R v Lyon [1906] HCA 17

Customs € 'Customs

770 HIGH COURT

(HIGH COURT OF AUSTRALIA.} THE KING AND

ALBERT C. LYON . A r : a . -DEFE

H.C. or A. Customs Act (No. 6 of 1901), secs. 144, 154, 234—Proprietary mediei 1906. imported in bulk for putting up under trade name—Value for dut}

—~ cost of labour and material in Australia—Conatruction, sypwey, April 3, 4, 5. Sec. 144 of the Customs Act 1901 provides that medicinal prep completely manufactured, but imported for completing the manufac Grimth ©, therecf, or for the manufacture of any other article by putting up or oGonmor 3d them under a proprietary or trade name, shall be "irrespective of cost:

for duty and duty shall be paid thereon at the ordinary market value in' country whence imported of the completed preparation when put up labelled . . . less the actual cost of labour and material used or ex] in Australia in completing the manufacture thereof or of putting labelling the same."

The defendant imported a large quantity of pills in bulk from America, the purpose of putting them up and labelling them under a proprietar trade name and selling them in Australia. He entered them for hom sumption, and valued them for duty under sec. 154 at their ordinary m value in New York in the condition in which they were imported, per cent. added. The Crown brought an action in the High Court recovery of penalties for a breach of sec. 234 of the Customs Act in h wade a false entry and an untrue statement in an entry.

Held, that the pills, being a " medicinal preparation not completely factured " within the meaning of sec. 144, should have been valued fo and duty paid thereon in the manner and at the rate prescribed b section, and, therefore, that the defendant had committed a breach 234 (d) and (e).

On the importation of dutiable goods for home consumption, their for duty must be stated and duty paid immediately upon passing tl and therefore the words "actual cost of labour and material used or'

in Australia" in sec. 144 must be construed as meaning "' actual

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é 'it can be ascertained at the time of entry ; not 'such cost as is ascertaine

by actual disbursements already made," but the "real direct cost," as wred by necessary disbursements for the sole purpose of completing the 'nanufacture or putting up the article under a proprietary or trade name, and 'ascertained by an estimate based upon experience in the manufacture or

jutting up of goods of the same description. Bx parte Britz, (1904) 4 S.R. (N.S.W.), 116, overruled on that point.

referred for consideration of the Full Court.

defendant, who was an importer of pills, carrying on nsiness in Sydney, in October 1902, imported certain pills in which were dutiable goods within the meaning of the s Act 1901, being liable as "medicines" to duty at the 'of 15 per cent. ad valorem. The agent of the defendant, for

cription of goods—6 cases containing pills.

jalue for duty, £154; rate of duty, 15 per cent. ; duty, £23 2s." valuation was made under sec. 154 of the Customs Act as goods imported were ordinary goods liable to ad valorem

e Crown then brought an action in the High Court to wer from the defendant penalties for breaches of sec. 234 of the Customs Act, on the ground that the entry made by the efendant was false and untrue in that the value for duty was in more than £154, and the duty payable was in fact more £23 2s. By his statement of defence the defendant denied aterial allegations in the plaintiff's statement of claim, and was joined upon that defence.

The case came on for hearing before O'Connor J.in Sydney on jovember 1905. It appeared at the trial that the goods in were manufactured in America and shipped in bulk as n cathartic pills from New York to Sydney to the com- 'of which defendant was the manager. There they were to 'up in bottles, labelled, and sold as Dr. Morse's Indian Root Evidence was given that the market value of the pills

,d H.C. or A.

1906. ——

Tue Kine b Lyon.

