Papua New Guinea Law Reports - 1967-68
[1967-68] PNGLR 239
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
ADMINISTRATION OF THE TERRITORY OF PAPUA AND NEW GUINEA
V.
THE CHINA NAVIGATION COMPANY LIMITED
Port Moresby
Minogue J
30-31 October 1967
1 December 1967
CUSTOMS - Statute - Construction - Carriage of goods by sea - Loss of goods unshipped under Collector’s permit - Carrier not liable to consignee for value of goods - Customs Ordinance 1951-1959, s. 69*[cccix]1 .
Section 69 of the Customs Ordinance 1951-1959 does not impose on a carrier in favour of the consignee a liability over and above the liability under the contract of carriage. The risk referred to in the section is primarily the risk of liability to customs duty and it must be a risk vis-à-vis the Customs authorities.
Semble:
(1)      If s. 69 imposes a duty on the carrier a risk beyond the risk of liability to Customs duty (a) the parties could contract out of the section, and (b) it would not affect the provisions of a contract of carriage the proper law of which was not the law of the Territory of Papua and New Guinea and which spelt out in some detail the manner of performance.
(2)      The duty of safe-keeping imposed on the master or owner under the prescribed form of application for a Collector’s permit is an absolute one so that if the goods are stolen or lost the master or owner would still be liable for the customs duty thereon.
Collector of Customs (N.S.W.) v. Southern Shipping Co. Ltd. (1962), 107 C.L.R. 279, referred to.
(3)      The undertaking for safe keeping may also have the effect of indemnifying the Collector against any liability incurred through the neglect or wilful act of one of his officers; sed quaere whether such a liability may be within the risk contemplated by s. 69.
(4)      Section 135*[cccx]2* operates of its own force to impose a liability to Customs duty on the master or owner from the reporting of the cargo until an entry is made and passed for the goods.
Collector of Customs (Vict.) v. Wilh Wilhelmsen Agency Pty. Ltd. (1956), 102 C.L.R. 147, referred to.
Additional cases referred to: R. v. Lyon (1906), 3 C.L.R. 770; C. G. Crespin & Son v. The Colac Co-operative Farmers Ltd. (1916), 21 C.L.R. 205; Hales v. Bolton Leathers Ltd., [1951] A.C. 531, at pp. 548, 554.
Action.
The Administration of the Territory of Papua and New Guinea commenced an action against The China Navigation Co. Ltd. claiming damages for breach of a contract of carriage by sea alleging a failure to keep safely and take care of 139 bags of rice and alternatively claiming in detinue for the return of the said goods or their value. The defendant pleaded that the loss complained of arose after completion of the discharge of the cargo from its ship and that consequently it was exempted from liability under the terms of the bill of lading and, further, that if the said goods should be treated as not having been discharged from the ship the loss arose without its actual fault or privity and without the fault or privity of its agents or servants. The relevant facts appear in the reasons hereafter.
Counsel:
Croft, for the plaintiff.
Yeldham (of the New South Wales Bar), for the defendant.
Cur. adv. vult.
1 December 1967
MINOGUE J:  When this action came on for hearing counsel for both parties informed me they had agreed on the facts material to the issues and a statement of the agreed or admitted facts was handed to me. It reads as follows:
“1.      At all relevant times the defendant was the owner of the M.V. Shansi.
2.       On or about the 24th November, 1964, the plaintiff pursuant to two bills of lading which are tendered herewith entrusted to the defendant for reward certain goods, namely 800 bags of rice, to be safely kept and taken care of by the defendant as carrier for the plaintiff.
3.       On or about the 2nd December, 1964, the said goods were unshipped from the M.V. Shansi and landed at Port Moresby under a Collector’s permit issued under the provisions of the Customs Ordinance 1951-1962 and placed in a place of security approved by the Collector.
4.       The said place of security was owned by the plaintiff and comprised inter alia a shed into which the goods the subject of this action were placed and for the use of which shed Steamships Trading Co. Ltd. paid a fee as licensee to the Collector of Customs. The defendant had no control over the said shed unless it had such control by Steamships if the latter was its agent. There were other areas in the said place of security available to the defendant for storage of the said goods.
