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[1921] HCA 11
High Court of Australia
1921-07-01
Original judgment source is linked above.
Customs Duties - Offence - Intent to defraud revenue - Corporation - Liability of H.C. o¥ Ae corporation for acts of servant - Acts done by sercants of corporation with infent - 1921, Customs Act 1901-1910 (No. 6 of 1901 - No. 36 of 1910), sees. 234, 241 - Acte ws Interpretation Act 1901 (No. 2 of 1901), sees. 22, 24 'Sypxey,
it 1, See. 234 of the Customs Act 1901-1910 provides that no person shall do "?T™ 1
certain acts, and imposes a penalty not exceeding £100 upon a person con: victed of doing any one of them, See. 241 provides that "Any person may at the same time be charged with an offence against this Act and with an intent to defraud the revenue and if in addition to such offence he is convicted ff such intent the maximum penalty shall be double that otherwise provided."
Hel, that under sec, 241 a corporation may be convicted of doing an act prohibited by see. 284 with intent to defraud the revenne where its servant or agent in the course of his employment has done tho particular act charged and that servant or agent, or some superior servant or agent by whose direction the act is done, had an intent to defraud the revenue, but not where a servant for agent not concemed in the doing of the act alone had that intent.
Mousell Brothers Lad. x. London anil North-Western Railway Co., (1917) 2 KB, 836, applied.
Stephens v. Abrahams, 27 V.L.R., 753 ; 23 A.L.., 233, approved.
_ Questions of law reserved. An action in the High Court was brought by His Majesty the King and the Minister of State administering the Customs against Aus- tralasian Films Ltd. and Harry George Musgrove to recover penalties
H.C.or A. under secs, 234 and 241 of the Customs Act 1901-1910. 'The ag 121. was heard by Knox C.J., who, at the conclusion of the evi 'Tur Krve made certain findings of fact, which he stated in the following eaye 'Avstnaz. Whereby he reserved the questions of law therein set out for
'The defendant Musgrove was charged with sixteen offences in all, as follows: In respect of drawback claimed on the export of the films mentioned above, with two offences in respect of each film against the provisions of sec. 234, viz., (1) making in a declaration a statement which was untrue (sub-sec. (e) ) and (2) misleading am officer in a particular likely to affect the discharge of his
(oub-sec. (/)). This defendant was also charged separately with having committed each of the eight offences specified above with intent to defraud the revenue (see. 241),
During the trial before me Dr. Brissenden, for the Crown, with: drew the charges made against Mr, Musgrove under sec. 241 (intent to defraud the revenue), and Mr, Shand admitted that both defend: ants had committed all the offences charged against them respectively under sec. 234, 'These admissions reduce the issues which I have to decide to the following : - (1) Does the evidence establish an intent 'on the part of the Company to defraud the revenue () in respect of the offences committed in connection with claims for drawback on export of films or any of such offences, (b) in respect of the offences committed in connection with the import of are lamps by the Aeon and Roscommon or any of such offences ? (2) What penalties should be imposed on the defendants for tlie offences admitted or proved to have been committed by them respectively ?
Before dealing in detail with the evidence given in support of this charge on intent to defraud the revenue, it will be convenient to state the contention of counsel on either side with respect: to the liability of a company charged with committing an offence against the Act with intent to defraud the revenue. Dr. Brissenden con- tended, while Mr. Shand denied, that: a company could be convicted of an offence involving intent to defraud the revenue as an essential ingredient of the offence. On the assumption that a company could be so convicted Mr, Shand contended that intent to defraud the revenue could only be imputed to a company in respect of an act done by a duly authorized agent of the company if such an intent were proved to exist in that agent in the doing of that act and the directors of the company knew of its existence. Dr. Brissenden admitted that, if this proposition were correct, there was no evidence in this case on which intent to defraud could be imputed to the Company in connection with the claims for drawback, inasmuch as it was not suggested that the agents of the Company who did the acts in respect of which offences were charged did any of such acts with intent to defraud the revenue ; but he contended that as a company can have neither knowledge nor belief nor intention except such as may be imputed to it through the knowledge, belief or intention of
H.C.or Aan agent, a company doing an act by the hand of an agent must oa have imputed to it the knowledge, belief and intention not meray of 'Tax Kio that agent but of all its agents. To put the matter in a concrete Avera. form, he contended that if the authorized customs clerk of a com. asus Frias pany in the course of his duty makes a statement which he honestly
Drawback on Films Exported. - On this part of the ease Lfind the relevant facts to be as follows : - The business carried on by the defendant Company inclided (jiter alia) the importation, use and exportation of kinematograph films. The defendant Musgrove was, atall relevant times, the general manager of the defendant Company. In the course of carrying on its business the Company imported copies of the following films, viz., Diamond from the Sky, Little ;
Brother, A Square Deal and A Journey to Nowhere. Some
time after the importation of these films the Company at different times proposed to export one copy of each, and in connection with
each copy so proposed to be exported the Company made a claim
for drawback under Part IX. of the Customs Act 1901, 'The eoune of procedure in each case was as follows : - Notice of intention to pack the film for export having been given to the Customs Depart ment on a particular form, an officer of the Department attended ab the premises of the Company and inspected the film specified in the notice. Inspection of a film would not necessarily disclose whether it had been used or exhibited, and accordingly the Customs - officer inquired from one T. E. Ferguson, a clerk employed by the Company, whether the film had been used or exhibited. In the case of the filins other than Diamond from the Sky, it was Ferguson's duty to attend to all matters connected with claims for drawback - on export of films, and in the ease of all the films in question it was his duty to prepare all the necessary particulars and documents in support of the claims, and to afford to the Customs officers such information as they might require, the difference in the procedure in the case of Diamond from the Sky being that one CR Barton, the duly authorized customs agent of the Company, acted
as hereinafter set forth. On each occasion Ferguson told the -C. oF A. Customs officer that the film or films under consideration had not 182! been used or exhibited; and I find as a fact that on each occasion Tur Kiwe on which Ferguson made that statement he honestly believed it to avsYaan- be true, and had no intention of defrauding the revenue. In fact "S45 Fmus the statement was in each case untrue, On each occasion the = - Customs officer was shown the appropriate folio of a book of the
Company known as the Film Release Book, from the entry in which
it appeared that the film in respect of which the claim was made had
never been "released." Both the Customs officer and Ferguson
believed that the word " released " in such entries meant " exhibited" or''used." The Film Release Book was kept by one W. Johnston,
a clerk in the employ of the Company, in the course of his duty.