772 HIGH COURT

H.C. or A. when so put up for sale and labelled was very much gre ver, the value of the pills in bulk. Tur Kixe It was contended for the plaintiff by Dr. Cullen KC, Lyox, Whom Blacket appeared, that the pills were medicinal p tions within the meaning of sec. 144 of the Customs Act, fore should have been valued under that section, at the m value of the completed preparation in New York less the ": cost of labour and material used or expended in Aus putting up and labelling" the goods. The market value ii York of the shipment in question, when so put up and labe was shown to be £2,100. The necessary deductions and additions being made, the was that the value for duty should, according to this con i have been stated at £2,160 8s., on which the ad valorem would be £324 Is. 3d., instead of £23 2s. as stated in the ent For the defendant it was contended by Gordon K.C., with wh Mitchell appeared, that the valuation of the goods under see. was impossible, because the latter part of the section could no applied until after the entry had been made. Actual labour and material could not be ascertained at the time of ent In support of this contention he cited Hx parte Brite (1). The point involved being one of difficulty and importam the administration of the Customs, His Honor, by consent parties, reserved for the consideration of the Full Court thed tion whether, on the evidence, and on the proper interpre sees. 144, 154, and 234 of the Customs Act 1901 and the ( Tarif 1902, the Court having power to draw inferences of fa the plaintiff or the defendant was entitled to a verdict upo whole or any part of the plaintiff's statement of claim, directed the case to be set down for argument accordingly. verdict was to be entered in accordance with the decision of Full Court, but the question of costs, and, if necessary, the qu tion of penalty, His Honor reserved for consideration until the decision of the Full Court. a

Dr. Cullen K.C. (with him Blacket) for the plaintiff. It ist on the evidence that the pills in question were a medicini (1) (1904) 4 S.R. (N.S.W.), U6.

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ction, unless the terms of the section rendered it impossible. d that the section is inapplicable because of the presence the words "actual cost of labour and material used or expended Australia," inasmuch as at the time of entry no labour or has been used or expended. That is construing " actual"

the natural construction in this context. The expression cost" is fairly capable of being construed, not as applied particular goods imported, but generically, as applied to ds of that description. All the important words in the earlier t of the section are used generically, eg., " completing the re thereof," " manufacture of any other article," "such tions." They refer, not to the actual goods in respect of the entry is passed, but to all goods of that class. That so, words in the latter part of the section which are of being read in the generic sense should be so read. words "actual" and "used or expended " may fairly be istrued as "mere" cost, in which sense they become appli- ble to any goods of the description in question, that is to cost of labour and material ulone, exclusive of other of expenditure which might otherwise be included er cost of manufacture or of putting up for sale. On the ler construction, in every case of the importation of such forhome consumption the section would be wholly unwork-

hough it was clearly intended to apply to that particular The word "actual" was interpreted in the generic sense in re United Merthyr Collieries Company (1). 'The words" actual 'of removal" in an order were construed to mean, not the ual cost incurred in respect of removing particular coal, but amount which coal of that class would in fact cost. Such a tion would be based upon an estimate. So in the present 5 the importer may make an estimate of the probable cost of and material based upon his previous experience, and ake the deduction provided for in section 144, and in that way a (1) LR. 15 Eq., 46.

imported for the purpose of being put up and labelled, H.C. or A.

1906. ot Tue Kine v, Lyon.

H.C. or A. 1906."

Tue Kise

Lyon.

HIGH COURT

the whole section will be satisfied. In The Borough of 1 y. Sanders (1) the words " costs and expenses incurred," tract, were construed as meaning, not disbursements a but costs which would have to be paid. This is a reason struction and one which carries out the obvious intention « legislature, whereas the other construction would defeat it. Court should therefore adopt the reasonable construction, eve it involved reading particular words in an unusual sense, is not necessary here: Salmon v. Duncombe (2); even a : the section under consideration is a penal one: Rev y. V (3). In making the valuation under sec. 154 the defe has not adopted the method applicable to this particular ¢ goods, with the result that the statements in the entry are m both as to value and as to amount of duty. Frand is not all and need not be proved. Sec. 234 makes it an offence to n entry which is untrue in any particular (d), or to make ast ment which is untrue in any particular in any document to any officer (e). The defendant has therefore commi breach of that section, and is liable to the penalties imposed |

and the plaintiff is entitled to judgment. ;

Gordon K.C. and J. L. Campbell (with them Mitchell), fort defendant. The entry was correct and was the only one po under the circumstances. Ex parte Britz (4), on this point, rightly decided. The question is, not whether duty has to bey : on these goods under sec. 144, but whether there was an ment of sec. 234 on the day when the entry was passed. whole section uses terms which are generic, but in, pra must be applied to particular goods. When a shi imported the "ordinary market value" must be the ordit market value of that particular shipment, and in the same "actual cost" must refer to the particular goods. The va under sec. 144 need not be made at the time of entry. day it would be sufficient to pass an entry under sec. 154 the Customs authorities could take security under sec. 42 fo due payment of any further duty which might become

