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[1972] HCA 19
High Court of Australia
1972-07-01
Owen JJ, Hope J
Original judgment source is linked above.
High Court of Australia Barwick C.J. McTiernan, Menzies, Windeyer and Owen JJ. Commonwealth v Sterling Nicholas Duty Free Pty Ltd [1972] HCA 19
ORDER Appeal allowed with costs. Orders and declarations made by the Supreme Court of New South Wales set aside and in lieu thereof order that the suit be dismissed with costs.
The respondent Sterling Nicholas Duty Free Pty. Ltd. carries on the business in Sydney of a duty free shop with the concurrence of the Department of Customs and Excise. Goods may there be purchased for delivery on board ship or aircraft, an entry of the goods for export being made by the respondent on behalf of the purchaser. The respondent's authority from the Customs extends to such delivery. The property in the goods, at least in instances of the kind with which this case is concerned, may have passed to the purchaser before any such delivery of the goods. No difficulty appears to have been experienced in the course followed by the respondent in connexion with goods delivered to ships or with respect to goods delivered to aircraft for placement in the hold of the craft. However, difficulties have arisen in cases where purchasers have desired to have the purchased goods with them in the cabin of a departing aircraft. The problem in this connexion is how to effect the export of the goods following upon their entry for export. In the case of a purchaser who desires to have the goods with him or her in the cabin of the aircraft the respondent may lawfully remove the goods purchased by such a purchaser from its store and, so far as the Customs Act 1901-1968 Cth and regulations are concerned, carry them to the airport and there effect their export. But, two legal obstacles have been said to stand in the way of the completion of such a delivery of goods to such a departing passenger purchaser in the airport. First, it is said that delivery of goods, whether or not the property of the passenger purchaser, to that person within the airport is a breach of s. 7 (1) of the Airports (Business Concessions) Act 1959 Cth. Second, it is said that only a delivery of such goods to a passenger purchaser in a particular area, namely the holding room, can lawfully be made in conformity with the control of the Customs to which admittedly the duty free goods are subject up to the time of their export from Australia.
The respondent, carrying on the business I have briefly described, had been informed by responsible officers of Customs that it could not effect such delivery at any place but the said holding room (to which it was denied entry for that purpose), and by the Department of Civil Aviation that it could not make such a delivery within the airport at all to a departing passenger purchaser. It, thereupon, brought a suit in the Supreme Court of New South Wales in Equity for declarations that its delivery of such goods within the airport to passenger purchasers was not a contravention of the said section of the Airports (Business Concessions) Act and that a described procedure, to which I shall later refer, did not involve a contravention of the Customs Act or the regulations made thereunder. The Commonwealth was the defendant to the suit, its interest in the matter embracing both the administration of the Airports (Business Concessions) Act and that of the Customs Act. The Supreme Court, Hope J., in full and careful reasons for judgment [1] , decided that such deliveries as I have described were not in breach of the Airports (Business Concessions) Act and that a procedure carefully and precisely laid out by him would not contravene the Customs Act and regulations.
The Commonwealth of Australia has appealed to this Court from those declarations submitting that the Supreme Court was in error in both respects. Section 7 (1) of the Airports (Business Concessions) Act 1959 Cth says:
7.-(1) Except in accordance with an authority granted under the next succeeding section and the terms and conditions of that authority, a person shall not, within an airport, either personally or by his servant or agent, or as the servant or agent of another person -
(a) sell, for delivery within the airport, or supply, any goods or services;
(c) erect, display or distribute, or communicate by sound, any advertisement or public notice.
The respondent did not have an authority under s. 8 (1). But another person had such an authority to conduct within the airport the business of selling duty free goods for delivery within the airport. Section 8 (1) provides that:
8.-(1) The Minister may, on behalf of the Commonwealth, by writing under his hand, grant to a person an authority to do, either personally, or by his servants or agents, or both, any act or thing referred to in sub-section (1) of the last preceding section.
That other person was permitted by the Civil Aviation officials and the Customs officers to enter the appropriate holding room at the airport and there to deliver to departing passenger purchasers goods which they had bought in the shop in the airport and which they wished to have with them in the cabin of the departing aircraft. The respondent not being permitted to do so in the holding room proposed to hand over the goods which it had sold at a point where the departing passenger purchaser had cleared his or her ticket with the airline concerned and had received a boarding pass and was entering the staircase leading downstairs to the holding room. But it was claimed by the Commonwealth that such a course would be a breach of the Customs Act.
The Commonwealth submits that the delivery within the airport of goods is relevantly a "supply" of goods within the meaning of s. 7 (1). But, in my opinion, the proper construction of s. 7 (1) is that unless in accordance with an authority granted under s. 8, a person shall not sell within the airport goods for delivery within the airport or supply services within the airport. In my opinion the section properly read does not provide that a person shall not supply goods within the airport, whatever significance is given to the word "supply". It is quite obvious that the sub-section does not provide that a person shall not supply services for delivery within the airport. The word "sell" is not unqualified but qualified by the expression "for delivery within the airport". Consequently if it be applied to "services", it must be with this qualification. Such a reading is in my opinion nonsensical. It is thus clear to my mind that the verb "sell" is confined to the subject "goods". This leads me to conclude that the subject of the verb "supply" is the word "services" and not the words "goods and services".