It was Johnston's duty to enter in this book (inter alia) the date of
release of each film. In fact the copy of each of the films above mentioned upon which drawback was claimed had been exhibited
in Australia, The errors and omissions in this book were probably
caused by the slipshod and unbusinesslike method or want of method
displayed in keeping the books and records of the Company ; but,
however this may be, there is no evidence that any entry or any
error or omission in any entry relating to these films was made by
any employee of the Company with intent to defraud the revenue.
'The Customs officer, being satisfied by inspection of the Film Release
Book and by the information he received from Ferguson that the
film had not been used or exhibited, signed the certificate at the foot
of the form of notice of intention to pack, the films specified in the
notice being packed and sealed in his presence. Documents in particular forms, one of which was called a " drawback debenture,"
were then lodged with the Customs Department, and these documents
were, in each case, supported by a statutory declaration of the defendant Musgrove that the films mentioned in the drawback debenture had never been used or screened in Australia, In the
ase of Diamond from the Sky, one of the films now in question,
the later steps in the matter were taken by C. R. Barton, as customs
agent for the Company, and the declaration on the drawback deben-
ture was made by one G. McKnight, his clerk, but in this case McKnight relied on information given to him by Ferguson. 'There
js no evidence of any intention on the part of Barton or McKnight _ to defraud the revenue; and Iam satisfied that McKnight honestly believed in the truth of the statements made by him, though the statement that the owners were entitled to the drawback was untrue, In the other cases the matter was carried through and the declaration on the debenture was made by Ferguson - a statutory declaration being made by Musgrove in each case ; and I am satisfied, on the evidence, that both Ferguson and Musgrove honestly believed in the truth of the statements made by them respectively, and that neither of them had any intention of defrauding the revenue, In ue course the Company received payment of the amount of draw- ack claimed in respect of each of the above-mentioned films. It is admitted that the Company was not entitled to any sum by way of drawback in any of these cases, all the films having been used and exhibited in Australia, Before making the statutory declaration above referred to, Musgrove was in each case informed by Ferguson that the films in respect of which the declaration was made had not been used in Australia, and accepted that information as sufficient to justify him in making the declaration, without making any further inquiry and without knowledge of the names of the films to which such declaration related. At all relevant times, at least one employee of the Company knew, from information received by him in the course of his duty, that the copy of each of these films on which drawback was claimed had been used and exhibited in Australia; but there is no evidence that any employee of the Company who had this knowledge knew at any relevant time that drawback was being laimed in respect of such copy or knew that any statement had been or was about to be made to the Customs Department that such eopy had not been so used or exhibited, or that the Company was entitled to drawback thereon, nor is there any evidence that any employee of the Company knew at any relevant time that any untrue state: ment had been, was being or was about to be made to the Customs Department in connection with any application for drawback in respect of any of these films. 'The evidence establishes that inquiry by Musgrove, Ferguson or Johnston from the employee in the
Sydney office of the Company who controlled and directed the
distribution and exhibition of films would have disclosed the fact
"that the copies in respect of which drawback was claimed had been
Ireserve for the consideration of a Full Court the question whether, on the facts found by me and stated above, the defendant Company 'can be found to have committed with intent to defraud the revenue the offences charged in respect of the export of the films above mentioned, or any of such offences.
Importation of Are Lamps. - The charges against the Company relate to two shipments - one by the ss. Aeon, which arrived in Sydney in the month of November 1916, and the other by the s.s Roscommon, which arrived in Sydney in the month of March 1917. By virtue of the Customs Tariff, introduced by resolution, of 3rd December 1914, and the Customs Tariff Validation Act No. 6 of 1917, duty at the rate of 35 per cent. ad valorem was imposed on kinematographs not produced or manufactured in the United Kingdom, and duty at the rate of 10 per cent. ad valorem was imposed on are lamps not so produced or manufactured. 'These duties were payable as from 3rd December 1914 and throughout the Years 1916 and 1917. By notice dated 22nd February 1912 and Published in the Commonwealth Government Gazette on 24th February 1912, the Minister for Customs, in pursuance of the powers conferred on him by the Customs Tariff 1908-1911, directed that " parts of any article, machine, or appliance shall, although specifically or Senerically provided for in the Tariff as parts, if imported with any
'Avera. shipped in an unassembled condition ready or practically ready for astax Fits assembling shall be treated as though actually assembled."