5.       The goods were landed on the wharf from the defendant’s vessel by Steamships for which work the latter charged the defendant stevedoring charges.
6.       Wharfage charges were paid by Steamships as agent for the defendant to the Collector of Customs.
7.       The handling charges which covered taking the goods from the ship’s side and placing them in the place of security and any other charges incurred in relation to the goods until they were delivered to the consignee were paid by the plaintiff to Steamships and were retained by it on its own account. There was no pre-existing agreement between Steamships and the plaintiff in relation to such charges.
8.       The practice at the time was that after goods had been in the place of security for more than four working days after the departure of the ship the Collector of Customs charged a storage fee to the owner of the goods, except where such owner was the Administration.
9.       The area adjacent to the main wharf of Port Moresby bounded by a six foot wire fence and the side of two cargo sheds and shown edged in red on the map tendered herewith is a place of security approved by the Collector under s. 69 of the Customs Ordinance.
10.     That the 800 bags of rice the subject of this action were placed in the said place of security.
11.     Whilst the goods were in the place of security they were not in the actual custody of the defendant unless the custody of Steamships was the actual custody of the defendant.
12.     That 661 of the said 800 bags of rice were lawfully removed from the place of security and received by the plaintiff.
13.     That the remaining 139 bags of rice whose value was at all relevant times $991.76 were not lawfully removed from the said place of security.
14.     The plaintiff has requested the defendant to deliver up to the plaintiff the said 139 bags of rice.
15.     That the application for clearance in respect of the Shansi and guarantee to pay duty dated 1st December, 1964, was signed by Steamships as agent of the defendant.
16.     That the Collector’s permit dated 1st December, 1964, in respect of the Shansi was signed by Steamships as agent for the defendant.
17.     That the relevant gate passes were issued by Steamships as agent for the defendant and that goods could not lawfully leave the place of security without the said gate passes.”
It was also agreed that if the plaintiff was entitled to succeed in this action the amount for which it should be entitled to judgment was $495.88.
The two bills of lading referred to were, firstly, what appears to be a standard Department of Territories bill of lading for cargo to be carried from the port of Sydney and, secondly, a New Guinea Australia Line bill of lading. The former contains a clause paramount providing that the provisions of the rules contained in the Schedule to the Sea Carriage of Goods Act 1924 (Cth) (to which I shall hereinafter refer as the “Hague Rules”) are to apply to the contract contained in the bill of lading and for the carrier to be entitled to the benefit of all privileges, rights and immunities contained in such rules as if the same were therein specifically set out. These rules define carriage of goods as covering the period from the time when the goods are loaded on to the time when they are discharged from the ship. Article IV(2) thereof exempts the carrier from responsibility for loss or damage arising or resulting from inter alia,
“(q)    any other causes arising without the actual fault or privity of the carrier or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.”
By virtue of art. VII nothing in the Hague Rules is to prevent the carrier from making any reservation or exemption as to his responsibility and liability for loss or damage in connexion with the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.
A number of such reservations and exemptions are contained in the New Guinea Australia Line bill of lading, and the terms, conditions and exceptions of this document are specifically incorporated into the Department of Territories bill of lading. Those which are or may be material to the issues in this action are as follows:
“2.      During the periods prior to the commencement of the loading of goods on to the ship and after the completion of the discharge of the goods from the ship, the following terms, conditions and exceptions shall apply to the exclusion of any other provisions in this Bill of Lading that may be inconsistent therewith:
(a)      so long as the goods remain in the actual custody of the carrier or his servants (otherwise than as mentioned in sub-clause (b) hereof), the carrier shall not be liable for loss damage or detention arising or resulting from the act neglect or default of the servants or agents of the carrier, nor from any other cause whatsoever arising without the actual fault or privity of the carrier, nor in any event for an amount exceeding the declared value of goods paying freight on an ad valorem basis or the invoice value, whichever shall be least, or in the case of other goods the invoice value or £100 per package or unit, or £25 per cubic foot or half hundred-weight, whichever shall be least, liability for partial loss or damage shall be adjusted at such proportion as the percentage of loss or damage bears to the sum which would have been payable in the event of total loss.