This construction, in my opinion, accords with what I apprehend to be the policy of the provision as disclosed by the Act as a whole. The Act is obviously an Act to enable the Commonwealth to grant business concessions on airports constructed on land acquired by the Commonwealth for the purpose of civil aviation. Sections 6 and 8 of the Act provide the means of creating such concessions. The concessionaires will be conducting the business of selling goods or of providing services. On any construction of the word "supply" they are quite unlikely to be conducting in the airport a business of supplying goods, i.e. not selling, but merely "supplying". Section 7 (1) is evidently enacted to protect the concessionaires against competition within the airport in the same areas of business as those in respect of which the concessions are granted. The limitation on the prohibition on sale, namely the sale for delivery within the airport, emphasizes this relationship of s. 7 (1) to the business of the concessionaire who, if authorized to sell, will only be authorized to sell for delivery within the airport. The terms of s. 8 (1) are tied to those of s. 7 (1). There are in this connexion none of those considerations which have led to the use of the word "supply" as a means of preventing their distribution in statutes dealing with the sale and distribution of alcoholic liquors. Further if the mere delivery of goods within the airport was intended to be forbidden, it is somewhat strange that it was thought necessary or appropriate expressly to forbid sale for delivery within the airport. It must have been contemplated that goods sold for delivery within the airport would accordingly be delivered within the airport, though it must be conceded that theoretically a sale of goods for delivery within the airport might not be completed by such delivery. But such a result could have little relevance to the concessionaire who was entitled to make, but confined to, sales of goods for delivery within the airport. I cannot think that the form of the sub-section was specifically designed to deal with uncompleted sales of goods for delivery within the airport and that the word "supply" was used to embrace deliveries within the airport of sales made elsewhere.
If the prohibition on sale of goods for delivery within the airport contemplates the completion of such sales by delivery and if the practical operation of the sub-section in that respect is to allow such deliveries, it seems to me highly unlikely that it was intended that the word "supply" should apply to goods. The provision as to sale would, alone, fully cover the field in which the concessionaire may be authorized to operate. There would be no need to protect the concessionaire against the deliveries in the airport of goods sold outside the airport, and in any case if it had been thought that there was any such need an express prohibition on such delivery would surely have been included. Consequently, I would reject the submission that delivery by the respondent to the passenger purchasers within the airport of the goods not purchased within the airport was a supply of goods within the meaning of the sub-section.
Therefore, in my opinion, the delivery by the respondent within the airport of goods to the passenger purchasers would not be in breach of s. 7 (1) because such a delivery is neither a sale of goods for delivery within the airport nor a supply of services.
However, if contrary to my own opinion, it should be thought that the sub-section does forbid the supply of goods within the airport, I should express my opinion on the submission that the delivery within the airport of the goods it had sold whether by the respondent or by a carrier or agent employed by it to carry and deliver the goods was the supply of these goods within the meaning of the sub-section.
In my opinion, the delivery of goods to a purchaser is not relevantly the supply of goods. It must be the case that large quantities of goods are delivered within an airport by carrier. Generally speaking the goods will be either the property of a seller or of a purchaser. The carrier will have no other connexion with the goods than an obligation to carry and deliver them, either to a place or a person within the airport. It cannot be said, in my opinion, in any proper use of language that the carrier "supplies" the goods he carries. Nor, in my opinion, can it properly be said that the seller, by the act of delivery alone, "supplies" the goods he has sold. Nor can I think that s. 8 (1) contemplates the grant of an authority to a carrier to carry on his business of a carrier within the airport. For, if the carrier relevantly supplies within s. 7 (1) he could have an authority under s. 8 (1) to carry on as a business the activity forbidden by s. 7 (1). But does the seller, who delivers in accordance with the terms of sale, "supply" the goods? In my opinion he does not. I agree with what Sugerman J. said in Andaloro v. Wyong Co-operative Dairy Society Ltd. [1] . In this connexion I have had the advantage of reading the reasons for judgment prepared by my brother Windeyer. I agree with what he has to say on the meaning of the word "supply" in relation to goods which have been sold.
Therefore, even if the word "supply" in the sub-section is not confined in its application to services, the delivery by the respondent within the airport to departing passenger purchasers of the goods it had sold, would not, in my opinion, be a supply of those goods.
I turn now to the other principal submission of the Commonwealth which challenges the propriety of the declaration made by the Supreme Court as to a procedure which the respondent might adopt without infringing the Customs Act. I have already briefly indicated what that declaration provides. I have no need to repeat its precise terms or to describe the layout of the relevant parts of the airport; they are well set out in the reasons for judgment of the Supreme Court.
