Stretton v Malika Holdings Pty Ltd
[1998] VSCA 127
•4 December 1998
SUPREME COURT OF VICTORIA
COURT OF APPEAL Not Restricted
No. 5173 of 1990
| VIRGINIA STRETTON (in her capacity as Regional Director of the Australian Customs Service for the State of Victoria) |
| Appellant |
| v |
| MALIKA HOLDINGS PTY. LTD. |
| Respondent |
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JUDGES: | Winneke, P., Charles and Batt, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 August, 1998 | |
DATE OF JUDGMENT: | 4 December, 1998 | |
MEDIA NEUTRAL CITATION: | [1998] VSCA 127 | |
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CUSTOMS AND EXCISE - Duty - Proceeding by Collector to recover duty as short levied after goods released to importer - Importer cannot in its defence dispute dutiability or amount or rate of duty but must proceed under s.167 - Post-warrant amendment entries - Whether demand by Collector necessary - "If any dispute arises ..." - Customs Act 1901 (Cth.) ss.7, 71F, 71G, 71J, 153, 165, 167, 273GA.
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APPEARANCES: | Counsel | Solicitors |
For the Applicant | Mr. G.T. Pagone, Q.C. and Mr. B.E. Walters | Australian Government Solicitor |
| For the Respondent | Mr. M.A. Dreyfus | Jeffrey Waincymer |
WINNEKE, P.:
I agree with Batt, J.A.
CHARLES, J. A.:
During the hearing of the appeal, I was at first impressed by Mr. Dreyfus's contention that the construction of s.167 of the Customs Act 1901 (Cth) argued for the appellant results in the respondent being prohibited from raising any matter in defence in the proceeding since the respondent had not paid the duty claimed under protest; and that such a construction, removing fundamental common law rights, should not be accepted, when another interpretation - less invasive of the general system of law - was open. Having had the advantage of reading the reasons for judgment of Batt, J.A., however, I am persuaded that the appellant's construction of s.167 is correct, and that s.167 constitutes the only means by which an importer or owner of goods may challenge the amount and rate of, and the liability of, goods to customs duty, for the reasons given by his Honour.
I agree with Batt, J.A. that it was, before the 1992 amendments to the Customs Act, and remains now, possible for the owner of goods, when a demand for duty short-levied is made or when he or she is sued for unpaid duty, to make a protest in accordance with s.167 after the goods have been entered and taken into home consumption. On this view the respondent, once the duty has been paid, remains entitled to challenge the amount or rate of duty and the liability of the goods to duty.
On this view, there can be no good reason for straining to interpret Part VIII of the Customs Act in such a way that a different regime should operate depending upon whether the importer is seeking to recover moneys said to have been overpaid as duty, or whether Customs is claiming moneys allegedly owing as duty in circumstances where the Customs have delivered the goods to the respondent without payment of duty.
I agree with Batt, J.A. that the appeal should be allowed, and the questions answered in the form proposed by his Honour.
BATT, J.A.:
Introduction
This is an appeal, by leave of the Court of Appeal given on 24 October 1997 (after the time for applying therefor had been extended by a judge), from an order of a judge of the Court made as long ago as 20 October 1994 answering in the affirmative a preliminary question which Master Wheeler by order made 13 May 1993 pursuant to Rule 47.04 of Chapter I of the Rules of Court had stated and ordered to be tried before the trial of the action. The question is:
"Is the Defendant entitled to dispute:
(a) the amount of duty
(b) the rate of duty; or
(c) the liability of the goods the subject of the action to duty
where the Defendant has neither:
(i)paid under protest pursuant to subsection 167(1) of the Customs Act 1901 the sum demanded by the Collector as the duty payable in respect of the goods; nor
(ii)brought an action pursuant to subsection 167(2) of the Customs Act 1901 for recovery of the sum so paid?"
In the proceeding in which the question was stated the appellant, who is a Collector of Customs (Customs Act 1901 (C'th) ("the Act"), s.8(1)(a)), seeks as plaintiff to recover from the respondent as defendant the sum of $44,540.77 claimed to be payable as customs duties in respect of a shipment of clothing imported from India on or about 23 September 1986. By its defence served on 23 April 1990 the respondent, amongst other things, in effect denied that the goods were dutiable and in terms denied the rate and amount of duty alleged by the appellant in the statement of claim.
The Master's order provided for the trial of the preliminary question to be by affidavit. An affidavit had been filed for the appellant setting out the facts relevant to the preliminary question and was relied on. The essential facts are not in dispute. On or about 23 September 1986 the respondent imported into Australia certain cotton garments from India and lodged with Customs an entry for home consumption in respect of them. The entry was accompanied by invoices describing the goods as "handcrafted cotton garments". There was no duty payable on handcrafted cotton garments by reason of concessions under Part II of Schedule 4 to the Customs Tariff Act1982 (Cth) for "handicrafts" (as defined in Note 1 to that Part), whereas there was substantial duty payable on machine-made garments. Given the description of the goods, they were entered as duty free.
On 26 September 1986 Customs queried the importation and directed that two samples of each type of garment be taken from the bulk to enable checks to be made as to the eligibility of the garments for exemption. On 30 September the goods were released to the respondent upon the giving by the latter of a written "guarantee" or undertaking to pay "any additional duty charges applicable". During October and November 1986, expert opinion was provided to Customs that the garments were machine-made and thus Customs decided that they attracted duty. With the possible exception of an ineffectual demand for additional duty in December 1986 (the making or, perhaps, effect of which is in dispute), Customs took no step to recover the duty until late in 1988, when an enquiry was made of the respondent whether it was entitled to any quota benefits which might have reduced the amount of duty payable. On 24 April 1989 Customs wrote to the respondent enclosing a formal demand for payment by 8 May 1989 of the amount now claimed. The letter stated that the sum could be paid under protest pursuant to s.167 of the Act. The respondent did not pay the sum claimed either under protest or otherwise. On 2 March 1990 the writ in the present proceeding was filed.
Relevant legislation in force at the time of importation
As the preliminary question makes clear, the critical provision is s.167 of the Act. But it is necessary or desirable to have regard to other provisions as well. Many of the provisions have been amended since they were first introduced into the Act, and in particular have been amended between the date of importation and the present date. It is the legislation in force at those dates and perhaps the date this proceeding was commenced that is directly material to the preliminary question, but it is necessary or desirable to refer in more detail to the legislative history of certain of the provisions.
I summarise or set out, so far as material, relevant provisions of the Act in force in September and December 1986. I begin with the sections that constitute the backdrop to the curial drama. By s.7 the Comptroller-General had the general administration of the Act. Part III of the Act was headed "Customs Control Examination Entries and Securities Generally". By s.30(a) goods were to be subject to the control of the Customs, in the case of all goods imported, from the time of importation until the goods were dealt with in accordance with an entry of the goods for home consumption, or by virtue of an approval or permission from a Collector (ss.71A and 71B) or under the regulations (s.162A), or until exportation to parts beyond the seas, whichever should first happen. By s.33, a person was not to move or interfere with goods subject to the control of the Customs. By s.36, an entry in respect of goods required or eligible to be entered was to be made by the "owner" of the goods giving to an appropriate Collector in a manner prescribed by the regulations an entry in respect of the goods containing the particulars required by the regulations and, on the giving of the entry, the goods were to be taken to be entered. "Owner" was defined in s.4(1) to include importer and consignee. Section 36 was subject to s.37, (which dealt with advance entries). Section 38 permitted the withdrawal by the owner of goods, by written notice to the Collector, of an entry at any time before duty in respect of the goods the subject of it was paid. Section 38A prohibited an entry subsequent to an entry for home consumption unless the latter had been withdrawn under s.38. By s.39, subject to the Act, where an entry in respect of goods had been made, the Customs might give authority in accordance with the regulations for those goods to be dealt with in accordance with that entry, and in that event s.40 required the owner to deal forthwith with the goods in accordance with the entry. Section 38B(1) authorised a Collector to refuse to give authority under s.39 if he had not verified particulars of the goods shown in the entry by reference to information contained in commercial documents furnished to him by the owner upon, or at any time after, the giving of the entry. Subsequent sub-sections authorised a Collector to require of the owner written information or to ask questions of the owner and meanwhile to withhold authority under s.39. In particular, sub-s.(4), replacing the original s.216, mentioned in argument, authorised a Collector to require proof by declaration or production of documents that the goods were owned as claimed and were properly described, valued, or rated, for duty. By s.42 the Customs was given the right, exercisable by a Collector, to require and take securities for compliance with the Act and generally for the protection of the revenue and, pending the giving of the required security, to refuse to deliver the goods or give any authority under s.39 to deal with them. By s.43 a security was to be given "in a manner and form approved by a Collector" and might, subject to that approval, be by "bond, guarantee, cash deposit or any other method, or by two of more different methods." See also Customs Regulations, regs. 25 and 201. Section 47 provided that the form in Schedule I to the Act should suffice for all purposes of a bond or guarantee under the Act. That form is skeletal. Section 48(1) (held valid in Commonwealth v. Melbourne Harbour Trust Commissioners (1922) 31 C.L.R. 1) provided that whenever any such Customs security was put in suit by the Collector the production thereof without further proof should entitle the Collector to judgment for their stated liability against the persons appearing to have executed the same unless the defendants proved compliance with the condition or that the security was not executed by them or release or satisfaction. It is clear from this provision that a Customs security was to state the amount of the obligors' respective liabilities or at any rate a method of calculating them as liquidated sums.