[Sub-clause (b) is not material to this action]
(c)      in all other cases the responsibility of the carrier, whether as carrier or custodian or bailee of the goods, shall begin only when the goods commence to be loaded on the ship and shall cease absolutely when discharge of the goods from the ship is completed.
15.     Discharge and Delivery. The goods may be discharged from the ship as soon as she is ready to unload and as fast as she is able, continuously day and night Sundays and holidays included, on to wharf or quay or other spaces, open or covered, or into store, hulk, lazaretto or lighters, whether insulated, bonded or not, at ship’s option and at the risk and expense of the cargo owners, any custom of the port to the contrary notwithstanding, and always subject to the regulations and conditions of any such wharf or quay, spaces, store, hulk, lazaretto or lighters, whether the property of the carrier or other persons, to which regulations and conditions the cargo owners hereby authorise the carrier to agree on their behalf. . . .
18.     Where Customs at port of transhipment or delivery require any bond or undertaking before permitting the landing or forwarding of dutiable goods, the carrier or his agents or the master are hereby authorised to give such undertaking on behalf of the cargo owners, who shall indemnify the carrier from all liabilities and expenses incurred. The carrier and/or master porter are authorised by the owners of dutiable cargo at any port, during and after discharge, at their sole discretion to incur and pay Customs charges for watching such cargo, which charges the owners thereof undertake to repay, any custom of the port to the contrary notwithstanding.
22.     . . . At any port where, in accordance with Customs regulations, the goods have to be landed into the charge of the Customs or other Authorities, no claims for shortage or damage will be considered by the carrier, beyond that noted by the Authorities at the time of receiving the goods into their charge.”
Because of the defendant’s failure to deliver the missing 139 bags of rice out of the place of security where it was agreed by the parties they were placed, the plaintiff brings this action claiming damages against the defendant for breach of its contract to keep safely and take care of these bags whilst it had them in its care and keeping and, alternatively, claiming in detinue for the return of the goods or their value. To this claim the defendant replied that the loss complained of arose after completion of the discharge of the cargo of rice from its ship and that consequently it is exempted from liability under the terms of the bill of lading and, further, that if the 139 bags should be treated as not having been discharged from the ship the loss arose without its actual fault or privity and without the fault or neglect of its agents or servants.
It was not really contended before me that the custody of Steamships Trading Co. Ltd. was the actual custody of the defendant nor can I see in the admitted facts any room for such a conclusion. Neither was it contended that if the contract for carriage stood alone any action for breach of that contract or in detinue would lie at the suit of the plaintiff, but it was submitted by Mr. Croft (for the plaintiff) that the contract did not stand alone and the plaintiff was entitled to succeed by virtue of the provisions of s. 69 of the Customs Ordinance 1951-1959. That Section reads:
“Goods unshipped and landed under a Collector’s permit shall be placed by, and at the expense of, the master or owner of the ship or the pilot or owner of the aircraft from which they were unshipped, in a place of security approved by the Collector and shall, until lawfully removed from that place, be at the risk of the master or owner of the ship or the pilot or owner of the aircraft as if they had not been unshipped.”
Mr. Croft’s submission was that if the carrier takes advantage of s. 67 in order to turn his ship around quickly and unships goods pursuant to a Collector’s permit he is thereby caught by the operation of s. 69 which creates a fresh relationship between the parties and notionally puts the goods which have been unshipped back on the ship. In such a case he said the carrier can only avoid liability for loss or damage if he can avail himself of the provisions of art. IV(2)(q) of the Hague Rules and the burden of proof being upon him there is nothing in the facts of this case to show that he has discharged such burden. If this contention is correct the plaintiff is entitled to succeed. Mr. Yeldham, for the defendant, submitted that the section is neither apt nor intended to affect a contract of carriage but is directed solely to the protection of the revenue. His broad submission was that having regard to the provisions of cl. 2(c) of the New Guinea Australia Line bill of lading and to the facts which I have set out the defendant did all that it had to do under the contract of carriage and its liability ceased when the goods were discharged from the ship. His major contention was that s. 69 is not designed to nor does it have the effect of altering or affecting the rights and liabilities of the carrier and of the consignor or consignee respectively, but it is part of a scheme whereby safeguards are provided in relation to goods entering the Territory on board ship or aircraft to protect the revenue; or, as he subsequently put it, the Ordinance was one dealing with the public rights of the Territory Administration and its purpose is to regulate what goods shall go out, what goods shall come in and what duties shall be paid thereon. It is not concerned with the rights of parties to a contract and is not an ordinance dealing with private rights at all. If Mr. Yeldham is right then s. 69 is of no avail to the plaintiff and the defendant must succeed.
