Whim Creek Consolidated N.L. v Colgan, G

[1990] FCA 620

C A T C H W O R D S

CUSTOS - seizure of forfeited goods - effectiveness of seizure - notice of seizure - title to forfeited goods -

return of seized goods upon provision of security.

ADMINISTRATIVE LAW - Administrative Decisions (Judicial Beview1 Act 1977 - review of decision concerning seizure sought - nature of decision considered - natural justice - procedural fairness - improper exercise of power

. .

- Jud~ciarv Act 1903, s.39B

1977 s.6;
para.l0(2)(b)(i) Paras-3(2)(9), 5(l)(a)r 5(l)(b), 5(l)(e), 5(l)(f); sub-

Customs Acf 1901 ss.30, 39, 40AA, 153, 203, 208, 229, 262; sub-s.4(1), 33(1) r 39(3), 203(2), 205(2), 205(6), 205(7), 208A(2), 208A(4); paras.208A(l) (b), 208A(3) (a), 208A(3) (b), 229(1)(a) and 229(1)(i)

Judiciarv Act 1903 s.39B

Cooper, C , w - ppaa. 2152

Little's Victorv Cab Co. Ptv. Ltd. v. Carroll [l9481 V.L.R.
Ausf;salian v.	(1990) 64 A.L.J.R.
4 6 2	.--
Be t	v. Federal Commissioner
of Taxation (19761 10 A.L.R. 501 Burton v. on an (i952) 86 C.L.R. 169

f	o	c	-	v. Brian awlo or Automotive Ptv.
- .	Ltd. 119791 24 A.L.R. 307

Ullector 'of Customs f o r the State of New South Wales v.

S o ut r d (1962) 107 C.L.R. 279

v.

o~rietarv Limited (1956) 102 C.L.R. 147

. .

Commiss.&pner of Taxation v. McCabe, Unreported (Federal Court of Australia, 12 October 1990)

v. m (1985) 159 C.L.R. 550

t 0 ' v. Peko-Wallsend Limited

(1986) 162 C.L.R. 24

9'Neil v. Wratteq (1986) 11 F.C.R. 404

pearce v. ~utton (i986).65 A.L.R. 83

powers v.	(1959) 103 C.L.R. 478
ucearowers CO	ive Mills Ltd. v. Bannerman (1981) 38

A.L.R. 535
Scott v. m [l9881 W.A.R. 377
Stincovic v. commissioner of the Australian Federal Police,

Unreported (Federal Court of Australia, 29 June 1990)

Tov Centre Aaencies Ptv. Ltd. v. S~encer	(1983) 46 A.L.R. 351
Willey v.	(1935) 54 C.L.R. 175

WHIM CREEK CONSOLIDATED N.L. v. GREGORY COLGAN

NO. WAG14 OF 1989

LEE J.
PERTH

2 NOVEMBER 1990

IN THE FEDERAL COURT	)
OF AUSTRALIA	1
WESTERN AUSTRALIA	1
DISTRICT REGISTRY	1
GENERAL DIVISION	1 NO. WAG 14 OF 1989
B E T W E E N :	WHIM CREEK CONSOLIDATED N.L.

Applicant

and

GREGORY COLGAN

Respondent

MINUTE OF ORDERS

JUDGE MAKING ORDER: LEE J.

DATE OF ORDER:	2 NOVEMBER 1990
WHERE MADE:	PERTH
THE COURT ORDERS THAT:

Application be dismissed.

Applicant pay the respondent's costs of the

application.

Note:  Settlement and entry of orders is dealt with
in Order 36 of the Federal Court Rules.

.

l

IN THE FEDERAL COURT	)
OF AUSTRALIA	1
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	1
GENERAL DIVISION	1 NO. WAG 14 OF 1989
B E T W E E N :	WHIM CREEK CONSOLIDATED N.L.

Applicant

and

GREGORY COLGAN

Respondent

CORAM: LEE J.

DATE : 2 NOVEMBER 1990

REASONS FOR JUDGMENT

At material times Whim Creek Consolidated N.L. ("Whim Creek") carried on the business of goldmining at several locations in Western Australia. In mid-1988 Whim Creek decided that additional ore grinding facilities were required to increase Whim Creek's capacity to treat gold- bearing ore.

In about August 1988 Whim Creek instructed Westmont Equipment Pty. Ltd. ("Westmont") to locate suitable equipment

for Whim Creek to acquire.

Hastie, a director of Westmont, located two ball mills and spare parts for sale in Finland. By letter dated 13 September 1988, Westmont offered to supply the two ball mills and spares free on wharf at Fremantle for a price of $1.796m.

By letter dated 20 September 1988, Westmont advised Whim Creek that the price included "all Customs Duty" and stated that each ball mill would be insured in the sum of $760,000. By memorandum forwarded on, or about, 21 September 1988, in response to a request for further details of the costs of purchase, Westmont informed Whim Creek that the "Estimate for Govt. charges and Wharf clearance" was $80,000.

On, or about, 27 September 1988 Whim Creek and Westmont executed an agreement under which Westmont agreed to sell and Whim Creek agreed to purchase the ball mills and spare parts for the price of $1.796111. The agreement provided for title to the equipment to pass to Whim Creek upon payment of an instalment of $1,086,206 within one day of execution of the agreement.

