Zachariassen v Commonwealth [1917] HCA 77; (1917) 24 CLR 166 (20 December 1917)

Zachariassen and Another Plaintiffs; against The Commonwealth and Another Defendants.

There are really three questions to be decided in this case, viz., (1) whether the Comptroller-General is primâ facie liable; (2) whether the Commonwealth is primâ facie liable; (3) whether the plea as to the war power is a justification.

The ground may be cleared by a general view as to the Customs Act 1901, on which the two first questions turn. It should be observed in passing that the first question, as it falls to be decided now, was expressly left undetermined in Baume v. The Commonwealth[1] (see particularly at pp. 113, 122). Full consideration of that Statute has led us to the conclusion that, in the main, the plaintiffs' view of it is right.

The first and fundamental circumstance to be remembered is that by the Constitution itself (sec. 69) it is enacted that "the Departments of Customs and of Excise in each State shall become transferred to the Commonwealth on its establishment." Sec. 64 refers to the Departments of State of the Commonwealth. The Department of Trade and Customs was accordingly established. The Customs Act 1901 was for the purpose of regulating that Department so far as Parliament thought necessary. Having in view the Constitutional provisions as to Customs, and the reference to Departments, it is difficult to see how the Commonwealth can so far dissociate itself from the administration of the Department as to say any of its functions are not functions of the Commonwealth, but of some person in his own individual capacity, entirely independent of the Commonwealth. No doubt superior officers may be, and in most cases are, independent of the acts of their subordinates, unless those acts are expressly or impliedly authorized or directed or participated in by them. Further, Parliament could lay a personal duty on an officer towards the public. But it is quite another matter to say that the Commonwealth is or can be, in its corporate capacity, a stranger to any part of the administration of the Department of Trade and Customs.

Reading the Statute by the light of the Constitution, we think that "the Customs"—a short term for the Department—is organized as a Government Department, with a Minister to supervise its administration, but bound by the provisions of the Act in relation to that administration. One provision is that there shall be a permanent Head, the Comptroller-General, who—under the Minister—is to have control of the Department throughout the Commonwealth. Another is that in each State there is to be a Collector called "the Collector of Customs for the State." But that expression is not synonymous with the term "Collector," as used in the Act. The State Collector is a specific individual. The "Collector" is not. The "Collector" is a convenient term for indicating that certain very important duties, some of which involve obligations of individuals, shall not be performed by all and sundry officials, but only by selected officials, of a higher standard and responsibility. The Comptroller, and all State Collectors, are included as of course, but there may be others, as the principal officers of Customs, doing duty at the time and place. Then, in order to indicate that no specific individual is intended by Parliament to be the "Collector," the definition provides that whichever officer is doing duty "in the matter" is as to that to be the "Collector." Detailed reference to the various sections is unnecessary, but would bear out this general view.

The functions so limited by the Act to the "Collector" are limited with respect to the duty and authority of officers as between the Crown and the officers, and as between the Crown and the individual. They are not intended to create rights and duties on the part of the "Collector" personally and the individual. The necessary result of that is that the Comptroller-General is not liable to the shipowner for non-feasance of the duty to issue a clearance (R. v. Lords Commissioners of the Treasury[2] and R. v. Commissioners of Inland Revenue; In re Nathan[3]). We may add that as he is undoubtedly an officer within the meaning of sec. 221, he is not liable in this action, unless he has been given the necessary notice (secs. 221 and 225—see Arnold v. Hamel[4]).

