[HOUSE OF LORDS]

AND

Conflict of Laws - Jurisdiction - Forfeiture - Goods unlawfully exported from New Zealand - Provision that unlawfully exported goods "shall be forfeited" to Crown - Whether forfeiture automatic - Historic Articles Act 1962 (No. 37 of 1962) s. 12

Section 12 (2) of the Historic Articles Act 1962 of New Zealand provided:

"An historic article knowingly exported or attempted to be exported in breach of this Act shall be forfeited to Her Majesty and, subject to the provisions of this Act, the provisions of the Customs Act 1913 relating to forfeited goods shall apply to any such article in the same manner as they apply to goods forfeited under the Customs Act 1913."

Section 5 (1) ¹ provided that it was unlawful for any person to remove an historic article from New Zealand, knowing it to be an historic article, without written permission. As from January 1, 1967, the Customs Act 1913 was replaced by the Customs Act 1966.

The plaintiff, suing on behalf of the Crown in right of the Government of New Zealand, brought an action alleging that a Maori carving that was found in New Zealand in about 1972 and was an "historic article" within the meaning of the Act of 1962, was removed from New Zealand with no certificate of permission as required by the Act by the third defendant, who knew that the carving was an historic article, and that the third defendant later sold the carving to the first defendant who in turn offered it for sale by auction by the second defendants in London. The plaintiff claimed that the Crown was the owner and entitled to possession of the carving, and he sought an injunction restraining the sale and an order for delivery up of the carving. A trial was ordered of two preliminary issues, namely, whether on the facts alleged the Crown was the owner and entitled to possession of the carving pursuant to the Historic Articles Act 1962 and the Customs Acts 1913 and 1966, and whether in any event the provisions of those Acts were unenforceable in England as being foreign penal, revenue and/or public laws. Staughton J., giving judgment for the plaintiff, held that the Customs Acts 1913 and 1966 provided for forfeiture of goods only when the goods were seized, but that section 12 (2) of the Act of 1962 was ambiguous, and that having regard to the purpose of that Act, namely to secure the enjoyment of historic articles for the people of New Zealand, forfeiture, and hence the passing of title to the Crown, under section 12 (2) occurred automatically when goods were exported or attempted to be exported illegally. On the second preliminary issue, he held that section 12 was enforceable in England. The Court of Appeal allowed an appeal by the first and third defendants on the ground that forfeiture under section 12 (2) was not automatic. The court also indicated, in relation to the second preliminary issue, that that section was unenforceable in England.

On appeal by the plaintiff, on the question raised by the first preliminary issue: -

Held, dismissing the appeal, that on the true construction of section 12 of the Historic Articles Act 1962 and the relevant provisions of the Customs Act 1966, forfeiture under section 12 (2) of the Act of 1962 took effect only when the historic article was seized by the New Zealand customs or police, and not automatically immediately the article was exported; and that since no seizure had taken place, the Crown was neither the owner nor entitled to possession of the carving (post, pp. 41C-F, 42D-E, 48D-E).

Per curiam. No conclusion is expressed as to the correctness or otherwise of the Court of Appeal's opinions, which were obiter, on the second preliminary issue (post, pp. 46C-E).

Decision of the Court of Appeal, post, p. 13E; [1982] 3 W.L.R. 570; [1982] 3 All E.R. 432 affirmed.

No cases are referred to in the opinion of Lord Brightman.

1 Historic Articles Act 1962, s. 5 (1): see post, pp. 42H - 43A.

The following cases were cited in argument in the House of Lords:

Daganayasi v. Minister of Information [1980] 2 N.Z.L.R. 130.

Dalmia Dairy Industries Ltd. v. National Bank of Pakistan [1978] 2 Lloyd's Rep. 223, C.A.

Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251; [1980] 3 W.L.R. 209; [1980] 2 All E.R. 696, H.L.(E.).

Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse [1923] 2 K.B. 630, C.A.; [1925] A.C. 112, H.L.(E.).

Smith v. McArthur [1904] A.C. 389, P.C.

The following cases are referred to in the judgments in the Court of Appeal.

Annandale, The (1877) 2 P.D. 179; 2 P.D. 218, C.A.

Apollon, The (1824) 9 Wheat. 362.

Attorney-General v. Parsons [1956] A.C. 421; [1956] 2 W.L.R. 153; [1956] 1 All E.R. 65, H.L.(E.).

Banco de Vizcaya v. Don Alfonso de Borbon y Austria [1935] 1 K.B. 140.

Brokaw v. Seatrain U.K. Ltd. [1971] 2 Q.B. 476; [1971] 2 W.L.R. 791; [1971] 2 All E.R. 98, C.A.

Cable (Lord), decd., In re [1977] 1 W.L.R. 7; [1976] 3 All E.R. 417.

Congreso del Partido, I [1983] 1 A.C. 244; [1981] 3 W.L.R. 328; [1981] 2 All E.R. 1064 H.L.(E.).

Don Alonso v. Cornero (1611) Hob. 212; 2 Brownl. 29.

Foster v. Driscoll [1929] 1 K.B. 470, C.A.

Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251; [1980] 3 W.L.R. 209; [1980] 2 All E.R. 696, H.L.(E.).

Huntington v. Attrill [1893] A.C. 150, P.C.

India (Government of) v. Taylor [1955] A.C. 491; [1955] 2 W.L.R. 303; [1955] 1 All E.R. 292, H.L.(E.).

Isaack v. Clark (1615) 2 Bulst. 306.

Italy (King of) v. Marquis Cosimo de Medici Tornaquinci (1918) 34 T.L.R. 623.

Kahler v. Midland Bank Ltd. [1950] A.C. 24; [1949] 2 All E.R. 621, H.L.(E.).

Lockyer v. Offley (1786) 1 T.R. 252.

Loucks v. Standard Oil Co. of New York (1918) 120 N.E. 198.

Paley Olga (Princess) v. Weisz [1929] 1 K.B. 718, C.A.

Regazzoni v. K.C. Sethia (1944) Ltd. [1956] 2 Q.B. 490; [1956] 3 W.L.R. 79; [1956] 2 All E.R. 487, C.A.; [1958] A.C. 301; [1957] 3 W.L.R. 752; [1957] 3 All E.R. 286, H.L.(E.).

Rex v. Nat Bell Liquors Ltd. [1922] 2 A.C. 128, P.C.

Skylark, The [1965] P. 474; [1965] 3 W.L.R. 759; [1965] 3 All E.R. 380.

The following additional cases were cited in argument in the Court of Appeal:

Aksionairnoye Obschestvo A.M. Luther v. James Sagor & Co. [1921] 3 K.B. 532, C.A.

Austria (Emperor of) v. Day and Kossuth (1861) 3 De G.F. & J. 217, C.A.

Folliott v. Ogden (1789) 1 Hy.B1. 123.

Frankfurther v. W.L. Exner Ltd. [1947] Ch. 629.

Hellenes (King of the) v. Brostrom (1923) 16 L1.L.Rep. 167.

Jabbour (F. & K.) v. Custodian of Israeli Absentee Property [1954] 1 W.L.R. 139; [1954] 1 All E.R. 145.

Lepage v. San Paulo Coffee Estates Co. [1917] W.N. 216.

Oppenheimer v. Cattermole [1976] A.C. 249; [1975] 2 W.L.R. 347; [1975] 1 All E.R. 538, H.L.(E.).

Schemmer v. Property Resources Lid. [1975] Ch. 273; [1974] 3 W.L.R. 406; [1974] 3 All E.R. 451.

INTERLOCUTORY APPEAL from Staughton J.

By writ dated June 26, 1978, as subsequently amended, the plaintiff, the Attorney-General of New Zealand, suing on behalf of Her Majesty the Queen in right of the Government of New Zealand, sought against the first defendant, George Ortiz, the second defendants, Sotheby Parke Bernet & Co., and the third defendant, Lance Entwistle, a declaration that a Maori carving as further particularised was the property of Her Majesty the Queen; against the first and second defendants, an order for the return and delivery up to the plaintiff of the carving and an injunction restraining those defendants from selling, exposing or offering for sale, disposing of or otherwise dealing with the carving; and against the third defendant, damages for conversion. By the first six paragraphs of his statement of claim as amended, the plaintiff alleged as follows:

"(1) The plaintiff brings this action on behalf of Her Majesty the Queen in right of the Government of New Zealand. Her Majesty the Queen is the owner and entitled to possession of a valuable Maori artefact being a series of five Maori carved wood totaro wood panels that formed the front of a food store carved in the Taranaki style. The said artefact is hereinafter referred to as 'the carving.' (2) The carving was found by one Manukonga in a swamp near Waitara in the province of Taranaki, New Zealand, in or about 1972. (3) In or about March 1973 the said Manukonga sold the carving to the third defendant, who was at all material times a dealer in primitive works of art. (4) At all times material hereto there was in force in New Zealand the Historic Articles Act 1962. The carving is an historic article within the meaning of the said Act. Accordingly by virtue of section 5 (1) of the said Act it was unlawful for any person to remove or to attempt to remove the carving from New Zealand, knowing it to be an historic article, otherwise than pursuant to the authority and in conformity with the terms and conditions of a written certificate of permission given by the Minister of Internal Affairs for New Zealand under the said Act. (5) On a date which the plaintiff is unable to specify precisely before discovery herein the carving was removed from New Zealand by or on behalf of the third defendant, who knew that the carving was an historic article within the meaning of the said Act and that the carving was being exported or attempted to be exported. (6) No certificate of permission authorising the removal of the carving from New Zealand had been granted by the Minister of Internal Affairs. Accordingly, by virtue of section 12 of the said Act the carving became and was forfeited to Her Majesty."

On February 25, 1980, Master Warren ordered that the following questions be determined as preliminary issues:

"(1) Whether on the facts alleged in paragraphs (1) to (6) inclusive of the statement of claim herein Her Majesty the Queen has become the owner and is entitled to possession of the carving as therein defined pursuant to the provisions of the Historic Articles Act 1962 and the Customs Acts 1913 and 1966; and (2) whether in any event the provisions of the said Acts are unenforceable in England as being foreign penal, revenue and/or public laws."

On appeal, Comyn J. set aside the order of the master, but on the first and third defendants' appeal, the Court of Appeal restored the master's order but varied it so that the first issue referred to the statement of claim "as amended." On the trial of the preliminary issues, Staughton J. [1982] Q.B. 349 answered the first issue "Yes" and the second issue "No," and gave judgment for the plaintiff accordingly. The first and third defendants appealed.

The grounds of appeal of the first defendant were (1) that, in relation to the first preliminary issue, the judge wrongly construed the phrase "shall be forfeited" in section 12 of the Historic Articles Act 1962 as meaning "shall be automatically forfeited" whereas on its true construction the phrase meant "shall be liable to be forfeited" and in consequence the first preliminary issue should have been answered in the negative; and (2), in relation to the second preliminary issue, that the judge wrongly held that section 12 was neither a foreign penal law nor a foreign revenue law nor a foreign public law whereas in truth the section was one, two or all three of such laws and hence unenforceable in England, and in consequence the second preliminary issue should have been answered in the affirmative.