On, or about, 30 September 1988 Whim Creek arranged

for an engineer residing in Finland to inspect the mills and

to supervise the dismantling and loading of the mills and	spares into containers for shipping to Australia. Westmont
provided a copy of the Bill of Lading to Whim Creek in October 1988. The consignee on the Bill of Lading was Herman Ludwig Pty. Ltd. as agents for Whim Creek.
The equipment arrived at Fremantle and was unloaded on the wharf in late November 1988. An entry for home consumption had been produced to the Australian Customs Service ("Customs") on, or about, 24 November 1988. The entry identified the owner of the goods as "Westmont Equipment Services". The entry was supported by an invoice from Finland dated 7 October 1988 which showed the purchase price of three ball mills to be approximately $142,755. Customs duty of $19,985.72 was paid on the value of the goods disclosed in the invoice. Pursuant to s.39 of the customs Act 1901 ("the Act"), Customs gave authority for the goods to be dealt with in accordance with the entry. After further enquiries were made, the authority to deal with the goods was suspended pursuant to sub-s.39(3) of the Act and replaced by permission, pursuant to s.40AA of the Act, to remove the goods to a specified place subject to the control Customs pursuant to s.30 of the Act.
On 30 November 1988, Westmont, as owner, requested move unpacked pieces of machinery that had been unloaded on the permission of Customs pursuant to s.40AA of the Act to
the wharf to an engineering firm, AN1 Hoskins, and undertook
to hold the goods for the order of the Collector of Customs.
Whim Creek had arranged for AN1 Hoskins to renovate and repair
some of the equipment. The request was made on a form headed "Westmont Equipment Pty. Ltd.", but on the foot of the form
was endorsed "Proprietor: Westmont Holdings Pty. Ltd.". At all material times Hastie was a Director of Westmont and Westmont Holdings Pty. Ltd. Permission was granted by Customs on the day of the request.
On 1 December 1988, Westmont sought permission under s.40AA to move the remainder of the goods contained in 12 shipping containers to Sadleir's Bond Store. That permission was granted by Customs on 5 December 1988.
On 2 December 1988 Whim Creek was informed by Herman Ludwig Pty. Ltd. that the goods taken to AN1 Hoskins had not been released by Customs but had been delivered to that site with the permission of Customs pursuant to s.40AA of the Act.
On the same day Customs officers attended at Whim Creek's offices and advised Whim Creek that Westmont had understated the value of the equipment on which Customs duties had been payable. Pursuant to a warrant issued under the Act,
a Customs officer then seized documents relating to the
Westmont transaction.
As a result of its inspection of seized documents and interrogation of Hastie on 7 December 1988, Customs ascertained that the two ball mills had been purchased in Finland for a cost of approximately $899,357 and that the
amount of customs duty evaded was approximately $126,000. Customs thereupon regarded the goods as forfeited goods under paras.229(l)(a) and 229(1)(i) of the Act.
On 6 January 1989 Nicholson, a Project Development Manager employed by Whim Creek, and Harding, a Director of Whim Creek, attended a meeting with two Customs officers, Stitt and Platell. Stitt was Regional Manager of Customs in Western Australia.
At that meeting Whim Creek was advised that Customs intended to seize the equipment.
On 10 January 1989 Whim Creek was served by Customs with copies of two Notices of Seizure relating to the imported goods. The Notices stated that on 10 January 1989 the equipment held at AN1 Hoskins and the contents of the containers held at Sadleir's Bond Store had been seized pursuant to s.203 of the Act as forfeited goods. Each notice
Westmont Equipment Services". was addressed to "Westmont Holdings Pty. Ltd. trading as :
On 26 January 1989 Westmont claimed the seized equipment pursuant to sub-s .205(6) of the Act. On 2 February 1989, solicitors for Whim Creek gave formal notice to Customs that Whim Creek claimed the ball mills pursuant to sub- s.205(6) of the Act.
On 20 February 1989, Whim Creek executed a form of security pursuant to s.208 of the Act and the Customs Regulations in respect of the ball mills and spare parts in a sum of $618,750. The security was accepted on 21 February 1989 and the goods were released to Whim Creek on 22 February 1989.
There was no issue in these proceedings that the goods were forfeited goods pursuant to s.229 of the Act and that there were reasonable grounds for an authorized person to
form the belief that the goods were forfeited goods pursuant
to sub-s.203(2) of the Act.
The Act requires an authorized person to form a belief on reasonable grounds that the goods are forfeited goods before the goods are seized. The Act does not require either the formation of that belief or the formation of an
affected by seizure of the goods. intention to seize to be notified to a person likely to be
Whim Creek seeks an order pursuant to the ministrative Decisions (Judicial Review) Act 1977 ("ADJR Act"), to review the decision of the respondent to seize the imported equipment and the decision embodied in the acts of seizure of those goods. Whim Creek also seeks relief pursuant to 8.39B of the Judiciary Act 1903 in respect of the respondent's acts of seizure of the goods.
The application for relief under the ADJR Act reviews once more the question of what is the nature of a decision under an enactment to which the ADJR Act applies.
It is, perhaps, erroneous to speak of a decision to seize forfeited goods as a discrete determination for which provision is made under the Act. Where the Act, as in s.203, provides for the seizure of goods and for rights and consequences to flow from an act of seizure, it may be more appropriate to regard the formative process prior to the act of seizure as the crystallization of an intention to seize rather than the decision with which the Act is concerned seize, such a decision only being manifested upon the act of seizure.
The fact that an officer may seek from superior officers confirmation of his belief that the goods are liable to seizure and support for his intention to seize those goods would not elevate either the intention of the officer or the acts of authorization undertaken by superior officers to "decisions" made under the Act.
The better view may be that such procedural determinations, or conclusions, in a process of reasoning leading to an ultimate decision are to be reviewed pursuant to the provisions of s.6 of the ADJR Act as conduct engaged in for the purpose of making a decision under the Act. (See .Australian Broadcastina Tribunal v. Bond (1990) 64 A.L.J.R.
462 per Mason C.J. at pp.468-469 with whose reasons Brennan and Deane JJ. agreed.)