Now, to test the matter as between the Commonwealth and the plaintiff: Is there a statutory right to receive a clearance supposing all the statutory conditions are fulfilled? The Act nowhere says in affirmative words that if all the requirements of the law are satisfied, the Collector "shall" grant a clearance. It does not even say he "may" grant it. If it did, the principle of Julius v. Bishop of Oxford[5] would in the circumstances apply, and give such a provision compulsory force. The affirmative duty is found, we think, in other considerations. Magna Charta (9 Hen. III.), c. 30, relating to foreign merchants said: "All merchants unless they were openly prohibited before, shall have safe and sure conduct to depart out of England, and to come into England, and to tarry in and go through England, as well by land as by water to buy or sell ... except in time of war." This provision, as is observed in Chitty on the Prerogative (p. 163), "strongly proves that the English had this liberty before." International commercial intercourse by sea (subject to any specially indicated municipal requirement) is always understood to imply a right to depart with the vessel. Foreign commerce and intercourse would otherwise be impossible, and one main object of the Customs Acts, including Tariff Acts, would be frustrated. The Customs Act must be read with reference to maritime practice, applicable to all oversea commerce, inwards and outwards. It is trite law that Statutes should be construed, so far as their language permits, so as not to clash with international comity (Ex parte Blain; In re Sawers[6]; Winans v. Attorney-General[7]; Colquhoun v. Brooks[8]; Macleod v. Attorney-General for New South Wales[9]). So reading it, there is a duty on the Commonwealth (by the hand of the Collector) to grant the clearance if satisfied that the law has been complied with. An arbitrary refusal or one based on unjustifiable grounds is the denial of a right implicitly recognized, incorporated into and limited by the Act. By unjustifiable grounds, we must not be understood as excluding in all cases an honest and not unreasonable belief on the part of the Collector acting for the Commonwealth, that the law has not been complied with. In times of peace, the refusal alleged in this case, if its possibility then be assumed, would be a clear primâ facie breach of the Statutes.

The justification of the Commonwealth, if any, must rest on par. 8 and par. 12 of the defence. Par. 8 raises considerations applicable both in peace and in war. At this point, we need only say they afford no justification since, apart from the facts raised by par. 12, the refusal was arbitrary and was not based on failure to comply with those conditions. Par. 12 is different. It is not a mere contention in law. It contains allegations of fact, and is so treated in par. 3 of the replication, by which it is demurred to. It is certainly couched in very broad and somewhat vague terms, and possibly the plaintiffs, if they so desire it, are entitled to obtain some greater particularity either in the pleading itself or by way of particulars. But from the standpoint of general demurrer we have to consider whether its allegations however broad and vague are, if true, necessarily insufficient in law to justify the matters complained of.

It alleges that the acts complained of "were acts of a belligerent power in right of war and are not justiciable in this Court." What does that mean when alleged of acts with respect to an alien? It means that inasmuch as the basis of the plaintiffs' claim is as foreigners, and not British subjects, the Crown acting not simply upon its powers considered municipally, towards a subject permanent or temporary, but on the wider ground of international power, acting as representing the whole nation, towards the plaintiffs as externals, that is, as subjects of a foreign power, exercised what are called in the plea belligerent rights—war rights recognized by international law, in effect acts of State in the sense of being "an exercise of sovereign power" (see per Lord Moulton (then Lord Justice) in Salaman v. Secretary of State in Council for India[10]). It is also alleged that this "act of State" was such as not to be the subject of measurement by the recognized standards of this civil Court, a result which, according to the judgment of Lord Moulton, may or may not ensue according to the facts proved. That is the substance of par. 12. The principle stated by Lord Parker in The Zamora[11] is invoked in argument in support of this allegation.

If, however, the plaintiffs abandon the basis of "alien" and take up the position of "British subject" on account of being—though temporarily—within the Dominions (which is not the position they assumed on the argument), then other considerations may apply and are dealt with later. It is said that there is no allegation in par. 12 of the Crown's belief that the acts were necessary for the public safety. That, at most, is matter of evidence to support the allegation which is sufficiently comprehensive, however vague, that the acts were belligerent rights. Par. 12, if conceded to be true, as the demurrer must concede it, though raising questions of novelty as to which there is no direct authority, is in our opinion on principle a good answer to the matter complained of, and the demurrer to that paragraph cannot be sustained.