The jurisdiction to make a declaratory order without consequential relief is a large and most useful jurisdiction. In my opinion, the present was an apt case for its exercise. The respondent undoubtedly desired and intended to do as he asked the Court to declare he lawfully could do. The matter, in my opinion, was in no sense hypothetical, but in any case not hypothetical in a sense relevant to the exercise of this jurisdiction. Of its nature, the jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law. Indeed, it is that capacity which contributes enormously to the utility of the jurisdiction.
Here the respondent was in business carrying out in relation both to ships and airports activities of the general kind proposed in this case. No doubt, duty free goods not desired to be personally carried by a departing passenger purchaser, or too large to be admitted to the cabin of an aircraft were being delivered by the respondent to the airport prior to and at the date of the commencement of this suit. Further, there had been actual opposition by the Customs Department to the course which the respondent desired and intended to take. In my opinion the Supreme Court was right to entertain the respondent's suit in relation to both the declarations sought. Further, assuming that conduct in accordance with the second declaration of the Supreme Court would not be in breach of the Customs Act and regulations, I find no reason to criticize the form of the declaration made. Indeed I would endorse it as a most careful and precise exercise of the jurisdiction to make a declaratory order.
I turn then to the question whether that declaration was rightly made. Whilst, as I have said, the duty free goods sold by it could lawfully be moved by the respondent to the airport for "shipment" on a departing aircraft, they remained until actually exported under the control of the Customs. Theoretically the goods ought to have been placed by the respondent on the departing aircraft. But the practical exigencies of an airport and aircraft operation make it necessary for the airlines and the Customs to accept a situation in which the goods to be exported are delivered at some place or to some person at the airport from which or by whom they are in a practical sense certain to be in fact exported. The holding room is quite clearly such a place, though without the presence of an officer of Customs, the diversion of such goods must remain a substantial possibility.
It must be remembered that the goods with which the respondent is concerned are not unlawful or prohibited imports. They are goods on which the appropriate duty has not been paid but which must be paid if they pass into domestic consumption. Whilst I would not minimize the matter, it must therefore be borne in mind that the consequence of such goods being passed back by the departing passenger purchaser to a person who places them in domestic consumption is that the respondent becomes liable to pay the appropriate duty thereon, as well as any other penalty or disadvantage for breach of the conditions on which it is allowed to sell duty free goods. The Customs' interest in the procedure of delivery adopted no doubt springs from difficulties of detection of any diversion of the goods which might take place. The practical exigencies to which I have referred have resulted in a manner of carrying out the Customs' control of goods on their path to export.
The place of delivery to the departing passenger purchaser which is laid out in the declaration of the Supreme Court is, in my opinion, substantially within the convention which the Customs Department has itself made and accepted for the delivery of duty free goods purchased for delivery personally to a departing passenger or departing passenger purchaser. Clearly, if such a passenger in fact carries the goods down the staircase to the holding room, his possession of the goods is treated by the Customs as a lawful possession of the goods, though of course, they remain under the control of the Customs. That possession is not regarded as or treated either by the Customs Act or regulations as in breach of or inconsistent with that control. It would be strange indeed, if, in the administration of this practical expedient in the export of the goods, the respondent should be regarded as in breach of the Act or regulations, or that control by handing the goods to that passenger. This is not a case of the court prescribing a course of conduct for the Customs in an area in which it is lawfully operating. The Customs has itself established a course of conduct, no doubt eminently suited to its own convenience, which, for reasons best known to itself, it was decided to apply in a discriminatory fashion. The question is not whether the Customs ought to insist on nothing short of delivery inside the departing aircraft. No doubt it could. But it does not. It is within the authority of the court, in my opinion, to decide that a particular course of conduct is within the convention prescribed by the Customs itself.
In my opinion both declarations made by the Supreme Court were rightly made. I would dismiss the appeal.
I agree in the reasons of Menzies J. The appeal, in my opinion, should be allowed.
This is an appeal by special leave by the Commonwealth of Australia against the making of two declarations in proceedings instituted in the Supreme Court of New South Wales by Sterling Nicholas Duty Free Pty. Ltd., which I shall call "the company".
The company's business is to sell to persons about to leave Australia for foreign parts, at duty free prices, goods imported into Australia, held in bond stores, and not subject to customs duty if exported from store. The goods having once been imported are subject to the control of customs as provided by the Customs Act 1901-1968 Cth, s. 30 (a), until delivered for home consumption or until exported. Here we are not concerned with goods delivered for home consumption because the company's business is one that is dependent upon the exportation of its goods.
