BP Australia Ltd v Bissaker

Except as provided by the regulations, ship's stores and aircraft's stores are not liable to Excise duty. Section 160A(5) defines "ship's stores" for the purposes of Pt XIV of the Excise Act as meaning: stores for the use of the passengers or crew of an overseas ship, or for the service of an overseas ship. It is common ground between the parties that the regulations under the Excise Act do not make ship's stores liable to excise duty.

By s. 4(1) of the Excise Act it is provided that " "Overseas ship" has the same meaning as "ship" has in Part VII of the Customs Act 1901 ". The word "ship" is not positively defined for the purposes of Pt VII of the Customs Act 1901 Cth which deals with ship's stores and aircraft's stores. However, s. 130C, an interpretation section for the purposes of the Part, provides that:

(a) a ship that is not currently engaged in making international voyages; or

(b) a ship that is currently engaged in making international voyages but is about to make a voyage other than an international voyage.

The expression "international voyage" is also defined by s. 130C, so as to mean, in relation to a ship: a voyage, whether direct or indirect, between a place in Australia and a place outside Australia. And the same section provides that the expression "place outside Australia" does not include:

(a) a ship, or an area of waters, outside Australia;

(c) a reef, or an uninhabited island, outside Australia.

The respondent, the Collector of Customs for Western Australia ("the Collector"), considered that the three Japanese vessels were not overseas ships because they were not currently engaged in making international voyages or, if they were, they were about to make a voyage other than an international voyage. On the other hand the appellants maintained that each vessel was engaged in a continuous international voyage, commencing in Japan and terminating in Japan, in the course of which it fished for southern bluefin tuna in waters off South Africa and southern Australia. The appellants also maintained that, when each of the vessels departed from Fremantle, having obtained the fuel in question, the next port of destination of the vessel was not known. In fact, each vessel proceeded to the southern bluefin tuna fishing grounds. Where it went thereafter depended upon the location of the fishing grounds and the quantity of fish caught. Conceivably the next port of destination might be in Australia, New Zealand, South Africa or even back in Japan. As it happened, in each case the next port of call was a port in Australia.

The appellants sought a review of the respondent's decision by the Administrative Appeals Tribunal ("the Tribunal") under s. 29(1) of the Administrative Appeals Tribunal Act 1975 Cth. According to evidence called by the appellants, southern bluefin tuna are found in waters around 40° latitude south of the equator. The principal southern bluefin tuna fishing grounds lie off the southern shores of South Africa and Australia, the east coast of New Zealand and in the Atlantic Ocean off South America. Japanese long-line tuna fishing vessels may be away from Japan for up to two years. It often takes that time to fill the fishing holds of a typical vessel which has 300 tonnes capacity. Needless to say, during the course of such a protracted period away from Japanese ports, the vessels find it necessary to call in at southern ports, particularly South African and Australian ports, for repairs and supplies, including fuel.

Fishing for southern bluefin tuna is seasonal. As the tuna migrate in an easterly direction, they mature. Consequently the fishing vessels follow the fishing grounds in an easterly direction also, although a vessel may move west or east at any time. The ports most often visited by the Japanese vessels are Cape Town and Fremantle. Other ports visited with less frequency are Durban, Port Hedland, Albany and Hobart. The port visited, the date of call and the frequency of visits varies from vessel to vessel and is influenced by reports of the areas where the best catches have been found, the position of the vessel in relation to those areas, the quantity of tuna already taken, sea temperature, tide, stocks of fuel, bait and provisions on board.

Before leaving Japan the fishing master and the owner plan a basic schedule for the voyage. The fishing master keeps in contact with the owner during the voyage and obtains the owner's approval to changes in the basic schedule. But much is left to the discretion of the fishing master and there is no strict calendar of events or map for the voyage, the object being to maximise the catch in the shortest time.

