Hurley and Collector of Customs

This case concerned statutory demands issued by the Collector of Customs to the applicant, Mr Hurley, for payment of duty on alcoholic beverages. The dutiable goods were imported by Liquor Traders Australia Pty Ltd (LTA), of which Mr Hurley was the sole director. LTA held a periodic settlement permission (PSP) allowing it to deliver alcoholic beverages into home consumption without immediate payment of duty, provided the duty was paid by a specified later date. LTA delivered the goods but failed to pay the duty within the stipulated timeframe. Mr Hurley conceded that he had possession, custody, or control of the goods and that the demands were issued to him in his circumstances, and he did not pursue issues relating to LTA’s deed of company arrangement or past payments. The central dispute revolved around whether Mr Hurley had failed to keep the dutiable goods safely, as required by section 35A(1)(a) of the *Customs Act 1901* (Cth).

The Administrative Appeals Tribunal was required to determine whether Mr Hurley had failed to keep the dutiable goods safely within the meaning of section 35A(1)(a) of the *Customs Act*. This involved considering whether the PSP constituted an express statutory exception to the general duty to keep goods safely, and whether the goods remained subject to customs control at the time of the alleged failure. The Tribunal also had to consider the temporal relationship between the delivery of goods into home consumption and the subsequent obligation to pay duty, and how this impacted the applicant's liability under section 35A.

The Tribunal found that the purpose of section 35A is to protect customs revenue, and a failure to keep dutiable goods safely includes failing to prevent their delivery into home consumption without payment of duty. It held that the PSP did not operate as an express statutory exception to section 35A, as liability under section 35A is collateral to, and not substitutional for, the primary liability to pay duty. The Tribunal reasoned that LTA’s failure to pay duty by the specified time meant the goods were delivered into home consumption by "irregular means," constituting a failure to keep them safely. Furthermore, the Tribunal determined that the goods did not cease to be subject to customs control merely by being delivered into home consumption under a PSP, as this delivery was not "in accordance with" the permission due to the non-payment of duty. Therefore, Mr Hurley, as a person entrusted with the goods, had failed to keep them safely.

The Tribunal set aside the Collector's decision regarding Demand 1 and substituted a decision to make a demand for a reduced amount of $424,712.30. The decision regarding Demand 2 for $83,027.54 was affirmed. The decision regarding Demand 3 was set aside, with a decision not to make a demand. The decision regarding Demand 4 for $690,481.38 was affirmed.