To understand and conclude on the validity of the defendant’s contention it is necessary to consider the provisions of the Ordinance in some detail. It is intituled “An Ordinance Relating to the Customs”. Following on the preliminary sections and those relating to the administration of the Customs, Pt. III provides for Customs control examination entries and securities (i.e. securities for compliance with the Ordinance) generally. Section 24 provides that goods shall be subject to the control of the Customs:
(a)      as to all goods imported—from the time of importation until delivery for home consumption or until exportation to parts beyond the seas whichever first happens. . . .
(c)      as to all goods subject to any export duty—from the time when the goods are brought to any port or place for exportation until payment of duty.
(d)      as to all goods for export the exportation of which is subject to compliance with any condition or restriction under any Ordinance or regulation—from the time the goods are made or prepared in or are brought into any prescribed place for export until their exportation to parts beyond the seas.
By s. 25 all goods on board any ship, boat or aircraft from parts beyond the seas are made subject to the control of the Customs whilst the ship, boat or aircraft is within the limits of the Territory, and by s. 27 no such goods are to be moved, altered or interfered with except by authority and in accordance with the Ordinance. Goods imported through the post office are similarly made subject to Customs control (s. 29). Sections 30 to 34 provide for entries being made and passed for all goods subject to the control of the Customs. Section 36 provides:
“The Customs shall have the right to require and take securities for compliance with this Ordinance and generally for the protection of the Revenue of the Customs, and, pending the giving of the required security in relation to any goods subject to the control of the Customs, may refuse to deliver the goods or to pass any entry relating thereto.”
Part IV deals with the importation of goods. Section 43 provides that for the purpose of securing the due importation of goods: (a) the ship or aircraft may be boarded; (b) the cargo shall be reported; (c) the goods shall be entered, unshipped and may be examined.
Sections 44 to 50 which comprise Div. 1 of this Part, deal with prohibited imports and imports in relation to which restrictions exist. Division 2 provides for the boarding of ships and aircraft and is designed to ensure that a ship will be brought into a proclaimed port, that facilities shall exist for boarding by Customs officers, and that the ship be not removed from its proper place of mooring or unloading before the discharge of the cargo intended to be discharged at that port. Then Div. 3 deals with the report of the cargo. By s. 57 the master or owner of every ship arriving from parts beyond the seas must make a report of the ship and her cargo by delivering to the Collector of Customs an inward manifest, in duplicate, of goods for that port and the master or owner must answer questions relating to the ship and her cargo, etc., and produce documents relating thereto. If a ship is lost or wrecked upon the coast the master or owner is required as soon as practicable to make a report at the Customs House nearest the place where the ship was lost or wrecked (s. 58). And any dutiable goods from a wreck or found at sea or on shore by any person are to be delivered to the Customs and prohibition exists against interfering with any goods inter alia from a wreck (ss. 59, 60). Division 4 relates to the entry, unshipment, landing and examination of goods. All imported goods must be entered either for: (a) home consumption; (b) warehousing; or (c) transhipment (s. 61). Entries are to be made of the whole of any cargo unshipped or to be unshipped within seven days of the report of the ship and if default is made in entry of goods the Collector may cause them to be removed to a warehouse and if they are not claimed and entries passed therefor within six months after such removal, they may be sold by the Collector (s. 65 and reg. 37). By s. 67, except as prescribed, goods may only be unshipped pursuant to: (a) a Collector’s permit; or (b) an entry passed; and by s. 68 all goods unshipped are to be either landed at a wharf or transhipped to the ship in which they are to be transhipped. Section 69 is the last section of this Division.