The business of the Company included (inter alia) the purchase in America and the importation to Australia of considerable quantities of kinematograph films and machinery for exhibiting such films, and the use and sale in Australia of such machinery and of parts thereof both as complete units and separately. For the purpose of
"transacting so much of this portion of its business as fell to be trans- H- ©. or A. geted in America, including business connected with the purchase 12! "and shipment to Australia of kinematograph films and machines and 'Tuy Kuve spare parts, the Company established and at all relevant times aust. maintained an office in New York, where the business of the Com. *St4% Prats pany was conducted by one Millard Johnson, whose position was - - ~ described as that of " American representative" of the Company.
Inthe month of July or August 1916 (the precise date was not fixed)
one H. G. Harper, who had up to that time been employed in the
office of the Company in Sydney as assistant to the sales manager,
'one G. F. Todd, was sent to the office of the Company in New York
for the purpose of taking charge of that part of the business con- ducted in the New York office which related to machinery, but Millard Johnson continued after Harper's arrival in New York to
cecupy the position of American representative of the Company.
Todd's duties as sales manager in the Sydney office were to order machinery, to dispose of as much of it as possible, and to supervise
the branches in the other States in matters connected with the part
of the business of the Company relating to machinery, Before
Harper left for America Todd sent him to consult Mr. C. R. Barton,
A licensed customs agent, carrying on an extensive business in Sydney,
4s to the headings under which machinery imported by the Company
should be classified for Customs purposes, and particularly for the
purpose of finding out what the duty was on kinematograph (or
biograph) machines and are lamps, Mr, Todd apparently holding
the view that are lamps were chargeable only with 10 per cent. ad
valorem duty whether imported in the same ship as the machines
or in another ship. On 11th July 1916 Todd caused to be written
and sent to the New York office, enclosed in a letter from the defen-
dant Musgrove to that office, a letter the material portion of which
is as follows : - " As you know, the duty on machines is 35 per cent.
While on arc lamps it is only 5 per cent., consequently we would like
You to instruct that with future shipments the arc lamps be removed
and sent out separately, and that they also be invoiced separately.
Tt is advisable when and wherever possible, to send these out by a
different steamer, as if there were six machines by the ' Simplex"
People and six are lamps, the Customs would then, we think, take
H.C.or A. themas part and parcel of the machines. It will be as well, however, 1821- to point out to the manufacturer why these are being sent separately, -
'tue Kise and that the are lamps of course be ordered at the same time as the
'Avstaar. Projectors, otherwise they would be getting back to their highly
asia Frias unsatisfactory tactics of only allowing 50 per cent. off the list prices
price when they are despatched." It was not proved at what date
this letter was received in New York, but it was proved that the
course of post between Sydney and New York was about twenty-
eight days from the departure of the mail steamer from Sydney,
On 25th August 1916 Barton wrote to the secretary of the
defendant Company a letter which, omitting formal parts, is in the
following terms : - " As promised your Mr. Harper before he left
for America, we have now drafted out for your information what is
required -re importing cinematograph machines in parts or else
getting spares for complete machines. 'The position is :- - If complete
of the Tariff at 25 percent. United Kingdom and 35 per cent, Foreign... If, however, the various parts are imported, some by some by another, as long as the quantities brought by the same vessel do not make up reasonably complete machines, they would pay under the separate heading as follows: - " ('The separate headings and the rates of duty were then set out}, "* Any other parts than the above would be classified according to the material they are made of or the individual Tariff heading, but they would of necessity be only in the minority. Please note it is no use having the various parts invoiced separately if they come forward by the same vessel ; for if they make up a reasonably complete machine or machines, they will becharged under the rate applying to item 320n, 'Trusting the above may be of service to you, and at the same time pointing out this is supporting information already given you about eighteen months back, and assuring you of our attention at all times in your interests." The secretary was one Biakeney, who is now dead, Barton's letter was seen by Todd, and he enclosed a copy of it in a letter to Harper dated 13th September 1916. Harper was not called as & witness, and there is no evidence when he received this letter, but he was aware of the interpretation which Barton put on the Tariff
"and Ind ciscssed it with Todd before he went to America, 'The H.-G oF 8 serial portion of Todd's letter to Harper of 13th September 1916 192
~ jzas follows - - " Attached hereto please find copy of ©. R. Barton's Tax Kise "'aterpretation of the Tariff. It is the best we have been able to Ave aan, lit, and evidently when the Tariff was framed, according to "4% Ps Parton, it was desired to make importers split up their shipments - - - overa variety of steamers. However, itis on this basis that we are
paying duty, and you will need to do the best under the cireum-
stances, Simplex are lamps and fitments are not independent
of the machines inasmuch as we do not carry sparearc lamps, &e, Tt
willbe desirable to send them with the projectors until such time as
cuz stocks are good, to obviate the risk of getting incomplete out-
fit" On 18th October 1916 Mr. Musgrove furnished Todd with the
following extract from a letter which he had received from the
New York office of the Company : - " Re Simplez - I have ordered
and there are ready for us 8 Simplex machines. According to your instructions, I have had the arc lamps packed in a separate case and
together with two choppers from Hallberg out to Australia by a different steamer, and have invoices showing 8 are lamps only charged on it, The 8 machines will follow by another steamer almost immediately, and are complete with 240 volt motor attach- ments Owing to the great trouble in obtaining place from Frisco when goods are sent by ship freight, I have instructed Davies 'Tumer to send these by direct steamer from New York to Sydney." n the evidence I find that the Simplex machines and are lamps referred to in this letter were those shipped by ss. Aeon which are" the subject of the charges made in this action. I find further that the letter from New York from which this extract was taken was written by the said H. G. Harper, and was received by the defendant Musgrove on or before 18th October 1916.