The grounds of appeal of the third defendant were that (1), in relation to the first preliminary issue, (a) the judge wrongly construed the phrase "shall be forfeited" in section 2 of the Act of 1962 as meaning "shall be automatically forfeited," whereas on its true construction the phrase meant "shall be liable to be forfeited"; (b) the judge, having found that the phrase "shall be forfeited" where it occurred in the Customs Act 1913 and its successor the Customs Act 1966 did not provide for automatic forfeiture but provided only that goods should be liable to forfeiture in certain circumstances with the effect that title passed to the Crown only on seizure or later on condemnation, should not have found that the same phrase had a different meaning in section 12 of the Act of 1962 which expressly provided that the provisions of the Act of 1913 and/or 1966 should apply to historic articles; (c) the judge erred in placing any or excessive weight on the words "subject to the provisions of this Act" in section 12 (2) of the Act of 1962, in giving the phrase "shall be forfeited" a different meaning in that Act from its meaning in the Customs Acts, for there were no relevant provisions in the Act of 1962 to which the phrase was properly subject; and (d) the judge erred in applying the doctrine of purposive construction adumbrated in Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251 by reason that (i) there was no room for the application of the doctrine since the meaning of the phrase to be construed was clear, (ii) where, as in the instant case, the words being construed would have been effective whichever of the constructions contended for was adopted, the doctrine did not require the choice of the most severe construction, a

fortiori when such severe construction was out of accord with the relevant statutory framework, and (iii) the judge failed to attach any or sufficient weight to the evidence that it would not have been part of the purpose of the Act of 1962 to create uncertainty of title, which on the construction contended for by the plaintiff and found by the judge was bound to occur; and (2), in relation to the second preliminary issue, (a) the judge wrongly held that section 12 was not a foreign penal, revenue or public law, whereas in truth it was one or other or all three and hence unenforceable in England; (b) the judge erred in holding that section 12 was not a penal law by (i) failing to give any or sufficient weight to the fact that the section made no provision whatsoever for the payment of compensation by the Crown to the owner of the chattel forfeited, (ii) holding by implication that it would follow from the fact that the purpose of the section was to preserve an historic article as the property of the people of New Zealand, that such a section was not a penal one, and (iii) failing to give any weight to the fact that whereas the said purpose would have been attained by the forfeiture of the chattel together with the payment of compensation, the effect of the section on the construction adopted by the judge would be to preserve the chattel for the people of New Zealand and to mulct its owner of its value (said by the plaintiff to amount to not less than £300,000 in the instant case); (c) the judge erred in applying the test of the characterisation of the English suit rather than the test of whether the enactment of the foreign state which the plaintiff sought to enforce was a penal, revenue or other public law; and (d) the judge erred in failing to hold that it was a principle of English law that the courts of England would not enforce the public laws of a foreign state, and that section 12 was such a public law.

By a respondent's notice the plaintiff sought to contend on the appeal that the judge's order should be affirmed on the additional grounds that (1), in relation to the first preliminary issue, (a) the judge failed to attach any or any sufficient weight to section 5 (j) of the Acts Interpretation Act 1924 of New Zealand, when construing the Historic Articles Act 1962; and (b) if and in so far as it was necessary or legitimate to have regard to the provisions of the Customs Act 1966 for the purposes of construing the Act of 1962, the judge ought to have accepted the plaintiff's submission that the words "shall be forfeited" in the Act of 1966 did not require an act of seizure before forfeiture took effect; and (2), in relation to the second preliminary issue, the judge ought to have accepted the plaintiff's submission that his claim did not involve the extraterritorial enforcement of New Zealand law.

The facts are stated in the judgment of Lord Denning M.R.

Counsel's argument on the second preliminary issue only is reported. For argument in the House of Lords on the first preliminary issue, see post, p. 35G et seq.

Colin Ross-Munro Q.C. and Gerald Levy for the third defendant. Section 12 of the Historic Articles Act 1962 is a foreign penal law. It is not sought to argue that it is a revenue law. Staughton J. [1982] Q.B. 349 was wrong to hold that there is no residual third category of "other public laws," and

rule 3 in Dicey & Morris, The Conflict of Laws, 10th ed. (1980), vol. 1, pp, 89-90, stating that there is, is correct.

Two preliminary points are probably not in dispute. (1) For the purpose of the rule that foreign penal, revenue or other public laws are unenforceable in England, New Zealand is a foreign sovereign state, within Government of India v. Taylor [1955] A.C. 491. (2) It is for the English court to determine the characterisation of foreign penal etc. laws.

The cases establish five broad propositions. (1) English courts will not enforce penal, revenue and other public laws of a foreign country. (2) English courts will recognise penal, revenue and other public laws of foreign states, in order for example to enforce a contract: Foster v. Driscoll [1929] 1 K.B. 470. (3) English courts recognise transfers of title pursuant to foreign nationalisation, expropriatory or confiscatory legislation if the asset was within the jurisdiction of the foreign state at the time of the transfer: Aksionairnoye Obschestvo A.M. Luther v. James Sagor & Co. [1921] 3 K.B. 532. (4) Transfers of title, as in (3), will not be recognised if the asset was in England at the time of the transfer: Frankfurther v. W.L. Exner Ltd. [1947] Ch. 629. (5) English courts will not recognise a foreign law which is unacceptably unfair, racial or barbaric: Oppenheimer v. Cattermole [1976] A.C. 249. It is important to keep in mind the difference between recognition and enforcement, which appears in Government of India v. Taylor [1955] A.C. 491.

There are two main elements for ascertaining what is a public law, in private international law. (1) It must be a law which grants power to the state in its capacity as sovereign over an individual. One must see whether the state or some organ of state is trying to enforce the law. Huntington v. Attrill [1893] A.C. 150 illustrates the distinction between an action or proceeding on behalf of a government and one on behalf of an individual. (2) The question must be asked whether what is being claimed is compensation, or something different.

Forfeiture provisions may be penal: Folliott v. Ogden (1789) 1 Hy. B1. 123 and Rex v. Nat Bell Liquors Ltd. [1922] 2 A.C. 128. The court must look to the substance of the matter to see if the law is penal: Banco de Vizcaya v. Don Alfonso de Borbon y Austria [1935] 1 K.B. 140, 143-144. The most important "penal" case is Huntington v. Attrill [1893] A.C. 150. The relevant question is not "is the statute penal?" but "is the statutory provision relied on by the plaintiff a penal provision?" On that basis, section 12 of the Act of 1962 is a penal provision for the following reasons. (1) The purpose and effect of section 12 (2) is to expropriate goods without any compensation, as a sanction for the breach of the Act. Where the owner loses his goods and is mulcted of their value by the state, that is a classic penalty. The value in the present case could be some £300,000. If the desire of the state was merely to preserve the New Zealand heritage, the Crown could have been given the right to retain the goods on payment of their market value. As it is, the section provides for a punishment for breach of the Act. If compensation were provided for, the section would not be penal, though it might still be an "other public law." Further, the Government of New Zealand might have been entitled to relief if it had reduced the carving into its possession and displayed it in a museum, and it was then removed, because it would

then have already executed its own penal provision. The Government would have acquired a good title by seizing and reducing into possession, including title against the previous owner, whose title would be extinguished by section 12. The English court would recognise that title, as in Aksionairnoye Obschestvo A.M. Luther v. James Sagor & Co. [1921] 3 K.B. 532: see Dicey & Morris, The Conflict of Laws, 10th ed. (1980), vol. 1, pp. 93-94. The court will not however reduce the article into the New Zealand Government's possession in England. (2) The plaintiff is not a private individual suing in a private right but is the state itself. (3) In most cases the penalty of forfeiture without compensation would be far more serious than the £200 fine in section 5 of the Act of 1962.

Loucks v. Standard Oil Co. of New York (1918) 120 N.E. 198, which Staughton J. strongly relied on, is not in point because compensation there was payable to the widow and/or children (i.e., private individuals), and not to the state. The provision in question in the case could not possibly be penal within Huntington v. Attrill [1893] A.C. 150. Staughton J. [1982] Q.B. 349, 366, took the passage of Cardozo J. in the Loucks case, 120 N.E. 198, 198 out of context. The purpose of the provision is wholly irrelevant for deciding whether it is penal etc., unless perhaps it is so barbaric that it cannot be accepted, as in Oppenheimer v. Cattermole [1976] A.C. 249.

The principal case on "revenue" is Regazzoni v. K.C. Sethia (1944) Ltd. [1958] A.C. 301. "Revenue" means more than income tax; it also covers the broad field of customs and duties. It is not contended that section 12 is a revenue law.

The existence of the residual category of "public" laws appears from a number of cases, the first in time being King of Italy v. Marquis Cosimo de Medici Tornaquinci (1918) 34 T.L.R. 623, which however is not very helpful as it is briefly reported. King of the Hellenes v. Brostrom (1923) 16 L1.L.Rep. 167 concerned decrees providing that if currency was unlawfully exported, it was liable to be forfeited. To that extent the facts were similar to the present case. The decrees were not really penal or revenue, as they were made to protect the Greek currency. They came within a third category. The assets were in England and had not been reduced into possession. In Brokaw v. Seatrain U.K. Ltd. [1971] 2 Q.B. 476, the case was put on "revenue," but the interesting point is that, again, the goods had not been reduced into possession. The propositions stated at p. 479 are adopted. In Schemmer v. Property Resources Ltd. [1975] Ch. 273, the judge treated the Act as a penal law, but whether the particular provision was penal is open to question. Schemmer was obviously acting on behalf of the United States Government or the Securities Commission. The decision was right, but questionably on the ground that the provision was a penal one. It could be seen as in a third category. The issue in In re Lord Cable, decd. [1977] 1 W.L.R. 7 was whether Indian exchange control regulations should be enforced in England. Exchange control is neither revenue nor penal (see Regazzoni v. K.C. Sethia (1944) Ltd. [1958] A.C. 301, 324, per Lord Reid), and the judge in the Cable case did not base his decision on either. In F. & K. Jabbour v. Custodian of Israeli Absentee Property [1954] 1 W.L.R. 139, which the plaintiff relied on below, the question was essentially whether the Israeli

legislation should be recognised, not whether it should be enforced, and the points arising in the present case were not discussed. Staughton J. was correct [1982] Q.B. 349, 369G-H, not to put any weight on the case. See also generally, on the subject, Dr. F. A. Mann's paper on Prerogative Rights of Foreign States and the Conflict of Laws (1954) 40 Tr.Gro.Soc. 25, 27-33.

Paul Baker Q.C. and Nicholas Patten for the first defendant. The third defendant's submissions are adopted. The reasons for the non-enforcement of foreign penal, revenue and other public laws have changed since Folliott v. Ogden, 1 Hy. B1. 123, probably as a result of changes in taxation. The approach in the 18th century was that it was undesirable for one country to carry out another's punishment. Government revenues were then obtained from customs and from the forfeiture of goods of convicted felons, heirless persons and others. There was no direct taxation; it was all indirect and local in operation. The concept of tax is now quite different; it is a matter of civic obligation. The turning point in the judicial attitude was Huntington v. Attrill [1893] A.C. 150. The principle is now based on the sovereignty of states, and the vice aimed at is infringing the sovereignty of another country. Relationships between sovereigns are carried on by governments and diplomacy. At the end of his judgment Staughton J. [1982] Q.B. 349, 371-372, referred to the interests of comity requiring the national heritage of other countries to be protected, and the "hope of reciprocity" as a reason of public policy which reinforced his decision. Courts are not in a position to demand reciprocity. That is solely a matter for governments through diplomatic channels and treaties. Therefore, however meritorious the individual law might seem, there is more at stake.

