CEO Customs v Granite Arms Pty Ltd & Anor [2004] HCATrans 524 (3 December 2004)

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CEO Customs v Granite Arms Pty Ltd & Anor [2004] HCATrans 524 (3 December 2004)

Last Updated: 16 December 2004

[2004] HCATrans 524

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B21 of 2004

B e t w e e n -

THE CHIEF EXECUTIVE OFFICER OF CUSTOMS

Applicant

and

GRANITE ARMS PTY LTD

First Respondent

OMEO WAY PTY LTD

Second Respondent

Application for special leave to appeal

GUMMOW J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 3 DECEMBER 2004, AT 12.24 PM

Copyright in the High Court of Australia

MR C.M. MAXWELL, QC: May it please the Court, I appear with my learned friend, MR R.M. NIALL, for the applicant. (instructed by Australian Government Solicitor)

MR M.B. EVANS: May it please the Court, I appear with my friend, MR F.H. MARTIN, for the respondent. (instructed by Roberts & Kuskie)

GUMMOW J: Yes, Mr Evans. We would be assisted to hear from you first.

MR EVANS: Thank you, your Honour. Your Honour, the applicant argues, in the argument is set out at the application book at page 53, that the general principle that “He who does a thing by means of an agent does it himself” - - -

GUMMOW J: Can we get to the specifics? Can we just look at line 25 on page 7. This seems to be the evidence:

As the goods were to be wholesaled to Licenced Dealers [throughout] all States of Australia, the decision was made to Consign the goods to a trusted business associate . . . who had agreed to import them.

MR EVANS: Yes.

GUMMOW J: The question is, what comes out of that, and what comes out of that with particular reference to the notion of importation in the statute?

MR EVANS: Yes. Goods were imported via Melbourne and were imported in that sense by the consignee, Granite Arms, who was in Victoria licensed to possess those firearms by arrangement between Mr Owen - - -

GUMMOW J: By arrangement?

MR EVANS: Yes. When the goods were landed, they would then be held in Victoria by Granite Arms, and there is no evidence to suggest - - -

GUMMOW J: When you say “held” do you mean as bail to them?

MR EVANS: Yes, they would be dealt with by Granite Arms, and there is no evidence to suggest otherwise.

GUMMOW J: Who would have the property in them?

MR EVANS: The property in them would be in the second respondent, in Omeo Way. Omeo Way, not being a licensed firearms dealer in Victoria, would not be lawfully entitled to possess them in Victoria, but when they were shipped to Queensland from Victoria, Omeo Way, being a licensed firearms dealer in Queensland, would have been licensed lawfully to possess them in Queensland, and there would have been no subversion or contravention of the domestic law by that arrangement or by that transaction.

GUMMOW J: That is the question.

CALLINAN J: They had to get into Queensland before Omeo could lawfully possess them. Is that right?

MR EVANS: That is correct, your Honour.

CALLINAN J: Was there any evidence of the arrangements with respect to the delivery of them?

MR EVANS: No, but nor was that a matter that was challenged in any way.

CALLINAN J: What do you mean, it was not challenged?

MR EVANS: There was no evidence led or put forward to suggest that there would be any contravention of the domestic law once the goods came into the possession of Granite Arms in Melbourne.

CALLINAN J: Would there not be an onus on you, at least an onus that might shift? I do not know. It may be that the whole onus is on you under the Act. I am not sure.

MR EVANS: The presumption, in my submission, and the only presumption that the Court should draw from this is that Granite Arms would not have dealt with the goods other than in accordance with the domestic law once they were landed. In other words, it would not part with possession of the firearms contrary to the law of Victoria or the law of Queensland.

GUMMOW J: The question is, why its possession was not a possession of its principal. That is the question.

MR EVANS: Because in Victoria, only Granite Arms was licensed to possess them. So, for instance, if a citizen who possessed no licence to possess firearms came across a commercially valuable shipment of firearms - - -

GUMMOW J: That explains the device that was adopted, but it does not answer the question.