Part IV of the Act was headed "The Importation of Goods". Division 4 of that Part, as its heading showed, contained provisions relating to the entry, unshipment, landing and examination of goods. Section 68(1) required, subject to the Act, goods that were imported to be entered for home consumption, warehousing or trans-shipment. Section 69 provided for sight entries and s.71 for complete entries thereafter. By s.72(1), where imported goods required to be entered were not entered a Collector was authorised to move the goods to a warehouse or other place of security. By s.74, except as prescribed, goods might be unshipped only pursuant to a Collector's permit or an authority to deal with the goods under s.39. Approval and permission under ss.71A and 71B respectively have already been mentioned.
Part VIII of the Act was headed "The Duties". Division 1 dealt with the payment and computation of duties generally. By s.132, subject to s.132B (which related to declared period quotas having the effect of postponing the date of the applicable rate of duty), the rate of any import duty payable on goods was the rate in force when the goods were entered, or first entered, for home consumption, with a presently immaterial exception in relation to a subsequent entry for warehousing. The last section in the Division is important. It read:
"153All duties shall constitute Crown debts charged upon the goods in respect of which the same are payable and payable by the owner of the goods and recoverable at any time in any court of competent jurisdiction by proceedings in the name of the Collector."
Division 2 contained detailed provisions for the valuation of imported goods. Division 3 was headed "Deposits, Abatements, Remissions, Refunds and Rebates of Duties". It contained provisions allowing the delivery to importers of goods intended for export upon the giving of security either specifically or generally, but it is unnecessary to summarise those provisions. Section 163 provided for the making of refunds, rebates and remissions of duty. Section 165(1) is of some importance. It provided:
"165.(1)When any duty has been short levied or erroneously refunded the person who should have paid the amount short levied or to whom the refund has erroneously been made shall pay the amount short levied or repay the amount erroneously refunded on demand being made by the Collector within twelve months from the date of the short levy or refund."
The final Division in the part, Div.4, headed "Disputes as to Duty", contained one section, s.167. It read:
"167. (1)If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff, or under any Customs Tariff or Customs Tariff alteration proposed in the Parliament, the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section.
(2) The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid.
(3) A protest in pursuance of this section shall be made by writing on the entry of the goods the words 'Paid under protest' and adding a statement of the grounds upon which the protest is made, and, if the entry relates to more than one description of goods, the goods to which the protest applies, followed by the signature of the owner of the goods or his agent.
(4) No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times:
(a)In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment; or
(b)In case the sum is paid as the duty payable under a Customs Tariff or Customs Tariff alteration proposed in the Parliament, within 6 months after the Act, by which the Customs Tariff or Customs Tariff alteration proposed in the Parliament is made law, is assented to.
(5)Nothing in this section shall affect any rights or powers under section 163."
Finally, by an amendment introduced in 1980, as subsequently amended before September 1986, a procedure by way of application to the Administrative Appeals Tribunal of the Commonwealth was provided in s.273GA as an alternative to the procedure of action under s.167. So far as material, s.273GA provided:
"(2)Where a dispute referred to in sub-section 167(1) has arisen and the owner of the goods has, in accordance with that sub-section, paid under protest the sum demanded by the Collector, an application may be made to the Tribunal for review of the decision to make that demand and of any other decision forming part of the process of making, or leading up to the making of, that first-mentioned decision.
(5)An application may not be made to the Tribunal under sub-section (2) unless the application is made within the time specified in paragraph 167(4)(a) or (b), whichever is appropriate.
(6)Where the owner of the goods has made an application to the Tribunal under sub-section (2), he is not entitled to bring an action under sub-section 167(2).
(7)Where, on an application made under sub-section (2), the Tribunal has made a decision reviewing a demand made by the Collector, the proper duty payable in respect of the goods concerned shall be deemed to be -
(a)the sum determined to be the proper duty by, or ascertained to be the proper duty in accordance with -
(i)the decision of the Tribunal; or
(ii)an order of a court on appeal from that decision; or
(b)the sum paid under protest,
whichever is the less.
(8)In this section, 'decision' has the same meaning as in the Administrative Appeals Tribunal Act1975."
The "Tribunal" is the Administrative Appeals Tribunal.
Duty is of course imposed, for constitutional reasons, by a separate Act. At the relevant time this was the Customs Tariff Act1982. By s.2 of that Act, the Customs Act 1901 was incorporated, and was to be read as one, with the first-mentioned Act. Part II of the Tariff Act dealt with duties of Customs. Section 18(1) provided, so far as material, that, subject to that Act, duties of Customs were imposed, in accordance with that Part, on goods imported into Australia. The general rates of duty were specified by s.19. Part III dealt with concessional rates of duty. Substituted concessional rates of duty were provided for by s.29, which made applicable the provisions of Part II of Schedule 4 already mentioned.
Legislative provisions currently in force
Such, then, are the relevant legislative provisions at the time of the importation and the time of the asserted first demand in question here. I turn now to the legislation as it presently stands, both because it may bear on the question of what steps, if any, are open to the respondent as defendant in the proceeding and because the rival contentions of the parties as to the effect upon commerce of the decision below may need to be considered prospectively rather than on the legislation in force in 1986.
Section 7 now refers to the Chief Executive Officer of Customs. Whilst the provisions relating to the requiring and giving of security in force in September 1986 referred to earlier (ss.42, 43, 47 and 48), as well as s.33, remain either unamended or amended only immaterially, the provisions in Part III relating to entries that were referred to earlier (ss.36, 37, 38, 38A, 38B, 39 and 40) have been repealed and all the provisions relating to entry and authority to deal with goods are now found in expanded form in Div.4 of Part IV, read with Div.4A relating to the use of computers for import entry purposes. These changes were made in 1992, by the same Act as substituted in s.167 the sub-ss.(3) and (3A) appearing in the current version of s.167, which is set out in the next paragraph. That has meant that the terminology and references in s.30 relating to the control of the Customs over goods have required alteration. But since the goods in question have long since passed into home consumption it is unnecessary to summarise the present provisions. I simply note that under s.71F(1) the withdrawal of an import entry is authorised "before the goods to which it relates are dealt with in accordance with the entry"; that, by s.71G, where goods have been entered for home consumption a person must not communicate a further entry to Customs in respect of those goods unless the first-mentioned entry is withdrawn; and that, by s.71J, where a person who has communicated an import entry changes information included in that entry the person is taken to have withdrawn the entry as it previously stood.
In Div.1 of Part VIII, so far as material, s.132, relating to the rate of import duty, remains the same and s.153 has not been amended at all. In Div.3, whilst their terms have been amended, the nature and effect of ss.162, 162A, 163 and 165 have not been changed. Section 167, the critical section, has been changed, principally to cover the case of import entry by computer. It now reads:
"167.(1)If any dispute arises as to the amount or rate of duty payable in respect of any goods, or as to the liability of any goods to duty, under any Customs Tariff, or under any Customs Tariff or Customs Tariff alteration proposed in the Parliament (not being duty imposed under the Customs Tariff (Anti-Dumping) Act1975), the owner of the goods may pay under protest the sum demanded by the Collector as the duty payable in respect of the goods, and thereupon the sum so paid shall, as against the owner of the goods, be deemed to be the proper duty payable in respect of the goods, unless the contrary is determined in an action brought in pursuance of this section.