The course of business which the company would like to adopt, but which it has not been able to adopt, is to deliver the goods, after purchase and after entry for export, to the purchaser in what is called the farewell lounge at the overseas terminal at the Kingsford Smith Airport at Mascot. The reason why the company has chosen the farewell lounge as the place in which the goods should be delivered is simply that it has not access to another part of the airport, namely the holding room, to which intending passengers pass after leaving the farewell lounge. The farewell lounge is open to members of the public; the holding room is not and is supervised from time to time by customs officers. It seems that another seller of duty free goods, which holds a concession at the airport under the Airports (Business Concessions) Act 1959, does have access to the holding room and Customs does not object to that seller delivering its duty free goods to its embarking customers in that room. Goods to be so delivered are taken to the holding room from a bond store by a route which is subject to customs supervision.
The Commonwealth raised two objections to the company's proposal to deliver duty free goods to passengers in the farewell room. The first, that such delivery would be contrary to s. 7 of the Airports (Business Concessions) Act; the second, that Customs is not obliged to allow goods, subject to customs control and covered by an entry authorizing delivery to an overseas aircraft for export, to be delivered to an intended passenger on that aircraft while the passenger is in the farewell lounge.
His Honour the learned trial judge, who heard the matter in the Supreme Court, rejected both contentions of the Commonwealth and made declarations (1) that the company
is not prohibited by s. 7 of the Airports (Business Concessions) Act, 1959, from delivery at Sydney (Kingsford Smith) Airport to persons about to depart overseas by air, goods sold to those persons in its shop at Nos. 113-115 Oxford Street, Darlinghurst, the title to which goods has vested in these persons prior to their delivery at the said Airport [1] , and (2) that no delivery as aforesaid which conforms to elaborately stated conditions shall be a movement alteration or interference with the goods so delivered otherwise than in pursuance of the said Act by reason only of any direction or requirement heretofore made or purporting to be made in pursuance of the provisions of the said Act that no delivery of those goods may be made in that manner at that place or by that procedure. [2] 1. [1971] 1 N.S.W.L.R. 353, at p. 371. 2. [1971] 1 N.S.W.L.R., at pp. 372-373.
The Commonwealth has questioned the use which has been made of the power to make declaratory orders in relation to the legality of a course of conduct which a person wishes to follow, but I leave this point on one side to deal with the questions of law which have thus, hypothetically, emerged.
By s. 7 of the Airports (Business Concessions) Act certain acts are forbidden. The relevant prohibitions here are against (1) supplying goods within an airport, and (2) carrying on any business within an airport. To understand these prohibitions it is, however, necessary to consider the whole of s. 7 (1) which is as follows:
7.-(1) Except in accordance with an authority granted under the next succeeding section and the terms and conditions of that authority, a person shall not, within an airport, either personally or by his servant or agent, or as the servant or agent of another person -
(a) sell, for delivery within the airport, or supply, any goods or services;
(c) erect, display or distribute, or communicate by sound, any advertisement or public notice.
It is to be observed that not all sales within an airport are prohibited. The prohibition is against sales of goods for delivery within the airport and such sales are prohibited without regard to actual delivery. It is the sale of this sort that is prohibited; delivery is not, as such, prohibited. The first question here is whether delivery pursuant to a contract of sale requiring delivery of the goods within the airport amounts to the supply of those goods within the airport. The word "supply" is a word of wide import. It could, perhaps, in some circumstances be applied to the giving of a book or a box of chocolates. As used here, however, the word cannot have such a wide connotation. The prohibited supply does not cover anything which is not part of a business transaction. It is significant that what is prohibited by s. 7 may be authorized under s. 8 as a business concession. It is, however, obviously part of a business transaction to deliver goods that have been sold elsewhere for delivery at a particular place. I have come to the conclusion that such delivery amounts to supplying goods whether the delivery is regarded as pursuant to a contract or as made upon the authority of the purchaser. It is an essential element of the company's business that, unless delivery is made to an aircraft, it should occur at the point of the departure of the passengers to board outgoing aircraft. It must be within the airport. Such delivery is, in my judgment, the supply of goods within the airport. It was argued for the company that it could not "supply" goods at the airport because the property in the goods had passed, at the latest, upon entry for export. To accept this, however, would be to accept an altogether too narrow meaning of the word "supply". The supply of goods does not necessitate a change in ownership of the goods supplied. In many cases the word "supply" is equivalent to the word "provide" and it often happens that a person is provided by others with what belongs to him. Thus a shop, which has a home delivery service, supplies goods upon delivery notwithstanding that they may have been bought in the shop, or by telephone, or by mail order. A supplier is not merely one who sells. He may be one who delivers. It would, I think, be wrong to call the company the supplier of goods at the point when an entry for export has been passed. To become a supplier something more would still be necessary, namely the delivery of goods to the purchaser. Looking at the transaction from the point of view of the customer, it is, I think, obvious that it is not until delivery that the purchaser is supplied with the goods which he has bought.
My conclusion, that, if it were to follow the course of business proposed, the company would supply goods within the airport, makes it unnecessary to consider whether, in carrying out that course of business, the company would also carry on business within the airport and I leave that problem for another day. In my judgment the first declaration ought not to have been made.
