs officials in administering the Customs Act. What such an interpretation would entail is unclear to me. Perhaps it would involve reading into the legislation the words that nothing in the section is to be read so as to impair or detract from the power of Customs. But even if it were permissible to read so much into the section, why limit the additional words to customs? The very uncertainty to which such an approach gives rise suggests that it is preferable to approach the present case, as the parties have done, by reference to s109 of the Constitution, rather than to attempt to read down the words of the Tobacco Act.
A submission made in passing by counsel appearing for the Chief Executive Officer of Customs to the effect that the Tobacco Act did not authorise the Chief Commissioner to take tobacco from the Crown (presumably where the tobacco is in the possession of the Crown) may be noted, but put to one side as unnecessary for decision because, as will be noted, the tobacco was not, in the present case, in the possession of the Crown at all.
The submissions of the Chief Commissioner proceeded from the premise that s58(1) of the Tobacco Act should be given the widest construction, but that so construed the section produced no inconsistency within the meaning of s109 of the Constitution. It is this issue which must be addressed.
It is well established that s109, does not impose absolute invalidity of a State law which is inconsistent with a Commonwealth law: The State of Western Australia v The Commonwealth ("the Native Title case") (1995) 183 CLR 373 at 465. The State law remains valid, although it is rendered inoperative to the extent of the inconsistency.
The extent of that inconsistency, as the same case makes clear, will depend both upon the text of the relevant statutes and their operation.
It is clear that in the day to day operation of the Tobacco Act no inconsistency with the Customs Act is likely to arise. Inconsistency is not readily apparent by comparing the text of each statute. The fields of operation of the two statutes are widely disparate. The present is clearly not a case where it can be argued that the Customs Act evinces an intention on the part of the Commonwealth to cover the field so as to leave no room at all for the operation of the Tobacco Act: cf per Mason J in R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563, cited in the Native Title case at 466. Rather, it is said, the present is a case where inconsistency arises where the Commonwealth and State law intersect in respect of a particular point of contact, albeit that each is a law on a different subject matter. What is submitted here is that there is but partial invalidity and that only where s58(1) of the Tobacco Act is availed of by the Chief Commissioner in circumstances where the goods are under the "control" of Customs. For it will only be then when the two statutes come into conflict: cf State of Victoria v The Commonwealth (1937) 58 CLR 626 at 632.
On the facts of the present case at least, the two statutes never did come into conflict. That is because s58(1) of the Tobacco Act is not inconsistent with the "control" which the Customs Act confers upon Customs. Nor did the exercise of the power under s58(1) as a matter of fact involve a contravention of s33.
Section 30 of the Customs Act confers upon Customs "control" of goods relevantly from the time of importation until the goods are delivered into home consumption, in accordance with an authority to deal under s71B of that Act. Practically, therefore, the control continues until duty has been paid and authority is given by Customs that the goods be released.
The nature of the "control" conferred upon Customs is not defined in the Customs Act directly. It can, however, be inferred from a consideration of the statutory scheme. Specifically "control" includes the right of Customs to examine goods subject to its control: s31. But "control" does not mean ownership; nor does it mean possession; nor power of disposition. Thus, the Customs Act contemplates that there will, while the control of Customs subsists, be an "owner" of the goods who might be (or hold himself out to be) a:
"person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods".
Negatively, the control is defined by the provisions of s33 of the Customs Act which makes it an offence for a person to move, alter or interfere with the goods which are under the control of Customs.
In the present case the goods are claimed to have been at the relevant time beneficially owned by the appellant. As a matter of fact the goods were, at the time the Chief Commissioner exercised his powers under s58(1) of the Tobacco Act, in the possession of JAS International (Aust) Pty Limited the proprietors of a licensed warehouse. Customs' control extended to granting permission to move the goods under s71E of the Customs Act, and a request under that section was in fact made by the Chief Commissioner after purporting to act under s58 of the Tobacco Act, so as to have the tobacco removed to a bond store operated by the Chief Commissioner. That permission was in fact given.
That the control of Customs does not exist to the exclusion of possession, custody or control in another is made clear by s35A(1) of the Customs Act which provides relevantly:
"(1) Where a person who has, or has been entrusted with, the possession, custody or control of dutiable 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 a Collector:
that person shall, on demand in writing made by a Collector, pay to the Commonwealth an amount equal to the amount of the duty of Customs which would have been payable on those goods if they had been entered for home consumption on the day on which the demand was made."
(See also s35A (1A) of the Customs Act).