Part V deals with warehousing and it is clear from a perusal of ss. 71 to 94 that their whole purpose is to protect the Customs revenue; e.g. by s. 93, warehoused goods may be entered: (a) for home consumption; (b) for export to parts beyond the seas; (c) for removal for warehousing elsewhere; and if the licensee of a warehouse allows goods to be removed from his warehouse except by authority he is bound to pay the duty thereon (s. 82).
Part VI which deals with the exportation of goods begins with prohibited exports and the Administrator is empowered by proclamation to prohibit the exportation of inter alia any goods the exportation of which would, in his opinion, be harmful to the Territory or the prohibition of the exportation of which is in his opinion necessary for the protection of the revenue. Then follows a series of provisions designed to see that export duty is paid and that no prohibited export leaves the Territory. This Part includes a further provision in aid of the collection of revenue upon imports, viz., before a certificate of clearance for a ship or aircraft can be granted all the inward cargo and stores have to be duly accounted for to the satisfaction of the Collector (s. 110).
Parts VIII and IX (ss. 118 to 159) deal with the payment and computation of duties generally. Section 135 provides that if any dutiable goods which are included in the report of any ship or aircraft are not produced to the officer (i.e. of Customs) the master or owner of the ship shall on demand by the Collector pay the duty on the goods as estimated by him unless the goods are accounted for to his satisfaction. A provision designed to ensure full benefit to the revenue is s. 125 which enacts that if any goods enumerated in the tariff are or can be classed under two or more names, headings or descriptions, with a resulting difference as to duty, duty shall be charged when it is a difference between liability to or freedom from duty and the higher or highest of the duties applicable shall be charged when it is a difference as to two or more duties. I pause to note that by s. 118 no goods the property of the Commonwealth of Australia or of the Territory shall be liable to any duty or Customs.
Part X deals with the coasting trade and is designed to prevent smuggling or any other evasion of duty.
Parts XII and XIII deal with the powers of officers and contain penal provisions including forfeiture of goods which are smuggled or unlawfully imported. The final section of the Ordinance (s. 262) provides for the disposition of the proceeds of any goods sold by the Collector under the various empowering sections throughout the Ordinance. These proceeds are to be applied firstly in payment of the expenses of the sale, secondly in payment of the duty, thirdly of the warehouse rent and charges and, fourthly, of the harbour and wharfage duties and freight, if any, due upon the goods, and it is only if any balance remains after these payments that the owner or any other person entitled to the proceeds is to receive anything.
In my view the overall scheme of the Ordinance is to prevent the import or export of anything which may be to the detriment of the Territory either as to the health or morals of its inhabitants or the good order of the country and to ensure by an elaborately designed set of provisions that the revenue benefits to the fullest extent from the extraction of duty in respect of dutiable goods coming into or going out of the country. It remains to be seen if and to what extent s. 69 fits into this scheme.
Section 67 allows only two ways in which goods can be unshipped. One is pursuant to an entry passed. In such a case the duty has either been paid or adequate security given or other provisions of the Ordinance ensure that it will be paid. It is the owner’s responsibility to make the entries (ss. 31, 62, 63) and he is liable for the payment of the duty (s. 139). The ultimate sanction is the sale of the goods. But there are other situations where an entry cannot be made and passed immediately on arrival of the ship. The consignee or warehouseman may not be ready to receive the goods, or may not have completed arrangements for payment of duty; or even the consignee, if he has made a bad bargain, may not wish to claim them. The goods may be for transhipment to another ship which has not yet arrived in port. In all these cases the carrier would wish to unload his ship and proceed with his business of earning further freight. It is to meet these situations that unshipment pursuant to a Collector’s permit is allowed. This is undoubtedly of convenience to the carrier as Mr. Croft submitted. But unshipment in this manner also may well have the result that there is no owner of the goods to whom the Collector can presently look for payment of duty. In the case of transhipment the owner may be in London or Hong Kong or Tokyo. Section 69 fits logically into the scheme and is the only section dealing specifically with the requirements under and effect of a Collector’s permit. The payment of duty is not a condition precedent before the goods can be unshipped in this way and the revenue would be at risk unless some stringent precautions are taken and effective assurances provided. It is only to the master or owner (who by s. 5 in respect of a ship includes every person acting as agent for the owner) to whom the Collector can effectively look at this stage for payment of duty.