'On 19th September 1916 the Precision Machine Co. of New York, from whom the Simplex kinematograph machines were purchased by the defendant Company, furnished to the Company's New York
"office two invoices for the machinery which was subsequently
Shipped by the ss. Aeon. One invoice was for 18 cases, contain- ing all the parts of 8 Simplex machines except the are lamps,
H.C.orA. and the other was for one case of arc lamps. The Aeon sailed
from New York on 7th October 1916. These invoices were for-
tur Kixe warded by the defendant Company's New York office to Sydney, 'Avstaar. and came into the possession of C. R. Barton, who was authorized asiax Fits by the Company to act as its customs agent in connection with the
importation of the goods shipped by the Aeon and Roscommon, On the evidence before me I find that these invoices were sent to Barton direct from New York, and that they reached his office on 8th November 1916.
'On 12th October 1916 the said Millard Johnson wrote from New York and sent to the defendant Company at Sydney a letter the material portion of which is as follows : - " Re Simpler. - Having ordered 8 Simplex machines to make up the balance of your cabled instructions, wanting a further 12, I arranged with the Precision Machine Co. to ship 8 are lamps in one case and give those to Davies Turner & Co, for shipment on the ss. Delhi, but the goods were crowded out and left on the wharf, and were shipped against my wishes with the 8 machines on the ss. Aeon, which left New York 'on 7th October as you will see from the dates of the shipping, these were delivered to Davies Tuer & Co. in plenty of time to have left on 19th September, the advertised date of sailing of the DelAi and the Aeon, but both these steamers delayed their sailing until 7th October. It is on account of unforeseen delays on the wharf that it will make it almost impossible to depend on sending posters in hopes of getting cheaper freight. I am having separate bills of lading for the are lamps and also for the machines, so it will be possible to ass the customs entry for the are lamps first and a few days later for the machines." This portion of the letter was shown to Todd directly after it arrived in Sydney and before 27th November 1916. I find on the evidence before me that this letter was received by 'the Company in Sydney not later than 18th November 1916.
Both invoices having been received in Barton's office on Sth November 1916, the invoice for the arc lamps was produced to the Customs Department on 20th November 1916, some days before the arrival oftheship. This was done under the system known as " check toarrive," whereby invoices with entries could be lodged before the arrival of the ship, the entry being left undated and the declaration on
entry not being made until after the arrival of the ship. Till that H.-C. or A. event the invoice and undated entry were retained by the Depart. '®2!- 'ment, and on arrival of the ship the entry was handed to the customs 'Tar iu owe agent or clerk, not to take away, but in order to enable him to sign veYeas. the declaration on the entry. No entry can be passed until the ship 454% Frias amives, The other invoice (that in respect of the eighteen cases - - ~ of machinery) remained in Barton's office until 29th November 1916, The Aeon arrived in Sydney on 27th November 1916, and 'on that day an entry was passed for the case containing the are Jamps, duty being assessed at the rate of 10 per cent. ad valorem. The invoice in respect of the other parts of the machines was not produced to the Customs Department until 29th November 1916, and on that day an entry was passed in respect of the goods covered by that invoice, duty being assessed at the rate of 35 per cent. ad valorem on part of the goods and 30 per cent. on the balance,
The declaration on each entry was made by one McKnight, a clerk
employed in Barton's office, in the course of his employment, and
duty was in each case paid by him under protest. 'There is no direct
evidence that the contents of Millard Johnson's letter of 12th
October above referred to were communicated to Barton or to any
'one in his office. On the completion of the transaction a costing
sheet was made up by one J. L. Collins, a clerk employed by the
Company, who had charge (inter alia) of matters relating to Customs,
showing that the amount of duty saved to the Company by the use
of separate invoices and entries amounted to £2 1s. 9d. on each of
the eight arc lamps, or £16 4s. in all. In making up this statement
Collins was acting in the course of his employment. With regard
4o the shipment of are lamps ex Roscommon the evidence shows that
on 5th January 1917 two invoices similar to those above referred to
were rendered by the Precision Co. to the New York office of the
defendant Company, one invoice being for eight Simplex machines
{excluding the are lamps belonging to them) contained in eighteen
'ases, and the other for eight are lamps contained in one ease. On
25th January 1917 Millard Johnson wrote and sent to Barton a
letter in the following words, viz. : - " Enclosed you will find bill
of lading and invoices for 19 cases of motion picture machines.
