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Pacific Media Publications Pty Ltd v Saun [1990] PGNC 22; N919 (6 April 1990)

Unreported National Court Decisions

N919

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

OS 49 OF 1990
PACIFIC MEDIA PUBLICATIONS PTY LTD
V
(I) PIOUS SAUN - COLLECTOR OF CUSTOMS
(II) THE STATE OF PAPUA NEW GUINEA
(DEFENDANTS)

Waigani

Brown J
6 April 1990

ADMINISTRATION LAW - Right of Review - Judicial Review - Customs Duties - Collector of Customs - Assessment pursuant to classification of items - Customs Tariff Budget Provisions Act Chapter no .... s 3 schedule 2 (Budget Rates of Duty) Items 1097; 1098.

DECLARATIONS - Power of Court to make declarations and to dispose of questions in issue.

Cases Cited:

Thompson v Lyill (1910) AC 409 followed.

Counsel:

I R Peterson, for Plaintiff

D Sode, for 1st Defendant

L Kari, for 2nd Defendant

REASONS FOR DECISION

BROWN J: In December 1989 the plaintiff Company imported a new Catamaran yacht intending to charter the vessel in the waters of Papua New Guinea. The Collector of Customs assessed the yacht for duty at the higher rate on the basis that it was designed “for pleasure or sports”. The plaintiff asserted that it was not so designed and consequently, should attract the lesser rate of duty. The Court considered the appropriateness of the remedy sought, a declaration that the yacht fell within the tariff.

Classification 1097 (the lesser rate)(and consequently) the Collector remove his seals upon payment of such duty at the lower rate and the correct approach in determining the appropriate rate by reference to the primary purpose for which the imported item has been designed and built.

This matter comes by way of Originating Summons seeking declarations that a Motor Vessel, “Taleo Tambu” is for the purposes of the Customs Tariff Budget Provisions Act 1989 such that it should be reclasified as goods so defined in the Customs Classifications item 1097 of the “import rates of duty” provision under that Act. Further the plaintiff seeks an order that upon the payment of that duty calculated in accordance with item 1097 the first defendant remove his seals to permit the plaintiffs use and exclusive possession of his vessel. Consequental on Order 2. that the Controller of Customs make an entry for the vessel pursuant to s 19 [dealing with entries made for customs purposes].

In support of its application the plaintiff filed an affidavit by Mr Alan Beck a Director of the plaintiff company who recited facts as to the acquisition and entry of the vessel which is a 50 ft. catamaran. He also deposed to matters pertinent between the Customs Department and the plaintiff which give rise to these proceedings.

The facts are that the plaintiff sought an indication from Customs as to its attitude about the appropriate rate of duty payable for a proposed tourist charter vessel, the catamaran, which the plaintiff wished to import.

On the 12 October, 1989 the Customs Department advised that the proposed vessel (the catamaran) on the information then at its disposal would attract the luxury rate of duty, under item no. 1098, of 30%.

The prospective importer disputed this assessment and provided all the information before me to substantiate his assertion that the lesser rate of duty is the appropriate rate. The importer had obtained concurrently a license to engage in the coasting trade from the Department of Transport. That license required for different purposes is not a determination so far as customs duties are concerned for the purposes of classification. I find the plaintiff has by such an application a genuine intention to carry on business as a commercial enterprise, i.e. the carriage of tourist and charter parties about the coastal waters of Papua New Guinea.

Further representations were made to customs without any reassessment. On about the 15 December, 1989 a Customs Entry was made in respect of this vessel. Such entry resulted in Customs raising a charge pursuant to its tariff classification on an amount of K174,315.00, the value of the yacht for duty purposes, at the luxury rate. This duty amounted to K52,294.73. The plaintiff has refused to pay alleging the proper rate is 9% Classification Item 1097, the lower rate.

Classification 1097 says -

“All goods (except yachts and other vessels designed for pleasure or sports, whether motorised or not and trawlers and other fishing vessels, factory ships and other ships used in activities directly concerned the fishing operations - 9%”.

Classification 1098 -

“Yachts and other vessels, designed for pleasure or sports whether, motorised or not - 30%”.

After the yacht had arrived in Papua New Guinea, further negotiations were had between the parties and the plaintiff sought an opinion as to “purpose” of the Chief Marine Surveyor of the Department of Transport. He says the vessel is a commercial charter yacht basically for the purposes of tourism in Papua New Guinea. The designer a Mr. Ron Given of Auckland, New Zealand also advised that on request the yacht was “designed for charter use” and that forms part of the affidavit of Mr. Beck as annex “I”. I quote [“On this basis all construction parameters used were to ABS (American Bureau of Shipping) guidelines and the craft is basically a sister ship for other catamarans from my design office that have already build up a record of safety, and structural integrity in the Pacific area”]. The design was requested by Mr. Barry Smith of Export Multi-Hulls Limited, specifically for charter use including off-shore sailing capabilities. And he refers of course to “Taleo Tambu” the catamaran.