The dichotomy between possession, on the one hand and the "control" of Customs, on the other, is made clear by Mason J in Kitano v The Commonwealth of Australia (1973) 129 CLR 151 at 170 where his Honour said:
"Goods subject to the control of Customs are not as such in the possession of the Customs (see s35A). The provisions of the Act which spell our what is involved in the control of the Customs include those 'giving the customs a right of examination (ss32, 49 (3)), forbidding any movement, alteration or interference except by authority of a Customs officer (s33), requiring, `for the purpose of securing the due importation of goods' that they be entered and unshipped (s49(3)), and making elaborate provisions for ensuring that the unshipping is subject to adequate safeguards for the revenue (ss36-41, 68-77."
Reference may also be made to the comments of O'Connor J in R v Lyon (1906) 3 CLR 770 at 784:
"the whole policy of the Customs Act, as indicated by a number of sections, is that, from the time of importation until the time of paying duty, the customs shall not lose control of the articles imported. That is indicated directly in sec.30, which provides that imported goods shall be subject to the control of the customs from the time of importation until delivery for home consumption or exportation. The object of that provision, if it were necessary to give any reasons for its enactment, is obvious; if once goods go into home consumption, that is, into circulation, it becomes almost impossible to trace them... Therefore it is, if the Act is to be effective, that all through the dealings, with the goods, from the time they are first imported until duty is paid, they must be kept under customs control."
It is clear from what is said above that custody (or possession, the two are largely synonymous) is not necessarily inconsistent with the "control" of Customs, for the "control" continues to subsist irrespective of where custody resides. The word "custody" has its ordinary English meaning of "keeping; guardianship; care" (see the Macquarie Dictionary). It is often used in the composite phrase "custody or control" as, for example, in Botany Fork & Crane Hire Pty Ltd v New Zealand Insurance Company Limited (1993) 44 FCR 27 where, as that case demonstrates, in some contexts at least, custody may not be exclusive of control.
The power in s58(1) of the Tobacco Act to "take" is a power to take into custody the relevant tobacco. It is the precursor of the power to keep in custody to which that section also refers. It is not a power to dispose. The present facts illustrate how the custody of the Chief Commissioner could be exercised without in any way interfering with the "control" conferred upon Customs.
However, it is submitted that the power to take and thereafter keep custody, at the very least may and at the highest must collide with the provisions of s33(1) of the Customs Act in that that power may (and perhaps must) be exercised so as to involve a movement or interference with the goods under the control of Customs. The facts of the present case (which are fully dealt with in the reasons for judgment of Beaumont J) do not, in my view, suggest that the Chief Commissioner at any time sought to move or interfere with the goods (at least without the permission of Customs).
If the power under s58(1) of the Tobacco Act is exercised so as not to involve an infringement of s33(1) of the Customs Act or so as not to derogate from the "control" of Customs, no question of inconsistency will arise. If, contrary to my view, there was, as a matter of fact, an interference with the goods, or movement of them contrary to s33(1) of the Customs Act (or such an interference or movement were necessarily involved) then an inconsistency would arise. But any invalidity brought about by s109 of the Constitution as a result of that inconsistency would only be to the extent of that inconsistency. The practical consequence would not be that s58(1) of the Tobacco Act would be wholly invalid, as the appellant would have it, but, rather, that the taking of goods into custody and keeping them would necessarily have to give way to the inability of the Chief Commissioner to move or interfere with the goods other than with the permission of Customs given, for example, in accordance with s71B of the Customs Act - as was indeed the case here.
Although the separate question stated by Beazley J refers to the provisions of s153 of the Customs Act, the section which, inter alia, makes customs duty a charge on goods imported, in addition to ss30 and 33 to which reference has been made above, no separate submission was directed to it. However, it is clear that nothing in s58(1) of the Tobacco Act affects the charge imposed by s153 of the Customs Act, nor does s153 in any way impinge upon the exercise of the power conferred by s58(1).
The separate question as stated does, however, raise a difficulty. While on the facts of the present case there was in my view no inconsistency brought about by the action of the Chief Commissioner under s58(1) of the Tobacco Act, other factual situations may, perhaps, be imagined where the exercise of the power under s58(1) could involve a contravention of s30 of the Customs Act. But such cases are necessarily hypothetical. In these circumstances the question does not admit of a simple yes or no answer. I am thus of the view that the question should be answered so as to confine the answer to the particular facts of the present case in the following terms:
"In the events which have happened there was no inconsistency within the meaning of s109 of the Constitution between s58 of the Business Franchise Licenses (Tobacco) Act 1987 and any of sections 30, 33 and 153 of the Customs Act 1901 (Cth)."
Although the notice of appeal from the decision of Davies J referred to a number of matters, including questions relating to judicial review, counsel for the appellant advised the Court that these grounds were not pressed. I accordingly do not deal with them. To the extent that the question whether what had been done by the Chief Commissioner in exercising his power under s58(1) of the Tobacco Act contravened s33 of the Customs Act should be considered as a separate question to the question of invalidity, it will be obvious from the above reasons that I would not find such a contravention. I agree with the reasons of Beaumont J on this matter.