If the submissions are right, all public-type laws which are not translatable into individual terms and which a foreign government is trying to enforce, will come within the prohibition. That will even be true of bona vacantia, which troubled the judge [1982] Q.B. 349, 371: see Dicey & Morris, The Conflict of Laws, 10th ed., vol. 2, p. 611.

Charles Gray and Nicholas Paines for the plaintiff. Courts in the United Kingdom recognise the lex situs in regard to moveable property, with two exceptions: where the lex situs purports to have extra-territorial effect, and where the foreign law is repugnant to public policy here. Where the lex situs is recognised, it is normally enforced, but there are three exceptions, namely when the law is penal, revenue, or repugnant. The Historic Articles Act 1962 comes within none of those exceptions.

Rather than attempt a definition of a "revenue" law, it is easier to list laws which have been held to be revenue: see Halsbury's Laws of England, 4th ed., vol. 8 (1974), p. 317, para. 420, note 1. They perhaps all have the characteristic that they form part of the legislative machinery by which states raise money for the executive functions of government. "Fiscal" might be a better description than "revenue," which is ambiguous. If anything, the legislation in the present case would lead to a charge on the state, since the carving would be placed in a museum. The English court is not being asked to raise money for a foreign government, and the law is therefore not revenue, for the same reason as was given in Regazzoni v. K.C. Sethia (1944) Ltd. [1956] 2 Q.B. 490.

When considering penal laws, it is vital to appreciate that it is the purpose of the Act that must be looked at, not its consequences. It is accepted that the consequence might throw some light on the purpose, and also that "penal" in a broad sense means "harsh." But it has a more limited meaning in the present context. A suggested definition is that the law must be part of the criminal code of the country, which is designed to punish the wrongdoer and has as its purpose the vindication of the public justice. Staughton J. raised the question whether it is the suit or the provision that must be penal. The plaintiff does not argue that the suit must be penal.

In Huntington v. Attrill [1893] A.C. 150, 156, Lord Watson said that the object of the law must be the imposition of punishment. A submission that it was sufficient if that was an incidental consequence was rejected: see p. 159. Lord Watson drew a distinction between remedial and penal provisions. The purpose requirement is strongly emphasised in Loucks v. Standard Oil Co. of New York, 120 N.E. 198. The case contains the nearest to an attempted definition of "penal," and purpose is at the heart of it. The dissenting judgment in the case was on another point. The reason for the provision being penal in Rex v. Nat Bell Liquors Ltd. [1922] 2 A.C. 128 was that a punishment was imposed. See also Regazzoni v. K.C. Sethia (1944) Ltd. [1956] 2 Q.B. 490, 499, perSellers J.

The object of the Act of 1962 is to keep works of art in New Zealand. The punishment provisions are merely a byproduct. The Act therefore cannot be "penal," however harsh the consequences might be in any particular case. The third defendant's submissions err in that they concentrate too much on the consequences. That approach cannot be right for two reasons. First, whether a statute was held to be penal or not would depend on the particular financial resources of the person affected. It would thus be possible for the same law to be held penal as against X but not as against Y. Secondly, it would depend on the value of the object, with the same anomalous result.

The cases do not support the existence of an additional category of unenforceable "public" laws embracing all instances of public laws. There may be a limited third category, but if so it should be based on public interest. With one exception, none of the textbooks recognises a separate "public law" category as such: see Halsbury's Laws of England, 4th ed., vol. 8, pp. 315-316, paras. 418 and 419; Cheshire and North's Private International Law, 10th ed. (1979), pp. 131-145 and Morris, The Conflict of Laws, 2nd ed. (1980), pp. 41, 47-48, 322. The Foreign Judgments (Reciprocal Enforcement) Act 1933, which is declaratory of the common law, mentions no such category, nor does the American Law Institute's Restatement, Second, Conflict of Laws, sections 89-90. The only exception among the textbooks is Dicey & Morris, The Conflict of Laws, 10th ed., pp. 89-90, rule 3. The explanation is perhaps that it was desired to keep some third category after the "political" category, which had figured in previous editions of the work, disappeared as a result of Regazzoni v. K.C. Sethia (1944) Ltd. [1958] A.C. 301.

The proposition in rule 3 has no foundation in the cases, and some are inconsistent with it. In Emperor of Austria v. Day and Kossuth

(1861) 3 De G.F. & J. 217, a foreign sovereign was asserting a prerogative right. If ever there was a "public law" category, that would be in it but the case seems to have been decided on a sort of proprietary basis. If the category existed, no injunction could have been granted, and similarly in Lepage v. San Paulo Coffee Estates Co. [1917] W.N. 216. Huntington v. Attrill [1893] A.C. 150 is a classic penal law case. The reasoning that because penal laws, which are public laws, are unenforceable, therefore public laws in general are unenforceable, is false. In King of Italy v. Marquis Cosimo de Medici Tornaquinci, 34 T.L.R. 623, the state papers must necessarily have been vested in the Italian state by virtue of a public law, but the judge granted an injunction to restrain their sale in England, King of the Hellenes v. Brostrom, 16 L1.L.Rep. 167, was argued and decided on the basis that it was a revenue case: see pp. 168, 193. Since the Greek Government took a "cut," the provision was a revenue one. Government of India v. Taylor [1955] A.C. 491 similarly was argued and decided as "revenue." The difficulties referred to in Regazzoni v. K.C. Sethia (1944) Ltd. [1956] 2 Q.B. 490, 520, 524, about defining what a "political" law was, apply equally to "public" laws. The law in F. & K. Jabbour v. Custodian of Israeli Absentee Property [1954] 1 W.L.R. 139 must have been "public" if any meaning is to be given to the expression, but a declaration was made and the law was given effect to. In Kahler v. Midland Bank Ltd. [1950] A.C. 24 a law which on any footing must have been a public law was indirectly enforced. Dr. Mann in his paper, 40 Tr.Gro.Soc. 25, concludes that all laws which assert the jus imperii are unenforceable. The fallacy lies in the proposition that penal and revenue laws are not enforced simply because they assert the jus imperii. In fact, there are many reasons why such laws are not enforced, including convenience, history and public policy. It is nothing to do with jus imperii. At p. 37 Dr. Mann concedes the difficulty with his thesis. At p. 45 he also is hesitant about the existence of a category of public laws. In Schemmer v. Property Resources Ltd. [1975] Ch. 273 the law was regarded as penal: see p. 288C.

It would be consistent with the majority of the textbooks and the American Restatement to treat any third category as limited to cases where enforcement would be contrary to the public interest of the lex fori. It would probably be confined to discriminatory and confiscatory legislation which was repugnant. It might extend to foreign exchange provisions: see In re Lord Cable, decd. [1977] 1 W.L.R. 7. However, that is really yet another revenue case. It is difficult to reconcile the case with Kahler v. Midland Bank Ltd. [1950] A.C. 24. In any event it is a slender basis on which to erect a whole category embracing all public laws.

The Act of 1962 could not possibly come within such a third category. It would be strange for an English court to say that it would be contrary to our public policy to enforce the New Zealand law when the United Kingdom has a very similar law: see the Import, Export and Customs Powers (Defence) Act 1939 and regulations made under it, which are currently the Export of Goods (Control) Order 1981 (S.I. 1981 No. 1641), Schedule 1, Part 1, Group B. The plaintiff cannot improve on the way the matter was put by Staughton J. [1982] Q.B. 349, 371-372.

An alternative, tentative, submission, on the basis that there is automatic forfeiture but the above submissions on enforceability are wrong, is that the New Zealand Government is only asserting a proprietary right, since it acquired title to the carving in New Zealand. It is accepted that Brokaw v. Seatrain U.K Ltd. [1971] 2 Q.B. 476 constitutes a hurdle, since the carving has not been reduced into actual possession. The distinction between reduction to actual possession and having a proprietary right without possession is a narrow one, but the difficulty is recognised.

Ross-Munro Q.C. in reply. The question whether there is a third category of public laws may be the most interesting one intellectually, but if section 12 is penal, the defendants must succeed. The definition of "penal" in Halsbury's Laws of England, 4th ed., vol. 8, para. 419 is adopted. See also Huntington v. Attrill [1893] A.C. 150, 159, and Dicey & Morris, The Conflict of Laws , 10th ed., vol. 1, p. 92. The plaintiff's proposed definition cannot be right. Whatever be the position on the specific provisions which were the subject of decision in Schemmer v. Property Resources Ltd. [1975] Ch. 273, it could not be said that the whole of the Securities Exchange Act of 1934 was part of the United States Criminal Code. The purpose of a law is of little importance, for deciding whether it is penal. Many statutes have several purposes. The primary object of the Companies Act 1948 is to regulate the formation and subsequent activities of companies. Section 329, however, is undoubtedly a penal provision, and it is quite certain that a New Zealand court would refuse to enforce that section. There are two elements which must be had regard to: (1) whether the state or an organ of state is bringing the action; and (2) whether the cause of action concerns a private right giving rise to a demand for compensation (in which case it is not penal), or the breach of a public law. Although the word "purpose" appears everywhere in Cardozo J.'s judgment in Loucks v. Standard Oil Co. of New York, 120 N.E. 198, the two elements were there (the action was brought by the executors, not the state, and the action was in respect of a private wrong), and the case was rightly decided for that reason.

As to public laws, the House of Lords said in Regazzoni v. K.C. Sethia (1944) Ltd. [1958] A.C. 301 that exchange control is not revenue or penal, and in Kahler v. Midland Bank Ltd. [1950] A.C. 24 that it was not confiscatory. If therefore it is not to be enforced, as In re Lord Cable, decd. [1977] 1 W.L.R. 7 decides, one must look to principle to see why that is so. The plaintiff's suggestion, that it must not be contrary to English public policy, is a shifty formulation on which to build a principle. Public policy is an unruly horse. The true principle is based on the rule of public international law that a sovereign state's sovereignty ends at its own frontiers. That has the advantage of simplicity and continuity. It is the explanation of Aksionairnoye Obschestvo A.M. Luther v. James Sagor & Co. [1921] 3 K.B. 532; Frankfurther v. W.L. Exner Ltd. [1947] Ch. 629 and Princess Paley Olga v. Weisz [1929] 1 K.B. 718, which was discussed in the Frankfurther case. The relevance in the present context is that if property is claimed it must have been reduced into possession. If the Greek Government passed a law today and sued for the return of the Elgin marbles, the English court would recognise

the law but not enforce it because the marbles have not been reduced into the possession of the Greek Government.

Emperor of Austria v. Day and Kossuth, 3 De G.F. & J. 217, must be a decision on its own facts, even if it is rightly decided. It has been much criticised by academic writers. The action in Lepage v. San Paulo Coffee Estates Co. [1917] W.N. 216 was about whether there was power to give a good receipt for money received: see the end of the headnote. No one took the point whether it was a private or public right of action. It does not help one way or the other.