The Kaei Maru 28, one of the three vessels, departed from Shimizu in Japan on 6 February 1984. In the course of its journey it called at the ports as set out below: Port Date of Arrival Date of Departure Shimizu Feb. 6 1984 Durban Mar. 8 1984 Mar. 10 1984 Cape Town Jun. 26 1984 Jun. 28 1984 Fremantle Sep. 21 1984 Sep. 25 1984 Fremantle Oct. 30 1984 Nov. 1 1984 Fremantle Feb. 4 1985 Feb. 7 1985 Fremantle Apr. 21 1985 Apr. 22 1985 Yaizu (Japan) May 10 1985 On 1 November 1984 the Kaei Maru 28 took on board 99,560 litres of fuel. The question is whether excise duty is payable on that fuel. According to a Field Sheet, which is not required to be submitted to Australian Customs, the destination of the Kaei Maru 28, when it left Fremantle on 1 November was stated as "fishing grounds". Another form indicated that it was exiting from the Australian fishing zone to the high seas. In fact, its next port of call was Fremantle on 4 February 1985.

The Miho Maru 31 departed from Yaizu, Japan, on 24 April 1983. In the course of its journey it called at the ports set out below: Port Date of Arrival Date of Departure Yaizu (Japan) Apr. 24 1983 P. Louis May 19 1983 May 20 1983 Cape Town Aug. 7 1983 Aug. 11 1983 Cape Town Sep. 11 1983 Sep. 17 1983 Walvisbay Nov. 23 1983 Nov. 25 1983 Cape Town Jan. 25 1984 Mar. 4 1984 Cape Town Mar. 16 1984 Mar. 21 1984 Cape Town Jun. 4 1984 Jun. 8 1984 Cape Town Jul. 6 1984 Jul. 10 1984 Fremantle Aug. 28 1984 Aug. 29 1984 Fremantle Oct. 23 1984 Oct. 25 1984 Fremantle Jan. 10 1985 Jan. 12 1985 Hobart Mar. 11 1985 Mar. 14 1985 Hobart Apr. 26 1985 Apr. 26 1985 Yaizu (Japan) May 17 1985 On 10 January 1985 the Miho Maru 31 took on board 186,399 litres of fuel. The question is whether the fuel is liable to excise. With respect to the visit of this vessel to Fremantle between 10 and 12 January 1985 the following documents were placed in evidence: (1) the Field Sheet indicated in one column the destination as "T.B.A.", (being a short form for "to be advised") and in the right-hand column "next port T.B.A. FREM"; (2) form W. 601 indicated "T.B.A." as destination; (3) form 40 indicated "Fremantle" as destination; (4) the Port Bill had the description "from Japan to Japan"; (5) form 43 indicated "Fremantle to overseas" as the voyage.

The vessel's next port of call was Hobart on 11 March 1985.

The Ryoei Maru 18 departed from Kochi in Japan on 4 March 1984. In the course of its journey it called at the ports set out below: Port Date of Arrival Date of Departure Kochi (Japan) Mar. 4 1984 Durban May 27 1984 May 30 1984 Fremantle Sep. 21 1984 Sep. 25 1984 Fremantle Jan. 9 1985 Jan. 13 1985 Fremantle Mar. 27 1985 Apr. 1 1985 Fremantle May 13 1985 May 13 1985 Kochi (Japan) May 31 1985 On 27 March 1985 the Ryoei Maru 18 took on board 138,670 litres of fuel. Again the question is whether it is liable to excise. With respect to the visit of this vessel to Fremantle between 27 March and 1 April 1985 the documentation yields the following information: (1) the Field Sheet indicated in the left-hand column "destination T.B.A." and in the right-hand column "next port (FREM)"; (2) form W. 601 indicated "T.B.A. fishing grounds" as the destination; (3) the Port Bill indicated "from Japan to Japan" as the voyage; (4) form 40 indicated "fishing/grounds FREM" for destination. The vessel's next port of call was Fremantle on 13 May 1985.

At no stage did any of the three vessels engage in fishing in the Australian fishing zone.