We pass from the demurrer, to the questions of law, separately submitted in par. 4 of the replication. (a) The first is whether under the circumstances alleged in the statement of claim the Commonwealth is responsible for the conduct of the Comptroller complained of. This has been already answered by saying the Commonwealth is responsible. (b) The second is whether, notwithstanding no formal application was made for a certificate of clearance, a cause of action is disclosed by the statement of claim. Assuming the allegations in the statement of claim to be true, the absence of a formal application is immaterial. The question, however, involves further considerations of law. This question excludes par. 12 of the defence, so that we have now to consider the position apart from the special character of the plaintiffs as friendly foreigners in entirely external relations to the Empire regarded as a belligerent power. In this regard, they are of foreign nationality, but owing temporary allegiance to the British Crown, enjoying its protection, and to be regarded in large measure as British subjects. In this aspect, the problem raised by the question is whether the Commonwealth has the right in time of war, and as an expedient to send food to the United Kingdom and France—which, as a matter of common knowledge, are not only at war, but are in need of supplies by reason of German submarines,—to refuse a clearance under the municipal statutory law of the Customs Act to a foreign ship voluntarily arriving in time of war, unless the master agrees to carry a cargo of wheat for the Government from Australia to the United Kingdom. This is not the question of an embargo for considerations of security of which the Executive must be the sole judge (see Chitty on the Prerogative, pp. 48 and 172). It is a definite question whether in law the one specific ground of the refusal is justifiable.

A good deal of argument has taken place based on the cases of In re a Petition of Right[12] and The Zamora[13]. The contention on the one side was that though "requisition" of the vessel with compensation would have been intra vires, nothing short of that would be—for instance, an embargo considered by the Crown to be necessary for the public safety. On the other side it was urged that property of a foreigner may be taken equally with that of a subject without any right on the part of the owner to compensation, but subject to a diplomatic liability to his Sovereign to compensate the owner. From this it was deduced that anything short of total acquisition—such as temporary user—of a foreign ship is equally permissible and equally free of compensation.

In our opinion, the question as it arises in this case is not confined to property. The requirement of the Commonwealth was that the aliens should themselves engage in the service of the Commonwealth as well as permit their property to be used. To some extent this appears to be recognized as permissible. In Hall's Foreign Jurisdiction, at p. 171, it is said that an alien "in return for the protection which he receives, and the opportunities of profit and pleasure which he enjoys, is liable to a certain extent at any rate, in moments of emergency, to contribute by his personal service to the maintenance of order in the State from which he is deriving advantage, and under some circumstances it may even be permissible to require him to help in protecting it against external dangers." At p. 172 it appears that during the American Civil War Lord Lyons was instructed accordingly. But, in the authorities which we have been referred to or have seen, there is not any statement showing that the mere fact of war supports an attempt to compel aliens to personally enter into the King's service outside the territory, and on the open sea, and while there to risk capture or death at the hands of the enemy. Any such act, if justifiable at law, must be justified by emergency under the war power specially pleaded.

It would be most unwise, even if possible, to endeavour by anticipation to state the circumstances which alone would justify the acts complained of. In view of the fact that par. 12 is pleaded and remains to be proved, if it can be proved, we abstain from entering further into the position of the parties, apart from that paragraph. We must not be understood as saying that the war power does not on The Zamora principle enable the Crown—quite independently of the direct international aspect—to refuse a clearance if it considers the public safety demands such a refusal. But, in view of the actual state of the pleadings, that is largely a hypothetical question and further answer might embarrass or prejudice the just result of the case.

(1)

As to the demurrer in par. 2 (a) of the replication:—The law necessarily requires the making of an actual application as a condition precedent to the Collector determining whether a clearance should be granted or not. Once an application is made, the other requirements of law mentioned are not conditions precedent to the application being "dealt with," but are conditions precedent to its being granted.