(1) 2C.L.R., 214, at p.-220. (3) (1905) 2 K.B., 748. (2) 11 App. Cas., 627" (4) (1904) 4 8.R. (N.S.W.), 1

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n under sec. 144 might be made, and the "actual cost of rand material used or expended" deducted. It is impossible time arrives to make the calculation of " actual cost." rue that expression as meaning " estimated " or " probable" sould be straining the words. Every word in the latter part . section points clearly in one direction, that is, that the |sum expended on the specific goods in the process of com- he manufacture must be ascertained before the calculation is to be made. The argument, that on this construc- section would be difficult to work, applies equally to the ruetion put forward by the Crown. In the one case the den is on the Customs authorities, and in the other upon the If the importer has to make an estimate, and in he makes a mistake, he renders himself liable to a The Act makes no distinction between intentional and itentional breaches. rritH C.J.—In a taxing Act the rule is that the words are eive their ordinary natural meaning, without straining.] 155 the word "actual" is used to mean "in fact," not irically but specifically. That is the natural meaning of the r cand it is strengthened in see. 144 by the words "used or " In sec. 155 where an estimate is intended, words are indicate that intention, e.g., "actual money price at which joods were saleable." This construction gives a reasonable to every part of the section, and as it gives effect to the n their natural and ordinary meaning it should be adopted. y be that in general the whole duty is to be paid at the time 'but in this case the legislature, having used words which impossible, must be taken to have intended that in the

y of the balance of duty afterwards, e., see. 153. The struction necessitates leaving out "actual" and sub- Some such word as "ordinary." Even if the words

When the goods are put up and labelled, the H. ©. or A.

1906. —

Tue Kixe v Lyon.

H. C. or A.

1906. —— Tue King v Lyon.

April 5.

HIGH COURT

uses words which rebut any inference that contemplated in making the deduction. Sees. 144 may be read together as imposing a primary liab date of entry under the latter section, and a contingent to arise if certain events happen, under see. 144. See. the only one applicable up to the date of this action, and. requirement of it was complied with. The entry wasn the only form supplied by the authorities. In re United Merthyr Oollieries Company (1) is defendant's favour. "Actual" there was held to m "estimated," but actual, in the ordinary sense of already done. In Borough of Tamworth v. Sanders Court was considering the question whether "costs and incurred" meant only disbursements already made, or in liabilities as well, not whether it meant past or future. F As to Salmon v. Duncombe (3), Lord Hobhouse said natural and ordinary meaning of words should be prefe such a construction left a substantial operative effect enactment." That is in the defendant's favour. Rew y. applies only to a case in which the natural construction of would altogether nullify the Statute, which is not the case

Dr. Cullen K.C. in reply. The postponement of the pay of duty until completion of the manufacture or process of pi up and labelling, would, in the case of goods imported for h consumption, lead to the very result which the legisla throughout the Act laboured to prevent, that is, the dutiable goods from the control of the Customs before du finally paid. A construction which would lead to a opposed to the policy of the Act should be avoided if

GrirrirH C.J. This was an action brought by the

an untrue declaration in a Customs entry. The questi determined in this case is one which was left undecided bj

R. 15 Kq., 46. ~ (3) 11 App. Cas., 627, at p- CLR, sis (4) (1905) 2 K.B., 748.

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nof sec. 144 of the Customs Act 1901. That section

al preparation not completely manufactured but im- completing the manufacture thereof, or for the manu- another article by putting up and labelling it under a ry or trade name." That appears upon the evidence, as

valued by the defendant at their value in New York, place they were imported, as if they were ordinary ject to ad valorem duty, and as if see. 144 had no applica- em. It appears that the goods were consigned by whole- mfacturers to the defendant for the purpose of putting ip and labelling them for sale in New South Wales. The tof the evidence is that, in the condition in which they imported, according to the invoice value the goods were £140 or thereabouts with ten per cent. added, whereas, if were valued according to the provisions of sec. 144, they rth more than £2000. The question is whether under stances the defendant has committed a breach of the in entering the goods as of the value of £140, and declaring to be their true value.

fliculty is said to arise from the use in this section of the actual cost of labour and material used or expended in a," words which, it is said, refer to an existing fact by something which has already happened. On the

' ime of passing the entry, and that, if at that time the labour and material has not been ascertained by actual nditure, that circumstance does not affect the express direc- af the Statute that the goods are to be valued at the time of ng to the rule prescribed by the Statute.

w, this Act contains general provisions as to the working ustoms Department. But it does not introduce any new m. The system which it adopts has been in force as long as duties have been imposed. The method adopted has

(Ql) 1C.L.R., 391.