With the protection of the revenue in mind it is easy to see that if goods are unshipped under a Collector’s permit very strict precautions must be taken to ensure that they do not pass out of Customs control before duty is paid. As Kitto J. said in the Collector of Customs (Vict.) v. Wilh Wilhelmsen Agency Pty. Ltd.[cccxi]3, quoting from the observations of O’Connor J. in R. v. Lyon[cccxii]4,
“the whole policy of the Customs Act as indicated by a number of sections is that from the time of importation until the time of paying duty the Customs shall not lose control of the articles imported. That is indicated directly in s. 30 (our s. 24) which provides that imported goods shall be subject to the control of the Customs from the time of importation until delivery for home consumption or exportation. The object of that provision if it were necessary to give any reasons for its enactment is obvious; if once goods go into home consumption, that is into circulation, it becomes almost impossible to trace them. The only security the Customs authorities could have in such a case for the payment of duty would be, in most cases, the personal security of the importer. Therefore it is, if the Act is to be effective, that all through the dealings with the goods from the time they are first imported until duty is paid they must be kept under Customs control.”
And Kitto J. went on to point out that although the owner of the goods if they have in fact been imported is personally liable to pay the duty on them (s. 153—our s. 139) his liability may be difficult to enforce in a case where the goods are missing, for rarely will there be in the absence of the goods themselves any evidence admissible against him in a court of the fact of importation, and not always will such particulars of the goods be available as are needed for definite determination of the appropriate amount of duty.
As the Collector’s permit allows the ship to discharge both before the ship’s report and entry of its cargo (see Customs Regulation, reg. 39 and form 25 of the schedule to the Regulations, with which the Collector’s permit in this case—Ex. C—complies) there is a further risk to the revenue to be guarded against and provided for, i.e. that goods which are not included in the ship’s report may be unshipped either in error or with intent to evade the revenue. To guard against such events and consequently against goods, in respect of which there may be no initial check on unloading, passing into home consumption without payment of duty, such a stringent section as s. 69 seems apt.
Mr. Yeldham sought to show that without s. 69 no operation can be given to s. 135 where goods are unshipped pursuant to a Collector’s permit. This argument seemed to me to involve the proposition that s. 135 only applied whilst goods were on the ship, and consequently s. 69 was needed to put them notionally back on board. However, in my opinion s. 135 can operate of its own force from the reporting of the cargo until an entry is made and passed for the goods. In Collector of Customs (Vict.) v. Wilh Wilhelmsen Agency Pty. Ltd.[cccxiii]5 Kitto J. decided that the Australian equivalent of s. 135 (s. 149 of the Customs Act 1901-1950) was sufficient to enable an order for payment of duty to be made against the ship owner where goods had been landed under a Collector’s permit and were not able to be accounted for, and with that view of the section I respectfully agree. Although in that case Kitto J. was not called upon to interpret s. 69 (s. 76 of the Commonwealth Act), he included that section as amongst the “elaborate provisions for ensuring that the unshipping is subject to adequate safeguards for the revenue”[cccxiv]6. And I do not think it unusual in revenue legislation to attempt to close every possible loophole even if repetition or overlapping results. It might be argued, for example, that there is no necessity for the undertakings set out in the Collector’s permit which are made compulsory by reg. 39 and form 25. But in any event s. 135 would not cover the situation I have posited of goods not included in the report being unloaded. Section 69 would cover such a situation.