The second declaration raises what I regard as a more complicated question. In essence it is that, to carry on business as set out in the declaration, would not be a breach of s. 33 of the Customs Act which provides that "No goods subject to the control of the Customs shall be moved altered or interfered with except as authorized by this Act".
The declaration is directed to entitle the company to deliver the goods in the farewell area once the customer has passed the airline checkpoint for departing passengers in that area. The basis of this declaration seems to have been that, because Customs has, in the case of goods being delivered by the holder of the business concession at the airport, made provision for delivery of goods to passengers about to embark who are in the holding room, the company, which has no access to the holding room, may lawfully deliver goods to passengers who are its customers in the farewell lounge, provided that this takes place after a particular point has been reached by the passenger.
This basis is not, I think, a sound basis for a declaration of right. What must be looked at are the provisions of the Customs Act, not the procedure which Customs has adopted to meet the business convenience of the holder of a business concession at the airport. It is these provisions that I now consider.
The goods to be exported in the course of the company's business are subject to the control of Customs until exportation: s. 30 (a). Such goods cannot be moved except as authorized by the Act: s. 33. Entries may be made and passed for all goods subject to the control of customs: s. 36. Warehouse goods may be entered for export to parts beyond the seas: s. 104. Entries are passed in accordance with s. 39 by the Collector placing on the entry the word "Passed" and adding his signature thereto, no less and no more. In particular the Act does not authorize any special notation upon an entry relating to delivery to a person as conferring authority under the Act with regard to the goods. All goods in respect of which an entry has been made and passed shall forthwith be dealt with in accordance with the entry: s. 40. To pass an entry for export to parts beyond the seas is to authorize export of the goods by a ship or aircraft as specified: s. 116. This authority no doubt extends to the movement of the goods requisite for such export, i.e. movement of the goods from the warehouse to the ship or aircraft in which they are to be exported: s. 114. The passing of such an entry does not authorize the handing over of goods to a purchaser who intends to take them to parts beyond the seas. If it did it would authorize the handing over of the goods in the company's shop in Oxford Street or at any other point. Such delivery is not exportation and would be, in effect, delivery for home consumption without any entry. The company, having been entrusted with the possession of dutiable goods, would, by handing them over to a purchaser in Australia, upon a promise to take them out of Australia, have failed to keep such goods safely.
This examination of the Act reveals no sound basis for a declaration to the effect that the company is entitled by law to deliver goods to its customers in the farewell lounge, even under the most elaborate conditions devised by the court to prevent the goods getting into home consumption by virtue of such delivery. The company's right under an entry is no more than to move the goods from its warehouse for export by a particular aircraft by which export is to take place. Nothing further is a matter of legal right. Accordingly, I consider that the second declaration should not have been made.
Having come to the conclusion that the declaration should not have been made, I do not find it necessary to consider whether this was a proper case for the making of declaratory orders. I would observe, however, that the observations of Lord Robertson in Rossi v. Edinburgh Corporation [1] , tend to support the conclusion that the declarations of the kind sought could, in a proper case, have been made. The court has, I think, a wide discretion in determining whether or not to make declarations and would, of course, take into account, in an appropriate case, the principle that, in general, matters of criminal law should be dealt with at trials for alleged offences.
For the foregoing reasons I would allow the appeal and set aside both declarations.
Goods are sold in duty free shops to buyers intending to export them either by sending them from Australia by ship or aircraft or by themselves taking them when they leave Australia by ship or aircraft. The goods must be entered with the Customs for export. They can be lawfully exported if a passed entry be obtained from the Collector. Until exported they remain in the control of the Customs according to the provisions of the Customs Act 1901-1968 Cth and can only be lawfully dealt with as the Act and the Customs authorities prescribe. As I understand the Customs laws, goods are not exported by sea until the ship clears its last Australian port and is on the high seas, or by air until the aircraft finally leaves Australian territorial limits and the superincumbent air. But in practice Customs control is considered to end when an aircraft with the goods aboard leaves the ground, and does not come to ground again in Australia before a passenger disembarks at some place abroad, taking with him the goods, or such of them as he has not consumed on the journey. To exercise effective control, in the interests of the revenue, Customs officers must therefore be in a position to see that goods for which an entry has been passed for export by air are in fact put aboard or taken aboard the designated aircraft.
