Malika Holdings Pty ltd v Stretton

The High Court of Australia considered an appeal from the Court of Appeal of the Supreme Court of Victoria concerning the recovery of unpaid customs duty. The dispute arose when Malika Holdings Pty Ltd imported cotton garments, declaring them as "handcrafted" and thus exempt from duty. After the goods were released, Customs determined the garments were machine-made and attracted duty. The Collector of Customs subsequently sought to recover this duty, but Malika Holdings did not pay it, either under protest or otherwise.

The central legal issue before the High Court was whether section 167 of the *Customs Act 1901* (Cth) prevented the owner of goods from disputing the amount or liability to duty in proceedings initiated by the Collector for recovery, unless the duty had first been paid "under protest" and a separate action commenced for recovery. The Court of Appeal had held that the owner could not dispute the duty in the Collector's action unless this procedure was followed, requiring the owner to initiate a separate action if they wished to challenge the duty.

The High Court, by majority, allowed the appeal. The Court reasoned that section 167 of the *Customs Act* did not preclude an owner from disputing the rate or amount of duty, or the liability of goods to duty, in an action brought by the Collector to recover unpaid duty. The Court found that the owner could raise such disputes irrespective of whether the duty had been paid under protest. The Court's interpretation was that the owner was permitted to challenge the Collector's claim directly within the Collector's proceedings, rather than being forced to pay under protest and then initiate a separate action.

Consequently, the High Court allowed the appeal with costs, setting aside the orders of the Court of Appeal and dismissing the appeal to that Court with costs.