TIT

ease of Donohoe v. Britz (1), and depends upon the H: ©. oF A.

1906. <3

Tue Kine v. Lyon.

Griffith C.J.

Hi. C. or A.

1906. Se Tue Kixe v. Lyon.

Griffith C.J.

HIGH COURT

a

always been that the value is to be declared and the d at the time of passing the entry. In the case of goods it for home consumption the course of procedure is first get goods passed and paying the duty, and then taking the g of the Customs into consumption.

I will refer to some of the sections which deal with th See. 30 provides, amongst other things, that goods sh subject to the control of the Customs from the time of iny tion until delivery for home consumption or until expo parts beyond the seas, whichever shall first happen. provides that entries shall be made by the delivery of by the owner to the Collector, and sec. 39 provides that " shall be passed by the Collector signing the entry, and o passing of the entry the goods shall be deemed to be entere any entry so passed shall be warrant for dealing with the gc in accordance with the entry." See. 68 provides that i goods shall be entered either for home consumption, for housing, or for transhipment. That, of course, is at the opt the importer. Sec. 78 provides that dutiable goods may be w housed in warehouses licensed by the Minister. See. 79 pro that there shall be four classes of licensed warehouses, one of t being manufacturing warehouses, to be used for wi goods not completely manufactured and for carrying on th facture trade or process necessary for its completion. of the Statute relates to duties, and of that the principal d relates to payment and computation of duties. Division 21 to ad valorem duties, the provisions of Division 1 being 4 cations of the latter division. Sec. 154 provides that : [His He read the section to the end of sub-sec. (b).] See. 155 d "genuine invoice." Of course, there need not be an invoice but the duty cast upon the importer is to state the value 0 goods and verify it by declaration, and especially by p cl of the genuine invoice, if there is one. Having regard t provisions let us look at see. 144 [His Honour then section and proceeded :] That is a section qualifying | The latter section lays down a general rule for valuing g duty, while sec. 144 establishes another rule, ora q the general rule, which is to be applied to the case of

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x a oc

tions not completely manufactured, but imported for com- H- C. or A. g the manufacture, or for putting up and labelling under a Ris

ry or trade name. Primd facie, therefore, on the Tye Kine ion of goods of this sort, they ought to be described 1,"

al preparations not completely manufactured but

for the purpose of completing the manufacture. If e stated in the entry it would at once be apparent that jue for duty was not the value as prescribed by sec. 154, prescribed by sec. 144. It is said, however, that this result. ded by the words " actual cost of labour and material used pended in Australia." Now, in construing sections of this .the first duty of the Court is to ascertain what the legisla- e intended to enact, and to give effect to all the words that it used in expressing that intention. The important direction s section is that the goods "shall be irrespective of cost d for duty and duty shall be paid thereon at the ordinary yalue in the country whence imported of the completed when put up and labelled under such proprietary or le name." That is an explicit direction as to the valuing of ods for duty, and the payment of duty. Valuing for duty is the entry, and payment of the duty precedes importation. Jacie,therefore, this is a sectionto come intooperation before at the time when the goods are entered. I have already pointed that if they were not to be-entered for home consumption they be warehoused, and the manufacture completed in the ware- If the importer desires to make them up in that way, he can them for warehousing if he pleases, or, if he desires to enter 1 for home consumption, he can do that. But sec. 144 is itive, and does not depend upon the form of entry that the

Griffith C.J.

difficulty need arise in carrying it out. But, it is said, imd facie meaning cannot be adopted without rejecting the s"actual cost of labour and material used or expended in ia." If that were so, it would be the duty of the Court, I give effect to those words, and, even if the consequence at the duty required to be performed by the importer was ich could not be performed at the time of the passing of

H.C. or A. 1906. ——

Tue Kixe

v. Lyon.