'One bill of lading is for 18 cases of motion picture machines, one bill
H.C.or A. of lading for one case containing 8 are lamps. It is advisable to
'tus Kixo is entirely separate from the preceding cases." The invoices above
pass customs entries for these goods, taking care that number 19. referred to were enclosed in this letter, and were received in
On 9th March 1917 the invoice for eighteen eases was produced to the Customs Department under the system above referred to as the "check to arrive" system, with an entry for the goods covered by that invoice. 'The ship arrived in Sydney on 12th or 13th March 1917, and on the latter day MeKnight, in the course of his employ- ment as Barton's clerk, made the declaration on the entry form, passed the entry for the eighteen cases, and paid duty under protest at the rate of 35 per cent. ad valorem on part of the goods and 30 per cent, on the balance, On Mth March 1917 McKnight, in the 'course of his employment as Barton's clerk, produced to the Customs Department the invoice and entry for the ease of are lamps, made the declaration on the entry form, passed the entry, and paid duty under protest at the rate of 10 per cent. ad valorem. 'There is no direct evidence as to the reason for the procedure adopted in this case, and I find that it was adopted in compliance with the direction contained in Millard Johnson's letter of 25th January 1917 above referred to. After the evidence had closed I reopened the case and gave Mr. Barton, who had previously been called as a witness, an opportunity of explaining the matter or of suggesting any reason for the procedure adopted in the ease of both shipments ; but he was unable to give evidence of any value on the matter, or to suggest any valid reason for or explanation of the facts that the invoices had been produced and the entries passed in the manner set out above.
No information appears to have been given to the Customs Department by the Company, or by any officer or agent of the Com- pany or by any person, that the are lamps in either shipment were part of the kinematograph machines imported by the same ship, or that these machines including the are lamps had been bought by the Company as complete machines at a single inclusive price for the whole machine inchiding the are lamp.
'The declaration on the entry form is (so far as the same is material)
jin the following words, viz. : - "*(1) As to the goods entered herein H.C. or A. {declare that I am the agent duly authorized by the Australasian '8?!- Films Limited the owner of the goods mentioned in this entry Tax Kove 'and enter the goods for home consumption. (2) That the invoice ayeraar. now produced is the genuine invoice, and the only invoice received 48148 Frums orexpected to be received by me, or by any person to my knowledge, of the goods mentioned in this entry and cortained in the packages 'as marked, numbered and described therein. (4) That to the best 'of my knowledge and belief the price of the goods stated in the invoice is the usual and ordinary price paid for goods of the same kind and quality at the time of shipment in the country whence they were exported, without any deduction whatever other than such as would be allowed in the ordinary course to any purchaser for cash of similar quantities for consumption or use in the country of export. (6) That to the best of my knowledge and belief the description of the goods in this entry and the particulars in the invoice are true inevery respect. (6) That nothing on my part, or to my knowledge on the part of any person, has been done, concealed or suppressed, whereby His Majesty the King may be defrauded of any part of the duty due on the goods."
On the evidence before me I find further as follows : - (1) That in respect of the eight arc lamps shipped by the ss. Aeon the Company evaded payment of duty which was payable, and committed the other offences against the provisions of see. 234 charged against it in the statement of claim. (2) That at the time of shipment of the said eight arc lamps per s.s. Aeon the said Millard Johnson knew that such are lamps formed part of complete kinematograph machines purchased by the Company as complete machines including the said arc lamps and that the remaining parts of such complete machines were shipped by the same ship as the said are lamps. (3) 'That at the time of shipment of the said eight arc lamps per s.s. Aeon the said Millard Johnson, the said H. G. Harper, the defendant Musgrove, the said Blakeney and the said G. F. Todd knew that according to the practice of the Customs Department duty would be Payable on the said are lamps, if imported in the same ship as the other parts of the machines of which they formed part, at a higher tate than if imported in another ship, and believed that the Customs
tur Reso of the machines of which they formed part. (4) That at the time of
Department would insist on duty being paid at the higher rate gy such arc lamps if imported in the same ship with the other
shipment of the said eight arc lamps per s.s. Aeon the said voice for the said lamps, in ordertg enable the Company to evade payment of duty on the value of the said arc lamps at the high rate applicable to are lamps imported ax parts of complete kinematograph machines if imported with such machines in a complete or substantially complete state; and that he intended that the Company should evade payment of such duty. (5) That on 18th November 1916 the defendant Company tad notice by means of the letter received by Musgrove from the New York office of the Company and furnished by Musgrove to Todd on 18th October 1916, and of the letter of 12th October 1916 mentioned above, that the said eight arc lamps per s.. plete kinematograph machines purchased including the said are lamps, and that the rem complete machines were being imported by the same ship. There is no evidence to show that the defendant Musgrove saw the sail letter of 12th October 1916 at any relevant time. (6) That the sid letter of 12th October 1916 was written and sent by the said Milla Johnson, acting in the course of his employment a. sentative of the defendant Company, with intent to enable the defendant Company to evade payment: of the duty properly payable on the importation of the said eight are lamps. (7) That at the time 'of making out the said costing slip the said J. L Collins knew that the said eight aro lamps were part of complete kinematograph machines, and that if an entry had been passed for such are lamps as parts of complete machines duty would have been payable at 4 higher rate ad valorem than the rate at which duty was actually paid on them, and that the reduction in the rate of duty was due to 'the fact that separate invoices had been furnished to the Customs Department for the said are lamps and for the remaining parts of the said machines respectively. (8) That in respect of the eight are lamps shipped by s.s. Roscommon the Company evaded payment of duty which was payable, and committed the other offences against the provisions of sec. 234 charged against it in the statement of
