Broken Hill Associated Smelters Pty Ltd v Collector of Imposts (Vic) [1918] HCA 29; (1918) 25 CLR 61 (22 May 1918)

The Broken Hill Associated Smelters Proprietary Limited Appellant; and The Collector of Imposts for Victoria Respondent.

The necessary facts may be shortly stated. The appellant Company effected in England marine insurances with His Majesty's Government under His Majesty's Government's War Risks Insurance Scheme, provision for which was made by the Imperial Act 5 Geo. V. c. 11. The appellant made declarations under the Government certificates of insurance. The amount of premiums paid as premiums on these declarations was £18,287 8s. 1d. The appellant had also effected marine insurances in England with Lloyd's, had made declarations and paid £6,321 17s. 5d. premiums in connection therewith.

The Crown asserted the appellant's liability to take out an annual licence under the provisions of sec. 98 of the Victorian Stamps Act 1915, and claimed that the duty payable by the Company should be determined by taking into consideration both sets of premiums. This case raises no question with respect to the Lloyd's insurances or the sum of £6,321 17s. 5d. paid in connection therewith. It is confined to one question, namely, whether the sum of £18,287 8s. 1d. should have been taken into account by the Collector in fixing the sum of £500 as duty.

Upon the language of sec. 98 the appellant's liability, if it exists, in respect of that sum, depends upon the co-existence of two factors, viz., that within the meaning of the section—(1) the "company person or firm" who "makes a declaration" includes a company in the situation of the appellant, and (2) the "company person or firm of persons" by whom the policy is issued includes His Majesty's Imperial Government acting under the British war scheme. If either factor be wanting, the question must be answered in favour of the appellant. We find it unnecessary to deal with the first factor, because we are clearly of opinion that the second does not exist.

The Victorian legislation as to "Annual Licences in relation to Assurance &c." contained in the group of sections 84 to 99 inclusive of the Stamps Act 1915 does not, in our opinion, include His Majesty's Government acting in relation to the war scheme. That legislation forbids "every company person or firm of persons whether corporate or unincorporate" from carrying on insurance business in Victoria except under annual licence from the Collector of Imposts, for which a variable fee must be paid. Power is given to summon persons, examine on oath, compel production of documents, and to impose fines for carrying on unlicensed business. Contracts of marine insurance are declared null and void unless made by a licensed insurer, or by one publicly held out as licensed under the Act.

We may apply to the section the language of the Privy Council in Attorney-General for New South Wales v. Curator of Intestate Estates[1]:—"The question therefore arises whether the present Act binds the Crown. The Crown is not named in it, nor can their Lordships see any clear indication of an intention to bind the Crown. Primâ facie, therefore, the Crown is not affected by it." There should be added the circumstance that in sec. 17 in another connection the Crown is expressly mentioned. The silence of the Act with reference to the Crown in relation to insurance is, therefore, doubly significant.

It was said that the present case does not attempt to affect the Crown but the subject only. That, however, is not an answer, because if the appellant is liable in respect of the £18,287 8s. 1d. paid to His Majesty's Government, it is because that Government is a "company person or firm" forbidden under penalty from issuing similar certificates of assurance in Victoria, unless licensed by the Victorian Collector of Imposts and paying duty on the premiums it receives here.

It was also argued that His Majesty's Government by engaging in marine insurance did not quoad hoc occupy the position of Sovereign but that of trader, and so took upon itself the ordinary character of "company person or firm" within the meaning of the term of the Act. But, notwithstanding the views so clearly and forcibly expressed by Cussen J., we think that no such character can be attributed to the scheme under the Imperial Act. In the first place it is unduly straining the meanings of the terms "company person or firm" as used in the Victorian Act to apply any of them to His Majesty's Imperial Government at all. (See Sloman v. Governor and Government of New Zealand[2].) As to the scheme itself, it is a war measure, not a trading system. For the encouragement of Imperial transport for the purpose of utilizing the maritime resources of the Empire as a necessary and effective means of maintaining natural supplies and defeating the common enemy, the Sovereign through his Government undertakes what are called in the Imperial Statute "Government war obligations," which include the insurance against the risk of destruction of property at sea by the King's enemies. Whatever the agencies employed to carry out the scheme, whether they be corporate or unincorporate, they are but instrumentalities of His Majesty's Government, which means the Crown itself, as the principal for the more effectual prosecution of the War. Such an operation so carried out is in our opinion entirely outside the scope and object of sec. 98 of the Stamps Act, which therefore on ordinary principles of construction does not apply to such transactions as are involved in the question we have to consider. Consequently, without offering any opinion as to the first necessary element of the appellant's liability, we think that the appeal should succeed.

The appellant Company effected insurances against "King's enemy risks" with the British Government under His Majesty's Government's War Risks Insurance Scheme, and it is contended for the respondent that such insurances were effected with "a company person or firm of persons outside Victoria" within the meaning of section 98 of the Stamps Act 1918. I cannot accept this contention. I am disposed to think that these words have reference only to companies and individuals carrying on the business of insurance for profit in the ordinary way, but, be this as it may, I am satisfied that they do not include His Majesty's Government carrying on a great national undertaking for the purpose of encouraging British commerce by distributing the loss that must arise from capture by the enemy during the War of ships and cargoes in course of sea transit. The object of sec. 98 was to prevent evasion of the liability to pay duty in respect of licences to carry on ordinary marine insurance business within Victoria, and to protect those who had paid duty from undue competition by trade competitors who had not done so. This object cannot be attained nor can its attainment be facilitated by imposing a pecuniary obligation on persons within Victoria who avail themselves of the scheme designed and administered by the British Government for the protection of British commerce.

A further argument was made for the appellant Company before us which was not addressed to Cussen J. It was said that as the insurances which it had effected were in respect of its own goods, they did not come within sec. 98, which applied only to companies and persons insuring or assisting to insure the goods of others and doing this in the course of their business. It is unnecessary to determine this point, and, like the other members of the Court, I abstain from offering any opinion on it.

Appeal allowed with costs. Question answered in the negative. Respondent to pay costs of special case. Order that amount overpaid be refunded.

[1] (1907) A.C., 519, at p. 523.

[2] 1 C.P.D., 563.

High Court of Australia

Broken Hill Associated Smelters Pty Ltd v Collector of Imposts (Vic) [1918] HCA 29; (1918) 25 CLR 61 (22 May 1918)

HIGH COURT OF AUSTRALIA