However, where the making of an operative or ultimate decision consists of the doing of an act (ADJR Act para.3(2) (g)), not only may the doing of the act be reviewed (ADJR Act para.5(l)(b)) but the review of that decision may also expose for consideration the reasons which are given for the making of the decision and the processes by which the decision was made. (See Australian Broadcastina Tribunal v.
Bond per Mason J. at pp.469, 479. ) The reasoning of Northrop
J. in Ricearowers CO-o~erative Mills Ltd. v. Bannerman (1981) 38 A.L.R. 535 at p.544 followed a similar path. (See also
fommissioner of Taxation v. McCabe, Unreported (Federal Court of Australia, Davies J., 12 October 1990.))
With regard to the decision contained in the act of seizure, Whim Creek seeks review of that decision by challenging the effectiveness of the purported acts of seizure and by contending that consequential requirements of the Act
were not complied with. I will deal with the acts of seizure before considering events leading to the doing of those acts.
The circumstances relied upon by the respondent as evidence of seizure were as follows:
On 10 January 1989 the respondent, as an authorized person pursuant to s.203 of the Act, attended at the place of business of Westmont and Westmont Holdings Pty. Ltd. Mr Colgan, the respondent, asked to see Mr Hastie and upon being shown into his office said to Mr Hastie "I have come to seize the ball mills". The respondent then handed to Mr Hastie two notices of seizure purportedly in compliance with the requirements of sub-s.205(2) of the Act. Each notice was addressed to "Westmont Holdings Pty. Ltd. trading as Westmont Equipment Services" and had attached to it a document of 7 pages described as "Statement of Reasons for Seizure". One notice stated that on 10 January 1989 described goods were seized under s.203 of the Act by the respondent as forfeited
goods at Sadleir's Bond Store at Kewdale. The other notice
stated that on 10 January 1989 that other nominated goods were
seized as forfeited goods at AN1 Hoskins's premises at Bassendean.
The respondent then travelled to Sadleir's Bond Store at Kewdale where he spoke to a Mr Hindle and delivered to him another copy of the notice of seizure in respect of the goods held at that store and informed Mr Hindle that the goods were now seized and that storage charges would be met by Customs thereafter.
When cross-examined, Hindle agreed that it was consistent with his recollection that Colgan had said words to the effect "the goods are now seized".
The respondent then went to the premises of AN1 Hoskins at Bassendean and informed a Mr Howard that the relevant goods had been seized and gave Mr Howard a copy of the notice of seizure in respect of the goods. The respondent told Mr Howard that storage charges would be met by Customs from that date and instructed AN1 Hoskins that no further work waa to be done on the goods.
In an affidavit sworn by Howard and tendered in evidence, Howard stated that, to the best of his recollection, a Customs officer had handed him the copy of the notice of seizure on 10 February 1989. In cross-examination, Howard agreed that the day on which that occurred would have been 10 January 1989. Howard agreed that Colgan had instructed him that no work was to be carried out on the ball mill machinery, that Customs would be responsible for storage costs and that he had been asked by Colgan whether he would be able to do a valuation of the goods. In an affidavit sworn by Colgan and received in evidence, Colgan stated that he told Howard that he had been to Westmont and that the goods were seized. Howard gave evidence that he did not recollect Colgan using those words but in the absence of a firm denial and of any cross-examination of Colgan on the point, I am prepared to accept that the events occurred at the premises of AN1 Hoskins as Colgan described.
On the same day, Colgan delivered copies of the notices of seizure to Whim Creek. The annexure detailing the reasons for seizure was not attached to either copy notice served on Whim Creek.
The respondent did not seek to contradict Whim Creek's submission that s.205(2) of the Act contemplated separate events in an act of seizure and in service of a
notice of seizure. (See O'Neil v. Wratten (1986) 11 F.C.R. 404 per Jackson J. at p.410; Stincovic v. ~ommissioner of the
Australian Federal Police, Unreported (Federal Court of Australia, Neaves J., 29 June 1990 at p.19.)
The respondent submitted that the act of seizure was not a decision made under the Act and was simply the manifestation of a decision to seize the goods. I do not accept that argument. The conclusive or determinative nature of the relevant decision under the Act was to be found in the act of seizure. A decision to seize brought no consequences in itself under the Act.
Alternatively, the respondent submitted that pursuant to sub-para.lO(Z)(b)(i) of the ADJR Act, the Court should decline to exercise its powers under the ADJR Act
because of the remedies available to Whim Creek in proceedings commenced in the Supreme Court of Western Australia in which Whim Creek alleged that the respondent had not duly seized the goods and sought consequential declarations.
Although, as I stated in the course of the hearing it was unsatisfactory that parallel proceedings were being litigated in this Court and the Supreme Court of Western
Australia and appropriate orders could have been made to coalesce the proceedings under cross-vesting legislation, I do
not accept that the concurrent proceedings in the Supreme
Court have equivalence to an application under the ADJR Act to
review a decision under the Act. Although, in part, the relief sought in the Supreme Court proceedings may be equivalent to the relief sought in this application, those proceedings are unable to provide relief emanating from consideration of the reasons for the decision involved in the act of seizure and could not be regarded as proceedings seeking a review of that decision in the terms contemplated by the ADJR Act.
With respect to the issue of seizure, the respondent submitted that being forfeited goods, title in Whim Creek's goods passed to the Crown (Burton v. Honan (1952) 86 C.L.R. 169 per Dixon J. at p.176) and pursuant to sub-s.33(1) and
s.40AA of the Act, Customs retained control over the goods. It was argued that in these circumstances Customs had constructive possession of the goods and that to effect seizure of the goods it was only necessary that some intimation be made by an authorized officer to a person interested in the goods that the further degree of dominion over the goods would be exercised thereafter.
A similar argument was rejected by Neaves J. in Sincovic v. Commissioner of the Australian Federal Police.
I, too, am unable to accept the submission.
Although Customs exercised control of the goods pursuant to the Act, such control was insufficient without an act of seizure to render the goods into the possession of Customs. (See The Collector of Customs for the State of V i c t o a v. W' ilh W' ilhelmsen Aaencv Pro~rietarv L1 'm't i ed (1956)
102 C.L.R. 147 per Kitto J. at p.156; collector of Customs ~