him in respect of such are lamps. (9) That at the time of ship- H.C. or A. ment of the said eight are lamps per s.s. Roscommon, the said '®2+ Millard Johnson knew that such are lamps formed part of complete Tas Kao Kkinematograph machines purchased by the Company as complete 4,4! s4,, machines including the said are lamps, and that the remaining 4 Pitas parts of such complete machines were shipped by the same ship as the said arc lamps. (10) That at the time of shipment of the said ight arc lamps per s.s. Roscommon, the said Millard Johnson, the
sid H. G. Harper, the defendant Musgrove, the said Blakeney and | the said G. F, Todd knew that according to the practice of the Cus-
toms Department duty would be payable on the said arc lamps, if
imported in the same ship as the other parts of the machines of
which they formed part, at a higher rate than if imported in another
ship, and believed that the Customs Department would insist on
duty being paid at the higher rate on such arc lamps if imported in
the same ship with the other parts of the machines of which they
formed part. (11) 'That at the time of shipment of the said eight
are lamps per s.s. Roscommon the said Millard Johnson forwarded
a separate invoice for such lamps, in order to enable the Company
to evade payment of duty on the value of the said are lamps at the
higher rate applicable to are lamps imported as parts of complete
kinematograph machines if imported with such machines in a com-
plete or substantially complete state; and that he intended that the
Company should evade payment of such duty. (12) That the said
letter of 25th January 1917 was written and sent by the said Millard
Tohnson in the course of his employment as American representative
'of the defendant Company to the said C, R. Barton, with intent to
enable the defendant Company to evade payment of the duty
'properly payable on the importation of the said are lamps. (13)
'That at all relevant times the said C. R. Barton was the duly
authorized customs agent of the Company in respect of the goods
shipped per s.s. Aeon and s.s. Roscommon, and that it was part of
his duty as such customs agent to attend to all matters in connection
with making and passing entries for such goods. (14) That at all
relevant times the said C. R, Barton knew that according to the
'Practice of the Customs Department duty was payable on parts of
'Machines at the rate applicable to the complete machines if imported
H.c.or A. with or in the same ship as the other parts of the said machines, 1921. jrnow the terms of the direction of the Minister for Trade and Cus. pen Kiso toms of 22nd February and of the provisions of the Customs Tarif 'avetuar. hereinbefore referred to. (15) That at all relevant times the sid sstax Press @. McKnight was employed by the said C. R. Barton as a clerk, ant =" that it was part of the duty of the said G. MeKnight in the course of such employment to make and pass entries and to make the declaration required in connection therewith in respect of the importation of goods in respect of which the said C. R, Barton employed as customs agent.
T reserve for the consideration of a Full Court the question whether, on the facts found by me and stated above, the defendant Company ean be found to have committed, with intent to defraud the revenue, the offences charged in respect of the importation of
are lamps per 8.8. Acon and s.s. Roscommon, or any of such offences
'The matter now came on for argument before the Full Court.
Brissenden K.C. (with him Badham), for the plaintiffs, An intent to defraud the Customs may be imputed to a corporation, aul
that intent can be inferred from the statements or acts of one or
more agents of the corporation, By reason of secs. 22 and 24 of the Acts Interpretation Act 1901 and of the definition of indictable offence " in see. 4 of the Acts Interpretation Act 1904, "person" in see. 241 of the Customs Act 1901-1910 includes a corporation - there being nothing in the section to indicate a contrary intention. In the case of the are lamps the Company can be convicted on the ordinary principles of agency ; for Millard Johnson, who did the acts complained of, did them in the course of his business and with such knowledge and such intent that he would have been guilty if prosecuted under sec, 241 (Lloyd v. Grace, Smith & Co. (1)). But there is a wider principle which covers also the transaction with
regard to the films. A corporation may have a malicious intent ~ Brown (2)); for instance, it may
(Citizens? Life Assurance Co. bbe prosecuted for a criminal libel (Pharmaceutical Society v. London and Provincial Supply Association (3) ). Malice is one of the
"elements of that offence (R. v. Munslow (1)). If that is so, it is H-C. or A.
Jecause malice is inferred from the publication of the libel. So
Jere it is a question not of what was the intent of the agents of the Tus Kine Company, but whether the Company is to be presumed to have aust ear, done what it did, though by different agents, and whether the S14 Faas
presumption of intent can be drawn from those acts,
{Ricu J. referred to Pratt v. British Medical Association (2) ; Mousell Brothers Ltd. v. London and North-Western Railway Co. (3) ; Barwick v. English Joint Stock Bank (4).]
