Wilson v Chambers & Co Pty Ltd

[1926] HCA 15

38 CLR 131

CHAMBERS AND COMPANY PROPRIETARY

LAWRENCE CHAMBERS

WILLIAM CHAMBERS

ON APPEAL FROM A COURT OF PETTY SESSIONS OF

NEW SOUTH WALES. Customs Dulies-Offence-Entry of imported goods-When duty to enter arises-

"Imported," meaning of-Goods brought in ship into port-Goods not landed but taken away in ship-Evasion of payment of duty-"Evade," meaning of Failure to pay-Interfering with goods subject to control of Customs-" Interfere," meaning of-Physical dealing with goods-Intention to defraud revenue-Customs Act 1901-1920 (No. 6 of 1901-No. 41 of 1920), secs. 33, 68, 234, 236, 241.

A quantity of paint was shipped in England and consigned to a consignee in MELBOURNE, Sydney. The paint would have been dutiable under the Customs Tariff if June 8, 1926. imported into the Commonwealth. The ship did not go to Sydney but entered another port in New South Wales. The ship was about to discharge the Isaacs, Higgins, paint there, and the consignee was willing to take delivery. While the ship was in the port an arrangement was made between C., acting on behalf of

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the consignee, and the captain of the ship, whereby the paint was taken over for the use of the ship. No Customs entry was made in respect of the paint and it was not landed. By permission of the Customs officer at the port, a guarantee having been given by the captain to furnish a list of all dutiable stores consumed on the voyage to Melbourne, the next port of call, the ship left the port with the paint on board. No duty was paid in respect of any of the paint.

Held, (1) that the paint was imported, that the consignee had failed to enter imported goods as required by sec. 68 of the Customs Act 1901-1920, and that C. had been directly concerned in that offence within the meaning of sec. 236; (2) that the consignee had not, by reason of the arrangement made for the paint being taken over for the use of the ship, interfered with goods subject to the control of the Customs within the meaning of sec. 33; and (3) that the consignee had not evaded payment of duty which was payable within the meaning of sec. 234.

APPEALS from a Court of Petty Sessions of New South Wales.

At the Court of Petty Sessions at Sydney before a Stipendiary Magistrate nine informations were heard whereby Richard William Wilson, an officer of Customs, charged Chambers &Co. Pty. Ltd., Lawrence Chambers and William Chambers severally with offences against the Customs Act 1901-1920. The charges against the Company were that (1) it interfered with goods which were subject to the control of the Customs (sec. 33); (2) it failed to enter imported goods (sec. 68), and (3) it evaded payment of duty which was payable (sec. 234). The charges against each of the individual defendants were that he was directly concerned in the commission of each of the three offences alleged against the Company (sec. 236). All the offences charged-those against the Company and those against the individuals-were alleged to have been committed with intent to defraud the revenue (sec. 241). The whole of the informations were heard together. The material facts proved at the hearing are stated in the judgments hereunder. The Magistrate dismissed all the informations.

From his decision in each case the informant now, by way of case stated, appealed to the High Court, and the appeals were heard together.

E. M. Mitchell K.C. (with him Bathgate), for the appellant. There is an importation of goods for the purposes of sec. 68 of the Customs

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Act 1901-1920 if goods are brought into a port in the Commonwealth for the purpose of being landed there, that is, for the purpose of the goods becoming part of the commerce of the country (The Schooner Mary 1 ); and on the evidence the paint in question was imported in that sense. The obligation under sec. 68 to enter the goods arose immediately upon importation. The Company did not get rid of its obligation to enter the goods by the arrangement which was made with the captain or by the fact that the ship left the port with the goods on board before the time for making the entry expired. The fact that the goods were, pursuant to that arrangement, taken out of the port without an entry having been made, constituted an interference with them within sec. 33, the goods being, by sec. 30, under the control of the Customs as soon as they were imported. What the Company did amounted to an evasion of payment of duty under sec. 234. If the Company committed any of the offences alleged against it, the individual respondents were directly concerned in the commission of them. The evidence shows an intention on the part of the respondents to defraud the revenue (sec. 241).

Flannery K.C. (with him H. E. Manning), for the respondents the Company and Lawrence Chambers. Due importation is not completed until goods are entered and unshipped in accordance with sec. 49 (3) (see Wollaston's Customs Law, p. 32, note). The provisions of sec. 64 have the effect of casting upon the shipowner the duty of paying the duty. Sec. 68 only applies to goods which have been unshipped. Goods which are brought in a ship to an Australian port and taken away again are not imported goods. Sec. 132 shows that duty is not payable until goods are entered for home consumption, and the person who SO enters them imports them. Ships' stores are not dutiable merely because they are brought into a port (see sec. 127). If the consignee in Australia of goods permits the captain to take them away again, no duty is payable on them (see Wollaston's Customs Law, p. 91). [Counsel also referred to secs. 72-75.]

[STARKE J. referred to Attorney-General v. Ansted 2; Algoma

1(1812) 1 Gallison 206. 2(1844) 12 M. &W. 520. 38 CLR 134

Central Railway Co. v. The King 1; Canada Sugar Refining Co. V. 1925-1926.

