R v Australasian Films Ltd [1921] HCA 11; (1921) 29 CLR 195 (14 April 1921)

HIGH COURT OF AUSTRALIA

The King and The Minister for Customs Plaintiffs; against Australasian Films Limited and Another Defendants.

H C of A

14 April 1921

Knox C.J., Gavan Duffy and Rich JJ.

Brissenden K.C. (with him Badham), for the plaintiffs.

Shand K.C. (with him H. E. Manning), for the defendants.

Brissenden K.C., in reply,

The Court delivered the following written judgment:—

April 14

Knox C.J.,

Gavan Duffy and Rich JJ.

The answers to be given to the questions reserved for our consideration depend entirely on the true construction of sec. 241 of the Customs Act 1901-1910. The substantial question of law involved is whether a company can be convicted of an offence against the Act with intent to defraud the revenue. In Mousell Brothers Ltd. v. London and North-Western Railway Co.[1] Atkin J. says:—"I think that the authorities cited by my Lord make it plain that while primâ facie a principal is not to be made criminally responsible for the acts of his servants, yet the Legislature may prohibit an act or enforce 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 a 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 circumstances 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 to avoid payment is necessary to constitute the offence. That is an intent which the servant might well have, inasmuch as he is the person who has to deal with the particular matter. The penalty is imposed upon the owner for the act of the servant if the servant 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 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 calculated to lead 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. Consequently the object of the statute affords no reason for the exclusion 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 a body corporate, and by sec. 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 this section individuals are liable for the acts of their agents, and, as there is nothing in the section to indicate a contrary intention within the meaning of secs. 22 (a) and 24 of the Acts Interpretation Act, it follows that a company is responsible under this section for an act done by its agent in the course of his employment. Sec. 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 effect is to make the fraudulent character of the act an element in determining 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 scale 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 an offence committed against sec. 234 may be convicted under sec. 241 of an intent to defraud the revenue, the offence in the one case 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 secs. 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 sec. 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 furnishing 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 obligations are placed on the owner of goods entered for export; by sec. 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 of undervaluation; and the provisions of Part XI. of the Act (secs. 180-183) authorizing the employment of agents emphasize the fact that the owner is the person primarily subject to the obligations imposed by the Act for the purpose of ensuring the payment of the 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 in doing that act. Adopting the language of Atkin J. quoted above, we think that the principal is liable in any case in which his servant 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 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." 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 responsibility 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 convicted of intent to defraud the revenue in connection with the charges 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 relevant time that the revenue was being or was about to be defrauded, or that any false statement was being or was about to be made, and that no servant or agent of the Company who was employed in connection with the exportation of the films or with the claims for drawback in respect of them had any intent to defraud the revenue.

With regard to the arc lamps imported by the Aeon and Roscommon, we are of opinion that the Company is liable to be convicted 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 in Stephens v. Abrahams[2] 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 s.s. Aeon and s.s.Roscommon respectively.

The costs of this reference will be costs in the action.

Questions answered accordingly.

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

Solicitors for the defendants, Sly & Russell.

[1] (1917) 2 K.B., at pp. 845, 846.

[2] 27 V.L.R., 753; 23 A.L.T., 233.