On the reciprocity point, it is not for courts to take the initiative and say that the New Zealand law will be enforced in the hope that the New Zealand authorities will do the same for us. This is exclusively the province of governments, who do not proceed by expressions of hope but by treaties. Countries with frequently changing governments might not reciprocate, in the absence of a treaty.

Baker Q.C. also in reply. Even if the plaintiff's test is adopted, and the purpose of the law is considered rather than its consequences, section 12 (2) of the Act of 1962 is still penal. If the object of the Act were solely to retain historic articles within New Zealand, it would have been logical to enact that all goods would be forfeited if they were exported, whether innocently or not. The presence of the qualification "knowingly" in section 12 (2) is inconsistent with that construction. That word makes it look penal, as does the phrase "in breach of this Act."

May 21. The following judgments were read.

LORD DENNING M.R.

The door of the treasure house

Years ago in New Zealand a great chief of the Maoris had a treasure house. In it there were stored such things as dried fish, special foods and valuables. At the entrance there was a great door. It was made of totaro wood which is light, durable, tough, and of a dark red colour. This great door was four feet high and nearly five feet wide. It had five panels carved with exquisite skill. These depicted human figures with serpentine bodies and wide pointed heads.

This great door was lost for centuries in a swamp near Waitara in the province of Taranaki in North Island. Then in 1972 a Maori tribesman called Manukonga, whilst cutting a track through the swamp, came upon it and carried it to his home.

In the next year, 1973, there came to New Zealand Lance Entwistle, the third defendant. He was from London and was a dealer in primitive works of art. He got to know of this carving and went to see it. He realised at once that it was of much value. It was of the highest importance to the study of Maori art and civilisation and Polynesian sculpture. He persuaded Manukonga to sell it to him for the sum of $6,000. He took it up to Auckland and then across to New York. From there he telephoned

to George Ortiz, the first defendant, who lived in Geneva. Now George Ortiz was a collector of African and Oceanic works of art. His collection was one of the finest in the world. Lance Entwistle asked George Ortiz to inspect this carving. George Ortiz went to New York to see it. Lance Entwistle told him that it had been exported from New Zealand without a permit but nevertheless he was the owner of it and could pass a good title to it.

Thereupon, on April 23, 1973, George Ortiz bought this carving from Lance Entwistle for U.S. $65,000. It was sent to Geneva by air and was kept by George Ortiz in his collection there. In October 1977 the daughter of George Ortiz was kidnapped. In order to raise money for her release, he sent his art collection to Sotheby's, the second defendants, in London for sale by auction. Sotheby's prepared an attractive catalogue. It contained a fine coloured picture of this carving. It was the principal item in the sale. Sotheby's announced that the auction was to be held on Thursday, June 29, 1978.

This came to the notice of the New Zealand Government. Their Attorney-General at once on June 26, 1978 - three days before the sale - issued a writ claiming a declaration that this carving belonged to the New Zealand Government and an injunction to prevent the sale or disposal of it. In the face of this writ it was agreed that Sotheby's would not include this carving in the sale but would hold it pending trial or further order. The sale was held without this carving. Enough was realised from the other items to pay the ransom. So George Ortiz does not propose to sell it now. It is said to be worth £300,000.

The case may eventually require a hearing on disputed points of fact. But meanwhile this court has ordered that these two points be tried as preliminary issues:

"(1) Whether... Her Majesty the Queen has become the owner and is entitled to possession of the carving... pursuant to the provisions of the [New Zealand] Historic Articles Act 1962 and the Customs Acts 1913 and 1966; and (2) whether in any event the provisions of the said Acts are unenforceable in England as being foreign penal, revenue and/or public laws."

The defendants have also made the following concessions:

"The great majority of countries have legislation to forbid or control the export of antiquities and in many cases the sanction for any attempt to export an antiquity illegally is that the object may be confiscated ..."

Although this case concerns New Zealand law, I propose to consider first the English law. This is because New Zealand has inherited the common law of England; and also because its statutes and methods of interpretation are on much the same lines as our own. We use the same language - the English language - to express the same principles, to define the same concepts, and to give the same meaning.

The law of England

So far as England is concerned, whenever there is legislation providing that goods are to be forfeited for one cause or another, the law has always said that the forfeiture does not take effect until the goods are seized and that the title then relates back to the cause of forfeiture. If the owner or anyone else disputes the forfeiture, there are proceedings for condemnation. After condemnation, the title is perfected and can no longer be disputed by anyone.

That was settled in the great case of Lockyer v. Offley (1786) 1 T.R. 252. The master of the sailing vessel Hope smuggled 60 gallons of brandy into London. The customs officers, a month later, seized the ship and claimed her as forfeited. Willes J. said, at p. 260:

"it has been said that under the 24 Geo. 3 c. 47 and the excise laws, the forfeiture attaches the moment the act is done... but I think the actual property is not altered till after the seizure, though it may be before condemnation.... Till the seizure of the ship, it was not certain that the officers of the Crown knew of the illicit trade carried on by the master, or whether they would take advantage of the forfeiture."

In Manning Exchequer Practice, 2nd ed. (1827), it is said, at p. 142:

"Seizures for non-payment of customs, and the like, are grounded upon a principle of the common law, applied to Acts of Parliament creating a forfeiture" (emphasis added),

and, at p. 181:

"The property in goods, forfeited under the excise laws, is not altered until after seizure... For some purposes, as to avoid intermediate alienations and incumbrances, etc., the forfeiture seems to relate to the act done."

From that time onwards there were many Customs Acts. In most of them, the statute simply said that on breach the goods "shall be forfeited": see the Customs Laws Consolidation Act 1876, sections 106, 130 and 138; and that on seizure notice was to be given to the owner of the goods: see section 207. In accordance with the law as laid down in Lockyer v. Offley, 1 T.R. 252, the forfeiture was not automatic. It did not take effect until the goods were seized. Indeed, when a fresh consolidation Act was passed in 1952, Parliament did not use the words "shall be forfeited." It used instead the words "shall be liable to forfeiture": see sections 47 to 56 and 275 to 280 of the Customs and Excise Act 1952. Paragraph 1 of Schedule 7 said:

"The commissioners shall give notice of the seizure of any thing as liable to forfeiture and of the grounds therefor to any person who to their knowledge was at the time of the seizure the owner or one of the owners thereof:..."

Likewise in section 103 (1) of the Merchant Shipping Act 1854 (17 & 18 Vict. c. 104) it was enacted that on certain wrongs being done "such ship shall be forfeited to Her Majesty." Here too it was held that the forfeiture

took effect on seizure, but that the title then related back to the time of the wrongful act done which was the cause of the forfeiture (see The Annandale (1877) 2 P.D. 179, 185, per Sir Robert Phillimore) so that any disposal of the ship in the interim was invalid and of no effect: see the same case in the Court of Appeal, 2 P.D. 218.

So also in section 1 (1) of the Mortmain and Charitable Uses Act 1888 (51 & 52 Vict. c. 42) the words "shall be forfeited" were held to mean "shall be liable to be forfeited": see Attorney-General v. Parsons [1956] A.C. 421.

Works of art

So far as works of art are concerned, the law of England rests on a statute passed on the outbreak of the second world war. It is the Import, Export and Customs Powers (Defence) Act 1939. It gives the Board of Trade power by order to prohibit the import or export of goods of any specified description. The present order is the Export of Goods (Control) Order 1981 (S.I. 1981 No. 1641). It prohibits the export, unless permitted by licence, of, amongst other things: "Any goods manufactured or produced more than 50 years before the date of exportation," (Schedule 1, Part I, Group B) except personal property, letters, and so forth.

Section 3 (1) of the Act of 1939 provides that if any goods are imported or exported in contravention of an order under the Act "those goods shall be deemed to be prohibited goods and shall be forfeited ..." Section 9 (2) says that the Act is to be construed as one with the Customs Consolidation Act 1876 (39 & 40 Vict. c. 36). So the words "shall be forfeited" bear the same meaning as in the Act of 1876. So the forfeiture is not automatic. It does not take effect until the goods are seized.

It is clear therefore that if works of art more than 50 years old are exported from England without permission they are not automatically forfeited. They are only "liable to be forfeited." The title does not pass to the Crown until they are seized.

The New Zealand Customs Act 1913

The Customs Act 1913 of New Zealand is much more detailed and precise than the United Kingdom Act of 1876. For present purposes it is important to notice that it enacted in express terms the principle of Lockyer v. Offley, 1 T.R. 252. It said in section 251:

"Forfeiture to take effect on seizure - When it is provided by this Act or any other Customs Act that any goods are forfeited, the forfeiture shall take effect without suit or judgment of condemnation so soon as the goods have been seized in accordance with this Act or with the Act under which the forfeiture has accrued, and any such forfeiture so completed by seizure shall for all purposes relate back to the date of the act or event from which the forfeiture accrued."

It also gave a time-bar of one year, in section 252: "Seizure of forfeited goods - ... (4) No goods shall be so seized at any time except within one year after the cause of forfeiture has arisen," and also a territorial limitation, in section 253: "Where goods may be seized - Goods may be

seized as forfeited wherever found, whether on land in New Zealand or in the territorial waters of New Zealand ..."

The New Zealand Historic Articles Act 1962

The Historic Articles Act 1962 is far more detailed and comprehensive than the United Kingdom Act of 1939 and the orders thereunder. Section 5 makes it unlawful to remove any historical article without a permit:

"Restrictions on export of historic articles - (1) It shall not be lawful after the commencement of this Act for any person to remove or attempt to remove any historic article from New Zealand, knowing it to be an historic article, otherwise than pursuant to the authority and in conformity with the terms and conditions of a written certificate of permission given by the Minister under this Act. (2) Every person who contrary to the provisions of this section removes or attempts to remove any article from New Zealand, knowing it to be an historic article, commits an offence, and shall be liable on summary conviction to a fine not exceeding £200. (3) Nothing in this section shall apply to any historic article lawfully taken and normally kept outside New Zealand but temporarily within New Zealand."

Section 12 is the section which most concerns us. So I set it out in full:

"Application of Customs Act 1913 - (1) Subject to the provisions of this Act, the provisions of the Customs Act 1913 shall apply to any historic article the removal from New Zealand of which is prohibited by this Act in all respects as if the article were an article the export of which had been prohibited pursuant to an Order in Council under section 47 of the Customs Act 1913. (2) An historic article knowingly exported or attempted to be exported in breach of this Act shall be forfeited to Her Majesty and, subject to the provisions of this Act, the provisions of the Customs Act 1913 relating to forfeited goods shall apply to any such article in the same manner as they apply to goods forfeited under the Customs Act 1913. (3) Where any historic article is forfeited to Her Majesty pursuant to this section, it shall be delivered to the Minister and retained in safe custody in accordance with his directions: Provided that the Minister may, in his discretion, direct that the article be returned to the person who was the owner thereof immediately before forfeiture subject to such conditions (if any) as the Minister may think fit to impose."

The interpretation of section 12 (2)

The crucial words are those in section 12 (2), "shall be forfeited to Her Majesty." Seeing that those words come within a section which is headed "Application of Customs Act 1913," it seems to me that those words are to be construed as one with the Customs Act 1913. The words "shall be forfeited" are to be construed in the light of section 251 of the Act of 1913 which is, in turn, only an express statement of the principle in Lockyer v. Offley, 1 T.R. 252. They do not mean there is to be an automatic forfeiture. Forfeiture only takes place when the goods are

seized; but the title then relates back to the time when the cause of forfeiture arose.