(2)

As to par. 2 (b) of the replication:—The failure to comply with those requirements affords no defence to this action in view of the refusal to consider any application whatever.

(3)

As to par. 3 of the replication:—(a) The answer depends on what is proved under par. 12 of the defence; (b) the ultimate fact as alleged includes all necessary constituent facts: demurrer therefore does not lie, though further particularity may be required. (c) We have had no argument addressed as to the special position of a foreigner who is also the subject of an allied power. (d) This, apparently directed to show the impossibility of "act of State," has been already sufficiently dealt with.

(4)

As to the questions of law raised by par. 4 of the replication we answer as follows:—(a) Yes. (b) Yes, against the Commonwealth, unless the facts admissible and proved under par. 12 of the defence establish a justification under the war power. (c) Yes.

The plaintiffs in twenty-six paragraphs of their statement of claim set out a vast quantity of evidence, and continue thus:—(27) "The plaintiffs submit that the action of the defendant Comptroller-General of Customs in refusing to grant a clearance as aforesaid or to deal with an application for the same was wrongful and the plaintiffs claim to recover from the said defendant and from the defendant Commonwealth of Australia the damages suffered by them as herein set out in respect of and consequent on the said refusal." (28) "The plaintiffs further submit that the action of the defendant Commonwealth of Australia in directing the said Comptroller-General of Customs to refuse to grant a clearance for the said ship unless a cargo of wheat was shipped was wrongful and the plaintiffs claim to recover from the defendant Commonwealth of Australia the damages suffered by them as herein set out consequent on the compliance of the said Comptroller-General of Customs with such directions as aforesaid."

In order to support their claim with respect to the alleged refusal to grant a clearance, they state in par. 14 that "Nothing has been done or omitted up to the said twenty-sixth day of August by the said master in connection with the said ship or the discharge or loading of the same or in any matter in connection therewith in contravention of the Customs Act 1901-1910 or the regulations thereunder or in contravention of the provisions of any other Statute or regulations so as to disentitle the said ship to a clearance."

To this the defendants plead in par. 8 of the defence:—"As to par. 14 of the amended statement of claim the defendants say that the plaintiffs failed to comply with certain requirements of law a compliance with which was a condition precedent to the granting by the Comptroller-General or Collector of Customs of a certificate of clearance for the said vessel. These requirements were inter alia as follows." (The requirements are then set out.)

The plaintiffs in their replication say:—(2) "The plaintiffs demur to so much of the defendants' statement of defence as is contained in the 8th paragraph thereof and say that the same is bad in law on the following grounds:—(a) That the requirements of law in the said paragraph referred to are not conditions precedent to the right of the plaintiffs to have an application for a certificate of clearance dealt with by the Comptroller-General or Collector of Customs. (b) That the alleged failure of the plaintiffs to comply with the said requirements of law affords no defence in this action to the defendants or either of them. And on other grounds sufficient in law."

Par. 8 of the defence relies on the non-performance of the alleged requirements only as an answer to the allegation in par. 14 of the statement of claim that there have been no acts or omissions by the ship master, &c., which would disentitle the ship to a clearance, and has no reference to the alleged refusal to deal with the application. Par. 2 of the replication treats it as if it purported to be an answer to the plaintiffs' cause of action founded on the refusal to deal with the application. The demurrer is bad. Par. 8 of the defence, if proved, would sufficiently answer the allegations contained in par. 14 of the statement of claim and the claim based upon such allegations. Par. 15 of the statement of claim alleges that the plaintiffs were excused by the defendants from a compliance with the requirements of the Act and regulations, but that question is not touched by par. 8 of the defence or by the demurrer.

Par. 12 of the defence runs thus: "The defendants further say that the alleged refusal to grant a certificate of clearance to the said vessel and the imposition of the alleged restrictive conditions in regard to the granting of such certificate in so far as the same were acts of the defendants or either of them were acts of a belligerent power in right of war and are not justiciable in this Court."