The Queen 2.]

As to the charge under sec. 234 of evading payment of duty, the word "evade" connotes a wilful avoidance of payment, and does not include a mere failure to pay. Sec. 33, which makes it an offence to "interfere" with goods subject to the control of the Customs, is directed to physical acts of interference, and does not apply to making a contract in respect of the goods.

Brissenden K.C. and Treatt, for the respondent William Chambers. [During the argument it was conceded that the appeal in respect of this respondent could not be supported.]

E. M. Mitchell K.C., in reply, referred to Simms v. Registrar of Probates 3 Yorkshire Railway Wagon Co. v. Maclure 4; Stephens V. Robert Reid &Co. 5 Irving v. Gallagher 6.

The following written judgments were delivered: Knox C.J. These were appeals from determinations of a Stipendiary Magistrate dismissing a number of informations for alleged offences against the Customs Act 1901-1920.

The respondent Company was charged with offences against sec. 33, sec. 68 and sec. 234, and the respondents William Chambers and Lawrence Chambers were charged with offences against sec. 236 of that Act.

The relevant facts on which these charges were founded were, SO far as disclosed by the evidence, as follows, namely :-The Company was the consignee of 71/2 tons of paint shipped on board the Steamship Nauru Chief in England and consigned to Sydney. The ship went from England to Nauru, and thence to Port Kembla, omitting to call at Sydney. She arrived at Port Kembla on 6th or 7th of Sep- tember 1922 and remained there for thirteen hours for the purpose of bunkering. The respondent Lawrence Chambers and one Vogil,

1(1903) A.C. 478, at p. 481. 2(1898) A.C. 735. 3(1900) A.C. 323. 4(1882) 21 Ch. D. 309. 5(1902) 28 V.L.R. 82; 23 A.L.T. 6(1903) S.R. (Q.) 121. 38 CLR 135

an employee of the shipowners, the British Phosphate Commission, went to Port Kembla to meet the ship, and Chambers told Vogil that there was paint on board the ship for him and he was going to land it there. Port Kembla is a proclaimed port and a Customs officer is in attendance there. Lawrence Chambers had been engaged by the Phosphate Commission to clear the ship on its behalf. While the ship was lying at Port Kembla he arranged with the captain and chief officer of the ship to buy the whole of the paint on the terms that it was to remain on the ship to be used as required and to be paid for as used. The ship left Port Kembla with the paint, some of which was afterwards used in Melbourne in painting the ship. The paint was dutiable under the Customs Tariff, but no duty was paid on it nor was any entry made in respect of it.

On these facts the respondent Company was charged with the following offences, namely, (1) failing to enter the goods (sec. 68) (2) evading payment of duty (sec. 234); (3) interfering with goods which were subject to the control of the Customs (sec. 33). The respondents Lawrence Chambers and William Chambers were charged with aiding, abetting or being concerned in the commission of the offences alleged to have been committed (sec. 236). All the offences charged were alleged to have been committed with intent to defraud the revenue.

On the hearing of the informations no evidence was called for the respondents and the Magistrate dismissed all the informations, being of opinion that the evidence given for the prosecution failed to support, and in fact disproved, the averments of the informant. The question for us is whether his determination was erroneous in law. The charges against respondent William Chambers are not now pressed, and the case may be dealt with as if the charges were against the Company and Lawrence Chambers alone.

In my opinion the evidence given for the prosecution was sufficient to establish the charge of failing to enter the goods. Sec. 68 of the Act provides that all imported goods shall be entered either for home consumption or for warehousing or for transhipment. The only question is whether these goods were "imported," within the meaning of that section. According to the bill of lading the goods were consigned to the Company at Sydney. The evidence shows

38 CLR 136

that Lawrence Chambers on behalf of the Company was willing and intended to have the goods landed at Port Kembla and to take delivery of them there. The ship actually came into the port and remained there for some hours, and the only reason alleged why the goods were not landed there was that Lawrence Chambers agreed while the ship was in the port to sell them to the owner of the ship. Presumably on this agreement being made the bill of lading was held by Lawrence Chambers as the person authorized by the shipowners to act for them in clearing the ship. The Act contains no definition of the meaning of the word " imported " but

I think Mr. Mitchell was right in the view he put forward that goods are imported whenever they are brought into port for the purpose of being discharged there. So far as the ship is concerned the goods have at that time arrived at their destination, and their character as goods imported into Australia cannot, I think, be affected by an agreement subsequently made under which they are not in fact landed at the port at which the ship arrived. In the circumstances of this case I think it is clear that the paint in question was imported when the ship arrived in Port Kembla and that the obligation to make an entry arose at that time.

The second charge was that of evading payment of duty (sec. 234). The distinction in meaning between the words "evade" and "avoid" is well established, and a charge of evading payment is not made out by evidence which proves no more than that the person charged failed or omitted to pay an amount payable by him. There was nothing to suggest that the agreement to sell the paint to the ship was other than a genuine agreement, nor did the evidence tend to show that the respondents did not honestly believe that in the circumstances it was not necessary to enter the goods or to pay duty in respect of them, or that their intention in selling the goods was to escape payment of duty. In fact the evidence proved no more than an omission to pay duty which was legally payable. In my opinion the Magistrate was right in dismissing the informations founded on sec. 234.