(2)The owner may, within the times limited in this section, bring an action against the Collector, in any Commonwealth or State Court of competent jurisdiction, for the recovery of the whole or any part of the sum so paid.
(3)If a documentary import entry has been made in respect of goods, a protest under this section is taken to have been made if, and only if, the owner of the goods or the agent of the owner:
(a)writes on the entry 'Paid under protest'; and
(b)adds to the entry a description of the goods to which the protest relates (where the protest does not relate to all the goods covered by the entry) and a statement of the grounds on which the protest is made; and
(c)signs the statement.
(3A)If a computer import entry has been made by a registered COMPILE user in respect of goods, a protest under this section is taken to have been made if, and only if, the registered COMPILE user transmits to Customs at the time of making payment in respect of those goods following an import entry advice under section 71B:
(a)the entry number; and
(b)the words 'Paid under protest'; and
(c)a description of the goods to which the protest relates (where the protest does not relate to all the goods covered by the entry) and a statement of the grounds on which the protest is made.
(4)No action shall lie for the recovery of any sum paid to the Customs as the duty payable in respect of any goods, unless the payment is made under protest in pursuance of this section and the action is commenced within the following times:
(a)In case the sum is paid as the duty payable under any Customs Tariff, within 6 months after the date of the payment; or
(b)In case the sum is paid as the duty payable under a Customs Tariff or Customs Tariff alteration proposed in the Parliament, within 6 months after the Act, by which the Customs Tariff or Customs Tariff alteration proposed in the Parliament is made law, is assented to.
(5)Nothing in this section shall affect any rights or powers under section 163."
A "documentary import entry" is an entry effected by document in accordance with s.71A(1)(a) and (2).
The provisions of s.273GA set out earlier continue unamended.
In 1989 s.243T was added to the penal provisions. It provides for the owner of goods upon demand made within 12 months to pay a penalty equal to twice the amount of the excess of the duty properly payable over the amount payable if determined on the basis of a statement made by a person, whether knowingly, recklessly or otherwise, to an officer that is false or misleading in a material particular. For the purposes of that provision an import entry by computer that is taken to have been communicated to Customs is treated as a statement made to the Chief Executive Officer of Customs. (Section 234(1)(d) and (3), an offence provision, is not dissimilar in relation to statements knowingly or reckless false or misleading in a material particular.) Section 243T is qualified by the power in s.243U to remit the penalty in whole or in part, and can be rendered inapplicable by disclosure in cases of uncertainty under s.243V.
Earlier legislative history of the main section
In relation to the main sections only it is necessary to state their legislative history up to 1986. Section 153 has not been amended since 1901. Nor has s.165(1) except for the recent substitution of "CEO" for "Collector". On the other hand, s.167 has been amended several times. As enacted in 1901 it provided:
"167.If any dispute shall arise as to the amount or rate of duty or as to liability of goods to duty the owner may deposit with the Collector the amount of duty demanded and thereupon the following consequences shall ensue:-
(1)The owner upon making proper entry shall be entitled to delivery of the goods.
(2)The deposit shall be deemed the proper duty unless by action commenced by the owner against the Collector within six months after making the deposit the contrary shall be determined, in which case any excess of the deposit over the proper duty shall be refunded by the Collector to the owner with Five pounds per centum interest added.
The provisions of this section shall not apply to any goods which may be detained or seized for undervaluation or in respect to which any attempt to evade the payment of duty may have been made."
(It may be observed that s.154 of the Excise Act 1901 (Cth.), which corresponds to s.167, is, unlike s.167, still in substantially the same form as it was when enacted.)
A new section 167 was substituted by the Customs Act 1910. Disregarding stylistic matters, that section was in the same terms as the section as in force in 1986 except in two respects. First, sub-s.(3) of the 1910 version did not require the addition of a statement of the grounds of protest or a specification of the goods to which the protest applied in the case of more than one description of goods. Secondly, the 1910 version included a sub-s.(6) containing definitions of "proposed Tariff" and "Tariff alteration", and it used those defined expressions in sub-ss.(1) and (3). As to the first of those differences, the words appearing in sub-s.(3) as at 1986 between the words "adding" and "the signature" were inserted by the Customs Act1923. As to the second difference, sub-s.(6) was repealed and the references to proposed Tariff or Tariff alterations appearing in sub-ss.(1) and (3) as at 1986 were substituted by the Customs Act 1963.
Finally, s.273GA(2), as originally enacted in 1980, specified the subject of the review as "the demand made by the Collector for that sum". That expression was changed to the present expression by the Customs (Valuations) Amendment Act1981. A stylistic change was made in 1982.
Regulations
Although the topic of regulations was mentioned by the Bench, neither party referred the Court to any regulation.
Reasons
The issue in this appeal, as stated (correctly, in my view) by senior counsel for the appellant, is: Does s.167 constitute the only means by which an importer (or, more generally, the owner of goods imported) may challenge the amount and rate of, and the liability of goods to, Customs duty? The Court was informed that the proceeding in which the order appealed from was made was a test case on that issue. For the appellant it was contended that the issue so stated should be answered in the affirmative and the preliminary question accordingly in the negative. For the respondent the reverse was contended. The appellant contended that s.167 constitutes a code for the resolution of any dispute as to duty. The respondent accepted that s.167 formed a code, but said that the issue here was the content of that code. With that I agree, as will appear. The respondent argued that s.167 constitutes no more than the only means by which an importer may seek to recover moneys paid as duty said to have been overpaid: it is silent as to the case where no payment at all has been made. With that, as will appear, I do not agree.
In Comptroller-General of Customs v. Kawasaki Motors Pty. Ltd. (No.2) (1991) 32 F.C.R. 243 at 263 a majority of the Federal Court did hold that s.167 provided the only method whereby an action for the recovery of overpaid Customs duty could be brought where there was a dispute between the owner of the goods and the Collector as to liability or matters affecting liability and that the section operated to exclude the availability of any alternative common law remedy. (This is subject to the possible effect, immaterial for the purposes of that case and for present purposes, of s.273GA(2), as is shown by the discussion by the majority at 263-264.) In Collector of Customs v. Gaylor Pty. Ltd. (1995) 35 N.S.W.L.R. 649 (special leave to appeal refused: [1995] 17 Leg.Rep. SL 1), a case decided after the decision under appeal, the New South Wales Court of Appeal expressed the same opinion, but with the qualification that the provisions of s.273GA provided another method and under it a common law recovery action could be instituted. In other words, as Cole, J.A. said at 660, there were two methods by which an owner who paid duty under protest could contest the propriety of the duty imposed. But, subject to the qualification worked by s.273GA, it is clear that, as a step in their reasoning, each of the members of that Court accepted the ratio decidendi of Kawasaki Motors. Indeed Handley, J.A. at 655 expressly approved the statement at p.263 of that case. In A&G International Pty. Ltd. v. Collector of Customs (1995) 129 F.L.R. 23 Ormiston, J. followed the ratio of Kawasaki Motors, adding powerful reasons of his own for the conclusion that, subject to being read down only to the extent necessary to enable s.273GA to have effect, s.167 constituted a code in relation to the recovery of any overpayments of Customs duty. In Matchbox Toys Pty. Ltd. v. Chief Executive of Customs (unreported, Supreme Court of New South Wales, 17 October 1997) Rolfe, J. accepted the ratio of Kawasaki Motors. Section 167 is referred to in the recent decision of the High Court in The Commonwealth v. SCI Operations Pty. Ltd. (1998) 72 A.L.J.R. 687 at paras 37, 60 and 101 (in n.28). At the last reference Kirby, J. described one matter which it was unnecessary to decide as "the suggested effect of s.167(4)...," with a reference to Kawasaki Motors. That description, when the matter was not decided, does not warrant this Court's declining to follow Kawasaki Motors. No reliance was placed on the footnote by either party. Indeed the High Court decision in SCI Operations was not cited.