the State of New South Wales v. Southern ShiD~ina ComDany
U i t e d (1962) 107 C.L.R. 279.)
Whether it is upon the occurrence of the facts to which 8.229 of the Act applies or upon seizure of the goods that a change of ownership occurs, may be undecided. (See powers v. Maher (1959) 103 C.L.R. 478 per Kitto J. at p.483;
pert Needham Automotive Co. Ptv. Ltd. v. Federal Commissioner of Taxation (1976) 10 A.L.R. 501 at pp.506-507.) However, although Customs may have had formal title to the goods pursuant to the statute upon the goods becoming forfeited goods, it was not an entire title and at least residual rights to the property remained vested in others under the Act. Such rights were capable of being relied upon if the discretion to seize the goods pursuant to s.203 of the Act was not exercised by Customs and authority to deal with the goods was granted pursuant to s.39 of the Act at which time the goods would no
longer be subject to the control of Customs pursuant to 9.30
of the Act.
It cannot be said that the circumstances described amounted to constructive possession by Customs and that seizure of the goods required no more than an intimation to a person interested in the goods that Customs now regarded the goods as being seized.
I agree that the word "seized" as used in s.203 of the Act bore the ordinary meaning of the word, namely to carry out an act of confiscation or to do an action with respect to the goods to signify the taking of possession. W h e r e t h e goods are not in the physical possession of the authorized person referred to in s.203 of the Act, there must be some demonstrable exercise of dominion over the goods that will amount to seizure of the goods at law. (See Stincovic per
Neaves J. at p.20 and Scott v. [l9881 W.A.R. 377 at
pp.385-388.)
I am not satisfied that such a seizure was effected by Colgan attending on Hastie as a Director of Westmont and advising Hastie that he had come to seize the goods situated at AN1 Hoskins and Sadleir's Bond Store. It was an equivocal act as consistent with notice of intention to seize as it was with the actual act of seizure. The notices of seizure
relied upon by the respondent to provide some further quality delivered to Mr Hastie immediately thereafter could not be
to the act.
Although forfeiture of the goods pursuant to the Act vests title in the goods in the Crown, the extinguishment of the interests of others in the goods is obtained by condemnation. Condemnation is a statutory substitute for judicial proceedings by the Crown against the goods. (See Willey v. 5vnan (1935) 54 C.L.R. 175 per Dixon J. at pp.185-
186. )
The Act deems such condemnation to have taken place if no notice claiming the goods is given under sub-ss.205(6) and (7) of the Act. Under s.262 of the Act, conviction of a person for an offence, the committal of which causes forfeiture of the goods, also has effect as a condemnation of the goods.
The effect of the act of seizure, therefore, is to give notice of the Crown's claim to its statutorily vested title by the taking of the goods into its possession.
Where the goods are already in possession of an authorized person, the act of seizure may rest in a manifestation which gives effect to an intention of an
the goods. authorized officer of the Crown to claim the Crown's title in
In such a case the completion of a Notice recording that the goods have been seized may be evidence of the seizure. (See Little's Victorv Cab Co. Ptv. Ltd. v. carroll [l9481 V.L.R. 249.)
Perhaps some other act of seizure may be required, however, if the authorized person giving effect to the intention to seize the goods on behalf of the Crown played no part or had no control over the possession of the goods taken by another authorized person. (See Stincovic per Neaves J. at
P-6.)
Although neither the attendance upon Hastie by Colgan with the words that the latter had come to seize the ball mills nor the service upon Hastie of notice that seizure of the goods had been effected was sufficient to constitute seizure of the goods pursuant to sub-s.203(2) of the Act, Colgan's later attendance and actions at AN1 Hoskins and Sadlier's Bond Store were, in each case, sufficient acts to show that the goods were thereupon being seized. The acts were clear notice to persons responsible for the safe custody of the goods that the Crown was claiming its title to the goods. The acts were a sufficient exercise of dominion over the goods to represent notice to all that a claim of right had
been made.
The question left for determination is whether the required notice of seizure was served pursuant to sub-s.205(2) of the Act.
The uncontested evidence shows that after those acts of seizure, Colgan served on Whim Creek a copy of the notices addressed to Westmont Holdings Pty. Ltd. The notices were not accompanied by the detailed reasons for seizure and merely stated that the goods had been seized as forfeited goods.
The object of service of such a notice is to give an opportunity to the person interested in the goods to make a claim to the goods or to advise other persons who may have a claim to the goods that the Crown has claimed title to the goods.
The Act does not require the Crown to serve all persons in respect of whom Customs may have notice of a possible claim to the goods. The seizing officer is only required to serve the owner of the goods or the person who had possession, custody or control of the goods immediately before seizure.
There is no reason to read-down the meaning of the word "owner" as used in sub-S. 205 (2) and following provisions. Customs may rely upon the extended meaning of the term as defined in sub-s.4(1) of the Act. (See Willev v. per Dixon J. at p.182.)
It will commonly be the case that Customs deal with an importer or agent without any knowledge of the extent of the beneficial interest of other parties in the goods.
It may be noted that the person who may give notice under sub-s.205(6) is not restricted to the person upon whom the Customs officer served the required notice. Any person who meets the definition of the owner of the goods or the person who had possession, custody or control of the goods before they were seized is entitled to give notice of a claim to the goods.
The service of the notice on the owner of the goods or the person who had possession, custody or control of the goods is a precondition to a deeming of condemnation of the goods. It is, of course, important that the notice be properly directed in order that the person served with the notice may give warning to any other person with an interest in the goods that the Crown has acted to have the goods
condemned as forfeited.
Although the notice served on Hastie named "Westmont Holdings Pty. Ltd. trading as Westmont Equipment Services" as the party to whom the notice was directed, it was served at the place of business of Westmont Equipment Pty. Ltd. where it carried on business as Westmont Equipment Services, being the name of the owner recorded in the Customs entry document.
