Messrs Burns Philp and Company recently sold a hulk in Townsville to Messrs Murray and Hoare, the intention of the purchasers being to break her up. It appears that the Sub-Collector has demanded 25 per cent duty on the purchase money.

The vessel (presumably not Australian built) was purchased by Burns Philp and Company in 1887, and has since been used as a coal hulk at Townsville. It is stated that no such claim for duty has, as far as can be ascertained, been hitherto made on vessels sold in Queensland for breaking up, and that no such charge was anticipated by the purchasers, and Burns Philp and Company have asked that the claim should be waived.

From inquiries made by the Customs, it appears that before Federation there is no record of such duty having been charged in Queensland, New South Wales, Victoria or South Australia; but that in Western Australia duty was charged on a valuation.

The Minister for Trade and Customs forwards the papers to me with the following minute (dated 29 July 1902):

Forwarded to the Hon. the Attorney-General for opinion as to liability to duty of portions of the hulk when landed. I do not see that it is possible to maintain a claim on the purchase money simply on the sale. But it seems to me that goods of a dutiable nature but now forming portion of the hulk would on landing be dutiable-just as goods landing on dismantling are dutiable.

When a ship or hulk is brought to Australia and broken up, the materials, so far as they are dutiable goods, are clearly liable to customs duty.

In this case however other considerations arise. It is stated that this hulk, from 1887 until her recent sale, has been used in Townsville as a coal hulk. Under these circumstances it is difficult to hold that the materials, which have been within a Queensland port for so long, are now liable under the Federal tariff. It is true that importation is usually considered as not complete until the goods are landed, or so long as they remain in the custody of the Customs; and section 132 of the Customs Act 1901 provides that all import duties shall be paid at the rate in force when the goods are entered for home consumption. But I do not think that in this case the importation in 1887 can be said to be still incomplete. A coal hulk, not used in any way for navigation, is not a 'ship' within the meaning of the Merchant Shipping Acts: European & Australian Royal Mail Co. Ltd. v. Peninsular & Oriental Steam Navigation Co. 12 Jur. N.S. 909. If this hulk completely lost the character of a ship, and became a floating storehouse permanently situated in the harbour at Townsville, I think it must be considered to have been imported long before the Federal tariff came into force, and not to be liable under the Federal tariff.

In any case, I agree with the Minister that it is impossible to justify a claim for duty on the amount of the purchase money simply.

[Vol. 2, p. 119]