With regard to the charge of interfering with goods which were under the control of the Customs, I think the Magistrate's decision was right. Sec. 33 of the Act provides that no goods subject to the

38 CLR 137

control of the Customs shall be moved, altered or interfered with without authority. There was clearly no evidence that the goods in question were moved or altered, but it is said that the agreement made by Lawrence Chambers to sell them to the ship constituted an interference within the meaning of the section. I am unable to accept this contention. I think the expression "interfered with " in the context in which it is found should be construed as connoting some physical dealing with the goods, something in the nature of a movement of the goods or an alteration of their character.

For these reasons I am of the opinion that the Magistrate's deter- mination on the information against the Company and Lawrence Chambers founded on sec. 68 of the Act--failure to enter the goods / was erroneous, but that his determinations on the other informations were correct.

ISAACS J. This case comprises three appeals by Richard William Wilson, as Customs officer, from the dismissal of informations. under the Customs Act 1901-1920, against three several defendants, namely, Chambers &Co. Pty. Ltd., Lawrence Chambers and William Chambers. During the argument it was seen that the facts did not support any charge against William Chambers, and the appeal as to him was dismissed. The other appeals have now to be determined.

The charges laid against the Company were as follows :- Under sec. 234 of the Act for evading payment of duty in respect of certain goods, namely, enamel, varnish, lead and paint, imported into the Commonwealth at Port Kembla on or about 7th September 1922; (2) under sec. 68 of the Act for failing to enter the said goods, either for home consumption or for warehousing or for transhipment; (3) under sec. 33 of the Act for interfering with the said goods as subject to the control of the Customs. Similar charges were made against Lawrence Chambers. All the offences are alleged to have been committed at Port Kembla, which is a very material circum- stance. The main facts are that the Company was agent in Australia of Hoyle &Co. of Newcastle-on-Tyne for the sale of goods of the classes referred to. A consignment of those goods about 71 or 71 tons in all was sent by Hoyle &Co. to the Company deliverable at Sydney. The goods were carried in a ship called the Nauru Chief,

38 CLR 138

which, before calling at Sydney, called in at a small Customs port called Port Kembla, with the goods on board. Lawrence Chambers, who was agent for, and who represented, the Company, visited the ship while in Port Kembla. The ship needed painting, and Lawrence Chambers on behalf of the Company agreed with the ship's officers -and his agreement has since been affirmed and acted on by the Company-to sell all the goods in question to the ship, the goods to remain on board and to be paid for as used by the ship. This arrangement being made, the goods passed into ships' stores. Nothing was done at Port Kembla by way of unshipping the goods or of using them. The Customs officer at Port Kembla allowed the ship to proceed to Melbourne with ships' stores unsealed, a guarantee in the prescribed form being given. At Melbourne some of the goods were used in painting the ship. No duty was paid. The Company has since been paid by the shipowners for the goods.

I now consider the charges against the Company in order.

(1) Evading Payment of Duty.-The offence is constituted by sec. 234 (a): "No person shall evade payment of any duty which is payable." The latter part of the paragraph requires that duty is actually and presently payable; and this is the first inquiry. The foundation is naturally the Customs Tariff which imposes the duties on " all goods dutiable

imported into Australia," &. "Dutiable goods by incorporation of the Customs Act include " all goods in respect of which any duty of Customs is payable." By sec. 153 duties payable are Crown debts and instantly recoverable, The first essential for this purpose is importation. Importation does not necessarily include landing the goods. They may be transhipped direct from the ship in which they arrive into the ship or aircraft into which they are to be transhipped, and still be imported goods " (secs. 68 and 75 (b) ). Sec. 68 says "All imported goods shall be entered either (a) for home consumption; or (b) for ware- housing; or (c) for transhipment." Consequently "imported goods" as there used is an expression not confined to goods landed or even to goods to be consumed in Australia. On the other hand it does not include all goods in fact arriving by ship in an Australian port.

A vessel, say, with a cargo destined for New Zealand may call in at Melbourne or Sydney and may continue her voyage without it

38 CLR 139

being said that the goods it carries are "imported goods " within H. the meaning of sec. 68. Both these extremes are inconsistent with the working provisions of the Customs Act. In my opinion, having regard to the various sections of the Act-and needless to say the question must be solved by reference to that Act and not to other Acts-the expression "imported goods," in sec. 68, means goods which in fact are brought from abroad into Australian territory, and in respect of which the carriage is ended or its continuity in some way in fact broken. The underlying concept appears to me to be as follows Where, within our territory, some act takes place with regard to goods arriving from abroad, whether in fact they are or are not dutiable or prohibited, which in the absence of some new or further arrangement for carrying them away would make the place of arrival their destination and would therefore result in the goods remaining in Australia, then they are "imported goods and it the duty of the " owner " to comply with the provisions of sec. 68.