The copy notice served on Whim Creek on 10 January 1989, although addressed to the importer of the goods, was sufficient to inform Whim Creek if it wished to assert a claim of ownership to the goods that the Crown had claimed title to the goods as forfeited goods. The notice correctly identified the time and place of seizure of the goods. The notice also advised Whim Creek that unless a nominated officer of Customs received notice in writing of a claim to the goods from the owner of the goods, the goods would be deemed to be condemned as forfeited to the Crown within thirty days of the date of service of the notice.
Whim Creek's solicitors had been informed on 4 January 1989 by the Australian Government Solicitor that Customs intended to seize the ball mills and that advice had been confirmed directly by Customs officers to Harding at the meeting held on 6 January 1989.
On 17 January 1989, Whim Creek's solicitors obtained a copy of the statement of reasons for seizure which had accompanied the notice of seizure served on Hastie.
By letter dated 2 February 1989, Whim Creek's solicitors gave "formal notice" that Whim Creek claimed the ball mills pursuant to sub-s.205(6) of the Act.
I am satisfied that the purposes of the Act were met by the notice delivered to Whim Creek on 10 January 1989 in that the notice duly informed Whim Creek of the fact that the goods had been seized and that at the time Whim Creek gave notice of its claim to the goods it had notice of the seizure and of the reasons of seizure.
Bearing in mind that the act does not limit the persons who may give notice of a claim to the goods under sub- s.205(6) to a person who has been served with notice of seizure under sub-s .205(2) of the Act, Whim Creek's notice of claim to the goods was sufficient to activate the stay of a statutory condemnation of the goods pursuant to sub-s.205(6) of the Act. Although a deemed condemnation cannot arise unless a notice which complies with sub-s.205(2) has been served (see O'NeiJ, v. Wratten at p.411), failure to comply with sub-s.205(2) will not affect the nature of the possessory
goods although it may deprive it of the benefit of perfection title obtained by the Crown upon the seizure of forfeited
of title and the extinguishment of competing claims that would otherwise be effected by the statutory condemnation of the goods pursuant to sub-s.205(6).
But in any event, Whim Creek's notice of claim to the goods given under sub-s.205(6) of the Act set another course of events in train.
The delivery by Whim Creek of a notice claiming the goods under sub-s.205(6) rendered the statutory deeming of condemnation of the goods contained in that sub-section inoperative and the notices of seizure to which those provisions were tied irrelevant.
To obtain the benefit of a deemed condemnation of the goods, the Collector had to serve a notice under para.208A(l)(b) of the Act requiring Whim Creek to commence proceedings to recover possession of the goods within four months in default of which the goods would be deemed to be condemned pursuant to sub-s.208A(2) without the Crown being required to take further proceedings.
However, service of notice of its claim under sub- the goods pursuant to s.208 of the Act upon providing security s.205(6) also gave Whim Creek the right to seek delivery of
to pay the value of the goods if they were condemned as forfeited to the Crown. Whim Creek sought, and obtained, from Customs authority for the goods to be delivered to Whim Creek relying upon the formal notice it had delivered pursuant to sub-s.205(6) of the Act. Thereupon, the provisions of para.208A(l)(b) and sub-s.208A(2) became irrelevant (see para.208A(3)(a)) and a statutory deeming of condemnation of the goods would only arise under sub-~.208A(4) if the respondent served a notice under para.208A(3)(b) of the Act requiring Whim Creek to bring an action within four months of service of the notice seeking a declaration that the goods are not forfeited. It may be noted that the proceedings to be commenced pursuant to para.208A(3)(b) are limited to a declaration that the goods are not forfeited and, unlike para.208A(l)(b), do not require an order for recovery of the goods nor contemplate possession or declaration of a right to retain possession of the goods.
Delivery of seized goods to a claimant pursuant to 8.208 of the Act appears to be the equivalent of entry for home consumption and the rights of the Comptroller or a Collector of Customs seem to be restricted to the exercise of the security given to obtain the delivery of goods from the possession of the Crown. There are no provisions in the Act
providing the Crown with a further right to recover possession of the goods by seizure or any provisions enabling the Crown
to proceed against a claimant to whom the goods were delivered for any shortfall in the sum recovered against the face value of the security in so far as any amount unrecovered does not represent unpaid duty for which the owner remains liable under 5.153 of the Act.
Section 208 does not provide for the delivery of goods from the Comptroller or Collector to a claimant owner to be made subject to any conditions. (See Cooper, S.ustoms and Excise Law, para.2152.)
It is arguable that upon delivery of the goods to Whim Creek as claimant owner there was a re-vesting of title
in the goods in Whim Creek. (See Bert Needham at p.506.)
On 8 March 1989, the respondent served upon Whim Creek a notice pursuant to para.208A(3)(b) of the Act. Within four months of service of that notice, namely on 5 July 1989 Whim Creek commenced an action in the Supreme Court of Western Australia seeking, inter alia, a declaration that the goods are not forfeited.
It follows that any deficiency in the notice of seizure was overtaken by the notice of claim to the goods
given by Whim Creek under sub-s .205 ( 6) . (See Powers v. Maher
per Kitto J. at pp.479-480.)
I now turn to the arguments which were directed to the events which preceded the decision reflected in the act of seizure, in so far as those events are exposed for consideration as part of the review of a decision capable of review under the ADJR Act.
Whim Creek submitted that the decision was subject to review on the grounds that a breach of the rules of natural justice occurred in connection with the making of the decision
(ADJR Act, para.S(l) (a) ) , that the making of the decision was
an improper exercise of the power conferred by the Act (ADJR Act, para.S(l)(e)), and that the decision involved an error of law. (ADJR Act para.S(l)(f).)
Before dealing with these submissions, it is appropriate to make some comments about the nature of the power exercised by a decision under the Act to seize forfeited goods. The seizure of goods smuggled or otherwise dealt with in contravention of the provisions of Customs legislation is as old as the commencement of systems of revenue collection. The harsh consequences of forfeiture and condemnation of goods provided for in such legislation is well-known. The provisions of the Act follow a standard pattern.