The first four cases referred to in the immediately preceding paragraph undoubtedly establish the exclusiveness, subject to the qualification wrought by s.273GA, of the method provided in s.167 as the method for recovery of overpaid Customs duty. Those cases effectively reject the view, cited for the respondent, of Dr. Wollaston in his Customs Law (1904) at 115, who relied on Chapman v. Pickersgill (1762) 2 Wils. 145; 95 E.R. 734. The respondent indeed accepts the principle of exclusiveness. (Its written outline asserted a qualification under s.163 and (rarely) the common law.) But it argues that the four cases relevantly decided no more than that and that the area in which the operation of s.167 is exclusive extends no further than those cases decided. I agree with the respondent's submission that those cases did not relevantly decide more than the proposition stated. There are, however, passages in some of the judgments in those cases which, read in isolation, support the appellant's affirmative answer to the issue in this appeal. Thus, for instance, in Kawasaki Motors at 263 Hill and Heerey, JJ. said, "Whenever there is a dispute of the kind described in sub-s.(1), the owner of the goods, if he wishes to protect his position, must not only pay the duty, but also must protest in the manner provided by that section." Similarly, in Gaylor at 653 Clarke, J.A. said, "At the time when s.167 provided the sole means of challenging an assessment of duty it is obvious that the meaning and effect of sub-s.(4) was clear. There simply was no other way in which the challenge could be mounted." Again, in A&G International at 30 Ormiston, J. said that it was implicit in the reasoning in Gaylor "that s.167 should be treated as a code in respect of disputes relating to customs duty except" so far as s.273GA applied; and at 34 his Honour said, "The consistent policy of the parliament reflected in both sections [scil ss.167 and 273GA] is to prevent an importer from raising a dispute and claiming an incorrect imposition of duty except in the stringent circumstances laid down by each of the sections." Reference may also be made to the judgment of the New South Wales Court of Criminal Appeal in Barendse v. Comptroller-General of Customs (1996) 93 A.Crim.R. 210 at 230. These passages are not of great persuasive force on the issue here. For not only are cases only authority for what they actually decide, but passages in judgments are to be read in their context, including the context provided by the issues for decision. By the same token, however, none of the cases decided that s.167 had no further operation. In short, they did not decide the issue raised in this appeal.
I turn, then, to the interpretation of the words of s.167. I take them in their statutory and historical context, as Mason, J. demonstrated must be done in an oft-applied passage in his dissenting judgment in K&S Lake City Freighters Pty. Ltd. v. Gordon & Gotch Ltd. (1985) 157 C.L.R. 309 at 315. Now, the condition with which sub-s.(1) opens is not limited as to the time or stage of the arising of the dispute or as to the occasioning of it. Provided that the dispute is as to one or more of the specified subject-matters to which the condition is limited (amount of duty, rate of duty and dutiability of goods), it may be of any nature, extent, time or sequential position. For the sub-section speaks of "any dispute". Whilst it is undoubtedly the case that a particular context may limit the meaning or operation of the indefinite adjective "any", ordinarily it is, as Fry, LJ. said in his dissenting judgment in Duck v. Bates (1884) 13 Q.B.D. 843 at 851-852, a word that excludes any limitation or qualification of the other words used and declares affirmatively that the genus described by the legislature shall be taken in its utmost generality. That statement was approved and applied by Williams, J. in Victorian Chamber of Manufactures v. The Commonwealth (Prices Regulations) (1943) 67 C.L.R. 335 at 346 and in turn by Fisher, J. in Collins v. Repatriation Commission (1980) 48 F.L.R. 198 at 213. Here, in my view, by the respondent's denying in its defence the amount and rate of duty pleaded by the appellant as payable in respect of the goods and by its denying in effect, if not in form, that the goods were liable to duty at all there arose, within the meaning of sub-s.(1), a dispute as to each of the three specified subject-matters. Counsel for the respondent expressly disavowed any challenge to that. Further, sub-s.(1) of s.167 opens with a clause which stipulates the condition upon which the next clause depends; and all the succeeding provisions of the section are linked not only conceptually but by words which look either backwards or forwards ("thereupon ... so paid" and "action brought in pursuance of this section" in sub-s.(1); "within the times limited in this section" and "so paid" in sub-s.(2); "protest in pursuance of this section" in sub-s.(3); and at least "protest in pursuance of this section" in sub-s.(4)). Accordingly, if, as I consider occurred here, the opening condition is satisfied, the whole of the rest of the section is enlivened.
The view that sub-s.(1), and thus the whole linked section, is apt to embrace the dispute as to the three subject-matters that undoubtedly arose here is, I consider, confirmed by the heading to Div.4, "Disputes as to Duty", which is part of the Act (Acts Interpretation Act 1901 (Cth.), s.13(1)). For one would expect to find all the provisions relating to disputes as to duty in that Division. One finds no provision but s.167. The existence elsewhere in the Act of no other provision relating to disputes as to duty was suggested in argument, apart, of course, from s.273GA. The natural meaning of the section, then, accords with the appellant's construction.
The view which I have expressed is, I consider, supported also by the history of s.167. Until 1910 the wording of s.167 pre-supposed that the goods were in all cases to which it applied under the control of Customs until the payment ("deposit") of the amount of duty demanded. But after the amendment of 1910 the former para.(1), which had warranted that pre-supposition, no longer appeared. Hence the new section was capable of application after Customs had permitted the owner to obtain delivery of the goods. Counsel for the respondent did not, when asked, advance any reason for the change which showed to my mind that it did not have that purpose and effect. Although it is a small point, it may be noted that the Minister in charge of the Bill to amend s.167 in 1910 did state, "The procedure here proposed is considered to be more convenient for the Government": Commonwealth Parliamentary Debates - Senate, 16 November 1910, p.6187. It appears, too, from his speech that the Government wished to make the provision all-embracing. It is to be noted that s.30 of the United Kingdom Customs Laws Consolidation Act 1876 (39 & 40 Vict c. 36), which seems to have been the immediate source of the original s.167, made the same pre-supposition as the latter, as did the former's predecessor, s.29 of the United Kingdom Customs Consolidation Act 1853 (16 & 17 Vict c. 107), from which s.21 of the Victorian Customs Act 1857 (No.13) was derived. It was s.167 in its original form that fell for consideration by the High Court in Sargood Bros. v. The Commonwealth (1910) 11 C.L.R. 258. Similarly, the legislation considered by the Full Court of this Court in Sargood v. The Queen; McArthur v. The Queen (1878) 4 V.L.R(L) 389, which at 396 Barry, J. described as prescribing an imperative method in case of dispute, was s.21 of the Victorian Customs Act 1857. Accordingly, in my opinion, Sargood v. The Queen and Sargood Bros., whilst useful historically, are not of direct application to the issue in this appeal.
The construction which I favour derives some, perhaps not great, further support from considerations discussed later, namely, an argument of inconvenience, and a comparison of the position of the Customs as against the Commissioner of Taxation in particular, if the respondent's construction were correct.
The parties were in agreement that, where the Collector claimed that a certain amount of duty was payable and the owner of the goods disagreed with that, the owner had the option of paying under protest pursuant to s.167 or of paying without protest. The option of paying without protest is not, I am inclined to think, one conferred by s.167(1) itself. It was at one stage in the course of argument suggested that there was a third option, not to pay at all; but I do not think that that is an option under the Act, at any rate when a demand for the duty has been made in accordance with s.165(1), for non-payment would be a contravention of the Act. Although senior counsel for the appellant expressly declined to embrace the interpretation which follows, to my mind the word "may" in s.167(1) does not confer a discretion, but rather an authorisation or permission, as though the relevant part of the sub-section read, "... it shall be lawful for the owner of the goods to pay under protest ...". (Section 33(2A) of the Acts Interpretation Act 1901 is, for chronological reasons, inapplicable.) In other words, a procedure was being set up (or, in the case of amending legislation, substantially continued) under which owners were authorised to pay under protest and then sue for recovery. To my mind also, s.167(1) is analogous to the provisions in the Transfer of Land Act 1890 to the effect that "the proprietor of land ... may transfer the same by a transfer in one of the forms" in a schedule, considered by the High Court in Crowley v. Templeton (1914) 17 C.L.R. 457. (Substantially similar provisions occur in the current Act.) At 463 Griffith, C.J. said:
"Our attention was called to the fact that secs.89, 99 and 113 are in form permissive, while in the Act which introduced the new system, the Real Property Act 1862, the corresponding provisions were imperative, the word 'shall' being used where the word 'may' is now used. But ... the only way of dealing with land which is under the provisions of the Act is by alteration of the register, and modes by which such alteration can be procured are prescribed by the Act. No other mode is authorized. These provisions, therefore, although in form permissive or facultative, are in effect peremptory and exclusive."