The difficulty which arises in this case is that the Department of Civil Aviation, which controls the international air terminal at Mascot Airport, will not permit the plaintiff, the respondent before us, to deliver at the airport to departing passengers duty free goods for which export entries were duly passed. The airport authorities say that any such deliveries would be unlawful - or at least that they would not be permitted except in a part of the airport building to which the general public has access. As the Customs officers could not exercise supervision there to see that the goods were after delivery to the passenger actually taken aboard the aircraft, Customs will not permit delivery there of goods that remain in its control. I need not, I think, describe the physical arrangements at the airport terminal. Full details are given in the careful judgment now under appeal. The result of the attitudes that the Department of Civil Aviation and the Customs take is that the respondent cannot carry on the business of selling duty free goods at its shop to persons who will in fact take them with them when leaving Australia. The validity of this restriction of the respondent's trade depends upon whether the airport authorities can lawfully refuse to allow the respondent the same facilities as are allowed to another duty free shop of delivering goods in a place and in a manner acceptable to the Customs. The appellant, the Commonwealth, relies upon s. 7 (1) of the Airports (Business Concessions) Act 1959 Cth to justify preventing emissaries of the respondent from delivering at the airport goods bought in the respondent's shop.
7.-(1) Except in accordance with an authority granted under the next succeeding section and the terms and conditions of that authority, a person shall not, within an airport, either personally or by his servant or agent, or as the servant or agent of another person -
(a) sell, for delivery within the airport, or supply, any goods or services;
(c) erect, display or distribute, or communicate by sound, any advertisement or public notice.
The reason why the Commonwealth asserts that the respondent's acts are unlawful is, it appears, that pursuant to s. 8 of the Act the Minister for Civil Aviation, on behalf of the Commonwealth, granted an authority to another company to conduct a duty free shop at the airport and to do there acts that would otherwise be forbidden by s. 7 (1). The company to which this franchise was granted was, it seems, promised that it would be an exclusive franchise. Therefore those in control of the airport wish to keep the servants of the respondent from delivering at the airport to departing passengers goods that are theirs. And the Customs, being in control of the goods, will not permit their delivery except at the airport, under supervision and at the last moment before the departure of the passengers. The airport authorities seek to invoke what is said to be a prohibition in s. 7 (1) of supplying any goods within the airport. The learned trial judge did not uphold this proposition. He made a declaration as follows [1] :
This Court Doth Declare that Sterling Nicholas Duty Free Pty. Ltd. is not prohibited by s. 7 of the Airports (Business Concessions) Act, 1959, from delivering at Sydney (Kingsford Smith) Airport to persons about to depart overseas by air, goods sold to those persons in its shop at Nos. 113-115 Oxford Street, Darlinghurst, the title to which goods vested in these persons prior to their delivery at the said Airport. Much argument before his Honour and much argument before us revolved round the word "supply" and what is connoted by supplying goods. In my view this was to introduce an irrelevant consideration. Admittedly the extent of the prohibition in par. (a) of s. 7 (1) is debatable - clarity has been sacrificed to the brevity of a compendium. For my part, although others take a different view, I read this provision distributively or some would say reddendo singula singulis. As I read it, it states that "a person shall not sell any goods or supply any services". To read it as meaning a person shall not sell or supply any goods or sell or supply any services makes it I think worse than clumsy: it means that one has to decide what is meant by a sale of services. That in law is an unusual expression. When used it seems that it does not mean rendering services for reward but selling the services of one's servants so as to put them under the buyer's orders. But a prohibition against supplying services without authority at an airport is I think understandable. It connotes, I think, some undertaking regularly carried on, presumably for reward - such as providing porterage for passengers' baggage, booking accommodation for incoming travellers, arranging transport, or taking photographs. Merely helping someone with his suitcases would not, I think, be supplying a service, nor would driving him to or from the airport. As to goods, admittedly there is not the same difficulty with "sell or supply" as twins. But here "supply" stands alongside "sell for delivery". Presumably it does not mean deliver or "deliver" would have been used. In any event the prohibition must be read as it is written not distorted; and to my mind only by reading it distributively as I suggest can it be given a plain meaning. I therefore reject the proposition that we are here concerned with what is meant by supplying goods. However, as others do not see the case in this way, I shall make a few observations on the assumption that it is an offence to "supply any goods" within an airport. What then does supply there mean? 1. [1971] 1 N.S.W.L.R., at p. 371.
A good general definition of the word "supply" was given by Sugerman J. in Andaloro v. Wyong Co-operative Dairy Society Ltd. where his Honour said [1] :
"Supply", as applied to a commodity, commonly denotes the furnishing or providing of that commodity by one person who has it to, or for, another person who requires it; and it is usually evidenced by delivery by the one and acceptance by the other. In common parlance a supplier of goods is ordinarily a person who owns them and who by delivery transfers the ownership to another either for reward or gratuitously. But I do not think that the concept must be narrowed, as the learned trial judge narrowed it, to a delivery of something the ownership of which has not already passed to a recipient. The word is, I think, of wider import. Property in a thing bought may have passed from seller to buyer, yet the supply of it is only completed by delivery. The concept of supply is not to be made dependent upon the distinction between goods bargained and sold and goods sold and delivered. Delivery is ordinarily an essential element in the supply of a thing. But that does not mean that anyone who delivers a thing to another is a supplier of it. A carrier who, as an independent contractor, carries goods from one person to another is not the supplier of them. And yet the sender of them has not supplied them until they are delivered. 1. (1965) 66 S.R. (N.S.W.), at p. 479.