I do not think a mere agreement of sale between two merchants in Australia, even though the property passes, is sufficient in itself to constitute importation. If such an agreement were made before the ship arrived in Australian waters, it could not possibly operate as an importation. If afterwards the goods arrived and were allowed to remain en route, for instance to New Zealand or in the other direction to India, with the actual carriage undisturbed,

I do not see how the position would be altered. But in this case there are additional circumstances. The agreement was made with the shipowner; the delivery was accelerated; not only the property, but the right to possession also, was transferred. The contract of carriage was completely ended, and the shipowner's character in which he held the goods was transformed from that of carrier to that of proprietor. What follows is important vis-à-vis the Customs. The goods were, as it is found, taken into ships' stores and were allowed by arrangement, constituted by permission of the Customs and guarantee to the Customs, to be taken on to Melbourne as ships' stores. That involved the result that, not only was the character of the shipowner's possession altered as between the parties, but the character of the goods themselves was also altered as regards the Crown. What was the legal consequence of

38 CLR 140

all this ? In my opinion this catena of circumstances eliminates,

as unnecessary formalities, the manual delivery by shipowner to consignee, and redelivery by consignee to shipowner. It also treats for Customs purposes those formal processes as having for convenience been eliminated, but as having in substance taken place and as having had real commercial effects. The goods only became "ships' stores" in Port Kembla, and, in substance, that is where they were, by the catena of circumstances mentioned, treated by all parties, including the Crown, as having been shipped as such. Otherwise, the Customs permission and the guarantee to the Customs rested on no real transaction SO far as these goods were concerned. In the result, the goods were imported goods and were necessarily "imported" by the Company, and prior in law to their conversion notionally into ships' stores. The goods should have been entered by the Company under sec. 68, and as they were by the Company intended to be sold and were in fact sold to the shipowner for use as ships' stores and SO treated by all concerned, they should, in my opinion, have been entered as for warehousing. My reason is that the operation, if extended, connotes 1 importation into Australia by the Company, 2 possible but no necessary consumption in Australia, 3 immediate delivery to the shipowner as ships' stores.

I therefore eliminate from the proper entries by the importer (a) home consumption and (b) transhipment. The only appropriate notional entry is therefore warehousing," for that is the only thing that could have been done, had the notional formalities been actually performed.

Was there then an instant obligation to pay the duty ? The matter depends upon a well-established understanding as to warehousing. The Customs Act, in Part V., deals with the ware- housing of goods. Sec. 78 enacts "Dutiable goods may be ware- housed in warehouses licensed by the Minister." Such goods are ex necessitate imported and are within the taxing Act provision quoted. The duty is at once a debt to the Crown. Hamel on the Laws of Customs, at p. 100, states the relevant law and quotes the following authorities: Com. Dig. "Debt," A. 9 Leaper V. Smith (1) Anonymous (2) Salter v. Malapert (3); Attorney-General

1(1721) Bun. 79. 2(1606) Lane 15. 3(1617) 1 Roll. R. 383. 38 CLR 141

V. Weeks 1, and Attorney-General v. Ansted 2. In the last- H. mentioned case Parke B., who was in accord with Lord Abinger C.B., referring to the Warehousing Act 3 &4 Will. IV. c. 57, which is the prototype of Part v. of the Customs Act, in effect stated the law to be that, apart from the warehousing provisions, the duty was payable, and that those provisions when complied with suspended the Crown's remedy by giving time for payment until the happening of events mentioned in those provisions for requiring actual payment. He also held that, where by the importer's own fault those provisions were not complied with, the original liability stood and the time for payment had arrived. The commercial necessities that led to the enactment of the warehousing provisions, and that to some extent at least exist in Australia, are found stated in Sir George Stephens' work on Commerce and Commercial Law (1853), at pp. 108 et seqq. The statement is interesting as supporting practically the principles laid down by the above- mentioned authorities. Applying those principles, confirmed by sec. 153, to the present case, the time for payment had arrived.

Did, then, the defendant evade payment ? It depends on what is meant by the word "evade" in the particular context. The word itself is not rigid. As was said by Lord Hobhouse in Simms V. Registrar of Probates 3, " everybody agrees that the word is capable of being used in two senses: one which suggests underhand dealing, and another which means nothing more than the intentional avoidance of something disagreeable. Beyond this, nothing is to be found having much bearing on the construction of the word, which depends entirely upon its use in the Colonial Acts." That is to say, we start with the alternative possible meanings of the word itself and as to anything further we are thrown upon the construction of the statute in hand. Before proceeding to construe the statute for the purpose of ascertaining what precisely is there meant by the word evade --a process involving important consequences both to the revenue and to the mercantile community-it is necessary to understand properly the observations of Lord Hobhouse. The "something disagreeable to which he refers may or may not, SO