If the agents of a corporation either individually or collectively havedone acts which, if done by one person, would indicate a criminal intent, then that intent may be imputed to the corporation, [Counsel also referred to Dawson v. Jack (5); Kenny's Outlines of Criminal Tau, 4th ed., p. 62; Halsbury's Laws of England, vol. v., p. 31]
Shand K.C. (with him H. E. Manning), for the defendants, A contrary intention within the meaning of sees. 22 and 24 of the Aats Interpretction Act 1901 appears in sec. 241 of the Customs Act. There is no case in which it has been decided that a company is liable to indictment for an offence of which one of the ingredients is 'state of mind. As to the cases with regard to criminal libel, what malice means is not a particular state of mind but merely an absence
[Kxox C.J. referred to Thomas v. Bradbury, Agnew & Co. (6)-]
Libel is an exception to the ordinary rule of criminal liability (R. v. Holbrook (7)). 'The only eases in which a corporation is held to be criminally responsible is where a statutory duty is imposed on the corporation to do or not to do a particular act.
(Ricu J, referred to Warrington v. Windhill Industrial Co-operative Society (8); Buckingham v. Duck (9).]
Sec. 241 does not prohibit the doing of a particular act, but pro- vides a larger penalty if a certain prohibited act is done with a certain intent. In Mousell Brothers Ltd. v. London and North-Western
Railway C ited was the doing of an act with () 1805) 1 9 6) (1906) 2 K.B, 6 (2) (1919) 1 Re QB 8) (1917) 2 KB. (8) 88 Ld. LR 2k (5) 88 oy. KB, 375, (5) 28 V.LR.,, 6:
'H.C, or A. g certain intent, and the Court was able to say that the 'purpose Wl. the statute there in question would be rendered ineffective une ex Kme a corporation were hit by it and made liable for the acts of its ser 'svstaar. Vants. Here there is no indication of an intention to make a master assay Fira criminally responsible for the state of mind of his servant, and a corporation is in no worse position than an ordinary master, The intent which is punishable under sec. 241 is the personal intent of the person doing the forbidden act. [Counsel referred to Kearley ¥, Tonge (1); Pearks, Gunston & Tee Ltd. v. Ward (2); R. y,
Brissenden K.C., in reply, referred to Stephens v. Robert Rei & Co. (8).
'apais, 'Taz Court delivered the following written judgment - The answers to be given to the questions reserved for our eo sideration depend entirely on the true construction of sec. 241 of the Customs Act 1901-1910. 'The substantial question of aw involved is whether a company can be convicted of an offence: against the Act with intent to defraud the revenue. In Mousél Brothers Ltd. v. London and North-Western Railway Co, (5) Atkin). says: - "I think that the authorities cited by my Lord make it plain that while primd jacie a principal is not to be made eriminally : responsible for the acts of his servants, yet the Legislature may prohibit an act or enforee a duty in such words as to make the prohibition or the duty absolute; in which case the principal is liable if the act is in fact done by his servants, To ascertain whether & particular Act of Parliament has that effect or not regard must be had to the object of the statute, the words used, the nature of the duty laid down, the person upon whom it is imposed, the person by whom it would in ordinary cireumstances be performed, and the Person upon whom the penalty is imposed." And, after discussing the provisions of the statute then under consideration, the learned Judge proceeded : - " I see no difficulty in the fact that an intent
(4) 281.8, 82, atp. 1; SALE 242, at p. 244. 7) Gott) 2 KB, at pp. 845,88
to avoid payment is necessary to constitute the offence. That H.C. or A. js an intent which the servant might well have, inasmuch as he is '92!- the person who has to deal with the particular matter, 'The penalty tw Keo is imposed upon the owner for the act of the servant if the servant acg!san, commits the default provided for in the statute in the state of mind 4s14x Fiume provided for by the statute. Once it is decided that this is one of | - - ~ those cases where a principal may be held liable criminally for the act of his servant, there is no difficulty in holding that a corporation may be the principal. No mens rea being necessary to make the principal liable, a corporation is in exactly the same position as a principal who is not a corporation."" We proceed to consider, by applying the tests suggested by Atkin J., whether sec. 241 of the Customs Act has the effect of making the principal, if a company, liable for the act of its servant or agent when the person doing the act or some servant or agent of the company from whom he takes his instructions has the intention of defrauding the revenue, The general object: of the statute is to establish machinery for the collection of customs duties in aid of the revenue, and the particular object of Part XIII. (secs. 228-243) is to protect the revenue by imposing penalties upon persons doing acts ealculated tollead to evasion of payment of the duties imposed. It is apparent that the effective protection of the revenue requires that the same precautions shall be taken whether a company or an individual be the owner of goods imported, the fact being that companies are engaged to a great extent in the importation of goods. Conse- quently the object of the statute affords no reason for the exelt- sion of companies from liability under this part of the Act. 'The next thing to be considered is the words used in the relevant provisions of the Act read in the light of the Acts Interpretation Act 1901. By sec. 22 (a) of that Act person" is defined as including 4 body corporate, and by see. 24 it is provided that every provision of an Act relating to offences punishable on indictment or summary conviction shall unless the contrary intention appears be deemed to refer to bodies corporate as well as to persons. Returning to the Customs Act, sec. 234 provides that no " person" shall do certain acts under a penalty of £100 It is conceded that under
H.C. or A. this section individuals are liable for the acts of their agents, and, 1921. 45 there is nothing in the section to indicate a contrary intention tar Kimo within the meaning of secs. 22 (a) and 24 of the Acts Interpretation 'Acsinat. Ut, it follows that a company is responsible under this section for asx Frias an act done by its agent in the course of his employment. See, 241 = does not create any new offence, but imposes a heavier penalty in respect of acts done with intent to defraud the revenue where such
acts are offences although done without such intent. Its effet is
to make the fraudulent character of the act an element in deter
mining the amount of the penalty to be imposed for the offence, The principal being held responsible for an offence committed by _ the agent against sec. 234, there is no apparent reason why he should -
not be liable for the penalty on the higher seale which is imposed if
the same offence be committed with intent to defraud the revenue,
The probability that it was intended to render the principal liable
to the higher penalty is increased by the fact that sec. 241 provides
that "any person may at the same time be charged with an offence"
against sec. 234 and with an intent to defraud the revenue, This
provision seems to import that a " person" who is responsible for
aan offence committed against see. 234 may be convicted under set.