MR EVANS: Well, the possession in Victoria would be on behalf of the principal, but there would be no need for the goods to ever come into the possession of the principal in Victoria.

CALLINAN J: But the liability arises, does it not, at the point of importation? It does not arise at a State or in a State or Territory to which the imported goods may or may not be sent. It is importation, is it not, that attracts the liability?

MR EVANS: Yes, and the relevant - - -

CALLINAN J: And the importation was not to Queensland.

MR EVANS: No, the importation was into Victoria. So the relevant question is, were the goods going to be received at the point of entry in accordance with the domestic law, which must be the domestic law of the State in question. In our submission, it is clear that they would be received in accordance with that law, because Granite Arms was licensed to possess them.

If, for instance, the principal in the importation held no firearms licence at all, that principal could still deal commercially with the goods by never taking possession of them, by leaving them in the possession of a licensed firearms dealer, and simply receiving ultimately any commercial benefits from the trading in the firearms.

CALLINAN J: Is it not possible that the agent and the principal were both participants in the importation?

MR EVANS: It may be. One of the points we make in our submissions is that there is no necessary requirement under the Act or the regulations that the word “importer” must apply to one person only. The word “owner”, as defined, can apply - - -

GUMMOW J: It is not usually treated as applying to a Customs agent.

MR EVANS: No, not necessarily, but the word “owner” can extend to a Customs agent, and in that respect, your Honour, I would also draw your Honour’s attention to the wording of the regulation, in particular, the note to the regulation.

GUMMOW J: Vis-à-vis Customs (Prohibited Imports) Regulations?

MR EVANS: Yes, your Honour. The note was in the - - -

GUMMOW J: How does that help you?

MR EVANS: The note says that the police authorisation test can be satisfied by the provision of the certificate by an agent, and - - -

GUMMOW J: It is not saying the agent is the importer.

MR EVANS: No, but that the importer – for instance, if the Court accepts the argument put by the applicant that the word “importer” must comprehend the owner, which must mean the beneficial owner of the goods, then that importer can still satisfy the test according to the note, by providing the certificate through an agent, for example, a firearms dealer.

GUMMOW J: Well, you may be right at the end of the day, Mr Evans, but it seems to me, and I think my colleague, that there is a point in all of this that should be looked at, that is not sufficiently looked at – at the moment, anyway, it would appear – in the Federal Court.

MR EVANS: The issue of the note, for instance, is not directly addressed in the judgments.

CALLINAN J: You may have a good point. I am not suggesting what you are saying is not arguable.

MR EVANS: No. Beyond that, your Honour, the proposition that is advanced by the applicant appears to include the proposition that where a regulatory regime requires something to be done by a person, usually by indication of some status, the regulation must be satisfied by that act being done by the person and not by an agent. But the ramifications of that, if it was to be adopted, might be quite severe. A person required by some council regulation to do earthmoving works, for instance, could not employ a licensed earthmover to do it. He would have to acquire the licence and do it himself, it would seem - - -

GUMMOW J: We will hear what Mr Maxwell says about that in a minute.

MR EVANS: Yes, thank you, your Honour. Also, your Honour, the approach put forward by the applicant would require a narrowing of the definition of “importer”, as it appears in this regulation, to mean someone who is the ultimate beneficial owner of the goods, which would be contrary to, in my submission, earlier authorities on the meaning of the word “importer”.

For instance, in Wilson v Chambers, which is not included in the materials, but it is referred to by Justice Spender in his judgment – the quote is in the application book at page 12.5 – the owner in that case required to enter the goods upon importation could include a consignee. Here, if the word “importer” is given the definition sought by the applicant, it would be a much narrower definition, and that would require some consideration of the meaning of the word “owner” as it appears in the rest of the Act.

It would also raise difficulties in other contexts. For instance, if a trustee sought to import goods in circumstances where the importer was required to provide some documentation, would it be satisfactory for the trustee to provide the documentation or would it need to be provided by the beneficiaries of the trust? It also raises the question of what ought be the approach taken to the definition of the word “importer” as it appears in the - - -

CALLINAN J: I know. It sounds like a special leave point.