The Tribunal concluded that the fuel supplied to the three vessels was not liable to excise duty [1] . The President (Davies J.) and Mr. Trinick considered that the vessels were currently engaged in making international voyages and were not about to make a voyage other than an international voyage, that they were "ships" for the purpose of Pt VII of the Customs Act and "overseas ships" within the meaning of the definition in s. 4(1) of the Excise Act. The vessels were therefore "overseas ships" within the meaning of s. 160A(5) of the Excise Act, so that the fuel supplied was ship's stores as defined in s. 160A(5) of that Act. The third member of the Tribunal (Sir William Prentice) formally acquiesced in the view of the President by which he was bound on questions of law. However, he expressed a personal preference for holding that, although the vessels were currently engaged in making international voyages, they were about to make a voyage other than an international voyage.

On appeal the Full Court of the Federal Court (Sweeney, Lockhart and Jenkinson JJ.) allowed the respondent's appeal, set aside the decision of the Tribunal, affirmed the decisions of the Collector in relation to the fuel and ordered the appellants to pay the costs of the Collector [2] . The Full Court of the Federal Court concluded that the three vessels were not currently engaged in making international voyages and, even if they were so engaged, they were about to make a voyage other than an international voyage.

Mr. Merralls Q.C. for the appellants submits, first, that each vessel was currently engaged in making international voyages. Viewed from a Japanese perspective, each vessel was engaged at the relevant time in making an international voyage. Although the voyage began and ended in a Japanese port, the voyage entailed, in the light of its duration, visits to South African and Australian ports in the course of a single enterprise marked by a unity of purpose - the catching of a full load of southern bluefin tuna to be brought home to Japan: see Board of Trade v Baxter [3] . However, the definition of international voyage in s. 130C of the Customs Act, which is plainly intended to be an exhaustive one, adopts a different perspective and, as one might expect, an Australian perspective. It assumes a voyage beginning or ending at a place in Australia. It looks neither to the totality of the voyage in which the vessel is engaged, nor merely to the type of voyage in which the vessel is regularly or habitually engaged. Instead, the definition simply looks to the making of a particular voyage between a place in Australia (i.e. the place where the ship is when the question arises as to liability for excise duty) and a place outside Australia. The words "whether direct or indirect" take account of the circumstance that a vessel may, e.g., proceed to or from an Australian port to a foreign port via another Australian port. In this situation the fact that a foreign port is not the previous port of call or the immediate destination does not detract from the international character of the voyage.

The expression "international voyages" in par. (a) of the definition of ship in s. 130C must be read as including the singular and as referring to "international voyage" in its defined sense. There is no reason for refusing to apply s. 23(b) of the Acts Interpretation Act 1901 Cth. The words "currently engaged" in pars. (a) and (b) of the definition of "ship" do not evidence a contrary intention or indicate that "international voyage" should be understood in a sense which differs from the defined sense. The reference to the plural may be explained by the fact that a ship is very often engaged, at least indirectly, on more than one international voyage at one and the same time simply because at a given time the ship is travelling to various ports in different nations, picking up and setting down cargo or passengers in each port.

Paragraph (a) of the exclusionary definition of ship in s. 130C describes a ship by reference to its current engagement in the making of international voyages being, by force of the definition of that expression, voyages between a place in Australia and a place outside Australia. This is repeated in the first limb of par. (b) of the definition. On the other hand, the second limb of the definition (i.e. "but is about to make a voyage other than an international voyage") looks to a particular voyage. Like par. (a) and the first limb of par. (b) of the definition, the second limb of par. (b) needs to be read with the definition of "international voyage", in that to read it as excluding a vessel from the definition of "ship" if it plans to call at another Australian port at the end of the first section of a continuous international voyage from an Australian port to a foreign port would frustrate the purpose of specifically including in the definition of "international voyage" the voyage which is "indirect". At the same time, the second limb of par. (b) should be understood as referring to a voyage which is identifiable as distinct from the international voyage or voyages between a place in Australia and a place outside Australia on which the ship is currently engaged. The disconnexion of the two voyages that is contemplated by par. (b) may be temporal, geographic or even purposive.