In the context in which the word "supply" appears in s. 7 (1) it connotes, to my mind, some form of repetitive conduct. Doubtless a man who goes to see a friend off on an aircraft and at the airport furnishes him with a supply of reading matter, writing paper and cigarettes for the journey supplies him with goods. But I cannot think that by doing so he renders himself liable to a penalty of $200. The Act, as I read it, is directed to activities that are performed as incidents of a business. But by sending a servant to the airport to deliver goods there the respondent does not carry on business there. It carries on its business in Oxford Street. By delivering goods at the airport it completes a transaction of supplying them but it does not supply them "within an airport", for only the last incident of the transaction, delivery, was done there.
Therefore, I consider that the action of the respondent in sending goods that had been purchased in its shop to the airport for delivery there to departing passengers was not an offence under s. 7 (1). Of course, the airport is a Commonwealth place and the Commonwealth can control activities there. But I am unable to follow the reasoning by which the airport authorities seek to hamper the Customs and refuse to allow the respondent to effect deliveries of goods, that it is lawfully entitled to deliver, in conditions which will enable the Customs authorities to exercise due supervision.
The learned judge who heard the matter in the Supreme Court made two declarations. We do not, I think, have to consider whether the case was one in which a declaration was an appropriate form of relief. The Commonwealth is concerned to know what are its substantive rights and those of the respondent. It is not concerned in a purely adjectival and procedural question in the Supreme Court. Moreover, I think that it was open to the Supreme Court to entertain the suit for declarations. Injunctions might have been sought. Of the learned judge's two declarations the first should, I think, stand. In so far as it suggests that a condition of the right is that the property in the goods must have passed to the buyer before delivery it is I think needlessly restrictive; but not on that account invalid. The second declaration prescribes the manner of delivery in a way designed by his Honour to enable adequate Customs supervision. Such a declaration may be said to accord with the inherent power of a court of equity to mould the form of an injunction. But it appears to me to descend to too much detail in the conduct it prescribes. A procedure can be devised which will not prevent the respondent making deliveries at the airport of goods sold in its shop and which will not hamper Customs officers in carrying out their duty to protect the revenue. All that would be necessary would, it seems, be to allow the respondent similar facilities to those now allowed to its competitor. I would hope this could be left to the good sense of the two Departments concerned, not laid down by detailed dictation from the Court.
I would therefore dismiss the appeal with costs, confirm the first declaration of the Supreme Court and discharge the second declaration as unnecessary.
This is an appeal by special leave against two declaratory orders made in favour of the respondent company in proceedings taken by it in the equity jurisdiction of the Supreme Court of New South Wales [1] .
The company carries on the business of selling imported goods free of duty to persons who intend to travel abroad by sea or by air. It occupies premises in Darlinghurst consisting of a showroom and a store and these are licensed as a private warehouse under the Customs Act. The customer goes to the showroom in which samples of the company's goods are displayed and there selects the article which he wishes to buy. If he does not wish to have the article in his personal possession on the ship or aircraft, it is delivered by the company, after an entry for export is passed by the Customs authorities, to the appropriate place on the ship or wharf chosen by the Customs authorities or, in the case of passage by air, to the place at the airport where freight is received for carriage by aircraft. The company's goods are at all times between their importation and their exportation subject to the control of Customs under s. 30 of the Customs Act.
In some cases the purchaser of the article at the company's shop wishes to have it in his personal possession on the aircraft in which he is to travel and it is these cases with which the present litigation is concerned. At the international terminal at the airport there is a room called the "farewell area". There the intending passengers and those who come to see them off foregather and to that area the general public has access. Underneath it and connected to it by a staircase is what is called the "holding area". Before the aircraft is due to leave, passengers pass through a door at the top of the stairs and go down to the "holding area" where they remain until they board the aircraft. Their friends and other members of the general public are not allowed into the "holding area". Customs officers are on duty in that area but not in the "farewell area". The company wishes to be able to deliver to its purchasers, either in the "holding area" or at the point where the passengers pass through the door in the "farewell area" leading to the "holding area", the articles bought by them which they wish to carry with them overseas. Two objections have been made to the adoption of this proposal, one by the Department of Civil Aviation which controls the airport and the international terminal, the other by the Customs authorities. Subject to the requirements of the Department of Civil Aviation, the Customs authorities are prepared to allow delivery to be made in the "holding area" to which, as I have said, members of the public who are not travelling are not allowed access but not at the doorway at the top of the stairs, while the Civil Aviation authorities refuse to allow the company to make deliveries to its customers either in the "holding area" or in the "farewell area".
The objection taken by the Civil Aviation authorities is based on the provisions of the Airports (Business Concessions) Act.