It follows from the reasons which I have given that the appeal from the judgment of Davies J should be dismissed and that the appellant should pay the costs of the first respondent. There should be no order as to the costs of the second respondent as intervener.
I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Hill.
Associate:
Date: 9 April 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION ) No. NG 669 of 1996
ON APPEAL FROM JUDGMENTS OF SINGLE JUDGES
OF THE FEDERAL COURT OF AUSTRALIABETWEEN:GOBEN PTY LIMITED
Appellant
AND:THE CHIEF EXECUTIVE OFFICER OF CUSTOMS
First Respondent
THE CHIEF COMMISSIONER FOR BUSINESS FRANCHISE LICENCES (TOBACCO) NEW SOUTH WALES
Second Respondent
CORAM:Beaumont, Hill and Lehane JJ
PLACE:Sydney
DATE:9 April 1997
REASONS FOR JUDGMENT
LEHANE J: I have had the advantage of reading, in draft, the judgments of Beaumont J and Hill J. I agree with the reasons of Hill J and I agree that the appeal should be disposed of as his Honour proposes.
Particularly, and with respect, I share the difficulty expressed by Hill J in seeing that the matter can be satisfactorily dealt with by a process of construing (or reading down) s 58 of the Business Franchise Licences (Tobacco Act) 1987 (NSW) by reference to the general purpose of that Act, to the adjectival character of the provision (in the sense that it is intended to aid the collection of the revenue which it is the substantial object of the Act to raise) or to s 5. The express terms of s 58 are clearly such as to authorise the physical seizing, carrying away and storing of tobacco to which they apply; and if, for example, the tobacco in this case had simply been warehoused on behalf of the appellant, rather than subject to the control of the Customs, there can be no doubt that the Chief Commissioner might (if the conditions provided by the Act had been met) have entered the warehouse, seized the tobacco and taken it away for storage elsewhere. The power to do that is conferred by the plain terms of subss 58(1), combined with subs 55(1).
If the terms of those provisions are to be construed so as not to authorise an action which would impair the control of the Customs, it can only be done by reading into the provisions an unexpressed qualification, to the effect that, despite the width of their effect in other circumstances, they do not authorise an exercise of the power, where goods are in the control of the Customs, in a way which would interfere with that control. Even given s 5 of the Act, that seems to me, as a matter of construction, a very large step; and, additionally, a step which is partial or provisional only, because there may be other circumstances - a possibility not canvassed before us - in which the powers of the Chief Commissioner under s 58 might come into collision with rights or powers of the Commonwealth, or one of its authorities, under Commonwealth law. It may be, therefore, that if the process of construction results in a qualification of the apparently wide terms of the provisions, the true qualification is to be expressed not simply by reference to the control of the Customs but in more general terms; but I do not think that the material before us could be taken to indicate satisfactorily what those more general terms might be. It might be thought sufficient to read the provisions as subject to a particular qualification, relating to control of the Customs, while recognising that additional specific qualifications might, in later cases, be found to exist. That, however, seems to me a novel process of construction and I am not persuaded that it is warranted.
But given s 109 of the Constitution, in my view there is no need to impute to the State Parliament a particular intention as to the way in which the Act should operate concurrently with the Customs Act: if an intention were to be attributed to the legislature, perhaps a more probable intention might be that any inconsistency between its legislation and the Customs Act would be resolved by s 109 and that otherwise s 58 would operate in accordance with its expressed terms.
The context and purpose of s 58 are helpful as to one aspect of its construction: in my opinion s 58 should be construed so as to authorise not merely physical removal to custody elsewhere but also a more limited, even symbolic, seizing of the kind that occurred here. As Hill J demonstrates, no inconsistency arises between the State legislation and the Customs Act to the extent that the State legislation authorises the steps taken by the Chief Commissioner in this case; no other possible inconsistency arises for consideration.
I certify that this and the preceding 2 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.
Associate:
Dated: 9 April 1997
Heard: 12 February 1997
Place: Sydney
Decision: 9 April 1997
Appearances: Mr D F Jackson QC and Mr S J Stanton of counsel instructed by Warren F Ball & Co appeared for the appellant.
Mr P Roberts of counsel instructed by Australian Government Solicitor appeared for the first respondent.
Mr N Perram instructed by State Crown Solicitor appeared for the second respondent.
Mr J W Shaw QC, Attorney‑General for New South Wales, with Mr A Hughes instructed by State Crown Solicitor intervening.
7
24
0