The Customs Act 1966 of New Zealand

Much of the Act of 1966 is a re-enactment of the Act of 1913. But there is one section which changes the wording. Section 251 of the Act of 1913 (on which I have placed so much stress) is replaced by section 274 which says:

"Forfeiture to relate back - When it is provided by this Act or any other of the Customs Acts that any goods are forfeited, and the goods are seized in accordance with this Act or with the Act under which the forfeiture has accrued, the forfeiture shall for all purposes relate back to the date of the act or event from which the forfeiture accrued."

Then section 275 (4) extends the time from one year to two years: "Seizure of forfeited goods - ... (4) No goods shall be so seized at any time except within two years after the cause of forfeiture has arisen." And section 276 keeps the territorial jurisdiction: "Where goods may be seized - Goods may be seized as forfeited wherever found within the territorial limits of New Zealand."

I do not think the change of wording in section 274 imputes any change in sense from section 251 of the Act of 1913. Section 274 shows that the important thing is seizure. When it says that "the forfeiture shall for all purposes relate back." that means that the forfeiture does not operate automatically. The phrase "relate back" shows that the title does not accrue until the seizure, and that it then relates back to the cause of forfeiture. In short, it is another affirmation of the principle in Lockyer v. Offley, 1 T.R. 252.

The judge's view

Staughton J. analysed the Customs Acts 1913 and 1966 of New Zealand and came to the conclusion [1982] Q.B. 349, 360 that

"it does not provide for automatic forfeiture but does provide that goods shall be liable to forfeiture in certain circumstances, with the effect that title passes to the Crown only on seizure or later on condemnation."

I come to the same conclusion on the Customs Acts.

The judge then considered the Historic Articles Act 1962 of New Zealand. He took the view that it had no clear meaning and that he should adopt the "purposive" approach to statutes as indicated perhaps by section 5 (j) of the New Zealand Acts Interpretation Act 1924 and the speeches in the House of Lords in Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251. The judge held [1982] Q.B. 349, 362D that the purpose of the Act of 1962 "points firmly in favour of automatic forfeiture." He said, at p. 362:

"... the purpose of the Act is to secure the enjoyment of historic articles for the people of New Zealand in the territory of New

Zealand; that purpose is plainly advanced if articles exported or attempted to be exported become automatically the property of the Crown and can if necessary be recovered by the Crown."

I can well follow the judge's reasoning, but I think it is open to this fatal objection: if accepted, it means that the Historic Articles Act 1962 would have effect beyond the territory of New Zealand. It would have extra-territorial effect. That would be contrary to international law. To this I now turn.

The territorial theory of jurisdiction

It was said long ago by Story J. in the Supreme Court of the United States in The Apollon (1824) 9 Wheat. 362, 370: "The laws of no nation can justly extend beyond its own territories, except so far as regards its own citizens." And in his book, Story's Conflict of Laws, 2nd ed. (1841), p. 26, he said: "no state or nation can, by its laws, directly affect or bind property out of its own territory, or bind persons not resident therein," except that, see p. 28, "every nation has a right to bind its own subjects by its own laws in every other place."

In our present case the New Zealand Government invite us to interpret section 12 (2) of the Historic Articles Act 1962 as if it said: "An historic article which has been knowingly exported from New Zealand in breach of this Act shall be automatically forfeited to Her Majesty, and Her Majesty can recover it in any other country into which it may be imported." So interpreted, the Act seems to me to infringe the rule of international law which says that no country can legislate so as to affect the rights of property when that property is situated beyond the limits of its own territory. It is a direct infringement of the territorial theory of sovereignty which is most ably discussed by Dr. F. A. Mann in his Studies in International Law (1973), pp. 1 to 139.

If this Historic Articles Act 1962 provided for automatic forfeiture, that forfeiture would take place and would come into effect as soon as the historic article was exported, i.e. as soon as it left the territorial jurisdiction of New Zealand. That would be a piece of extra-territorial legislation which is invalid by international law.

Rather than suppose that the New Zealand Parliament would infringe international law, or would go beyond the limits of its own jurisdiction, I am quite clear that we should read section 12 (2), not as providing for automatic forfeiture, but as meaning "shall be liable to forfeiture."

A point of vast importance

The next preliminary point proceeds on the assumption that the Historic Articles Act 1962 provides for automatic forfeiture and then asks: should this law be enforced by the courts of England?

This point may become real when it is remembered that the Act of 1962 applies not only to actual export of an historic article, but also to attempted export. An attempt might be made to export an historic article. It might be taken to the airport and then prevented at the last moment from being loaded on to the aircraft. A New Zealand statute could well provide

(within its territorial jurisdiction) for automatic forfeiture to the Crown on such an attempt being made. The owner makes a second attempt. Then, before it is seized by the authorities, he manages to export it. He gets it to England. The New Zealand Government seeks to recover it. Will the English courts enforce its claim?

This second point is of vast importance. Most countries have legislation to prevent the export of their historic articles unless permitted by licence. This legislation may provide for automatic forfeiture on export or attempted export. It might be very desirable that every country should enforce every other country's legislation on the point - by enabling such articles to be recovered and taken back to their original home. But does the law permit of this?

Recognition and enforcement

At the outset I must point out that we are here concerned with a suit by a foreign state to enforce its laws. I hope our New Zealand friends will forgive me calling them a "foreign state." I only use the term so as to bring home the fact that we are concerned with an independent sovereign government which exercises sovereign authority over its own territory, and which, by international law, has no right to exercise sovereign authority beyond its own territorial limits.

This suit by a foreign state to enforce its laws is to be distinguished altogether from a suit between private firms or individuals which raises a question as to whether a contract has been broken by one or the other or whether a wrong has been done by one to the other. In such a suit our courts will often recognise the existence of the laws of a foreign state. We will recognise the foreign law so much that we will refuse to enforce a contract which is in breach of the laws of the foreign state: see the Prohibition case of Foster v. Driscoll [1929] 1 K.B. 470, and the jute case of Regazzoni v. K.C. Sethia (1944) Ltd. [1956] 2 Q.B. 490 and [1958] A.C. 301.

This present case is different. It is a suit by a foreign state brought in the English courts here to enforce its laws. No one has ever doubted that our courts will not entertain a suit brought by a foreign sovereign, directly or indirectly, to enforce the penal or revenue laws of that foreign state. We do not sit to collect taxes for another country or to inflict punishments for it. Now the question arises whether this rule extends to "other public laws." Dicey & Morris, The Conflict of Laws, 10th ed. (1980), vol. 1, p. 90, rule 3 say it does. I agree with them. The term "other public laws" is very uncertain. But so are the terms "penal" and "revenue." The meaning of "penal" was discussed in Huntington v. Attrill [1893] A.C. 150 and Loucks v. Standard Oil Co. of New York (1918) 120 N.E. 198. The meaning of "revenue" was discussed in Government of India v. Taylor [1955] A.C. 491. But what are "other public laws"? I think they are laws which are eiusdem generis with "penal" or "revenue" laws.

Then what is the genus? Or, in English, what is the general concept which embraces "penal" and "revenue" laws and others like them? It is to be found, I think, by going back to the classification of acts taken in international law. One class comprises those acts which are done by a

sovereign "jure imperii," that is, by virtue of his sovereign authority. The others are those which are done by him "jure gestionis," that is, which obtain their validity by virtue of his performance of them. The application of this distinction to our present problem was well drawn by Dr. F. A. Mann 28 years ago in an article "Prerogative Rights of Foreign States and the Conflict of Laws" in Transactions of the Grotius Society(1954) 40 Tr.Gro.Soc. 25, reprinted in his Studies in International Law(1973), pp. 492 to 514.

Applied to our present problem the class of laws which will be enforced are those laws which are an exercise by the sovereign government of its sovereign authority over property within its territory or over its subjects wherever they may be. But other laws will not be enforced. By international law every sovereign state has no sovereignty beyond its own frontiers. The courts of other countries will not allow it to go beyond the bounds. They will not enforce any of its laws which purport to exercise sovereignty beyond the limits of its authority.

If this be right, we come to the question: what is meant by the "exercise of sovereign authority"? It is a term which we will have to grapple with, sooner or later. It comes much into the cases on sovereign immunity and into the State Immunity Act 1978: see sections 3 (3) (c) and 14 (2) (a). It was much discussed recently in I Congreso del Partido [1983] 1 A.C. 244 and by Hazel Fox "State Immunity: The House of Lords' Decision in I Congreso del Partido" in the Law Quarterly Review(1982) 98 L.Q.R. 94. It can provoke much difference of opinion as is shown by the differences amongst the Law Lords on the facts of that very case. But, difficult as it is, it must be tackled.

I suggest that the first thing in such a case as the present is to determine which is the relevant act. Then to decide whether it is of a sovereign character or a non-sovereign character. Finally, to ask whether it was exercised within the territory of the sovereign state - which is legitimate, or beyond it - which is illegitimate.

In solving the question, we can get guidance from the decided cases. I will take therefore the cases decided in the English courts about tangible things which have been confiscated - or attempted to be confiscated - by a sovereign government.

Don Alonso v. Cornero (1611) Hob. 212; 2 Brownl. 29.

This case was decided in 1611. According to Dicey & Morris, The Conflict of Laws, 10th ed. (1980), vol. 1. p. 94, n. 22, it is the only reported English case which approaches the problem. Sir Walter Raleigh had recently introduced tobacco into Europe. It was a growth industry. Senor Cornero, a Spanish subject, committed crimes in Spain and fled in a ship to England, carrying with him 3,000 1bs. of tobacco. His very flight was in Spanish law a cause of forfeiture cf his goods, as it was in English law at that time: see Blackstone's Commentaries, vol. 4, 17th ed. (1830) p. 387. So these goods were "forfeited upon the high sea" to the King of Spain: see 2 Brownl. 29. On arrival in England, Cornero unloaded the tobacco and sold it to Sir John Watts for £800.

The Spanish ambassador then on behalf of the King took proceedings

in rem in the Court of Admiralty on the ground that the cargo was the property of the King of Spain. (This procedure in Admiralty for forfeiture is well recognised to this day: see section 1 (1) (s) of the Administration of Justice Act 1956 and The Skylark [1965] P. 474.) The Admiralty marshal served the warrant of arrest on the cargo in the hands of Sir John Watts. Sir John Watts then moved the Court of Common Pleas for a writ of prohibition to prevent the Spanish ambassador from proceeding any further with the arrest. The court granted his application. Prohibition was granted. The goods were released. Sir John Watts kept the tobacco and sold it - or smoked it. The King of Spain took nothing.

The report of the case in Hob. 212 tells us that the judges were quite willing to allow the Spanish ambassador to bring proceedings on behalf of the King of Spain - "they would not let [i.e. prevent] the ambassador from prosecuting his master's subject." As to the goods, the judges said, Hob. 212:

"if any subject of a foreign prince bring goods into the kingdom, though they were confiscate before, the property of them shall not here be questioned but at the common law."