The more general remarks of Isaacs and Gavan Duffy, JJ. at 466 show that they must necessarily have been of the same view. Here, too, the provision, although in form permissive or facultative, is, in my view, in effect peremptory or exclusive. That is, if an owner of goods wishes to maintain a dispute which has arisen as to one of the specified subject-matters the owner must follow the statutable procedure. If that be correct, it is immaterial that s.21 of the Customs Act 1857 used the word "shall", though, as I have already said, Sargood v. The Queen is distinguishable on another ground. I am conscious that in Sargood Bros. at 277-278 O'Connor, J. described the procedure under s.167 (twice, with respect, misnamed as s.165) as optional, as opposed to that under the Act of 1857, which was the only one permissible. In addition, Griffith, C.J. at 266 stated that he had assumed that the remedy given by s.167 was exclusive (by which he meant exclusion of a common law remedy), but must not be understood to express any opinion on that point. He then said that he would only point out that the words the "owner may" are prima facie permissive and not, like the words "the owner shall" in the corresponding section of the English Customs Regulation Act (usually known as the Customs Laws Consolidation Act 1876), peremptory. But most importantly s.167 then contained no equivalent of the later sub-s.(4). Further, one case clearly obiter and in the other arguably so, Griffith, C.J. held that there was no "dispute" and O'Connor, J. held that the moneys paid were, by statute, not recoverable. Further the Chief Justice was in dissent. As regards his Honour's statement, I have already said that the wording here is permissive in form. As to O'Connor, J.'s statement, it is true that the owner has an option, though for his Honour the alternative option was to sue for recovery outside the Act. It may be that O'Connor, J.'s view was influenced by the fact that the moneys demanded were for duties that would become payable only if the tariff proposed or any proposed amendment thereof were to become law. In any event, it is clear now from the subsequent authorities discussed earlier that there is only one method of recovering moneys overpaid as Customs duties, namely, that laid down in s.167: that method of recovery is not merely optional. In the present context reference may usefully be made to Kawasaki Motors at 262-263 as to the effect of the word "may". I should say that my view that the permissive language of s.167(1) is in effect peremptory and exclusive is the consequence of agreeing with the appellant's construction, not another reason for doing so.
Each party sought to use to its advantage the fact that no decision, reported or unreported, has been found where, in defence to a proceeding for the recovery of Customs duty, an owner has put in issue the rate or amount of duty or dutiability. That may tend to show (though it does not demonstrate) either that it has hitherto been accepted that this cannot be done or, on the other hand, that there has never been a suggestion, requiring a decision, that it cannot be done. It may be that the present circumstances (that is, release of the goods without payment or security, at any rate if the alleged guarantee, undertaking or agreement is disregarded) are of infrequent occurrence. But I must say that, if the respondent's construction is correct, I should have expected to find, amongst the cases dealing with the interpretation of items in the successive tariffs, a case in which such interpretation was raised by a defence putting in issue rate, amount or dutiability to a claim for Customs duty.
Though my earlier researches in digests and in annotations on ss.153 and 167 had revealed no such case, I should say that, since the conclusion of argument, a search (which I cannot claim was exhaustive) of the cases on customs and excise reported in the Commonwealth Law Reports has revealed two cases in which the owner did not proceed under s.167, or did not do so entirely; but they are very special cases and do not, in my view, support the respondent. In Markell v. Wollaston& The Commonwealth (1906) 4 C.L.R. 141, the plaintiff importers, who claimed that an article known as "Tanglefoot sticky flypaper" should be admitted duty-free as an insecticide, had proceeded under s.167 and been successful in the Supreme Court of New South Wales and the first defendant, Dr. Wollaston, the Comptroller-General of Customs, had appealed to the High Court and then abandoned the appeal, consenting to its dismissal with costs. But he continued to demand duty on subsequent importations of the article. The plaintiffs brought an action in the High Court seeking a declaration that the goods should be admitted duty-free and claiming an injunction restraining the defendants from detaining any importations of the article under a claim for duty. As Griffith, C.J. stated at 146, the plaintiffs also claimed a return of the duty paid by them in respect of a certain importation of those articles, that duty having been paid under protest. Although the defendants on a special case contended, amongst other things, that the plaintiffs' proper remedy, if any, was to proceed under s.167, the Court (Griffith, C.J. and O'Connor, J.) dealt with the point of substance, whether the article was dutiable or not. Griffith, C.J. stated that the claim for a declaration of the rights of the plaintiffs was not important because, if the court was of the opinion that the plaintiffs were entitled to recover the duty already paid, the expression of that opinion was itself a declaration of their rights. O'Connor, J. in substance expressed the same view at 151-152. As to the injunction claimed, Griffith, C.J. at 149 stated that it was not necessary to express any opinion. In short, then, the court treated the case as simply a second proceeding under s.167. Moreover, and perhaps critically, as already mentioned the original s.167 there in issue contains no equivalent of the later sub-s.(4) Indeed, O'Connor, J. said at 149 that in reference to the dispute both parties had availed themselves of s.167. The plaintiffs had, after all, already proceeded under s.167. The other case is Carmody v. F.C. Lovelock Pty. Ltd. (1970) 123 C.L.R. 1. There the Comptroller-General of Customs sued in the Supreme Court of New South Wales to recover duty said to be payable under the Customs Tariff (Dumping and Subsidies) Act 1961 (Cth.). That Act incorporated the Customs Act 1901. The defendant demurred on a number of grounds and also pleaded to the declaration. The plaintiff demurred to those pleas. The whole action was removed into the High Court by force of s.40A of the Judiciary Act1903 (Cth) as it then stood because the case raised an inter se question. There is no reference in the report to s.167. But the grounds of the defendant's demurrer and its pleas, all of which failed, did not, as it seems to me, raise a dispute as to the rate or amount of duty or the dutiability of the goods in question except, perhaps, in the very widest sense. Rather, those grounds and pleas contended that the necessary notice for the exaction of a dumping duty was beyond statutory power and published without satisfaction of its necessary pre-conditions and that the 1961 Act was in part constitutionally invalid. It was also alleged that the demand was out of time under s.165, that the defendant was not the owner of the goods at the date the duty became payable and that a necessary allegation was omitted from the pleading. The principal contention of the defendant was that the notice had been published after it had paid Customs duty on the goods, the entry of them had been passed and the goods had entered into home consumption and indeed been consumed. It may be that the special Act of 1961 was a "Customs Tariff" within the meaning of s.167(1), as the subsequent insertion in that sub-section of the expression "(not being duty imposed under the Customs Tariff (Anti-Dumping) Act 1975)" by the Customs and Excise Legislation Amendment Act (No. 3) 1989 (Cth.) might be thought to confirm. In one sense, if the 1961 Act relevantly was invalid or the notice invalid or defective, the goods were not "[liable] ... to duty". But the defendant was really saying that no duty whatsoever was imposed on any goods by the notice purportedly under the Act of 1961. I am inclined to think that such a contention did not raise a dispute as to the liability of the defendant's goods to duty within s.167(1). Certainly I should have thought that a contention that part of the Act purporting to impose the duty was constitutionally invalid did not raise a dispute falling within s.167(1). If that were not so, there might be a doubt as to the constitutional validity of s.167 to that extent. Leaving aside the constitutional challenge, I am conscious that there may well be a tension between the view which I have expressed and the view stated by the majority in Kawasaki Motors at 264 (as to which Beaumont, J. at 254 was in direct dissent). For Hill and Heerey, JJ. there said that the argument that a dispute whether a tariff concession order had been validly revoked was not a dispute as to the liability of the goods concerned to duty placed too narrow a construction upon the words of s.167(1), for the consequence of that dispute being resolved in favour of the owner of the goods was that there was no liability to pay Customs duty. The argument, they said, preferred form over substance. But, even if I am incorrect in the view I have expressed as to the non-constitutional aspects of the challenge to the notice in Carmody v. F.C. Lovelock Pty. Ltd., the point was not adverted to at all by the High Court. A case is not authority for a proposition silently assumed, let alone for one which, if there was merit in it, was, with respect, perhaps overlooked. The High Court, after all, dealt only with the demurrers.