In this respect it is significant that the expression "place outside Australia" excludes, amongst other things, "an area of waters, outside Australia". Mr. Shaw Q.C. for the respondent submits that southern bluefin tuna fishing grounds aptly fall within this exclusion. Mr. Merralls contests this submission, contending that the fishing grounds are not a terminus and that they are incapable of the precise identification that one usually associates with the word "place". The short answer to this submission is that the exclusion of an "area of waters" indicates that the statutory concept of "place" does not connote a precise point or fixed location. The exclusion would have been unnecessary if "place" was intended to be confined in the manner suggested. Indeed, the expression "area of waters, outside Australia" naturally denotes a non-specific destination at sea appropriate to fishing grounds. It may also denote an area of waters to which a vessel is proceeding in order to make a marine, hydrographic or mineral survey but this is no reason for thinking that the expression was not intended to denote fishing grounds as a destination.

The construction which we have placed upon par. (b) gives expression to a policy of denying an exemption from excise in favour of ship's stores supplied to a fishing vessel which, though currently engaged in making an international voyage, is nevertheless exploiting fishing grounds outside Australia and is resorting to an Australian port for supplies so as to enable it to continue its exploitation of the fishing grounds. The notion implicit in the provisions of s. 130C is that, as the ship is about to travel to a base or destination in the fishing grounds to pursue its activities there for an appreciable time, rather than pressing on to its ultimate port of destination overseas, the voyage to the fishing grounds is distinct from the international voyage or voyages in which it is otherwise engaged and is therefore other than international. We acknowledge that the interpretation which we favour is not free from difficulty but it best accords with the language of s. 130C as well as giving expression to an identifiable and rational policy. Subject to some qualification, a similar policy appears to underlie the exclusion of "a ship" in par. (a) and "an installation" in par. (b) of the exclusionary definition of "place outside Australia". These exclusions would embrace a voyage to a drilling ship and an oil rig outside Australia.

Notwithstanding the difficulties in arriving at a wholly satisfactory interpretation of the relevant provisions, we have not gained assistance from considering the history of this legislation and similar legislation in the United Kingdom. The legislation in its present form may be traced back to amendments made in 1968 and 1982. On both occasions there are suggestions in the second reading speeches that the amendments were not intended to achieve any substantial alteration in the pre-existing law. And it is said that if the preferred interpretation prevails, the legislation substantially departs from earlier legislation such as that contained in s. 175 of the Customs Act before its repeal in 1982, which referred to ships "engaged in the coasting trade". This provision in turn reflected the provisions of ss. 438 and 441 of the Merchant Shipping Act 1894 UK regulating the coasting trade, which in turn reflected earlier legislative provisions: The Winestead [4] and The Glanystwyth [5] . However, we do not regard this history as instructive. The only safe course is to construe the provisions in s. 130C according to their terms, giving due weight to their interrelationship and the purposes which they seem to serve.

1. [1895] P. 170, at pp. 173-174. 2. [1899] P. 118, at pp. 122-123.

According to the evidence and the findings of fact, each of the three vessels, on the relevant occasions, was proceeding to the southern bluefin tuna fishing grounds and was to return to an Australian port before returning, eventually, to Japan. In the circumstances previously stated this is enough to demonstrate that viewed from the perspective of the Port of Fremantle, the vessels were currently engaged in making international voyages, even if they were indirect international voyages. But, when we look to the immediate particular voyage which each vessel was about to make when the fuel in question was supplied to it, we find that the vessel intended to return to the fishing grounds and pursue its activities there. Those fishing grounds were the terminus of the proposed immediate voyage. Indeed, it was not then known to where the ship would proceed in the short term. Such a voyage was relevantly distinct from the international voyage from the Port of Fremantle (place in Australia) back to Japan (place outside Australia) and falls within the statutory definition of a voyage other than an international voyage.

Solicitors for the appellant, Arthur Robinson & Hedderwicks . Solicitors for the respondent, Australian Government Solicitor .