CUSTOMS DUTY

Evening Post, Volume CXV, Issue 102, 3 May 1933, Page 10

CUSTOMS DUTY

PAYMENT QUESTION

TALKING EQUIPMENT

CLAIM FOR £169 FAILS

Whether under certain, agreements the Western Electric Company (N.Z.), Ltd., was entitled to recover additional duty assessed by the Customs Department on talking-picture equipment from Kemball Theatres, Ltd., was the question the Chief Justice (Sir Michael Myers) had to decide in a case in the Supreme Court today. The Western Electric Company claimed £109 0s 9d in respect of plant that had been installed in the Paramount'and De Luxe Theatres. His Honour gave judgment for Kemball Theatres, Ltd. Mr. A. B. Bux'ton appeared for the Western Electric Company, ,and Mr: H. F. Johnston, K.C., with Mr. L. K. Wilson for Kemball Theatres, Ltd. THE HIRING OF EQUIPMENT. Mr. Buxton said the main object of the Western Electric Company \yas to purchase abroad and import into New Zealand talking-picture equipment. The equipment, so, far as it related to this case, was purchased in America. It was hired out to the various exhibitors, and the practice was tltat it was never sold. In May and June, 1929, the plaintiff company entered into hiring agreements with Mr. Komball, then trading as the Kemball Theatre Company, to lease two talking equipments for the Paramount and De Luxe Theatres. Following the installation of th'o plant the Customs duty on 'it was assessed", and tho amount was paid by Mr. Kemball. On September 25, 1930, the plaintiff compa-ry was notified that Kemball Theatres had become incorporated, and was tc be known as Kemball Theatres, Ltd. At the request of the defendant the Western Electric Company, agreed to transfer the equipment from the W. R. Komball Theatre Company to Kemball Theatres, Ltd., and fresh agreements were duly executed. Tho form of the new agreements differed materially from the old agreements,, tho Western Electric Company having since 1929 made a change in the form of its agreement. A new clause was added relating to the payment of Customs duty. The Chief Justice: Weren't these agreements dealing with equipment .already supplied. Mr. Buxton said that was the position. Tho new agreements did not relate to new equipment. His Honour: .Well, how does this question arise? INVOICE VALUE. Counsel said that in 1931 the Customs Department started to make inquiries in America as to the iuyoice value of the equipment being imported by the Western Electric Company. The equipment came out to New Zealand in pieces, and was assembled here. The original estimate of duty which Mr. Kemball had paid was based on the invoice value. As a result of the Customs Department's inquiries the Department came to the conclusion that tho invoices coming out with the equipment did not show the current domestic value in the United States; The, Customs Department held that the current domestic value of tho bulk of the pieces constituting the plant was really more than the whole plant was being invoiced to the plaintiff company for, and the Department increased the invoice value on all the equipment imported, by ...the company by 20 per cent. Replying to his Honour, Mr. Buxton said that the Customs Department had reassessed the duty, and had added 20 per cent, on equipment already in tho country. Tho Chief Justice: But you see this agreement prima facie is referable to something that is to be installed, not to goods that have already been delivered. Mr. Buxton said that the agreements certainly were shaped to cover goods to bo delivered. The exhibitor, ho pointed out, covenanted to pay any increase in Customs duty. The Western Electrjc Company had' had to pay the increase assessed by the Customs authorities, and it was submitted that under clause 26 of the new form of agreement it was entitled to recover. Hia Honour: I should doubt very much whether the defendant company would knowingly agree to pay another couple of hundred pounds. Mr. Buxton said that when the new agreements were entered into*, it was not known that .tho extra duty would have to be paid". As a result of the Customs Department reassessment the Western Electric Company had had to pay another £7600, included in which was the amount claimed from Kemball Theatres, .Ltd. AGREEMENTS CANCELLED. Mead Wahvorth, assistant managing director of the Western Electric Company, in his evidence, said that in both forms of agreement the defendant company was entitled to'-cancel the agreement on giving six months' notice."1 On July 16, 1931, the defendant gave hotico of cancellation, which was accept*! by his company. On the expiration of the notice the equipments were removed. After hearing Mr. Johnston briefly, hia Honour gave judgment. The view taken by his Honour was that whonthc second agreements were entered into the payments due under the documents had already been paid, and, therefore, tho covenant to pay did not operate. But even if that were not so he thought that tho cancellation before tho payments became due disentitled the plaintiff to recover. His Honour said, that in his opinion the agreements were determined, as were the leases, by the notice of July 16,1931, and he failed to see how the plaintiff could, after accepting notice of determination and, in effect, agreeing to rescind the agreements, subsequently recover from the defendant.