1(1726) Bun. 223. 2(1844) 12 M. &W. 520. 3(1900) A.C., at p. 334. 38 CLR 142

OF A. far as concerns the intrinsic meaning of the word "evade" apart

from context, be a legal obligation. Whether in a given statute it connotes guilt or innocence and in what circumstances depends entirely on the true construction of the statute itself. Here the 'disagreeable thing" to be avoided is "payment." That is, the person "intentionally avoids payment" in fact of a sum which in law is payable. But whether the "intention" extends SO as to make belief in facts constituting liability to pay, or, still further, belief in actual liability to pay, the criterion of the offence is another question and a serious one both for Commonwealth and individual. It would be serious for the Commonwealth, because ignorance of essential facts, by reason (say) of wilful neglect or even unreasonable business carelessness or ignorance of actual liability, would exclude liability for evasion because there would be no actual belief. The first alternative would be serious for honest merchants because, even with full knowledge of the facts, there might be a genuine dispute as to the law supported by strong legal opinion which, however, in the end might be held erroneous. In such case, if mens rea be adopted as the test, it would exist, because, as the Privy Council held in Bank of New South Wales v. Piper 1, " the absence of mens rea really consists in an honest and reasonable belief entertained by the accused of the existence of facts which, if true, would make the act charged against him innocent." Their Lordships went on to hold that the party charged must be presumed to know the law whether he did SO. or not. (The italics are mine.) The expression "honest and reasonable belief" indicates that facts of which a reasonable man in the given situation would avail himself must be taken into account. That is, for the purposes of mens rea. And it establishes that the law accepts in such cases the standard of reasonableness as a test of culpability. If, therefore, sec. 234 (a) be construed SO as to make every intentional avoidance of a pay- ment actually due an evasion where there is knowledge of the facts, actual or imputed, constituting liability to pay, then there was undoubtedly a contravention of the paragraph in the present case. That is seen at once by a relation of the salient facts. There was importation of all the goods at Port Kembla. The "payment"

1(1897) A.C. 383, at pp. 389, 390. 38 CLR 143

due there instanter. All the facts were known to the respondents other than William which constituted in law the instant liability to payment of the duty. The respondents (other than William) unquestionably determined not to pay any duty at Port Kembla but to proceed as above stated. The arrangement included a guarantee. Even apart from the special terms of that guarantee, what was actually done was to remove from Port Kembla without payment of duty goods in respect of which duty was instantly payable and on which there existed by statute a charge or security for the payment of the duty. The constitutive facts being known and the law presumed to be known, what prevents contravention on the interpretation assumed ? But the actual arrangement makes the position more acute. It was the intention of the respondents that the duties arising in law at Port Kembla should never be paid and they never have been. The guarantee was " to furnish a list of all dutiable stores consumed on the voyage, and to pay duty thereon at the port of Melbourne." That is, if none of the goods were consumed on the voyage from Port Kembla to Melbourne, there was to be no duty paid at all, and any duty paid was to be in respect of future happenings, not of what had taken place at Port Kembla. If, therefore, "evasion" rests simply on knowledge actual or constructive of facts creating liability to pay and on the intention to avoid the payment legally required by reason of that liability, the respondents must be convicted. But in my view of the statute that is not the legislative intention, an intention that would operate frequently to the detriment of the revenue and frequently to the detriment of honest traders. The solution is this -We begin with the intrinsic neutral meaning of evade as intentional avoidance. Then, by a process of elimination, we can see what the Legislature intended the word to connote. Being erected into an offence by sec. 234 with a maximum penalty of £100, it is manifest that the evasion contemplated is more than mere omission to pay instanter. And compare Ramsden v. Lupton 1. On the other hand, the evasion penalized by sec. 234 clearly does not connote intent to defraud the revenue. That is shown by sec. 241, which doubles the maximum penalty where that intent is charged

1(1873) L.R. 9 Q.B. 17, at pp. 28, 30. 38 CLR 144

A. and proved. The position SO far is that "evasion" is more serious

than mere omission to pay and less serious than attempting to defraud the revenue. At this point one observation is material. Defrauding the revenue is not confined to escaping payment for ever. Escaping for a time with an intention to pay when convenient and in the meantime depriving the Customs of its security is defrauding the revenue, though the moral tint is a shade lighter (see R. v. Naylor 1 ). Now, what is the evasion which the statute places intermediately between simple omission and fraud on the revenue. Any trick or artifice or force which results in obtaining dutiable goods without payment of duty is a fraud on the revenue, and is, therefore, outside simple "evasion." Bringing to the solution what should in a doubtful case always be assumed, a presumption of just intention consistent with safeguarding the Customs revenue, the test must be whether the Crown debtor has acted honestly and reasonably in relation to his public obligations. It is the same test as the Privy Council has stated with regard to mens rea. If, legally owing the duty, the importer has not merely omitted to pay, but has omitted without any reasonable grounds for withholding payment, he has evaded payment. If, however, he can show any reasonable excuse for omitting to pay, he does not evade payment. He may genuinely and without negligence be unaware of the facts constituting liability he may have misunderstood a regulation or a law; he may, though perfectly cognizant of all necessary facts, be strongly advised that either on construction or constitutionally the law does not reach him. Such a man does not, in my opinion, "evade" payment. On the other hand, if his ignorance of facts arises through his own unbusinesslike conduct, SO as to be unreasonable in his case want of knowledge is no reasonable excuse. That, as already shown, is not because of the absence of mens rea as ordinarily understood. It is simply because what he ought to know in his situation when his public obligations are in question, he is taken to know. But the only test of what he ought to know is what a man in his position acting reasonably would know. Consequently, it all comes to a question of honesty and reasonable conduct. The conclusion is that sec. 234 (a) is contravened when there is intentional non-payment

