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Tuesday, 21 May 1957

Mr OSBORNE (Evans) (Minister for Air) . - I ask the committee to consider an amendment to proposed new section 35a which is inserted by clause 5 of the bill.

The amendment will have the effect of restoring the bill to the form in which it was originally presented to the Senate. As the bill was originally presented, proposed new section 35a would impose a liability on a person who, havingbeen entrusted with dutiable goods which are subject to customs control either fails to keep those goods safely or, when so requested by a collector, does not account for those goods " to the satisfaction of a Collector ".

By an amendment introduced in the Senate, the words, " based upon reasonable grounds " were added after the words " to the satisfaction of a Collector ". The Government has been advised that, under well-settled provisions of the law, an obligation already rests upon a collector to act reasonably, so that the additional words are not necessary. For reasons which I will explain, the additional words could have results adverse to the cause of good administration, and adverse to the apparent intention of the mover of the amendment in the Senate. Therefore, the Government does not accept the amendment carried in the Senate and asks this House to restore the bill to its original form.

The requirement " to the satisfaction of a Collector " occurs frequently in customs and excise acts, and in regulations and securities under those acts. If this expression is qualified when used in section 35a, and left unqualified in the other instances in which it is used, it could be inferred that some different meaning is to be applied to the expression in section 35a from that applicable when the expression is used in numerous other cases without qualification. Honorable members will appreciate that such a situation is undesirable. The intention of the mover of the amendment was no doubt to prevent a collector from exercising his authority under the section in an arbitrary, capricious or unfair manner and to ensure that such exercise of authority could be brought under the surveillance of our courts. I would like to show that this is already amply assured under the existing law, without the addition of the words added in the Senate.

Mr. JusticeWebb, of the High Court, in his judgment in the case Regina v. the Canadian Pacific Tobacco Company Limited in June, 1952, when considering the meaning of this very expression " to the satisfaction of the Collector ", said that counsel had raised, among other questions, the question " To what extent can a court review the dissatisfaction of a Collector? ". In answering that question, the learned judge said -

It is the failure to satisfy the Collector that finally determines the liability to pay the duty on the deficiency. It is the Collector's want of satisfaction, and not a court's, that is made the test of liability by Section 105. The court must, however, examine the material which was before the Collector to see whether there could have been any reasonable ground for the dissatisfaction of the Collector. But unless the court finds that his want of satisfaction was not honest, or was arbitrary or capricious, or against sound and fundamental principle, or based on some fundamental error or illegal, it cannot interfere.

Later in the same judgment, His Honour cited with approval the following statement of the law from a judgment of the Privy Council -

The Court is always entitled to examine the facts which are shown by the evidence to have been before the Minister when he made his determination. If those facts are in the opinion of the Court insufficient in law to support it, the determination cannot stand. In such a case the determination can only have been an arbitrary one. . . .

This judgment shows that where a person is required to account for goods to the satisfaction of a collector, a collector cannot unfairly or capriciously refuse to be satisfied if evidence which could cause a reasonable person to be satisfied is produced. For these reasons, the Government cannot see the need for the inclusion in section 35a of the words " based upon reasonable grounds ". Such wording does not exist in other provisions of the Customs and Excise Act or in regulations and securities bearing on similar matters, and it is highly undesirable that there should be a difference in the provisions now before the chamber. For these reasons, I now move -

That in proposed new section 35a(1.)(d) the following words be omitted: - " , based upon reasonable grounds ".

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