241 of an intent to defraud the revenue, the offence in the one ease
and the intent in the other being chargeable against the principal as a result of the default committed by, or the state of mind of, the agent. 'The object of the provisions of sees. 234 and 241 seems to be to prevent evasions of duty and to adjust the amount of penalty imposed for an evasion according to the circumstances, increasing the penalty where the evasion is intentional. The conclusion that it was intended to make the principal responsible under see. 241 as well as under sec. 234 is warranted also by the consideration of the nature of the duty laid down, the person on whom it is imposed, and the person by whom it would, in ordinary circumstances, be Performed. The duty laid down is, speaking generally, the furnish- ing of true information with respect to goods liable to duty. By sec. 37 of the Act the primary liability for delivering an entry is Placed on the owner of goods imported ; by secs. 116 and 117 obliga- tions are placed on the owner of goods entered for export; by see: 154 the owner is required to make a declaration as to value of goods,
and by sec. 161 the goods are made liable to seizure and sale in case H- C. oF A.
'of undervaluation ; and the provisions of Part XI. of the Act (sees.
180-183) authorizing the employment of agents emphasize the fact Tas Kio that the owner is the person primarily subject to the obligations 4 csrmar. imposed by the Act for the purpose of ensuring the payment of the "S'48 Frsms
full amount of duty. Although the obligation is laid on the owner in the first instance, these sections recognize that in many, probably in most, cases that obligation would in ordinary circumstances be performed by an agent rather than by the owner personally, and this affords an additional reason for holding the owner as principal responsible for the acts and defaults and for the state of mind of his agent.
Having regard to all these matters, we think it is clear, from the provisions of the Act, that the intention was to make the principal responsible for an act done by his agent or servant in the course of his employment and for the state of mind of the agent or servant indoing that act. Adopting the language of Atkin J. quoted above, wwe think that the principal is li 'or agent in the course of his employment "commits the default provided for in the statute in the state of mind provided for by the statute. Once it is decided that this is one of those eases where a principal may be held liable criminally for the act of his servant, there is no difficulty in holding that a corporation may be the principal. No mens rea being necessary to make the principal liable, 4 corporation is in exactly the same position as a principal who is not a corporation." If the principal is liable for the fraud of the agent actually committing the offence, he is no less liable for the fraud of some superior servant or agent by whose direction the offence is committed, but we see no reason for extending the responsi- bility of the principal to a case in which it is sought to make the Principal responsible for the state of mind or the state of knowledge of some other servant or agent not concerned in the doing of the act.
On the findings of fact submitted to us there is no ground for the contention that the defendant Company can be convieted of intent to defraud the revenue in connection with the changes relating to the claims for drawback on films exported. It is clear on those findings that no servant or agent of the Company knew at any
H.C.orA. relevant time that the revenue was being or was about to
With regard to the are lamps imported by the Aeon and Rae common, we are of opinion that the Company is liable to be con. vieted of intent to defraud the revenue by reason of the intention existing in the mind of Millard Johnston that the Company should. evade payment of duty on these goods coupled with the acts done by him in furtherance of that intention and the fact that payment of duty was evaded. We think it was rightly decided im Stephens v. Abrahams (1) that preventing something from getting into the revenue which the revenue is entitled to get amounts to defrauding the revenue; and it follows that on the findings of fact Millard Johnston had an intent to defraud the revenue in the acts found to have been done by him in respect of these goods. It is specifically found that the acts done by Millard Johnston with this intent were done by him in the course of his employment (see findings 1, 2, 3, 4 6, 8,9, 10, 11, 12, 13, 14, 15).
'The questions submitted should be answered as follows : -
(1) The defendant Company cannot be convicted of intent to defraud the revenue in connection with the offences charged in respect of the claims for drawback on the export of films, or any of such offences.
(2) The defendant Company can be convicted of intent to defraud the revenue in connection with the offences charged in respect of the importation of arc lamps per ss. Acon and s.s. Roscommon respectively.
The costs of this reference will be costs in the action.
Solicitor for the plaintiffs, Gordon H. Castle, Crown Solicitor for 'the Commonwealth. Solicitors for the defendants, Sly 4 Russell.