As Dixon C.J. stated in Burton v. Honan at pp.178-

179: 

"On one side i t i s pointed out that injust ice may occur t o individuals who are innocent, and that they may be involved i n the loss o f property for which they can only have a recompense by recourse to the person who has sold i t , who may, o f course, not be able t o restore the purchase money. On the other side it i s pointed out that i n the history o f English and Australian Customs l e g i s l a t i o n f o r f e i t u r e

provisions are common, drastic and f a r -	reaching, and that they have been
considered a necessary measure t o vindicate the right o f the Crown and t o ensure the s t r i c t and complete observance o f the Customs laws, which are notoriously d i f f i c u l t o f complete enforcement i n the absence o f strong p r o v i s i o n s S u p p o r t i n g t h e i r administration. "

More recently in Tov Centre Aaencies Ptv. Ltd. v.

(1983) 46 A.L.R. 351 at p.355, Lockhart J. has said:

"The provisions o f the Act relating t o forfeiture and seizure have a long history and their operation may have drastic consequences and cause hardship. This arises from the very nature and purposes o f the Act including the promotion o f Australia's trading interests , the encouragement o f local industry and the collection o f revenue. The Act i s an important instrument t o governments i n the implementation o f their f iscal and other policies. "

In referring to the strictness of the legislation, recorded observations made in the Supreme Court of the United Barry J. in H;bttlels Victorv Cab Co. v. Carroll at p.252

States on such legislation which remarks are as pertinent today as they were 175 years ago.

"The policy o f the Legislature i n respect o f customs revenue has resulted i n the enactment o f provisions o f marked severity. The reason has been indicated by the Supreme Court o f the United

S t a t e s ,	which	s a i d	o f	s i m i l a r
l e g i s l a t i o n :

' I n the e t e r n a l s t r u g g l e t h a t

exists	b e t w e e n	the	a v a r i c e ,
e n t e r p r i s e	and	c o m b i n a t i o n s	o f

i n d i v i d u a l s on the one hand ,

and o f the power charged w i t h

the a d m i n i s t r a t i o n o f the l a w s

on the other, severe l a w s a r e

r e n d e r e d n e c e s s a r y t o e n a b l e

the e x e c u t i v e t o c a r r y i n t o

e f f ec t the measures o f policy

a d o p t e d by the l e g i s l a t u r e . '

( m t e d S t a t e s v. 1960 Baas o f C o f f e e ,

f1814 1 8 Cranch 398; 3 Law. Ed. 602, a t

Innocent parties may suffer from the exercise of these powers but it has been obvious for many years that the powers are not curtailed in their exercise by the nature of the consequences and it is clearly intended that such a range

o f consequences are designed to ensure that any party with an interest in importing goods will exercise appropriate diligence to see that the provisions of the Act are met and that any harsh result will act as a broadcast of a warning of the contents of the Act and deter non-adherence to its

provisions.