As I understand it, that means that the courts of this country would not enforce the forfeiture. Our courts would not enforce the title claimed by the Spanish King. Our courts of "common law" would enforce a possessory title by trespass or trover, but this would not avail the King of Spain because he never had possession: see Isaack v. Clark (1615) 2 Bulst. 306.

The confiscation was an act done in the exercise of sovereign authority outside the territory of Spain - it was done on the high seas. So our court would not enforce it. So also when many centuries later the Spanish Constituent Cortes passed a decree confiscating all the private property of the ex-King, it was held that it would not be enforced against his property in England: see Banco de Vizcaya v. Don Alfonso de Borbon y Austria [1935] 1 K.B. 140.

King of Italy v. Marquis Cosimo de Medici Tornaquinci (1918) 34 T.L.R. 623

In Italy the Marquis of Medici had a most valuable collection of historical manuscripts covering a period of 700 years. They were known as the Medici archives. Some of them were official communications and belonged to the Italian state. The government had allowed the Marquis to hold them on behalf of the state. Others were family papers coming down in the Medici family. They belonged to the marquis himself In 1909 the Italian Government passed a law by which the state papers were to be kept in Italy. They belonged to the state. By the same law the Italian Government prohibited the export of the family papers without a permit and there was a heavy export duty when a permit was granted. The state also had the right to purchase the family papers. The marquis brought these Medici archives to England and put them into the hands of Christie's for sale. Peterson J. held that the state papers belonged to the State of Italy and granted an injunction to prevent their being disposed of. But he refused

to grant any injunction, at the suit of the Italian Government, in respect of the family papers. It was only at the interlocutory stage. Peterson J. is reported as having said, at p. 624:

"Article 9 prohibited their exportation, but it was manifest that this only applied so long as they remained in Italy. The question arose whether there was any probability, at the trial of the action, that these documents, apart from the state papers, would be ordered to be returned to Italy. He did not think that the court would undertake such a burden."

The prohibition of export of the family papers was an exercise of sovereign authority by the King of Italy. It would not be enforced in our courts.

Princess Paley Olga v. Weisz [1929] 1 K.B. 718

Princess Paley Olga was the widow of Grand Duke Paul of Russia. She occupied the Paley Palace near St. Petersburg, full of valuable furniture, pictures and objets d'art. In 1918 the revolutionaries took possession of it. The Princess fled to England. The Soviet Government passed decrees declaring all of its contents to be the property of the Soviet Republic. They turned it into a state museum. In 1928 the Soviet Government sold some of the articles to Mr. Weisz for £40,000. He brought them to England. The Princess claimed that they belonged to her. She sued Mr. Weisz to recover them. She failed. Scrutton L.J. said, at p. 725:

"Our Government has recognised the present Russian Government as the de jure Government of Russia, and our courts are bound to give effect to the laws and acts of that Government so far as they relate to property within that jurisdiction when it was affected by those laws and acts." (Emphasis added.)

The confiscation by the Soviet Government was an exercise of sovereign authority within its own territory. It would therefore be enforced in England. If the Princess had removed the articles from the museum in St. Petersburg and brought them to England, the English courts would have made her give them up to the Soviet Government.

Brokaw v. Seatrain U.K. Ltd. [1971] 2 Q.B. 476

Mr. and Mrs. Shaheen were United States citizens living in the United States. Their daughter married Mr. Brokaw, an Englishman. The parents determined to send to their daughter their furniture and household effects so as to set up house in England. They were shipped on an American ship for delivery in England. While the vessel was on the high seas, the United States Government served a notice of levy on the shipowners. They claimed possession of the goods on the ground that Mr. and Mrs. Shaheen owed them money for taxes and that they were entitled by United States law to levy upon all the property of Mr. and Mrs. Shaheen. This court held that the United States Government had no right to the goods. I said, at p. 482:

"If this notice of levy had been effective to reduce the goods into the possession of the United States Government, it would, I think, have

been enforced by these courts, because we would then be enforcing an actual possessory title. There would be no need for the United States Government to have recourse to their revenue law. I would apply to this situation some words of the United States Supreme Court in Compania Espanola de Navegacion Maritima, S.A. v. The Navemar (1938) 303 U.S. 68, 75 in an analogous case: '... since the decree was in invitum, actual possession by some act of physical dominion or control on behalf of the Spanish Government was needful.'"

The notice of levy was an act done in the exercise of sovereign authority. It was not done in the territory of the United States but outside it. It would not be enforced by our courts. But if the United States Government had actually reduced the goods into their possession in the United States, that act would have been done within its own territory. It would therefore have been enforced in our courts.

I have not gone into any of the cases on intangible things or on foreign exchange regulations, such as Kahler v. Midland Bank Ltd. [1950] A.C. 24 and In re Lord Cable, decd. [1977] 1 W.L.R. 7; but I would suggest that they might be solved by adopting the distinction between acts done in the exercise of a sovereign authority within its own territory, and those outside it.

Conclusion

Returning to our present case, I am of opinion that if any country should have legislation prohibiting the export of works of art, and providing for the automatic forfeiture of them to the state should they be exported, then that falls into the category of "public laws" which will not be enforced by the courts of the country to which it is exported, or any other country, because it is an act done in the exercise of sovereign authority which will not be enforced outside its own territory.

On this point, therefore, I differ from the judge; but I would express my gratitude to him for his most valuable contribution to this important topic. He held that our courts should enforce the foreign laws about works of art by ordering them to be delivered up to the foreign government. He hoped that, if we did this, the courts of other countries would reciprocate and enforce our laws which prohibit the export of works of art. I regard this as too sanguine. If our works of art are sold to a dealer and exported to the United States without permission, as many have been, I doubt very much whether the courts of the United States would order them to be returned to England at the suit of our government, on the ground of forfeiture.

The retrieval of such works of art must be achieved by diplomatic means. Best of all, there should be an international convention on the matter where individual countries can agree and pass the necessary legislation. It is a matter of such importance that I hope steps can be taken to this end.

I would answer the first preliminary issue "No," and the second preliminary issue "Yes." I would allow the appeal accordingly.

ACKNER L.J. The most helpful and detailed submissions by counsel have ultimately satisfied me that this apparently complex case is not as difficult as it initially appeared. The appeal raises two main questions, although if the first is decided adversely to the plaintiff, the Attorney-General of New Zealand, he fails in his claim and the resolution of the second question becomes unnecessary.

1. Is an historic article knowingly exported or attempted to be exported in breach of the New Zealand Historic Articles Act 1962, automatically forfeited so that title there and then passes to Her Majesty in right of the Government of New Zealand, or must seizure first take place before the property vests in the Crown?

An Act may provide for automatic forfeiture, or it may provide merely that the goods shall be liable to forfeiture if some further step is taken to that end. For example, the English Customs and Excise Act 1952, which was in force at the material time (now the Customs and Excise Management Act 1979) provided in the material sections, not for automatic forfeiture where various offences were committed, but that the goods "shall be liable to forfeiture." By contrast the Maori Antiquities Act 1908, which remained in force until 1962 when it was repealed by the Historic Articles Act 1962, made special provision for a limited category of antiquities, namely those entered for export. Section 6 (3) of the Act of 1908 provided:

"Any Maori antiquities entered for export contrary to this Act shall be forfeited, and shall vest in His Majesty for the use of the people of New Zealand; Provided that the Minister may, after inquiry, cancel the forfeiture if he thinks fit."

Antiquities which had been entered for export would not only have come to the attention of customs, but would have been reduced into the possession of the Crown. Thus, the provision for such goods to vest in the Crown without the necessity for some further action, such as seizure, was a practicable course clearly open to the legislature. However, in respect of Maori antiquities which were not entered for export, there was no provision for automatic forfeiture. Forfeiture could only be achieved under the Customs Act 1913, and, as appears hereafter, it is indisputable that such forfeiture was not automatic.

When the Maori Antiquities Act was repealed, the New Zealand legislature did not choose to repeat the wording of section 6 (3) referred to above. It adopted the drafting technique of incorporating the provisions of the Customs Act 1913, which had by then been in force for nearly 50 years. [His Lordship read section 12 of the Historic Articles Act 1962, ante, pp. 578H - 579B, and continued:] Section 47 of the Customs Act 1913 referred to in section 12 (1) set out above, provided inter alia for a liability to a penalty of £200 and, by subsection (5), made this provision:

"All goods shipped on board any ship for the purpose of being exported contrary to the terms of any such prohibition in force with

respect thereto, and all goods waterborne for the purpose of being so shipped and exported, shall be forfeited."

However, any possible ambiguity as to the meaning of the phrase "shall be forfeited" was resolved beyond all doubt by section 251 of the Act of 1913, which provided:

"Forfeiture to take effect on seizure - When it is provided by this Act or any other Customs Act that any goods are forfeited, the forfeiture shall take effect without suit or judgment of condemnation so soon as the goods have been seized in accordance with this Act or with the Act under which the forfeiture has accrued, and any such forfeiture so completed by seizure shall for all purposes relate back to the date of the act or event from which the forfeiture accrued."

It will of course be appreciated that the section not only provided for forfeiture to take effect on seizure, but that the title thus acquired should, for all purposes, relate back to the date of the act or event from which forfeiture accrued.

Mr. Charles Gray, for the Attorney-General, to whose able argument I should like to express a particular tribute, contended in his initial submission that it is clear from the language of section 12 that forfeiture takes place under the Act of 1962 and not under the customs legislation. This submission is not referred to by the judge in his judgment, is barely taken in the respondent's notice and, in my judgment, is quite unsustainable. The very purpose of section 12, as its heading indicates, is to apply the Customs Act 1913 to any historical article the removal of which from New Zealand is prohibited by the Historic Articles Act 1962. Such application is, as specifically enacted, "subject to the provisions of this Act." Thus, where there is within the Act of 1962 a special provision which conflicts with the Customs Act, the Act of 1962 takes precedence. Thus, specific provision is made in section 12 (3) for delivery to the Minister and for his discretion as to the return of the goods, whereas section 252 (3) of the Customs Act 1913 provided for the goods to be taken "to a King's warehouse or such other place of security as the collector or other proper officer directs."

If the forfeiture provisions of the Customs Act 1913 applied, as the judge in my judgment rightly held, it is then common ground that so long as the Act of 1913 was in force the forfeiture was not automatic. Before title could pass to the Crown, the goods had to be seized. Since section 251 (4) provided that no goods should be seized at any time except within one year after the cause of forfeiture had arisen, and no such seizure ever took place, then if the Customs Act 1913 alone regulated the forfeiture, the Attorney-General would fail in his claim.

On January 1, 1967, the Customs Act 1913 was replaced by a new Customs Act, the Customs Act 1966, and it is common ground that references in the Historic Articles Act 1962 to the Customs Act 1913 must now be treated as references to the Customs Act 1966. Thus, the next question is whether the Customs Act 1966 still requires seizure to take place before forfeiture can take effect, or whether it fundamentally changes

the position by providing for the automatic vesting in the Crown of the title to the goods, immediately the prohibitive act takes place.