1(1865) L.R. 1 C.C.R. 4. 38 CLR 145

without honest and reasonable excuse of duty which is payable. Then, was there an honest and reasonable excuse here ? In my opinion there was. The arrangement made was on the mutual basis that no duty should be paid at Port Kembla but that the guarantee arrangement should stand. On that ground, on that only, do I think the charge should fail.

2. Failure to Enter.-For the reasons given, I am of opinion there was a contravention of sec. 68, and the appeal as to this should succeed.

3. Interference.-With respect to the third charge based on sec. 33 there was, with one exception, no physical act of any kind at Port Kembla which could be said to be an interference with the goods.

Interfere in sec. 33 is not satisfied by a mere mercantile contract. Contracts between merchants are not prohibited by sec. 33: they do not interfere with goods they merely affect the right of individuals to interfere with the goods. The one exception referred to is the moving of the goods from Port Kembla in the vessel. But that was done by permission, and there was no breach of sec. 33.

What I have said with regard to the Company applies equally to Lawrence Chambers, who by reason of his agency for the Company came within the statutory definition of "owner" in respect of the goods.

The appeals, respecting the Company and Lawrence Chambers, should, therefore, in my opinion, be dismissed as to the charges under secs. 33 and 234, and allowed as to sec. 68.

HIGGINS J. Nine informations under the Customs Act 1901-1923. The Company is charged with three offences; and Lawrence Chambers (one of the principal shareholders) and William Chambers are each charged under sec. 236 with being directly concerned in these offences. By consent, all the nine informations were heard together. The Stipendiary Magistrate found that the Company was not guilty of any of the offences charged against it, and that Lawrence and William Chambers were therefore innocent. The informant has appealed to this High Court. During the argument before us, however, it was conceded by counsel for the informant that the appeals as to William Chambers are not pressed.

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The case involves many details; but I do not think it necessary to linger over them. I propose to deal at once with the three charges against the Company.

There is one charge that the Company did, in New South Wales PTY. LTD.

on or about 7th September 1922, fail to enter either for home consumption or for warehousing or for transhipment six cases of enamel and varnish and 366 drums of lead and paint alleged to have been imported into the Commonwealth at Port Kembla on the Nauru Chief. Under sec. 68 of the Act, " all imported goods shall be entered either (a) for home consumption or (b) for warehousing or (c) for transhipment."

The facts are that the vessel Nauru Chief, containing the goods, entered the harbour of Port Kembla about 6 a.m.; that these goods were consigned to the Chambers Company; that Lawrence Chambers met the vessel at Port Kembla by the instructions of Mr. Vogil, Sydney manager for the owners of the vessel, the British Phosphate Commission; that Lawrence Chambers on behalf of the Chambers Company arranged with the captain and the chief officer of the vessel to keep the paint on board and use it as required, and to supply a list of the paint used SO as to enable the Chambers Company to charge up the paint to the British Phosphate Commission that the vessel left for Melbourne about 5.30 p.m. on the same day without entering the goods at all.

Now, the Chambers Company is not guilty of this offence charged under sec. 68 unless the goods were "imported" goods. There is no definition of the words " 'import" or "importation" in the Act. Several cases have been cited from the Courts of the United States as to the meaning in United States Acts; but it is for us to find the meaning from the language of our own Act. The appropriate definition found in the Oxford Dictionary for "import" is to bring in or cause to be brought in (goods or merchandise) from a foreign country, in international commerce; but is it an essential condition under our Act that the goods be landed before entry ? Or that they be, at least, unshipped ? Sec. 49 with sec. 75 makes it clear that the due order of events contemplated is (1) entry, (2) unshipping, (3) landing or transhipping; and therefore entry is obligatory before unshipping or landing. Under sec. 31 all goods on any ship from parts beyond the seas are subject to the control of the Customs

38 CLR 147

whilst the ship is within the limits of any port in Australia; and under sec. 64 the master, owner or pilot is under a duty, within one day after arrival at any port, to report the ship and her cargo by delivering an inward manifest of goods for that port. Under sec. 74, (except as prescribed) goods may be unshipped only pursuant to 1 a collector's permit or (2) an entry passed. In the case of Algoma Central Railway Co. v. The King (1) Lord Macnaghten said that if the ship be brought within the country (in that case Canada), no more is required for the meaning of imported. The port is in the country. His Lordship was not referring, of course, to such exceptional cases as that of wrecked ships, or even that of ships destined for other countries, but calling at an Australian port en route. In my opinion, the position is the same under our Act; and these goods were "imported" within the meaning of sec. 68. The view taken by the Magistrate was that the (alleged) sale to the master of the ship relieved the Chambers Company of liability to enter the goods. I cannot take that view; I think that the Chambers Company-the consignee-failed to enter these goods, contrary to law, and that the dismissal of the charge was wrong. But there is no evidence whatever that the failure was " with an intent to defraud the revenue" as alleged in the information; this averment in the information is not even prima facie evidence of the intent (sec. 255 (4) ). If the Company be convicted, Lawrence Chambers must also be convicted as being directly concerned in the offence (sec. 236).