However, as Barry J. observed in Little's Victorv Cab C o . v. Carroll at pp.255-256:

"The powers vested in the Customs authorities are necessarily wide. When Par1 f amen t creates and confers these administrative powers, it does so upon the assumption that they will not be exercised arbitrarily or capriciously but in the general interest of the community, and that before exercising them the authorities will always have regard to the justice of the particular case. "

That is not to say that a person whose goods have been forfeited by the operation of the Act has a right to be heard before the exercise of the power for seizure under s.203 of the Act (see Tov Centre Aaencies at p.357), but the circumstances of a particular case may require such an opportunity to be afforded if a decision-maker is to be seen to be acting in accordance with requirements of procedural fairness. (See Australian Broadcastina Tribunal v. Bond per

Deane J. at p.482; Little's Victorv Cab Co. at p.256; v.

m (1985) 159 C.L.R. 550 per Mason J. at pp.582-584.)

The need to act fairly was recognised in guidelines apply the general policy of the Act with discretion and	issued to Customs officers which required the officers to
commonsense and at all times to be conscious of what was equitable and fair. Particular guidelines were set out in respect of seizure for persons described as "innocent third parties".

"SEIZURE FROM THIRD PARTIES

(a)

Seizure action may not be appropriate in respect of goods purchased in good faith by innocent third parties, even though the goods at the time of importation would have been subject to forfeiture.

(b)

To be classed as innocent, third parties must be independent of the import transaction. Persons connected with, involved in or having knowledge of I the ordering, purchase or the act of importation of the goods are not to be classed as 'innocent' third parties. Similarly the continued involvement of the importer with the goods concerned (e.g. leasing back of goods after the sale to an independent finance company, etc) is not to be classed as a sale to an innocent third party.

In instances where the third party should have been aware that the price he paid for the goods is sianif icantlv less than that ordinarily payable for similar goods, seizure action

be appropriate.

The onus is on the third party

to satisfy the Collector."

The officers were further instructed as follows:

"It is important that seizure action not be instituted arbitrarily and that the full circumstances of each case be examined before the ultimate decision is taken. Before any seizure is effected, the owner of the goods should normally be given the opportunity to show cause why the goods should not be seized,

either by inquiry, interview or
statement."

Having regard to the fact that Whim Creek was a company whose interest in property would be affected by a decision for seizure, was there a failure to afford to Whim Creek such fairness of procedure as the context of the Act allowed?

The relevant circumstances were as follows:

Whim Creek entered a contract to buy the ball mills' spare parts pursuant to the terms of which it acquired title to the goods by payment of a substantial part of the purchase price shortly after execution of the contract. It engaged an engineer to supervise the dismantling and shipping of the goods and had obtained an estimate of "government charges and wharf clearance" of $80,000.