It is convenient to say at this stage that, although invited to do so, the parties did not cite, and I have not been able to find, any case in overseas jurisdictions that assists in the determination of the issue in this appeal, apart, perhaps, from one cited by the respondent in its later written submission. United Kingdom legislation, from at least the Act of 1853 to the present Act, has been clear in its express provisions that the section from time to time corresponding generally to s.167 applies only to disputes arising before delivery of the goods from customs charge. That is the effect of the current and former New Zealand Acts, though their language and structure are far different from those of s.167. The Supreme Court of the United States has held that under that country's then legislation an importer must pay first (and protest within 15 days) before it could litigate a dispute as to duty, but that, if the importer was sued for additional duties on an allegation of fraud or on a re-liquidation of an entry made more than a year after the original liquidation, the importer could defend: United States v. Sherman & Sons Co. 237 US 146 (1915). We were referred by the appellant to the current United States equivalent of s.167, s.1514 of title 19 of the United States Code, part of the Tariff Act of 1930, and by the respondent to ancillary sections of the Code. Though the terms of the legislation are quite different from those of s.167, the mechanism of protest and civil action provided for in s.1514 appears to be exhaustive. The case to which the respondent referred the Court, United States v. Cherry Hill Textiles Inc. 112 F3d 1550 (1997), a decision of the United States Court of Appeals for the Federal Circuit, shows that the last proposition is still subject to the two exceptions established by Sherman, on the second of which the actual decision in favour of the importer's surety turned. More interestingly for present purposes, the Court after a detailed review of the legislative and decisional history of s.1514, held, on admittedly different legislation, that it was clear law, from as far back as the 1880's, that the protest requirement of s.1514 and its predecessors applied not only to actions brought by importers or sureties to recover duties paid, but also to enforcement actions brought by the government to collect underpayments of duty, even though the legislation did not refer to actions of the latter kind. Accordingly, defences as to duty matters could not be raised. There, as here, the defendant had contended that the government's position was an effort to extend the statute to a context for which it was never designed. The Court, however, concluded to the contrary. At 1557 Bryson, J., speaking for the Court, said:
"The language of section 1514, that a liquidation will be 'final and conclusive' unless protested, is sufficiently broad that it indicates that Congress meant to foreclose unprotested issues from being raised in any context, not simply to impose a prerequisite to bringing suit. Moreover, we discern no compelling policy considerations counseling against giving the statutory language its naturally broad reading. To the contrary, under [the importer's surety's] position importers or sureties could bypass the protest mechanism in any case in which an underpayment of duties is alleged, and then collaterally challenge the liquidation in the ensuing enforcement action. To give importers and sureties that option would create a gaping hole in the administrative exhaustion requirement of section 1514 and would be inconsistent with the underlying policy of section 1514, which is to channel challenges to liquidations through the protest mechanism in the first instance. ...
... Thus, to apply the protest requirement to all challenges to liquidations does not result in a denial of the right to trial in the collection action if the importer or surety has not filed a timely protest; it merely limits the scope of the issues that can be contested at such a trial. Other issues remain open for trial ..."
I turn now to particular arguments advanced for the respondent. It was put that the appellant was attempting to read the clear provisions of the section so that it had an effect much wider than intended in order to protect the Customs in a situation which it had itself created, that is, by delivering the goods to the respondent without payment of the duty now claimed or the taking of any security for such duty. (That was stated on the assumption or assertion that the guarantee, undertaking or agreement relied on by the appellant in the alternative was not a Customs security.) It may be observed in passing that the situation which the Customs is said to have created for itself resulted from an indulgence to the respondent. But in any event, for reasons I have already given, I do not consider that the terms of the provision clearly show that it does not extend to the present case. Rather, in my view, the reverse is true. In the written outline for the respondent the cases which have mentioned s.167 were reviewed and it was pointed out that they all concerned actions for the recovery of moneys wrongly demanded and received. Obviously, they would; for that is the action s.167 authorises. But the respondent's self-evident proposition says nothing as to whether an owner can deny liability in a defence or whether it must first pay and then sue for the recovery of the moneys so paid. It was put that s.167 certainly does not use direct language to say that importers must pay the sum demanded. But that may be said to be stated by s.165, which uses the word "shall". Section 167 must, after all, be read with other sections, including s.165. It was also said that, if the appellant was not contending that the word "may" in sub-s.(1) meant "shall", then the appellant could rely only on sub-s.(4), which was clearly limited to actions for recovery of sums already paid. The true construction of s.167 cannot, of course, be determined by deduction from the concession or stance of a party. The respondent, however, did go on to make the positive submission that the word "may" was purely permissive, and it pointed to occurrences of the word "shall" later in the section. But, even if the word "may" does not mean "shall", it does not follow that sub-s.(1) is inapplicable. Even if, despite a demand under s.165(1), it be considered that an owner has the option of not paying at all, it does not follow that, when eventually sued for the duty claimed, the owner can dispute the matters referred to in the opening clause of sub-s.(1). I have earlier given reasons for considering that the words "may pay under protest ..." state exclusively the course open to an owner who wishes to continue a dispute and that in consequence the word "may" operates as "shall". With regard to sub-s.(4), if the only course open to an owner wishing to dispute duty is to begin by paying under protest the only action can be one for recovery and reference in sub-s.(4) to disputing the duty claimed or raising a defence as to duty is inappropriate.
It was put more than once for the respondent that the appellant was (in effect) saying that the respondent was prohibited from raising any matter in defence in the proceeding because it had not paid the duty claimed under protest. Reliance was placed on the well-known principles, stated in Potter v. Minahan (1908) 7 C.L.R. 277 at 304 and Bropho v. Western Australia (1990) 171 C.L.R. 1 at 18, to the effect that fundamental common law rights and the general system of law are not to be taken to have been removed or departed from without the clearest of language. The construction contended for by the appellant does not, in my view, entail any such consequence as asserted. An owner who is sued under s.153 for duty claimed and who, by hypothesis, has not to that time paid the duty may immediately pay it under protest and then, as a complete answer to the Collector's claim, plead payment as a defence since action brought. (No doubt the owner may have to pay the (small) amount of costs of the Collector of the proceeding up to the filing and service of the defence.) The owner may then sue the Collector for recovery of the amount so claimed in a separate action. So, the owner can mount a complete defence (namely, payment) to the Collector's action. The principle in the two High Court cases is not infringed by the appellant's construction, though the clear language affects a change of onus. Alternatively or, in some respects, in addition, the person sued by the Collector can, subject to what follows, plead in the defence and argue at trial one or more of the following: -
(a)that he or she is not and was not an owner within the wide definition of that word in s.4(1), as is exemplified by the unsuccessful defence in Wing On & Co. Ltd. v. Collector of Customs (N.S.W.) (1938) 60 C.L.R. 97, one of the only two reported cases under s.153 of which I am aware;
(b)that any demand under s.165 relied on by the Collector was not made within the time there stipulated;
(c)a constitutional defence.
During argument the question arose, in connection with the defence of payment, whether the two proceedings could both be kept alive and even consolidated in some way. But on reflection it appears to me, first, that a person who denies ownership will, because s.167 is predicated upon ownership on the part of the disputant, almost certainly not pay under protest; and, secondly, that, since payment will satisfy the Collector's claim, any further defences to that claim (or even to an alternative claim on a security or agreement) that are otherwise available will become immaterial (except, perhaps, on the question of costs) and that the Collector's action will, indeed, not proceed. Another example was taken during argument: if the Collector had made an agreement with the owner not to require payment of the duty for 12 months after entry, could that be pleaded in answer to a proceeding by the Collector under s.153 for payment of the duty that was commenced within, say, three months after entry? Whilst there are provisions in the Act and the regulations for rebates and remissions of duty, there does not seem to be any provision for deferment of payment and indeed s.153 speaks of the duties being recoverable "at any time", which must include a very early time as well as a very late time. (The time limit in s.165(1) relates only to the demand before action.) It would therefore seem that such an agreement on the part of the Collector would not be authorised and would not constitute a defence to proceedings under s.153. For no conduct by the Collector could operate as an estoppel against the operation of the Act: Whitton v. Falkiner (1915) 20 C.L.R. 118 at 125 per Isaacs, J. (an appeal in a s.167 proceeding raising tariff classification, affirmed by the Privy Council: [1917] A.C. 106); FC of T v. Wade (1951) 84 C.L.R. 105 at 117 per Kitto, J.; Maritime Electric Co. Ltd. v. General Dairies Ltd. [1937] A.C. 610.