MR EVANS: Yes, but, in our submissions, we do not seek to challenge the approach in Project Blue Sky, but that the ordinary natural meaning of the word “importer”, in our submission, should not be confined to the ultimate beneficial owner of the goods, the person who has paid for them, and, indeed, it ought not be confined, necessarily, to any one person or entity. It might be capable of being satisfied in a given case by a number of people.

Similarly, where an importer, even if the word is taken to mean the person who is the ultimate owner of the goods, is required to do something, that the importer can satisfy that requirement by having it done by an agent, particularly where it requires some legal authorisation or power to comply, and that the - - -

CALLINAN J: Particularly in the labyrinth of Customs regulations, it is understandable that people might get specialists to do all sorts of these things as their agents.

MR EVANS: They may, indeed, and for the importation of some other commodity, such as pharmaceuticals and the like, it may well be that you need to have someone who holds a relevant licence to receive and hold the goods, but that does not mean that you cannot be the ultimate beneficial owner of them.

The applicant’s argument also relies on the proposition that in some way the view taken by Justice Spender and by the majority in the Court of Appeal would allow the policy of the Act to be subverted, but they do not
actually say how that can happen, when the imported firearms are received and held by a licensed dealer. It must rely on the assumption that that dealer would in some way deal with the goods other than in accordance with the law, but there is no evidence to suggest any foundation for that assumption.

I have mentioned the note to the regulation, which is not addressed in the applicant’s submissions. The relevant policy of the regulation, which I think I have already dealt with, is that firearms imported must be received by someone with the authority to deal with them. Then what happens to them after that must be a matter for the domestic authorities. If a firearms dealer deals with firearms in his possession contrary to the law, it is a matter for the police, not Customs.

Finally, your Honour, the applicant, in the written submissions for the special leave application, has not addressed squarely the point taken by the Court of Appeal on what might be called the Forbes v Traders’ Finance point. This is a regulation involving forfeiture, and the question of construction would apply there.

GUMMOW J: Yes.

MR EVANS: Thank you, your Honours.

GUMMOW J: Yes, Mr Maxwell. What do say about the Forbes point?

MR MAXWELL: If your Honours please. We say, your Honours, that that is one element in the construction exercise, but we also draw attention - - -

GUMMOW J: In a way, your side brings all this upon itself by not defining “importer”.

MR MAXWELL: Your Honour is correct in that regard, but we have sought to argue that the fundamental principle that we deploy applies, whatever the description of the person who must comply with the statutory requirement. It would true for, as we have said, a manufacturer of tobacco, if an agent is doing the work, how could it be that an unlicensed manufacturer does not break the law because the agent happens to have the licence? At all events, your Honour is right, but what is important about the non-definition is that the reference to “owner” only makes our point.

The Customs Act defines “owner” to include “agent”. The New Zealand Customs Act defines “importer” to include “agent” in the terms of the UK provision to which Justice Kiefel refers early in her Honour’s judgment. That is what would have been done had it been intended that, as your Honour said before, a mere Customs agent, playing a part in an importation, would be an importer for the purposes of the regulations. That has never been said, in our respectful submission. That being so, one starts with principles of agency, rather than treating them, as the majority says, as external to the Act.

GUMMOW J: I think you have to begin with the findings of fact, I suppose, as to what was going on here, do you not?

MR MAXWELL: We have asserted, your Honours, and it is - - -

GUMMOW J: And it looks a bit odd, is one way of looking of it.

MR MAXWELL: Indeed. Well, it is more than that. It is a blatant device, and, indeed, it is apparent from the description of the facts that that was so. There was a difficulty for the importer, Omeo Way, because it did not have the authorisation which the police authorisation test required. Our learned friend’s reference to State licences is, with respect, wholly irrelevant. What you need to do – if your Honours have the regulation there, it would be convenient if I took your Honours to the beginning of the test. It is at the foot of page 65 of the photocopy we gave your Honours of the regulation, it is behind tab 8 in that folder - - -

GUMMOW J: Yes, I have it, thank you.