Another charge against the Chambers Company is that it evaded at Port Kembla payment of duty which was payable in respect of these goods. There is no doubt that the duty payable was not paid at Port Kembla (though it was paid afterwards) but does the word "evade" connote no more than failure to pay, in the words of sec. 234: "No person shall (a) evade payment of any duty which is payable ? Where mere failure to perform an obligation is meant, the word fail is used (as in sec. 268); but the word "evade" seems to mean something more than "fail." According to the dictionary, it means "to escape by contrivance or artifice from (attack, &.); to avoid, save oneself from (a threatened evil

1(1903) A.C., at p. 481. 38 CLR 148

A. or inconvenience): to elude (a blow), avoid encountering (an

obstacle)." According to Simms v. Registrar of Probates 1, a case as to succession duty, the words used were "has incurred or shall incur any debt with intent to evade the payment of duty hereunder". and, as the Judicial Committee said 2, "Everybody agrees that the word is capable of being used in two senses: one which suggests underhand dealing, and another which means nothing more than the intentional avoidance of something disagreeable." Both of these senses involve will, intention.

To say the least, " evade " would seem to connote the exercise of will in avoiding; whereas a mere failure to pay may be by accident or mistake. Under sec. 241 a person may at the same time be charged with an offence against this Act, and with an intent to defraud the revenue; and, if in addition to such offence he is convicted of such intent, the maximum penalty shall be double that otherwise provided. But this section does not show that the word "evade" must mean merely "fail"; for a person may " evade" the payment of duty by seizing from a vessel goods urgently wanted, although he may show, by paying the duty, that he has no "intent to defraud the revenue." The evidence rather points to an innocent mistake of the Chambers Company and of Lawrence Chambers; and, in my opinion, the information in each case was rightly dismissed.

I cannot, however, accept the gloss on the section proposed by my brother Isaacs-that the words "without reasonable excuse" " are implied. Indeed, for my part, I think it dangerous to attempt to frame a definition, or to interpose a formula between the section and the facts of each situation: facts vary SO infinitely.

Another charge is under sec. 33-that the Chambers Company did, without the authority of an officer of Customs at Port Kembla, interfere with these goods which were subject to the control of the Customs. All that the Chambers Company or Lawrence Chambers did was to make the arrangement which I have stated with the master of the vessel-to keep the paint on board and to use it as required, and to supply a list of the paint used. My opinion is that this does not constitute an "interference". with the goods

1(1900) A.C. 323. 2(1900) A.C., at p. 334. 38 CLR 149

The associated words are " moved altered or interfered with " - " No goods subject to the control of the Customs shall be moved altered or interfered with except by authority and in accordance with this Act." In my opinion, all the three words refer to physical acts-physical moving, physical altering, physical interference. When Lawrence Chambers made the arrangement, he did not even stipulate that the goods should be taken out of Port Kembla; SO far as the Chambers Company was concerned, it was immaterial whether the master should take the vessel (with the goods) out of Port Kembla at any time or at all. This charge was also, in my opinion, rightly dismissed-both as to the Chambers Company and Lawrence Chambers.

RICH J. I concur in the conclusions arrived at by the Court.

I do not consider it expedient to attempt an exhaustive definition of sec. 234 (a). The fact that the Customs officer at Port Kembla, after he had secured a guarantee in the prescribed form, allowed the ship to sail for Melbourne with the ship's stores unsealed, removes the case from the operation of the sub-section.

STARKE J. The defendant Chambers &Co. Pty. Ltd. was charged on information with three offences against the Customs Act 1901-1923. One charged that the defendant did not, contrary to the provisions of secs. 68 and 241 of the Act, enter goods imported by it into the Commonwealth, with intent to defraud the revenue. The defendant purchased the goods in England and shipped them on board the ship Nauru Chief, consigned to the defendant or its assigns at the Port of Sydney. The ship did not put into the Port of Sydney but into Port Kembla, a port some distance south of Sydney. It did SO for the purpose of coaling but it is clear on the evidence that the ship would not proceed to the port of Sydney, that it intended to land the goods at Port Kembla, and that the consignees were prepared to take delivery there. But before the goods were discharged an arrangement was made between the consignees and the representatives of the ship, whereby the goods were taken over for the use of the ship, and they were never landed.