Griffith C.J.

HIGH COURT

of the Supreme Court on this point in the case of Ex pa , (1). It it necessary, therefore, to look at the words a little closely. * In the first place, I remark that the words are used as ps a sentence dealing with a matter that is to a certain conjectural. But it is a matter which is certain to a co intent, though not arithmetically ascertained. What has { ascertained is the market value in the country whence in of the completed preparation when put up and labelled und proprietary or trade name. The subject matter of the calcul f is a mass of material imported into Australiain bulk. Ho) mass will work out when completely divided up is a matter e toa common intent, though not in a mathematical sense. — quantity may vary by a few boxes or numbers on one side ort other ; itis to that extent conjectural. That is the first sum 0 worked out in determining the amount at which the goods sh be valued for duty. The second is the actual cost of labo material used or expended in Australia in completing the m facture or in putting up and labelling the material impo Now, if these words are capable of a meaning analogous to thi F which the first branch of the sentence is used, it is not unre able to adopt it. If the goods are not for home consumption b for warehousing, the actual cost of labour and material expended in Australia cannot, of course, be then ascertained, not known to a certainty. Nor is the other element of ealeulat known to a certainty. Where we find a difficulty of that ki it is proper to inquire whether the words are so plain" ' unambiguous that no other meaning can be given to them, is to say, whether the word "actual" necessarily bears definite meaning that it cannot be read in any sense con with the plain meaning of the other words of the sent think that the word "actual," even apart from this collocati capable of another construction. But in this passage it see me to admit of two meanings, one being "such cost as is tained by actual disbursements already made," in antith "estimated" or "probable" cost, and the other the "real di as measured by necessary disbursements for the sole purpo (1) (1904) 4 S.R. (N.S.W.), 116.

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or trade name, in antithesis to notional or constructive ch might include rent of warehouse and general super- 1. By adopting the first construction we get an inconsistency en the two parts of the section. The first part requires the to be stated for duty, and duty paid immediately, whilst by ond, a man is required to pay a duty which cannot be ascer- d. That isa reductio ad absurdum, Still it is quite clear he cannot import the goods until he has paid the duty. A m which has that result is to be rejected unless the e incapable of any other sensible meaning. The other m is equally rational, and it is the only one which is consistent with the rest of the section. I am of opinion words "actual cost of labour and material used or " mean actual cost, so far as it can be ascertained at Whether it can be ascertained at the time depends upon the importer himself. If he chooses to adopt a form - which renders it impossible to ascertain it, the fault lies For these reasons, I am of opinion that the contention

on J. Iam of the same opinion. I think that the stage | the calculation is to be made is fixed by the section, and

tive of cost valued for duty and duty shall be paid thereon." the moment of entry that the section speaks, when the made, as here, for home consumption, and when it says Valve for duty shall be the ordinary market value of the sin the country whence imported it speaks of things which ascertained as at that time. Then it goes on to say that MG be deducted from that the "actual cost of labour and used or expended in Australia in completing the manu- thereof or of putting up and labelling the same." It is

that if we read that literally there is a difficulty the manufacture or putting up the article under a H.C. oF A. 1906.

Griffith C.J.

H. C. or A. 1906. aes

'Tae Kixe

cs Lyon.

Barton J.

HIGH COURT

created as contended for by the defendant. At that actual cost, in the usual sense of the term, has not yi incurred, and therefore it cannot then be exactly But we are bound to read the passage so as to give it meaning and effect, not to read it, as I take it, so as ton say that the legislature meant that the goods should be for duty and the duty paid only on the completion of the of manufacture or putting up and labelling, although the provisions of the Act and this section in particular indicate the duty is to be paid upon entry, there and then. That: be an unusual method of construction, and we natura ourselves, could Parliament have intended to make s vision as would render nugatory the whole provision for pay of duty at the time of entry ? The result, in my opinion, is th words "actual cost" should be interpreted in view of the ¢ stances under which the deduction has to be made, that is that the cost at the moment at which the goods are valu

the legislature did not intend the word "actual" to be unde in the ordinary sense, but as meaning actual cost as nearly be computed at that time and in those circumstances. Then thing to that would be the cost of manufacture as ascerta experience. That is to say, the cost, as I suggested in the e of the argument, as estimated by the owner of a going ¢ engaged in the business of putting up these pills for sale, s0 convert them from nondescript bulk into the marketable eo article. The calculation would be based on the quantity of imported as it will be represented in the goods when lab put up in bottles, the cost of bottles, labels and printing, and of wages to be paid during the process. All these capable of being computed at that time. This isan i calculation based upon known facts. This construction words "actual cost of labour and material used or & gives a sensible meaning to every part of the section. For these reasons I agree with my learned brother Justice in the opinion that the contention of the Crown