MR MAXWELL: Your Honours will see:

Police authorisation test

4.1 The importation of an article . . . complies with the test if:

(a) the importer of the article has been given a statement, in an approved form, to the effect that the importer holds a licence or authorisation according to the law of the relevant State or Territory to possess the article –

. . .

(c) the importer produces –

that statement. The note says exactly what you would expect, that the importer does not have to attend in person:

Note The importer can produce the statement . . . by an agent –

The note is not only not helpful to our learned friends, it rather makes our point, which is that any act can be done by an agent and in law with the act of the principal. So the possession of Granite Arms is, as your Honour Justice Gummow said, the possession of Omeo Way.

The policy is, as (a) says in the regulation, the importer, that is, the person by whom the goods are being brought into the country, that is, in this case, Omeo Way, who paid for them, who made the contract to buy them, and who will have the power of disposition over them, who will have the ultimate possession of them – that person must have a statement that that person has an authorisation in respect of that article.

Omeo Way obtained such a statement, your Honours, and that is mentioned in application book 22. Omeo applied for Queensland authorisation in respect of this importation, got the authorisation, and then it was rescinded.

GUMMOW J: Yes, we know that.

MR MAXWELL: And your Honour knows, conveniently decided on a device which would mean that someone, namely, Granite Arms, which was not acting in its own right at all, but merely as agent, that is to say, legally as Omeo Way, would produce Granite Arms’ authorisation. It is an extraordinary result.

GUMMOW J: Yes. Mr Evans put several propositions which I think you regard as putting it too highly.

MR MAXWELL: The one your Honour was foreshadowing asking me to respond to was the earthmoving one. Now, if there is a requirement of a planning permit that earthmoving works be undertaken and the permit holder is a natural person or a company, nothing we say requires the person to do the earthworks by their own hand. Companies act through agents every day, but the point - - -

GUMMOW J: I do not think we need to hear you any more, Mr Maxwell.

MR MAXWELL: If your Honour pleases. Yes, Mr Evans.

MR EVANS: Your Honour, on the point my friend raises on the note, he says the note should be read as meaning that the importer, being the owner or the person who has paid for the goods, produces a statement or certificate issued to them personally, and that that certificate can, if need be, be handed up by an agent. But the example given is by a firearm dealer, which would appear to contradict the construction my friend wishes to put on the note. The importer can satisfy the requirement by producing a certificate obtained
by an agent – for example, a firearms dealer who would be authorised to possess the goods – and that, in my submission, then is consistent with the point we make, that the domestic law requirements are then met by the possession of the goods by someone authorised to hold them.

My friend says that the Forbes point should be treated simply as part of the construction background, but, in my submission, it is critical in this case, because this is clearly a statute that would lead to forfeiture. The consequences are serious. It cannot simply be put into the background as part of a general matrix, and, in my submission, the answer there is insufficient.

The reading that my friend would also place on the wording of the test itself requires that where the word “importer” first appears, it be there taken to mean the person who has paid for the goods, rather than some consignee or other agent who is to land the goods. In my submission, that is a definition that does not flow from either the ordinary meaning of the words or the context. The test is satisfied if the person who is to land the goods – and we say in that case this is Granite Arms as the consignee – has the relevant authorisation.

Even if the words are given the meaning my friend has submitted, then we say that the note indicates how the test might then be satisfied by means of an agent possessing the necessary certificate. Those are my submissions.

GUMMOW J: Would this be a half a day case if we granted it?

MR MAXWELL: Yes, your Honour, it would be a half a day case.

GUMMOW J: I would have thought.

MR MAXWELL: It is a very short point, and we have not much more to say than is in our summary here.

GUMMOW J: Yes, well, I hope you do. There will be a grant of leave in this matter as a half day case.

MR MAXWELL: If the Court pleases.

GUMMOW J: We will now adjourn to reconstitute.

AT 12.48 PM THE MATTER WAS CONCLUDED