Mr. Croft strongly urged upon me that the section has a clear meaning which can be determined by looking at the wording of the section itself. A carrier who avails himself of s. 67 and unships goods pursuant to a Collector’s permit must place such goods in a place of security and until lawfully removed therefrom those goods are regarded as being still unshipped and regarded as held in the place of security at the risk of the carrier to the same extent that they would have been if still on shipboard. This he said means that you then look at the agreement contained in the bills of lading to discover the rights and liabilities of the parties whilst the goods are as yet unshipped. But to me the meaning is not so plain or clear as that for which he contends. This is an ordinance relating to the Customs not to contracts of carriage by sea nor to sale of goods nor to marine insurance. The words “goods unshipped and landed under a Collector’s permit ... shall ... be at the risk of the master or owner of the ship ... as if they had not been unshipped” do not, in my view, have an absolute or unqualified meaning of their own force. The nature of the risk referred to must be looked for outside the section. Mr. Croft would have it that the contract of carriage should be looked at to ascertain what that risk is, but this is not as I have said legislation dealing with contracts of carriage and nowhere else in the Ordinance can there be found any reference to such contracts. True it is that s. 138 makes specific provision for altering contracts of sale but the High Court justified the existence of that section by treating it as being necessarily incidental to the taxation power of the Commonwealth in that it existed to remove any unfairness or injustice in the burden of taxation. (See G. G. Crespin & Son v. The Colac Co-operative Farmers Ltd.[cccxv]7)
The difficulty lies in the use of the words “at the risk of ... as if they had not been unshipped” in the section. What kind of risk does it seek to impose? The liability to the risk is laid alternatively on the master or the owner as is the liability to report and to pay duty elsewhere in the Ordinance. I cannot see anything in the section to bring me to the view that the nature of the liability of the one is different from that of the other. I am unable to see what liability the master has personally in relation to the goods whilst they are on board ship other than the liability imposed on him by s. 135 if he fails to account for such goods or some possible liability in tort. The contract of carriage imposes no personal liability upon him and none was suggested to me in any contract of marine insurance or contract of sale. If one supposes goods being shipped from a country in which the Hague Rules have not been incorporated in the legislation and being carried at shipper’s risk, the owner or master is at no contractual risk if the goods are not unshipped, and if the section is directed to the contract of carriage it is difficult, if not impossible in such circumstances, to find any justification for its presence in an ordinance relating to Customs. I think it is relevant to note that this section was first enacted in Australia in 1901, long before the Hague Rules received statutory recognition in any of the maritime countries. I can only conclude that the risk referred to is the risk, primarily at any rate, of liability to duty, and so I am of opinion that s. 69 does not and cannot have the effect of imposing a liability on the carrier over and above and indeed in direct contradiction to those liabilities contained in the contract of carriage. If there are other risks or liabilities of the master or owner which I have been unable to envisage or comprehend I can discern no warrant in the legislation for imposing on either of them a liability which they do not bear contractually and which can be of no possible concern of the Customs that I can discover, and I would need much more explicit language to compel me to a conclusion different to that at which I have arrived. Whatever the nature of the risk at which the goods are said to be, in my opinion it must be a risk vis-à-vis the Customs.
Whilst the Regulations made under the Ordinance cannot control its construction it is not without importance in my view to consider whether they fit into the construction which I think the section properly bears. (See Hales v. Bolton Leathers Ltd.[cccxvi]8) Section 69 applies only to goods landed under a Collector’s permit. Regulation 39 of the Customs Regulations directs that the Collector’s permit is to be in accordance with the form set out in the schedule to the Regulations. It is important I think to look at that form and I set it out hereunder:
“Reg. 39
Form 25.
TERRITORY OF PAPUA AND NEW GUINEA CUSTOMS
COLLECTOR’S PERMIT—PERMIT TO DISCHARGE SHIPS—BEFORE ENTRY.
Port Of
19    
To the Collector.
I/We/ request permission to unship goods included in the cargo of the ........ from........(or the cargoes of the following ships:— during the month of.........) before the report thereof, or the passing of Customs entries.
I/We undertake—
(a)      To protect all goods landed under this permit;
(b)      To pay all expenses incurred in protecting and storing such goods;
(c)      That all such goods shall be safely kept until they cease to be subject to the control of the ......... Customs;
(d)      On demand to pay an amount equivalent to the Customs duty on any goods shown on the Ship’s Inward Report and not accounted for or delivered to your satisfaction.
Master, Owner or Agent.
Wharf.
Approved—
Collector
19    .”