It was similarly contended for the respondent that, if the appellant's construction is correct, a defendant could not, by reason of the opening clause of s.167(1), put ownership in issue without paying, as, it might be said, Wing On shows can be done. That contention cannot be sustained. It is true that s.153 makes Customs duties payable by the owner of the goods. In other words, it makes the owner liable to pay the duties. But the third subject-matter of disputes falling within the opening clause of s.167(1) is the liability of goods to duty, that is their dutiability under provisions such as s.18(1) of the Customs Tariff Act 1982, already mentioned. In any event, as already stated, s.167 is predicated on ownership on the part of the disputant.
The appellant's argument, then, does not prevent a defendant who has not paid the duty sued for from litigating with the Collector the rate or amount of duty or the dutiability of the goods in question. But it does require the owner to do that in a separate action in which the owner is the plaintiff. It is clear from the concluding portion of s.167(1) that in that action the onus on the three topics is on the owner. If authority were wanted for that proposition Whitton v. Falkiner at (C.L.R.) 125, 134-135 and 136-137 might be instanced. This imposition of the onus on the owner answers, in my view, any suggestion that an interpretation of s.167 which treats it as applying in the present case and thus requiring the respondent to pay under protest and commence a separate action requires a pointless exercise to be engaged in and so cannot be correct. The exercise is not, in my respectful view, pointless. With goods coming into the country from suppliers overseas the Customs will frequently, though I by no means suggest always, be at a considerable disadvantage as against the importer with regard to information, and the means of obtaining information, that bears upon the dutiability, classification and value of goods, such as country of origin, method and materials of manufacture, and the true amount charged. A fundamental object of the Act is the protection of the revenue of the Customs, part of the national revenue. The exercise which, as I think, is required is calculated to effect such protection.
It was then said that s.167 was intended as a provision in the interests of the importers, whereas the appellant's construction made it an instrument adverse to those interests and favourable to those of the Customs. It is true that there are statements to the effect that the modern s.167 is and its predecessors were for the relief of importers: Sargood v. The Queen at 397 per Barry, J.; Sargood Bros. at 300-301 per Isaacs, J.; and The King v. Collector of Customs (Vic.); ex parte Berliner (1935) 53 C.L.R. 322 at 337. But as Stawell, C.J. said in Sargood v. The Queen at 395, "In some respects [the importer] enjoys certain advantages, in others he is subjected to certain limitations", which respectively he went on to identify by reference to the legislation then in question. The first two passages which I have cited in this paragraph, together with the passage in F.J. Hamel, Laws of the Customs, 93 cited by Stawell, C.J. at 393, make reference to provisions which, as noted earlier, by their terms clearly pre-suppose that the goods are under the control of the Customs at the time of deposit of the amount claimed. Delivery to the importer in that circumstance was clearly beneficial to the importer. Section 167 after its amendment in 1910 is obviously still capable of applying to such a case and thus is still in the interests of the importer there. But it is, as again already stated, no longer predicated upon that circumstance. The passage in the Parliamentary Debates already mentioned tends to confirm that the degree to which the section favoured importers was being reduced. But overall the section still operates in relief of importers and facilitates commerce. Its operation in the somewhat unusual circumstances of this particular case does not lead me to accept the generality of the respondent's submission now under consideration.
It was also said for the respondent that the appellant's construction put the Customs in a far stronger position than the Commissioner of Taxation was in notwithstanding the presence of ss.175, 177, 208 and 209 in the Income Tax Assessment Act 1936 (Cth.); and DFC of T v. Richard Walter Pty. Ltd. (1995) 183 C.L.R. 168 was cited. I agree with the submission for the appellant in reply that it is dangerous to compare the two Acts, one relating to internal revenue and the other to duties of Customs. But, in any event, as counsel for the respondent accepted, Richard Walter and the cases which have preceded it did no more than establish that a taxpayer who was sued for income tax said to be due under an assessment was not precluded from raising (to use counsel's words) "at least some kinds of challenges" even where the Commissioner relied on s.177. The principal example of those challenges is the contention that an assessment is not a real assessment because it is not made bona fide or because it is tentative; but they do not include (if s.177 is relied on) substantive questions of liability or amount. Moreover, as was pointed out in reply for the appellant, there are important further sections available to the Commissioner, such as s.204 making income tax due and payable, in effect, 30 days after service of the notice of assessment, and s.14ZZR of the Taxation Administration Act 1953 (Cth.), whereby a pending appeal in relation to a taxation decision does not affect the decision in the meantime and any tax may be recovered as if no appeal were pending. To my mind, if comparison between the two sets of legislation is to be made, the position is, rather, that, if the respondent's construction is correct, the Customs, alone of federal revenue-gatherers, and unlike at any rate most State revenue-gatherers, has no onus or evidentiary provision in its favour when suing to recover revenue said to be due. That might be thought a signal exception. Although, Customs does not as counsel for the respondent pointed out, have a "s.177", s.167 of the Act may, despite the respondent's submission to the contrary, be thought roughly equivalent in effect where the legislative scheme does not provide for formal assessments, the action for recovery of duty paid under protest being the counterpart of proceedings under Part IVC of the Taxation Administration Act1953 (Cth).
In his clear and incisive judgment the primary judge relied on the number of factors in support of his conclusion. I have referred to all those factors, principally when dealing with the respondent's submissions.
There was dispute before us as to whether a large percentage, or only a small percentage, of the goods imported into Australia are (to use the present statutory language) cleared for home consumption without either the payment of the duty said by the Customs to be payable or the taking of security for the payment of that duty. For the respondent it was said that nowadays most goods are entered and cleared for home consumption under what was said to be a "self-assessment system" and reference was made to s.243T of the Act. We cannot determine where the truth on this question lies between assertion and counter-assertion. But, even if the appellant's assertion that the percentage is large is not correct, adoption of the respondent's construction may well be expected to lead to unwillingness on the part of the Customs to allow the practice to continue at all, even, I am inclined to think, where s.243T was available, for s.243T carries no assurance of payment. That would mean that in cases covered by the present practice there would be caused to Australian international trade either delay and inconvenience or (if goods were to be released pending investigations in return for payment or security) either the cost of interest foregone (in the case of payment made earlier than under the practice) or else (where security is given) the expense and inconvenience of furnishing security, at least where the importer did not have "standing" security. A construction having such consequences may, other things being equal, be thought unlikely unless the language clearly favours it, which is not the case here.
The one matter which, although not raised by the respondent in argument, has caused me some hesitation about the construction of s.167 which I favour is whether it is feasible for an owner, desirous of doing so, when a demand for duty short levied is made or when he or she is sued for unpaid duty, to make a protest in accordance with s.167 after the goods have been entered and taken into home consumption. (I shall speak in terms of the owner, but the owner could act by a customs agent in all the cases I am considering, as is tolerably clear from s.167(3) as in force at the time of importation and very clear from s.167(3) in its current form.) I put aside the case of supervening financial inability on the part of an owner (who may not in truth be liable) to pay, both because s.165 at any rate requires demand (and thus notice of opportunity to invoke s.167) to be made within 12 months of short levy and because the consideration must extend to cases where, without fault, Customs is unaware of the true facts until well after the date of short levy. At the times this proceeding was commenced in 1990 and the defence was served sub-s.(3) of s.167 was in the same form as it was at the time of entry of the goods. The sub-section then required words to be written on the entry. Since, on the agreed facts, the goods were entered as duty‑free, that entry must, one would have thought from the Act, have had to be withdrawn and another lodged. That could be done under the legislation as it stood at all times between importation and the service of the defence in the proceeding, because duty had not been paid (s.38(1)), and so s.38A caused no problem. If it were done, no doubt the owner could write on the new entry. But, whilst not expressly authorised by the Act, though seemingly to make it work fully, there was also a procedure of very long standing for the creation of a substitute entry setting out the duty demanded (usually referred to by the Customs as a "post-warrant amendment entry"), on which again the owner could write the particulars required by the then s.167(3). (Endorsements on "post entries" were, for example, accepted as effective by all members of the Administrative Appeals Tribunal in re Sterns Playland Pty. Ltd. v. Collector (1981) 3 A.L.N. 156.) Even if it was the Customs which prepared a post-warrant amendment entry, it is clear that it would be made available to the owner to write on. Ultimately, in any case, in order to make the Act work, there must be implied an obligation, enforceable by prerogative relief, on the Customs to make the entry available for the purpose of enabling the owner to write his or her protest upon it.