Par. 3 of the replication is as follows: "The plaintiffs demur to so much of the defendants' statement of defence as is contained in the 12th paragraph thereof and say that the same is bad in law on the following grounds." (The grounds follow.)

In my opinion par. 12 of the statement of claim alleges that the acts there referred to were done by the Commonwealth of Australia as a belligerent power or by the Comptroller-General of Customs as its officer. If this be its meaning, it is enough to say that the Commonwealth is not a belligerent power. But my learned brothers agree in thinking that it may be read as setting up and relying on the power and prerogative of the King and on the fact that whatever was done by the defendants was done on his behalf and by his authority. If this wide interpretation be given to the language of par. 12, it is impossible to say that the defendants might not under it prove some facts which would afford justification for their conduct. In that view the demurrer must fail.

In addition to demurring to the defendants' pleadings, the plaintiffs in effect proceed to demur to their own. They submit certain questions of law for our consideration, which as amended at the instance of my brother Isaacs run thus:—(a) "Whether under the circumstances alleged in the statement of claim the defendant Commonwealth of Australia is responsible for the acts and omissions of the defendant Comptroller-General of Customs alleged in the statement of claim." In par. 22 of the statement of claim the plaintiffs state that, in the matters therein set out, the Comptroller-General of Customs was acting under the directions of the Commonwealth of Australia. If so, the Commonwealth of Australia is clearly responsible for his acts and omissions alleged in the statement of claim. (b) "Whether under the circumstances alleged in the statement of claim the plaintiffs are entitled to maintain this action against the defendants or either of them although no formal application was made for a certificate of clearance." The statement of claim alleges facts from which it might properly be inferred that the Commonwealth of Australia directed that the ship should not be permitted to leave port unless loaded with wheat and that the master should be so informed, and that in pursuance of the purpose and by the direction of the Commonwealth of Australia the Comptroller-General of Customs directed that a clearance should not be granted so that the ship might not be able lawfully to leave port. If these facts are proved at the trial and such an inference is drawn, the plaintiffs will be entitled to maintain their action against both defendants although no formal application was made for a certificate of clearance. The ship master was in my opinion at liberty to accept the intimation that his ship would not be permitted to leave port and consider it detained by force majeure unless and until he consented to carry a cargo of wheat. (c) "Whether the defendant Comptroller-General of Customs is an officer within the meaning of secs. 221 and 225 of the Customs Act 1901-1910 or of either of the said sections." I agree with the other members of the Court in thinking that the Comptroller-General of Customs is an officer within the meaning of these sections.

Plaintiffs' first demurrer allowed, and their second demurrer overruled. Questions raised as points of law in par. 4 of the plaintiffs' replication answered as follows:—(a) Yes. (b) Yes, against the Commonwealth, unless the facts proved under par. 12 of the defence establish a justification under the war power. (c) Yes. Costs to be costs in the action.

Solicitor for the defendants, Gordon H. Castle, Crown Solicitor for the Commonwealth.

[1] [1906] HCA 92; 4 C.L.R., 97.

[2] L.R. 7 Q.B., 387.

[3] 12 Q.B.D., 461.

[4] [1854] EngR 89; 9 Ex., 404.

[5] 5 App. Cas., 214.

[6] 12 Ch. D., 522.

[7] (1910) A.C., 22, at p. 31.

[8] 21 Q.B.D., 52, at p. 57.

[9] (1891) A.C., 455.

[10] (1906) 1 K.B., 613, at p. 639.

[11] (1916) 2 A.C., at pp. 106-107.

[12] (1915) 3 K.B., 649.

[13] (1916) 2 A.C., 77.

High Court of Australia

Zachariassen v Commonwealth [1917] HCA 77; (1917) 24 CLR 166 (20 December 1917)

HIGH COURT OF AUSTRALIA