It will be seen that it provides specific undertakings in regard to the matters that are covered by s. 69. These undertakings are given to the Collector of Customs and to no one else. Undertaking (c) clearly places the goods, whilst in the place of security and before payment of duty by the owner, at the risk of the master or owner of the ship and the clear purpose of that undertaking, considered in conjunction with undertaking (d), in my view is to ensure that the revenue will not suffer. The undertaking appears to me to be framed in much the same way as the duty imposed by s. 60 of the Commonwealth Excise Act 1901-1952 upon a person who has or has been entrusted with the possession, custody or control of excisable goods which are subject to the control of the Customs, to keep those goods safely. This was held to be an absolute duty in Collector of Customs (N.S.W.) v. Southern Shipping Co. Ltd.[cccxvii]9, and I am of the view that the duty imposed by undertaking (c) is absolute. So that if the goods were stolen or lost the master or owner would still be liable for the customs duty thereon.
It seems to me that the undertaking may also have the effect of indemnifying the Collector against any liability incurred through the neglect or wilful act of an officer of his—a liability in respect of which he is not protected by s. 28 of the Ordinance. I have in mind the position where an officer of Customs directs the placing of the goods in a place which he knows or ought to know is not secure, and their disappearance therefrom. This sort of liability may be within the risk contemplated by s. 69. However, as this construction was not canvassed before me I prefer to reserve consideration of it. But it does seem to me that the permit required under the Regulations tends to show that it is framed on a view of the construction of s. 69 similar to that I have taken and that the respective rights and liabilities of carrier, consignee and consignor under the contract of carriage are not in the least adverted to nor intended to be dealt with therein.
Mr. Yeldham submitted alternatively that the proper law of the contract between the parties in this case is not that of the Territory of Papua and New Guinea but that of New South Wales, and this being so s. 69 cannot affect the provisions of a contract of carriage which spells out in some detail how the contract is to be performed (see for example, cll. 15, 18 and 22 of the New Guinea Australia Line bill of lading). Whilst the submission was not argued at length, if my conclusion as to the meaning and operation of s. 69 should be in error I am of opinion that the defendant is entitled to succeed on this argument and that the section cannot operate to alter the clear agreement between the parties. In any event, if the section is not one to protect or guard the revenue and is to be construed as affecting contractual rights and liabilities, I cannot see any indication that the parties may not contract out of it and this I would think in this case they have clearly done.
I do not propose to consider Mr. Yeldham’s submission that the Ordinance as a whole has no application where the goods imported are the property of the Administration. This submission was adumbrated rather than argued and as I think it raises matters of considerable complexity and difficulty I would not wish to deal with it without further and fuller argument.
For the reasons which I have endeavoured to state I find for the defendant and there will be judgment accordingly, with costs.
Judgment for defendant with costs.
Solicitor for the plaintiff: S. H. Johnson, Crown Solicitor.
Solicitors for the defendant: J. Irwin Cromie & McCubbery, Port Moresby.

[cccix]* Section 69 of the Customs Ordinance 1951-1959 provides: “Goods unshipped and landed under a Collector’s permit shall be placed by, and at the expense of, the master or owner of the ship or the pilot or owner of the aircraft from which they were unshipped, in a place of security approved by the Collector and shall, until lawfully removed from that place, be at the risk of the master or owner of the ship or the pilot or owner of the aircraft as if they had not been unshipped.”
[cccx]** Section 135 provides: “If any dutiable goods which are included in the report of any ship or aircraft are not produced to the officer, the master or owner of the ship or the pilot or owner of the aircraft shall, on demand by the Collector, pay the duty on the goods as estimated by the Collector, unless the goods are accounted for to the satisfaction of the Collector.”
[cccxi](1956) 102 C.L.R. 147, at p. 156.
[cccxii](1906) 3 C.L.R. 770, at p. 784.
[cccxiii](1956) 102 C.L.R. 147.
[cccxiv](1956) 102 C.L.R., at p. 156.
[cccxv](1916) 21 C.L.R. 205.
[cccxvi][1951] A.C. 531, per Lord Normand at p. 541, per Lord Oaksey at p. 548.
[cccxvii](1962) 107 C.L.R. 279.