On 6 January 1989 when Customs officers met with officers of Whim Creek, the latter were advised that an	intention to seize the goods had been formed and that seizure
would follow. Whim Creek was aware of the grounds on which the goods would be seized, namely the false statement of value in the Customs entry and was in no doubt that Customs would act to seize the goods. The meeting discussed the prospect of obtaining the goods after seizure by the provision of security. Whim Creek had the opportunity at that meeting to raise any matter it wished to have considered before seizure was effected. Alternatively, it had between 6 January 1989 and 10 January 1989 to lodge with Customs any further submission it desired Customs to consider before seizure was effected having been given notice at that meeting that it was intended that seizure of the goods would follow within a day or so of that meeting.
This was not a case of Customs officers acting on a false and prejudicial premise with respect to the involvement of Whim Creek in the importation of the goods. Upon the hearing of this matter, it was put to the respondent, the seizing officer, that he had understood some employees of Whim Creek to be involved in fraudulent activity at the time he made the decision to seize, but it was Colgan's clear response to that cross-examination that he would not have regarded it as proper for such suggestions to have influenced his seizure of the goods and he rejected any suggestion that he had given
evidence in that regard. any consideration to such a possibility. I accept his
Whim Creek was not able to point to any material it contended it was prevented from placing before Customs and placed most of the weight of its submissions on the comparative innocence of its position.
I am well satisfied that Customs understood Whim Creek's position and that fairness of procedure was afforded Whim Creek in the circumstances.
Whether the guidelines directed to Customs officers, published by Customs, amounted to a recognition of an outline of procedural measures to be followed as a matter of fairness to parties whose rights would be affected or whether the specific guidelines set out above involved any additional concept of legitimate expectation of an opportunity to be heard, the result is the same: Whim Creek was afforded appropriate opportunity and not denied procedural fairness.
In its grounds for review, Whim Creek submitted, firstly, that the departmental guidelines followed by Customs officers were not adhered to or,. alternatively, slavishly followed to the detriment of the consideration of the merits of the case.
Firstly, it was submitted that the officers did not understand Whim Creek to be an "innocent party" within the meaning of the guidelines. As I have stated above, Customs did not misapprehend the position of Whim Creek and the decision to seize the forfeited goods was neither capricious nor arbitrary.
Whim Creek was not the purchaser of goods in Australia after importation had been effected with no knowledge of the circumstances of importation. It was a party which had obtained title to the goods prior to their importation and was content to allow the vendor of the goods to make the Customs entry. Given that Whim Creek was innocent of any involvement in the vendor's evasion of Customs duty, the fact that Whim Creek had chosen not to supervise the importation and sought no authoritative advice on what amount of customs duty would be levied on the goods it had purchased and was importing were relevant facts for the Customs officers to consider in determining whether to seize the forfeited goods.
Whim Creek has failed to show that the decision of seizure was vitiated by a breach of the rules of natural justice nor that procedures required by law to be observed in connection with the making of a decision were not observed by the respondent. It has also failed to show that the decision
was an improper exercise of power by the respondent. The respondent did not fail to take into account any relevant
considerations and nor did his decision miscarry by an utter failure to attach proper weight to any material fact. It was a matter for the decision-maker to attach such importance and determine the extent of relevance of the various considerations placed before him. On the evidence, it simply cannot be submitted that Colgan failed to take into account anything he was bound to take into account according to an appropriate construction of the Act. (pinister for Aboriainak
Affairs v. Peko-Wallsend Limited (1986) 162 C.L.R. 24 per
Mason J. at pp.41-42.) The decision was not so unreasonable that no reasonable person could have so exercised the power, and nor was it an abuse of the respondent's power. Whim Creek has demonstrated no error of law in the making of the decision.
Whim Creek relies upon the same facts and circumstances for the relief sought under s.39B of the Judiciarv Act 1903, to restrain the respondent from acting on the notices of seizure and on the notice issued pursuant to para.208A(3)(b) of the Act.
For reasons I have already outlined, the notice was properly issued pursuant to para.208A(3)(b) and there is no foundation for the grant of any relief under s.39B of the
Judiciarv Act.
Furthermore, I am not satisfied that in the particular circumstances of this case it would be appropriate for the Court to grant either the relief sought under the ADJR Act or pursuant to s.39B of the Judiciarv Act. The reasons for that conclusion are as follows.
Upon becoming aware that Customs had seized the goods, Whim Creek was entitled to commence proceedings to challenge the seizure and seek recovery of its goods or commence an application under the ADJR Act to review the decision to seize its goods. Such proceedings would forestall any statutory condemnation of the goods.
Whim Creek gave notice under sub-s.205(6) of the Act that it claimed the goods. In its terms, the notice was directed to goods that had been seized.
Thereafter, Whim Creek requested the Collector of Customs to authorize the seized goods to be delivered to it, being the person claiming those goods pursuant to sub-s.205(6) in return for the provision of appropriate security.
At that point, the seizure remained effective for all purposes under s.208 of the Act. (See Collector of
Customs (NSW1 v. Brian Lawlor Automotive Ptv. Ltd. (1979) 24
A.L.R. 307 per Bowen C.J. at p.314; Pearce v. Button (1986) 65
A.L.R. 83 per Lockhart J. at p.93.)
It was not contested in these proceedings that the goods were forfeited goods. The power of the Collector of Customs to deliver such goods to the claimant was predicated upon the fact that the goods had been seized. Whim Creek chose to accept that seizure had been effected in giving notice of its claim under sub-s.205(6) and in negotiating delivery of the goods to it pursuant to 6.208. In consequence of that delivery, Customs gave up actual possession of the goods and arguably revested a title in the goods in Whim Creek sufficient to provide good title to a bond fide purchaser for
value. (See pert Needham per Rath J. at p.506.)
It would seem that an owner receiving delivery of the goods pursuant to 6.208 upon provision of adequate security is free to sell and encumber the goods as if they had been duly entered. (See DDNeiL v. Wratten at p.411.) In other words, Customs gives up what it has obtained under earlier provisions of the Act in return for appropriate security under 6.208 of the Act.
Pursuant to para.208A(3)(b) Customs served on Whim Creek a notice requiring Whim Creek to commence proceedings seeking a declaration that the goods were not forfeited. Whim
Western Australia. Creek duly commenced those proceedings in the Supreme Court of
Two days after it recovered possession of the goods pursuant to 6.208, Whim Creek commenced proceedings in this Court to review the decision to seize the goods.
In the course of the proceedings, the parties spent some little time on the extent to which Whim Creek had indicated it may take proceedings in respect of the decision to seize and seizure of the goods before it recovered possession of the goods pursuant to 8.208 of the Act.

In the end, I do not consider that issue to be of

great relevance.

The fact remains, by reliance on the provisions of the Act the parties changed their position and their rights.

Whim Creek could have sought relief under s.39B of the Judiciarv Act and perhaps the ADJR Act either prior to, or after, seizure of its goods or commenced an action in detinue and sought to restrain any further action by Customs under the Act. Instead, after the goods had been seized it chose to persuade Customs to exercise an authority that was grounded on possessory rights obtained by that seizure and to obtain

authority. Whim Creek has the goods and Customs has a	possession of the goods from Customs pursuant to use of that
security. Whim Creek must now pursue its action for a declaration that the goods are not forfeited which, if it is successful, will result in the discharge of the security.
It may be seen that these proceedings have an aspect of futility. There is no point in reviewing any administrative decision relating to the seizure of the goods; events have moved on. The steps taken pursuant to s.208 of the Act to deliver the goods to Whim Creek would remain effective even if this Court were to determine that the decision involved in the seizure of the goods was susceptible to review. The Court could not set aside that decision with the intention that the decision-maker make another decision in respect of seizure because the right to seize the goods has been replaced by a right to execute a security for the value of the goods.
Accordingly, for the several reasons stated, the application will be dismissed.

I certify that the preceding
thirty-eight (38) pages are a true copy of the

Reasons for Judgment of his Honour Mr Justice Lee.

Associate:	p /y	lJwW
Date :	2	h o v ~ m h e r L440

Counsel for the Applicant: Mr B.W. Rayment Q.C. and

Dr J.T. Schoombee

Solicitors for the Applicant: Messrs Bennett & Co.

Counsel for the Respondent: Mr D.R. Williams Q.C. and

Mr P.R. Macliver

Solicitor for the Respondent: Australian Government Solicitor

Dates of Hearing: 17, 18, 19, 20 April 1990

Date of Judgment: 2 November 1990