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yor J. In this case the charge against the defendant, zh put in several different ways, involves really only the , that the entry made by the defendant was untrue in culars, in the statement of value for duty, and in the 'at which the duty was stated. As the latter amount ded upon the value for duty the whole of the charges are substantially in the one allegation that the entry was ae in respect of the statement of value for duty. Now, the efor duty is a mixed question of law and fact. There is a deal of difference between what the plaintiff alleges alue, namely, £2,160, and the value for duty stated by ndant, £154. The difference between these valuations ids entirely upon the view taken of the meaning of sec. 144. difference between the two valuations turns entirely upon a of law.

ave had two interpretations of the section put before us. contended for by Mr. Gordon is this: the valuation for st mean valuation at the time when payment is to be That valuation cannot be made until after the process of up the goods has taken place. Therefore the time for ent of duty cannot arrive until the goods have been actually ap and the cost to be ascertained has been actually incurred. and not until then, is the defendant liable to pay duty. y that construction does give a meaning to the section. ion is whether that meaning is at all consistent with ntion of the Act in general or of this section in particular. ullen, on the other hand, reads the section as making it ve upon the person wishing to pass goods to make an ite of what the actual cost of labour and material used or d in putting up and manufacturing the goods will be, deducting that from the other known elements of value, ipon the entry of the goods, and before tliey are put up, lue for the purpose of duty will be. The question for ination is: which of these constructions is more in with the intention of the legislature as indicated by whole.

defendant is liable to a penalty for a breach of the H. C. or A.

1906. ~ 'Toe Kine v Lyon.

O'Connor J.

H.C. or A. 1906. Tne Kine v.

Lyon.

* O'Connor J.

HIGH COURT

There are two main underlying principles in the A must not be lost sight of. The first is this: the whole' the Customs dct, as indicated by a number of se from the time of importation until the time of paying di customs shall not lose control of the articles imported. indicated directly in sec. 30, which provides that importe shall be subject to the control of the customs from the importation until delivery for home consumption or e port The object of that provision, if it were necessary to reasons for its enactment, is obvious ; if once goods go it consumption, that is, into circulation, it becomes almost iny to trace them. The only security the customs authori

cases the personal security of the importer. Therefore it the Actis to be effective, that all through the dealings wit

they must be kept under customs control. In order to. that end it is provided that no goods can be landed from until the entry has been passed or a permit given by th The entry must be passed before goods can be landed. may be passed in one of three ways. It may be made fo consumption, that is to say, by passing an entry imm which, according to the Act, is a warrant for taking the away and dealing with them. Before they go out for cons tion duty must be paid. For that purpose it is essenti there be a payment of duty contemporaneous with the The other cases for which they may be entered are for wa and for transhipment. Warehouses under the Act are of s¢ kinds. There are some in which a manufacture may be @ on in bond. If goods are imported for the purpose of being factured, the manufacture is carried on in the warehouse and when the manufacture is completed, an entry for sumption is made and duty is paid. It will be seen fro different kinds of entry that the time for valuation is diff different cases. In the case of an entry for home co must be made when the goods are landed. In the case of for warehousing, it is not necessary to make a valuation um time arrives for payment of duty. And if goods are