Duties of Customs are imposed upon goods imported into Australia, but there is no definition in the Act of the word imported." They

38 CLR 150

may be imported by means of a ship or aircraft or through the post (cf. secs. 49 and 35). They may be brought within the territorial limits of Australia, and may indeed be subject to Customs control, and yet not be 'imported' in the fiscal sense of the term. Thus goods shipped from England to New Zealand via Australia are not imported into Australia because in the course of her voyage the ship with the goods on board comes within the territorial limits of Australia for commercial purposes. Yet such goods would be subject to the control of the Customs (Customs Act, sec. 31). Again, goods coming ashore from wrecks could hardly be classed as imported goods, and the Customs Act has made special provisions to meet the case (vide secs. 65, 66, 67 and 148).

It cannot, in my opinion, be maintained that the mere act of bringing goods into port constitutes an importation; though unexplained it may be evidence of the fact. If goods, however, are brought into their port of destination for the purpose of being there discharged, the act of importation is complete. On the other hand, the act of importation is not complete if a ship enter some port of call with goods on board which is not the destined port of discharge for those goods. Actual landing is not necessary, as was argued, to constitute an importation for fiscal purposes.

Now, in the present case the goods were not brought to their port of destination but to Port Kembla, where the goods were to be landed with the assent of the consignees. That, in my opinion, was an importation of the goods within the meaning of the Customs Act. It is clearly the duty of an "owner" who imports goods into Australia to enter them at the Customs, and that term " owner " includes the consignee of the goods (vide secs. 37 and 4, " Owner Consequently, in my opinion, the defendant should have been convicted of the offence that it did not enter the goods, but there was no evidence of any intent to defraud the revenue.

Another information charged that the defendant did, contrary to secs. 234 and 241 of the Customs Act, evade payment of duty which was payable in respect of the goods with intent to defraud the revenue. A duty was imposed on the goods mentioned in the information under the Customs Tariff upon importation into Australia and that duty was payable, in this case, upon the arrival

38 CLR 151

of the ship in Port Kembla (Attorney-General v. Ansted 1 ). did the defendant evade payment of that duty ? Clearly, in my opinion, the word "evade" in the Act does not necessarily involve any device or underhand dealing for the purpose of escaping duty; but on the other hand it involves something more than a mere omission or neglect to pay the duty. It involves, in my opinion. the intentional avoidance of payment in circumstances indicating to the party that he is or may be under some obligation to pay duty. The circumstances may consist of knowledge, or neglect of available means of knowledge, that the omission to pay is or may be in contravention of the Customs law. This, in my opinion, was not proved. The defendant and its representative acted on an honest but mistaken view that the arrangement with the ship and a guarantee to the Customs by the master thereof to furnish a list of all dutiable stores consumed on the voyage to Melbourne, the next port of call, and to pay duty thereon at that port fulfilled the obligations of the Customs law. Consequently this information was rightly dismissed.

A third information charged that the defendant at Port Kembla, contrary to the provisions of the Customs Act, sec. 33, interfered with certain goods subject to the control of the Customs, namely, the goods already mentioned, with intent to defraud the revenue. The proof led was that the defendant made the arrangement with the ship already mentioned. The section, however, points to some physical interference with the goods, and not to some disposition of the goods leaving them still subject to the control of the Customs; and the facts show that the goods were taken from Port Kembla in the ship with the sanction of the Customs and under the guarantee aforesaid. Consequently this information was rightly dismissed.

Three informations were also laid against Lawrence Chambers, based upon secs. 236 and 241 of the Customs Act, charging that he was directly concerned in the offences charged against the Company. Lawrence Chambers acted on behalf of the Company at Port Kembla, and the same results follow in his case as in the case of the Company. The information that he was directly concerned in the offence of the Company in failing to enter the goods must be supported, and the other informations dismissed.

1(1844) 12 M. &W. 520. 38 CLR 152

William Chambers was also charged on three informations in the same terms as in those laid against Lawrence Chambers. William Chambers was not a member or officer of the Company, and took no part in the acts proved against it. It was admitted, on the argument, that the informations laid against him could not be supported on the evidence adduced, and they were therefore all rightly dismissed.

As to the informations against William Chambers Appeals

dismissed. Appellant to pay costs in Court of Petty Sessions and in High Court. As to the informations against Lawrence Chambers :-

Appeals in respect of informations charging offences under secs. 33 and 234 of the Customs Act dismissed. Declare that the determination of the Magistrate on the information charging the respondent with being directly concerned in the commission of an offence under sec. 68 of that Act was erroneous in point of law and that the respondent should have been convicted of being directly concerned in the offence committed by the Company against that section. Remit the case to the Court of Petty Sessions to be dealt with in accordance with this declaration. As to the informations against Chambers &Co. Pty. Ltd.:

- Appeals in respect of informations charging offences under secs. 33 and 234 of the Customs Act dismissed. Declare that the determination of the Magistrate on the information charging an offence against sec. 68 of the Act was erroneous in point of law and that the respondent should have been convicted of failing to enter the goods mentioned in the information but not with intent to defraud the revenue. Remit the case to the Court of Petty Sessions to be dealt with in accordance with this declaration. Solicitor for the appellant, Gordon H. Castle, Crown Solicitor for the Commonwealth.

Solicitors for the respondents, Norton, Smith &Co.