Before contrasting section 251 of the Act of 1913 with its successor - section 274 of the Act of 1966 - it is important to note the marked similarities in the material sections. In both Acts "forfeited goods" are defined as meaning any goods in respect of which a cause of forfeiture has arisen under the Customs Acts. In both Acts there is a time bar in relation to seizure, expressed in the same terms as I have quoted above, except that the period of one year is increased in the Act of 1966 to two years. I agree with the judge that it does appear odd that goods can no longer be seized after two years and yet, if the Attorney-General is right, it is still open to the Crown to enforce a proprietary right by any other means. Moreover, if a significant change is intended it seems strange that the same words, "cause of forfeiture," should be adopted: see section 275 (1) and (4) of the Act of 1966. The provisions governing notice of seizure are the same (sections 255 and 278 of the Acts of 1913 and 1966 respectively) as are the provisions for condemnation (sections 259 and 282). In section 262 of the Customs Act 1913 it is provided that "All forfeited goods shall, on forfeiture, become the property of His Majesty ..." It is common ground that under that Act "on forfeiture" means on seizure. The only change made on its counterpart, section 286, is that "the Crown" takes the place of "His Majesty the King." The provisions as to waiving the forfeiture are identical (sections 264 and 287). Under section 264 of the Act of 1913 the phrase "When any forfeiture has accrued" must mean cause of forfeiture. Presumably it would have the same meaning in the Act of 1966. The application of the forfeiture provisions are the same in each Act (sections 265 and 288).

I now set out section 274 of the Customs Act 1966. This provides:

"Forfeiture to relate back - When it is provided by this Act or any other of the Customs Acts that any goods are forfeited, and the goods are seized in accordance with this Act or with the Act under which the forfeiture has accrued, the forfeiture shall for all purposes relate back to the date of the act or event from which the forfeiture accrued."

Thus the heading to section 251 of the Act of 1913, "Forfeiture to take effect on seizure," has been removed from the section as has the provision that the forfeiture shall take effect without suit or judgment of condemnation so soon as the goods have been seized and any such forfeiture so completed by seizure. It accordingly appears that the intention was that forfeiture should no longer take effect and be completed on seizure. This, however, still leaves unanswered the question: when is it to take effect? The legislature clearly thought it important to continue to provide that forfeiture should relate back - hence the very heading to the section - using the terms of the old section 251. If forfeiture was to be automatic in its effect, so that title passed there and then to the Crown, this specific provision for relating back is clearly superfluous. Moreover, the further question arises: why should there be any reference in the new section to "and the goods are seized in accordance with this Act," if seizure were no longer of any relevance?

Mr. Gray can provide no real explanation for the existence of section 274. Mr. Baker, on behalf of the first defendant, Mr. Ortiz, does offer this explanation. Section 283 of the Act of 1966 provides for a new cause of condemnation of forfeited goods, namely the conviction of an offence which involved forfeiture. The conviction itself shall have effect as condemnation without suit or judgment of any goods that have been seized or in respect of which forfeiture has accrued. He submits that if section 251 had been left in its original form, then there would have been a conflict, since that section provides for forfeiture to take place on seizure. Thus he submits that under the new Act seizure set in train the process of the alteration of title, but this did not in fact take place until condemnation, and thus it was necessary to retain the provisions in section 251 relating back the title. This, he submitted, explained the slight alteration in section 277 of the Act of 1966 dealing with the rescue of seized goods as compared to its predecessor, section 254. The words "as if they were" the property of the Crown were used instead of "being the" property because the property passed on condemnation and not on seizure.

I do not find Mr. Baker's explanation a wholly satisfying one, but it is better than nothing at all. It is clear that the draftsman was borrowing language from the Act of 1913, as well as from Australian and English legislation. This may well explain the oddity of the provision in section 272 of the Act of 1966 that every boat, vehicle or animal used in smuggling goods "shall be forfeited," whereas in section 273 it is provided,

"When any boat, vehicle, or animal has become liable to forfeiture under the Customs Acts, whether by virtue of section 272 of this Act or otherwise, all equipment thereof shall also be liable to forfeiture." (Emphasis added).

The judge was impressed by the apparent inconsistency of forfeiture being automatic and yet there being the time bar on seizure. He was also, in my judgment rightly, concerned about the difficulty and uncertainty which would ensue, as Mr. Thomas Q.C., who gave expert evidence for the defendants, pointed out, if title to goods passed automatically to the Crown upon any of the various events which gave rise to forfeiture. In this respect he referred, [1982] Q.B. 349, 359, to a manuscript treatise of Hale C.J., which was found amongst his papers and published in Hargrave's Law Tracts in 1787, and which was brought to the judge's attention by Mr. Baker. It included this passage, at p. 226:

"Though a title of forfeiture be given by the lading or unlading the custome not paid, yet the King's title is not compleat, till he hath a judgment of record to ascertain his title; for otherwise there would be endless suits and vexations; for it may be, 10 or 20 years hence there might be a pretence of forfeiture now incurred."

To have provided that all sorts and kinds of goods to which the Customs Act 1966 applied should automatically be forfeited to the Crown in certain circumstances could have cast upon the Crown a very onerous and burdensome obligation. Thus, considering both the provisions of the Customs Act 1966 and its predecessor, the Act of 1913, and its purpose, the judge preferred the evidence of Mr. Thomas that it did not provide for

automatic forfeiture, but that it provided that goods should be liable to forfeiture in certain circumstances, with the effect that title passed to the Crown only on seizure or later on condemnation. I respectfully agree. If the legislature had intended to make the very significant change in the Act of 1966 for which Mr. Gray contends, then not only would one have reasonably expected clear language to that effect, but also the absence of the apparently inconsistent provision for relation back in section 274, with its reference to the seizure of the goods.

The judge thus reached this provisional view: having regard to the fact that the words in section 12 (2) of the Historic Articles Act 1962 "shall be forfeited" were immediately followed by a reference to the Customs Act 1913 and the same words occurred in that Act and in the Act of 1966, where they had the meaning "shall be liable to forfeiture," linguistic considerations pointed to the view that in the Act of 1962 they had the same meaning. Accordingly, they did not mean "shall be forfeited automatically." I have used the word "provisional" because he - that is, the judge - then considered the words in section 12 (2) "subject to the provisions of this Act." Having observed that the nature of the articles dealt with by the Historic Articles Act 1962 were unlikely to impose any onerous burdens on the Crown, he then turned to the provisions of the New Zealand Acts Interpretation Act 1924, which the Attorney-General's expert, Dr. Inglis, considered to be of considerable importance. This provided in section 5 (j):

"Every Act, and every provision or enactment thereof, shall be deemed remedial, whether its immediate purport is to direct the doing of anything Parliament deems to be for the public good, or to prevent or punish the doing of anything it deems contrary to the public good, and shall accordingly receive such fair, large, and liberal construction and interpretation as will best ensure the attainment of the object of the Act and of such provision or enactment according to its true intent, meaning and spirit:..."

Mr. Thomas's view that section 5 (j) was not an early recognition in 1924 of the power of the courts to disregard the literal meaning of an Act and to give it a purposive construction was preferred by the judge. Mr. Thomas considered that the section did no more than abolish the old distinction between remedial and penal acts and said that it was very rarely cited in New Zealand. Mr. Gray has failed to persuade me that the judge was wrong to have preferred Mr. Thomas's evidence. The very terms of the section, deeming every act to be remedial irrespective of whether it is a penal act, is clearly designed to abolish the distinction.

The judge, who had appeared in Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251, which had only just been reported, drew the attention of the experts on New Zealand law to two passages in the speeches in that case. The first was in the speech of Lord Wilberforce, at p. 272:

"I start by considering the purpose of article 26, and I do not think that in doing so I am infringing any 'golden rule.' Consideration of the purpose of an enactment is always a legitimate part of the process of interpretation, and if it is usual - and indeed correct - to look first

for a clear meaning of the words used, it is certain, in the present case, both on a first look at the relevant text, and from the judgments in the courts below, that no 'golden rule' meaning can be ascribed."

The second passage was in the speech of Lord Diplock, at p. 280, where after referring to

"the traditional, and widely criticised, style of legislative draftsmanship which has become familiar to English judges during the present century and for which their own narrowly semantic approach to statutory construction, until the last decade or so, may have been largely to blame,"

he continued:

"That approach for which parliamentary draftsmen had to cater can hardly be better illustrated than by the words of Lord Simonds in Inland Revenue Commissioners v. Ayrshire Employers Mutual Insurance Association Ltd. [1946] 1 All E.R. 637, 641: 'The section... section 31 of the Finance Act 1933, is clearly a remedial section.... It is at least clear what is the gap that is intended to be filled and hardly less clear how it is intended to fill that gap. Yet I can come to no other conclusion than that the language of the section fails to achieve its apparent purpose and I must decline to insert words or phrases which might succeed where the draftsmen failed.' The unhappy legacy of this judicial attitude, although it is now being replaced by an increasing willingness to give a purposive construction to the Act, is the current English style of legislative draftsmanship."

Fothergill's case concerned an international convention where the essential words were ambiguous and had to be resolved by reference to their French meaning. Both the New Zealand experts said that the courts in New Zealand would follow and apply the passages referred to above. Such an agreement cannot be dissociated from the nature of that case, where there was no clear meaning which emerged from the words in the statute. The judge having, in my judgment, correctly concluded that the clear provisions of section 251 of the Customs Act 1913, which provided against automatic forfeiture, had been in substance re-enacted in the Act of 1966 by making seizure or perhaps even condemnation the sine qua non to the vesting of the property of the goods in the Crown, was not entitled to conclude that the words "shall be forfeited" were capable of either of the two meanings contended for. Having, in my respectful judgment, wrongly concluded that there was this ambiguity, he then [1982] Q.B. 349, 362 expressed the view that

"the purpose of the Act is to secure the enjoyment of historic articles for the people of New Zealand in the territory of New Zealand; that purpose is plainly advanced if articles exported or attempted to be exported become automatically the property of the Crown and can if necessary be recovered by the Crown."

The purpose of the Act is set out in its title: "An Act to provide for the protection of historic articles and to control their removal from New

Zealand." However, I accept Mr. Ross-Munro's well argued submission that what the judge was seeking to do was to interpret the words "subject to the provisions of this Act," in section 12 (2) of this Historic Articles Act 1962, as "subject to the purpose of this Act." Having correctly concluded, after a proper consideration of the Customs Acts, that there was no ambiguity in the words "shall be forfeited" there was no warrant for embarking on a search for the "purpose" of the Act.

I therefore reach the clear conclusion that an historic article knowingly exported or attempted to be exported in breach of the New Zealand Historic Articles Act 1962 is not automatically forfeited, so that the title there and then passes to Her Majesty in right of the Government of New Zealand. Seizure must first take place and, in view of the time bar contained in section 274 of the Customs Act 1966, the Attorney-General falls at the first fence.

2. Are the provisions of the Historic Articles Act 1962 and the Customs Acts 1913 and 1966 unenforceable in England as being foreign revenue, penal and/or public laws?

The judge answered this question in the negative. I have no difficulty in agreeing with him that the forfeiture provisions in section 12 of the Historic Articles Act 1962 are not a foreign revenue law. He correctly stated that the rule as to not enforcing a foreign law applies only to what may more or less accurately be described as taxes. He followed the observations of Denning L.J. in Regazzoni v. K. C. Sethia (1944) Ltd. [1956] 2 Q.B. 490, 515, approved by Viscount Simonds [1958] A.C. 301, 318: "These courts do not sit to collect taxes for another country or to inflict punishment for it:..."