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nay be carried out in a warehouse, and duty paid when facture is complete. Thus the time for payment of duty when all the elements necessary for making the valua- n existence. But if we look at the entry in question here it isan entry for home consumption. That entry be made without payment of duty. Duty cannot be fixed mnt ascertainment of value, and according to the whole scheme on of duties under the Act, the time for payment of duty ne for valuation. But it is contended that in cases under he valuation may be deferred. If it is to be deferred to period that is absolutely contradictory of the whole the Act, because then the goods must go into consump- jout an entry, and the provisions for keeping control of in the customs become valueless. Now, it is said by n that there is no reason why the entry should not be it is, an entry on importation, under sec. 154 in the way, leaving out sec. 144 altogether, and afterwards manufacture is completed, and the product ready for sumption, the additional value may be ascertained and duty recovered. But in my view that contention is und, for this reason :—Sec. 144 must be taken as qualifying

according to value, the valuation is to be made b-section (a) of that section, immediately it appears goods which are being imported are of the kind in sec. 144 they are taken out of the general category be dealt with under the latter section. If Mr. Gordon

been bottled, labelled and put up ready for sale, the would not need to make any entry at all, for in that duty would be payable until after the process of e was completed, and the goods had gone from the f the customs. Now, one objection that was put very by Mr. Gordon, and which at first impressed me a good this, that as the making of an incorrect statement under punishable by severe penalties, the legislature could intended that the Act should compel an importer to

e, matters may be arranged so that the manu- H. C. or A

1906. = 'Tue Kine v. Lyon,

O'Connor J.

HH. C. or A.

1906. — Tue Kine CH Lyox,

O'Connor J.

HIGH COURT

make such a difficult estimate, in which he might make a mistake, and then provide a heavy penalty making of any mistake. But the answer to that it is one of the underlying principles of the Act that the ment should rely upon the importer to honestly state according to his knowledge, in reference to a matter of w knows everything and the customs authorities know 1 If in the case of duties payable ad valorem the ¢ authorities took steps in each case to satisfy themselves value of the goods for duty before allowing them to la would be seriously hampered. Almost of necessity they

policy of the Act, therefore, is that the customs authoriti to the statement of the person importing the goods. cases in which there is no difficulty in stating values a In the ordinary case of goods purchased abroad the will have no difficulty in stating the market value. But are many cases in which the goods have not been purel abroad, but have been exported for sale in Australia. market value in the country of export to be fixed by the it In such cases he cannot do more than make an estimate 0 fair market value of the particular goods in the principal m of the country whence they are exported. The necessity of estimates of value by importers is ap through all that portion of the Act which deals with imposed according to value. In the case of all these esti value the importer is liable to be proceeded against for ments of value. It appears to me, therefore, that the int tion contended for by Mr. Gordon would be absolutely eon! to the whole intent and purpose of the Act as shown in its ¢ provisions, and would render nugatory the precautions di all through the Act for keeping the goods under the e the customs till duty has been paid. On the other h Cullen's contention is one which the words are capable 0 grammatically, and it is a construction which will bring this tion into harmony with the underlying principles of the the rest of its provisions. I do not think it is necessary

OF AUSTRALIA.

were cited to us in which the Court, in order to avoid ga section to a nullity, had gone a very long way in its tion inorder to bring out a workable meaning. There is ity to do that in this case. I think the case of Rew v. (1), in which Lord Alverstone C.J. makes a statement of the applied toa criminal case, states correctly the principle laid all the authorities. He said, (2):—" Where the language tatute, in its ordinary meaning and grammatical construction, a manifest contradiction of the apparent purpose of the , or to some inconvenience or absurdity, hardship, or wesumably not intended, a construction may be put upon modifies the meaning of the words, and even the structure sentence." He there quotes with approval the passage ell on the Interpretation of Statutes, 3rd. ed., p. 319, hich the principle is laid down to its fullest extent. It is not y to go to that extent here, because, it appears to me, you interpret this section as my learned brother the Chief Justice ted, by construing the words "actual cost of labour and used or expended" not as meaning labour and material used or expended on these particular goods, but actual as 'a distinction between cost of labour and material only and sts which might fairly in the ordinary estimate of trade tsbe put upon that labour and material.' I think that is the er contruction of the words.

That is a construction which makes it possible to have the de when the goods are landed. If the goods are entered 'consumption the estimate must, of course, be made before sbeen incurred. But, if the other form of entry, namely, using for manufacture, is adopted, 'the parties may be able to wait until as the result of actual experience they are

necessary for putting up and labelling the goods in

reasons I am of the opinion that the verdict should plaintiff on the whole of the claim.

(2) (1905) 2 K.B., 748, at p. 750.

rds of the section to give effect to that interpretation. H- ©. oF A.

1906. pales Tae Kine vs Lyon.

O'Connor J.