All this information had been made available to the Controller of Customs.

On the 31 January, 1990 customs seals were placed on the yacht to prevent its continued use. I should say that the plaintiff has supporting evidence of extensive charter bookings from the 28 February 1990 through to the 30th December, 1990. I should also say that I was impressed at the hearing by this matter by the agent of the plaintiff. He appeared properly dressed in appropriate dress as a charterer of a yacht of this standard.

I must first ask myself whether I have power to grant a declaration in these circumstances.

Mr. Sodi for the first defendant the Controller of Customs says that s 176 of the Customs Act is inclusive of all avenues of redress.

Section 176 is found in part 14 headed “Disputes as the Duty”. Section 176 “Payment under protest -

(i) ـ I60; If a dispute arises as to the amount or rate of duty on any goods or the liability of any goods to duty under any customs tariff, the&ـ owf thes may pay under protest the sthe sum demanded by the Collector as the dthe duty puty payablayable in respect of the goods.

(ii) teproundt subrection (1) (1) shall be made in writing on the entry of the goods the words paid under protest and having a statement of the goods the grounds on which the protest is made and if the entry relates to more than one description of goods, the goods which the protest applies followed by the signature of the owner of goods or his agent”.

Further, that section provides for a right in the owner of goods to bring proceedings against the Collector, in any Court of competent jurisdiction for recovery of the whole or any part of the sum paid i.e., to recover what is asserted to be an over-payment of duty.

I do not agree with Mr. Sodi’s submission on that point. It would take a particularly worded statement in the act to oust the general jurisdiction of this court to grant the relief sought. It is not enough to point to this section (which deals with recovery of duty over-paid) as evidence of exhaustive rights in an importer aggrieved by an assessment in duty.

In a decision of Lord Mersey [Thompson v Gill (1910) A.C. 409] he says -

“I come to the conclusion there is nothing in the Act of Parliament and nothing in the authorities which constrains your Lordships at arriving at a decision which arrived at would deprive the appellant of the remedy to which otherwise he is undoubtedly entitled”.

The decision Mr. Sodi wishes me to arrive at would mean either the vessel owners pay the assessed duty and exercise the rights found in s 48 or suffer the consequences. This plaintiff then would be deprived of a review by a judicial tribunal of the exercise of the Controllers powers. I cannot read such a restrictive indication into Section 47. As I say the authorities running from that appeal case through to the present day require a very specific legislative intent if a review of an administrative act is to be denied courts especially this National Court with its wide powers.

I must be satisfied however that such coersive relief as is sought here should be given. I am so satisfied for it will settle the matters in dispute between these parties once and for all.

I must then turn to the particular wording of the Customs Tariff Budget Provision schedule dealing with rates of duty. The exceptions in Item 1097 are “yachts and other vessels designed for pleasure or sports”.

The fact that a motor vessel is a yacht does not disentitle it for that reason alone from the lower rate of duty. The question is whether “it is designed for pleasure or sports”.

The only evidence before this court on that crucial aspect is that of the plaintiff. He says it is designed for commercial purposes. I am so satisfied it was. But it may also have been designed for pleasure, and for a commercial purposes. Such purposes are not necessarily mutually exclusive. But I am satisfied that the vessel was not principally designed for pleasure or sports. It may be incidental that it is pleasurable but its design criteria were not solely for pleasure, rather principally for commercial use.

It is for instance far larger than catamarans commonly used for pleasure or sports. Its design criteria permits carriage of large groups and I find that large groups need not necessarily be pleasurable. Its sail configuration means that its sails are ancillary to its main engine. A yacht is primarily seen as a sailing craft, but while this vessel sails the fact that it can is incidental to its principal purpose. I accordingly find it is not designed for pleasure or sports. It follows then that it should be assessed for duty pursuant to item 1097 at the rate of 9%.

I also have had regard to the Papua New Guinea five year tourism development plan which appeared to have been approved by the National Executive Council decision 161/1989. It would appear on the basis of the matter set forth in that development plan (which anticipates a lessening of duties to advance tourism) that the importer has brought the yacht into the waters of Papua New Guinea to assist with such tourism development. Nevertheless on the law as it now stands I consider the plaintiff entitled to his declaration.

I accordingly make orders in terms of paragraphs 1, 2 and 3 of the originating summons dated 27 March, 1990. I further order that the first and second defendant pay the plaintiff’s costs to be assessed or taxed. I further order that these orders be taken out forthwith.

The basis of my cost order is of course shortly that the plaintiff is entitled to his cost of successfully pursuing this cause.