Thus, at the time when the defence was served in 1990 it was possible for the respondent to make payment under protest in accordance with s.167(3) as it then stood. But, whether for the purposes of this appeal or more generally, the position of an owner, and the respondent in particular, needs also to be considered by reference to s.167 and other provisions of the Act as they now stand. The present version of s.167 and of other provisions seems indeed, in the absence of applicable transitional or application provisions, to be the version under which the respondent would now need to seek to act. If it is necessary for the original duty-free documentary entry to be withdrawn and another import entry, whether documentary or by computer, made recording the duty claimed in order for payment and protest to be made, it would seem that withdrawal is no longer possible because s.71F(1) now only authorises the withdrawal of an entry before the goods to which it relates are dealt with in accordance with the entry, and here the goods were dealt with in accordance with the original entry. But the procedure of creating substitute import entries setting out the duty demanded ("post warrant amendment entries") is apparently still in existence. Those substitute import entries may be documentary or by computer. If a documentary import entry were created, the respondent could write on it the particulars required by s.167(3). If the respondent or a licensed customs agent acting for it is a registered COMPILE user, such a person could make a substitute computer entry and could then, following an import entry advice under s.71B, transmit to Customs at the time of payment the particulars required by s.167(3A). If the original entry had been a computer import entry, the comments made in this paragraph about withdrawal of the entry, and about substitute entries and the making of protest, would be equally applicable.
It might, however, be said that s.71G, in combination with s.71F(1), is inconsistent with the procedure of post warrant amendment entries, unless they can be justified under s.71J. It will be recalled that s.71G prohibits the communication of a further import entry to Customs in respect of goods which have been entered for home consumption unless the earlier entry is withdrawn, and that under s.71F(1) the time for withdrawal has passed once the goods are dealt with in accordance with the entry. But, as will also be recalled, by s.71J where a person who has communicated an import entry changes information included in it the person is taken, when an import entry advice is given or transmitted in respect of the altered entry, to have withdrawn the entry as it previously stood. It may be that by a beneficial reading of that section (which treats it as overriding s.71F(1)) post warrant amendment entries can be supported.
In response to the Court's later invitation for written submissions bearing on the matter, the appellant submitted that the authority for post warrant amendment entries derives from ss.7 and 165 of the Act and that ss.71F(1) and 71G do not stand in the way of their use in the manner which the appellant had earlier outlined. It would seem that the nomenclature still used, post warrant amendment entries, reflects the language of the Act in earlier times, when the Collector issued a warrant for the handling of goods. But at any rate the expression, as I understand the congeries of nouns, indicates that entries are created. The appellant in its above response stated that "generally the procedure contemplated involves Customs, rather than the person who has communicated an import entry, changing information included in that entry". If that means that the entry communicated remains, albeit altered by Customs, in my opinion ss.7 and 165 authorise the procedure and payment under protest can be made under s.167(3) or (3A), as appropriate. One would, however, expect the nomenclature to be "post warrant entry amendments." Further, the previous description by the appellant of the procedure for use of substitute import entries made it clear that new entries were created, though by whom was less clear, except in the case of entries by computer. A reading of the Act suggests that it contemplates entries as created by owners alone (and, in the case of computer entries, by registered COMPILE users only), not by Customs. Nevertheless, if it is Customs which creates the substitute entries I would, on balance, consider, having regard to the exigencies of administration, that the procedure is impliedly, by necessary intendment, authorised by ss.7 and 165. Compare Broom's Legal Maxims, 10th edn, 312-314. Two other matters require mention. First, there is a suggestion in the appellant's latest submission that an owner can, if preferred, write on the original entry in the possession of Customs. That could, in my view (in agreement with the respondent's written response), sensibly be done only if the original entry had been altered to show the duty claimed, for a protest must be referable to an amount which is shown as payable and is being paid. The appellant's earlier written response to the Court's inquiry made it clear that post warrant amendment entries do show the amount of duty demanded. Secondly, the respondent submitted in writing that the current procedure described by the appellant and referred to above has no relevance to the current treatment of handicraft imports and that as a result the whole scheme of the legislation does not need the interpretation of s.167 contemplated by the appellant to make it administratively workable. Reference was made to Australian Customs Notice 88/35, operative from 1 March 1989. I do not accept this submission, for two reasons. First, the particular question arising in this appeal is whether payment under protest can now be made of duty claimed to be payable under the tariff in force in September 1986, not under the present tariff. The submission does not deal with that. Secondly and in any event, as regards the general question whether an owner can now pay under protest duty claimed to be payable on goods (of whatever nature) which have already, whether recently or not, been taken into home consumption, even if the premiss in the submission be granted the conclusion does not follow. Leaving aside handicrafts, a dispute as to duty is capable of arising with almost any goods and, as regards many, the Customs will frequently not at the time of entry have sufficient independent information bearing on the potential classification criteria to be satisfied as to the duty (if any) payable. Thus, the question is still a live one. (Confining myself to the Customs Notice, I would indeed take leave to doubt the premiss: it is evident from pp.13-14 that for some handicrafts, at least those which it is sought to import under the new handicraft concession, certification is not sufficient.)
If, contrary to my view, the validity of post warrant amendment entries cannot be supported, that consideration suggests that the 1992, computer-related, amendments to s.167 and to the entry provisions mean that s.167 now only applies in the case of actions for the recovery of overpaid Customs duty. In other words, its area of operation has been reduced by the 1992 amendments, presumably unintentionally. (The Second Reading Speech for the 1992 Bill casts no light on this question.) Even if that be the case, however, the fact, if it be such, that the respondent cannot make protest under the Act as it now stands does not, in my view, alter the construction, which I believe to be clear, of s.167 as it stood from the time of importation to beyond the time of service of defence in the appellant's proceeding for the recovery of duty. If the respondent cannot now make protest, as it was possible under the Act as it stood in 1990 for it to do when the writ was filed and the defence served, the consequence, in my opinion, is, not that the appellant's interpretation of s.167 in the Act as it then stood is incorrect, but that the respondent has brought its inability to make protest upon itself by taking an inadmissible defence in 1990. Accordingly, the preliminary question, which, if only because it refers to "the Defendant", must be read in the light of the pleadings and essential chronology of the proceeding, is to be answered in favour of the respondent.
I think it desirable to record that it is not clear to me, how, when an import entry has been made claiming that the goods are duty-free or are dutiable at a certain sum, and Customs is of the view that the goods are dutiable or dutiable at a higher sum, Customs under the current legislation signifies that it does not accept the entry and considers that duty or greater duty is payable. For, notwithstanding the statement by Fitzgerald P. and Mackenzie, J. in Carter Holt Harvey Manufacturing Group Pty. Ltd. v. Comptroller-General of Customs [1997] 1 Qd.R. 1 at 2 as to what an import entry advice must state, s.71B(2)(b) and (3)(c), with respect, requires only a statement in the import entry advice to the effect that the goods are cleared or alternatively are directed for further examination. There seems to me a third possibility, namely, that the goods will be cleared if duty of so much is paid. Section 71B(4) certainly contemplates the payment of duty (scil in the amount considered by Customs to be payable) after an import entry advice and shows that only then is actual authority given to take the goods into home consumption. No argument was directed to this question and I do not consider that an answer is needed for the determination of this appeal.
For the reasons given, I am of opinion that considerations of the feasibility of payment under protest do not require rejection of the appellant's construction, at least in relation to the legislation applicable in 1990.
During argument s.165 was referred to more than once and its relationship with s.153 was touched upon. That relationship, however, was not fully explored in argument. Without detailed argument on questions such as whether ss.153 and 165 confer upon the Collector (or CEO) separate entitlements to sue and, if not, whether proceedings under s.153 must always be preceded by a demand under s.165(1) (as to each of which the judgments of the Queensland Court of Appeal in Carter Holt Harvey Manufacturing Group Pty. Ltd. v. Comptroller-General of Customs are relevant), I consider it undesirable to say more than I have said in passing about s.165 except that, in my view, as was accepted in Carter Holt Harvey, "short levy" includes the case where no amount of duty was paid.
Conclusion
For the foregoing reasons, the appeal should, I consider, be allowed and it should be ordered that, in lieu of his Honour's order, the preliminary question be answered -
(a) No;
(b) No;
(c) No.
I would hear the parties as to whether any consequential orders should be made and, as requested by counsel for the respondent, on the question of costs.
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