Morton v Union Steamship Co of New Zealand Ltd

In an action before the High Court of Australia, Charles Evors Morton, the Collector of Customs for New South Wales, sought to recover a sum of money from the Union Steamship Co. of New Zealand Ltd. The plaintiff's claim was based on the defendant's alleged failure to safely keep excisable goods in its custody pending their exportation. Regulation 188 of the Excise Regulations 1925-1948 was invoked, which purportedly imposed a liability on the defendant to pay an amount equal to the excise duty on the goods that were not safely kept or accounted for. The defendant demurred to this part of the statement of claim, arguing that regulation 188 was invalid as it was ultra vires the power granted by the Excise Act 1901-1949.

The central legal issue before the court was the validity of regulation 188 of the Excise Regulations. Specifically, the court had to determine whether this regulation, which imposed a liability on a custodian of excisable goods for their safe keeping and accounting, and stipulated a payment equal to the excise duty if these obligations were not met, fell within the scope of the regulation-making power conferred by section 164 of the Excise Act 1901-1949. This section empowered the Governor-General to make regulations not inconsistent with the Act, prescribing matters necessary or convenient for giving effect to the Act or for the conduct of business relating to excise.

The court reasoned that while section 164 authorised regulations for the more effective administration of the Act, it did not permit regulations that varied from or departed from the positive provisions of the Act, nor those that extended beyond the field the Act itself marked out. The Excise Act 1901-1949 specifically detailed who was liable for excise duty, when it was payable, and provided for security measures. Regulation 188, by imposing a distinct and independent additional liability on custodians for the safe keeping of goods, went beyond mere administrative convenience or the effective implementation of existing provisions. It introduced a new layer of policy and obligation not contemplated by the Act's specific provisions regarding liability and revenue collection. Therefore, the court concluded that regulation 188 was beyond the power conferred by section 164 and was consequently void.

The demurrer was allowed with costs.