Except in accordance with an authority granted under the next succeeding section and the terms and conditions of that authority, a person shall not, within an airport, either personally or by his servant or agent, or as the servant or agent of another person -
(a) sell for delivery within the airport, or supply, any goods or services;
(c) erect, display or distribute, or communicate by sound, any advertisement or public notice.
Sub-section (2) makes a contravention of sub-s. (1) an offence punishable by fine, and sub-s. (3) creates certain exceptions to sub-s. (1) which are not material here.
(1) The Minister may, on behalf of the Commonwealth, by writing under his hand, grant to a person an authority to do, either personally, or by his servants or agents, or both, any act or thing referred to in sub-section (1) of the last preceding section.
(a) may be included in, or granted in relation to, a lease or licence in respect of particular land within an airport; and
(b) shall, subject to the next succeeding section, be granted for such period, on such terms and conditions and for such consideration as the Minister thinks fit.
Under the provisions of that Act the Minister has granted to a competitor of the company a lease of an area in the terminal for a "duty free" shop and store and has granted it also an authority pursuant to s. 8. That trader is permitted to deliver in the "holding area" articles sold by it to intending passengers in its airport "duty free" shop and to this procedure the Customs authorities have no objection. The Civil Aviation authorities have refused, however, to grant the company an authority under the Act authorizing it to make deliveries at the airport of goods sold by it to intending passengers, apparently on the ground that to grant such an authority would involve it in a breach of the contractual arrangements which it has made with the lessee of the airport "duty free" shop. They contend that for the company to make delivery to a customer within the airport without an appropriate authority would be a breach of s. 7 (1) of the Act. It was in these circumstances that the company sought and obtained from the equity court the two declaratory orders which are now in question. The first of them declared that the company "is not prohibited by s. 7 of the Airports (Business Concessions) Act 1959, from delivering at" the airport "to persons about to depart overseas by air goods sold to those persons at its shop the title to which goods has vested in these persons prior to their delivery at the said airport".
In arriving at this conclusion the learned judge before whom the proceedings were heard had of course to construe the provisions of s. 7 (1) of the Airports (Business Concessions) Act. He was of opinion that if the contractual arrangements made between the company and a purchaser from it were such that the property in the goods passed to the purchaser before the goods reached the airport, the delivery of them to that purchaser at the terminal would not be within the provisions of s. 7 (1). There would not, he considered, then be any sale by the company within the airport for delivery within the airport nor would the company be supplying any goods within the airport or carrying on any business within the airport. Accordingly he held that the company required no authority under the Act to carry out its proposal. With all respect to his Honour, I am unable to agree with this conclusion because I am of opinion that if the company's proposals were carried into effect it would be supplying goods within the airport within the meaning of s. 7 (1). The word "supply" is not, in my opinion, to be limited to cases in which the person to whom goods are delivered is not then the owner of them. If in a business transaction between shopkeeper and customer the property in goods sold passes to the customer at a stage before the goods are delivered, the shopkeeper, I think, is properly said to have supplied the goods to the customer when he delivers them notwithstanding the fact that the property in them may have earlier passed to the customer. Accordingly I am of opinion that the first declaratory order should not have been made. The result is that the company cannot follow the course of business which it wishes to adopt unless it obtains an authority from the Minister under the Airports (Business Concessions) Act, and this the Minister refuses to grant.
The second declaratory order is one in which his Honour laid down a number of elaborate requirements to be fulfilled by the company in delivering "duty free" goods to its customers at the Airport, one such provision being that delivery should be made at the "checkpoint" at the doorway at the top of the stairs giving access to the "holding area" The order went on to declare that if the company complied with the requirements laid down in the order, such a delivery would not be "a movement alteration or interference with the goods so delivered otherwise than in pursuance of the said Act" - this being a reference to s. 33 of the Customs Act - "by reason only of any direction or requirement heretofore made or purporting to be made in pursuance of the provisions of the said Act that no delivery of those goods may be made in that manner at that place or by that procedure". Objection was made that the case was not one in which it was proper to make a declaratory order of this kind and that the court had, in effect, usurped the functions of the Customs authorities upon whom the obligation is imposed by s. 30 of the Customs Act of exercising the control of goods from the time of their importation until exportation overseas.
I think there is substance in these submissions but, in my opinion, it is unnecessary to decide them.
An examination of the relevant provisions of the Customs Act seems to me to show that for the Customs authorities to allow a seller of "duty free" goods to deliver them to a purchaser in the "holding area" and not on board the aircraft is in the nature of a concession made by those authorities. It is, I think, within their power to adopt such a course but the fact that that procedure has been adopted in the case of the airport "duty free" shop confers no legal right on the company to insist that it be allowed to adopt the same procedure even if it held an authority under the Airports (Business Concessions) Act enabling it to "supply" its customers with goods within the airport. For these reasons I am of opinion that the second declaratory order should not have been made.
Commonwealth
Sterling Nicholas Duty Free Pty Ltd