A list of cases in which foreign law has not been enforced on the ground that it was revenue law is set out in Halsbury's Laws of England, 4th ed., vol. 8 (1974), p. 317, para. 420, n. 1, and are cases concerning capital gains tax, customs duty, stamp duty, rates, succession duty, income tax, profit tax and national insurance contributions. I do not think it would be overstating the position if I said that, certainly by the end of the defendants' submissions, all criticism of the judge's decision on this aspect of the case was virtually abandoned, although technically the point has been kept open.

Are the English courts being asked to enforce a foreign penal law?

It is common ground that if the question in this case was one of recognising the Historic Articles Act 1962, then it is a law which the English courts would recognise. Thus, if the carving had been seized and condemned in New Zealand, thereby being reduced into the possession of the New Zealand Government, then that Government would have been entitled to enforce its proprietary title in this country by reference to the Historic Articles Act 1962.

In Brokaw v. Seatrain U.K. Ltd. [1971] 2 Q.B. 476 goods said to be household effects were shipped in a United States ship from Baltimore in the United States to London, via Southampton. While the ship was

on the high seas the United States Treasury served a notice of levy in respect of unpaid tax on the shipowners in the United States, demanding the surrender of all property in their possession belonging to two United States taxpayers. When the ship docked at Southampton, both the former owner of the goods and the United States government claimed possession from the shipowners. Lord Denning M.R. said, at p. 482:

"If this notice of levy had been effective to reduce the goods into the possession of the United States Government, it would, I think, have been enforced by these courts, because we would then be enforcing an actual possessory title. There would be no need for the United States Government to have recourse to their revenue law... If the United States Government had taken these goods into their actual possession, say in a warehouse in Baltimore, or may be by attornment of the master to an officer of the United States Government, that might have been sufficient to enable them to claim the goods. But there is nothing of that kind here. The United States Government simply rely on this notice of levy given to the shipowners, and that is not, in my view, sufficient to reduce the goods into their possession."

Thus, Mr. Gray cannot validly contend that he is suing to enforce a proprietory title and not to enforce a statute. In order to make good his title in these proceedings, he has to rely on the Historic Articles Act 1962, since he cannot rely on any previous possession or other root of title.

The question whether a foreign law is penal must be decided by the English court. It must determine for itself, in the first place, the substance of the right sought to be enforced; and in the second place, whether its enforcement would, either directly or indirectly, involve the execution of the penal law of another state. The rule has its foundation in the wellrecognised principle that crimes, including in that term all breaches of public law, punishable by pecuniary mulct, or otherwise, at the instance of the state government, or someone representing the public, are local in this sense, that they are only cognisable and punishable in the country where they were committed. Accordingly, no proceeding, even in the shape of a civil suit, which has for its object the enforcement by the state, whether directly or indirectly of punishment imposed for such breaches by the lex fori, ought to be admitted in the courts of any other country: per Lord Watson in Huntington v. Attrill [1893] A.C. 150, 155-156. Lord Watson continued, at p. 157:

"A proceeding, in order to come within the scope of the rule, must be in the nature of a suit in favour of the state whose law has been infringed... But foreign tribunals do not regard these violations of statute law as offences against the state, unless their vindication rests with the state itself, or with the community which it represents. Penalties may be attached to them, but that circumstance will not bring them within the rule, except in cases where these penalties are recoverable at the instance of the state, or of an official duly authorised to prosecute on its behalf, or of a member of the public in the character of a common informer."

It was thus held that the action by the appellant in an Ontario court upon a judgment of a New York court against the respondent under New York State laws, being by a subject to enforce in his own interest a liability imposed for the protection of his private rights, was remedial and not penal. It was a suit for a penalty by a private individual in his own interest, and not a suit brought by the government or people of a state for the vindication of public law.

Huntington's case makes it clear that the first part of Mr. Gray's definition of foreign penal law, namely that it must be part of the criminal code of a foreign country, is not sustainable. The right which it is sought to enforce may be a right which arises under legislation which is essentially designed to regulate commercial activities such as company legislation which may well contain a penal provision. I agree with the judge that it cannot be right simply to categorise the statute sought to be enforced as a whole. The court must pay regard to the particular provision of the foreign law which it is sought to enforce.

It was readily accepted that forfeiture may, in certain circumstances, be a penalty. In Rex v. Nat Bell Liquors Ltd. [1922] 2 A.C. 128 forfeiture of whisky to the Crown in the Province of Alberta was held to be a penalty; so also in Banco de Vizcaya v. Don Alfonso de Borbon y Austria [1935] 1 K.B. 140 a decree expropriating all property of the defendant on the ground that he was guilty of high treason was held to be a penal law and unenforceable in this country. But, urges Mr. Gray, the whole scheme of the Historic Articles Act 1962 is to preserve in New Zealand articles to which the Act applies. The provisions for forfeiture are but a deterrent by-product. The fact that it carries with it unpleasant consequences no more makes it penal than did the Massachusetts statute which was the foundation of the dispute in the case in the Court of Appeals of the State of New York, Loucks v. Standard Oil Co. of New York (1918) 120 N.E. 198.

That statute provided for the recovery on behalf of the widow or children or next of kin of any person killed by negligence of damages "in the sum of not less than $500, nor more than $10,000, to be assessed with reference to the degree of... culpability" of the wrongdoer. It thus provided for penal damages. To my mind, this decision, so far from assisting the Attorney-General, does the contrary. Cardozo J., giving the judgment of the court, followed Huntington v. Attrill [1893] A.C. 150 by repeating that a penal statute is one which awards a penalty to the state, or to a public officer on its behalf, or to a member suing in the interest of the whole community, to redress a public wrong. The purpose must be, not reparation to one aggrieved, but vindication of the public justice. Mrs. Loucks was not a member of the public suing in the interests of the whole community. She was suing in her own interest. Nor was she suing to redress a public wrong - to vindicate the public justice. She was suing to vindicate a private right - reparation owed to one who was aggrieved.

In the instant submission, the claim is made by the Attorney-General on behalf of the state. It is not a claim by a private individual. Further, the cause of action does not concern a private right which demands

reparation or compensation. It concerns a public right - the preservation of historic articles within New Zealand - which right the state seeks to vindicate. The vindication is not sought by the acquisition of the article in exchange for proper compensation. The vindication is sought through confiscation. It is of course accepted that the provision of section 5 (2) of the Historic Articles Act 1962, which provides for a fine not exceeding £200 for the same offence as gives rise to forfeiture, is a penal provision. However, in the majority of cases, forfeiture is a far more serious consequence. This case is a dramatic example. The current value of the carving is asserted by one of the parties to these proceedings to be in the region of £300,000.

It seems to me to be wholly unreal to suggest that when a foreign state seeks to enforce these forfeiture provisions in another country, it is not seeking to enforce a foreign penal statute. No doubt the general purpose of the Act of 1962 is to preserve in New Zealand its historic articles. However, this does not mean that a suit to enforce the forfeiture provisions contained in section 12 is not a suit by the state to vindicate the public justice. I therefore cannot agree with the judge that section 12 is not a penal provision. Accordingly, if I am wrong in the answer I have given to the first question raised in this action, I would still dismiss the Attorney-General's claim on this point of public international law.

In these circumstances it is unnecessary for me to consider the question of whether there is a third category of foreign laws which our courts do not enforce, namely public law, and if so, what it comprises. Without reaching any firm conclusion, I am impressed by the reasoning of the judge that there is no such vague general residual category and, that if the test is one of public policy, there is no reason why English courts should not enforce section 12 of the Historic Articles Act 1962 of New Zealand.

I accordingly would also allow this appeal.

O'CONNOR L.J. (read by Ackner L.J.). In June 1978 the first defendant, George Ortiz, sent part of his collection of Polynesian and Maori artefacts to London for sale by auction at Sotheby's. Among the treasures was a carved wooden panel, a Maori rarity from New Zealand estimated by some to be worth £300,000. The auction was to take place on June 29, 1978. On June 26 the writ in this action was issued and the plaintiff applied for and obtained an injunction to prevent the sale of the Maori carving on the ground that it was owned not by Mr. Ortiz but by Her Majesty in the right of the Government of New Zealand. The basis of the claim was that the carving had been illegally exported from New Zealand in 1973 and thus been forfeited to the Crown.

There is no dispute that the third defendant, Mr. Entwistle, had exported the carving from New Zealand in 1973 without permission knowing that it was an historical article the export of which was prohibited by the New Zealand Historic Articles Act 1962 unless permission under that Act had been obtained. In due course an order was made for the trial of two preliminary issues of law. [His Lordship read the questions

of law, ante, p. 14E-G, and continued:] Staughton J. held that the plaintiff succeeded on both issues. The defendants appeal to this court.

The first issue depends upon the true construction of section 12 (2) of the New Zealand Historic Articles Act 1962. The question is whether subsection (2) makes forfeiture automatic on export or attempted export, or whether as a result of the Customs Act 1913 forfeiture depends upon seizure.

The Customs Act 1913 had been repealed and re-enacted in the Customs Act 1966 so that for this case the Act of 1962 must be read with the Act of 1966. Section 251 of the Act of 1913 expressly provided that forfeiture was to take place on seizure. That section has been replaced by section 274 in the Act of 1966. Mr. Gray on behalf of the plaintiff submitted that a radical change in the law had been made by the difference in wording between the two sections and that from 1967, when the Act of 1966 came into force, forfeiture was automatic. Like Lord Denning M.R. and Ackner L.J. and Staughton J., I cannot agree with this submission for the reasons given by them.

I can find no ambiguity in section 12 (2) of the Act of 1962. The incorporation of the Customs Act "subject to the provisions of this Act" requires that the same meaning be given to the phrase "shall be forfeited" in both Acts unless by express provision or necessary implication a different meaning is required under the Act of 1962. There is no express provision and I can find nothing in that Act which requires that a different meaning be given to the phrase. Forfeiture under the Act of 1962 is not automatic and the first issue must be decided in favour of the defendants.

Once that decision is reached it is not necessary to decide the second issue. Lord Denning M.R. and Ackner L.J. have however dealt with the issue. I agree the claim fails on this issue as well as the first because this is a penal law which our courts will not enforce.

Solicitors: Manches & Co.; Joelson Wilson; Allen & Overy.

M. I. H.

The plaintiff appealed.

Andrew Morritt Q.C., Charles Gray and Mark Warby for the plaintiff. The first preliminary issue depends on the proper construction of the Historic Articles Act 1962. Technically that is a matter of fact since it is a question of foreign law, but it would be artificial so to regard it since if the House were sitting as the Privy Council the question would be one of law. The two experts who gave evidence adopted different approaches. The issue will be argued as though it were a point of law arising on an English statute. The contention in the courts below that the Customs Acts 1913 and 1966 provide for automatic forfeiture is now

abandoned. However, there is automatic forfeiture under section 12 (2) of the Act of 1962.

The equivalent Act before 1962 was the Maori Antiquities Act 1908. The definition of "Maori antiquities" in section 2 is narrower than that of "historic article" in section 2 of the Act of 1962. Section 6 (3) provides that any Maori antiquities entered for export contrary to the Act "shall be forfeited, and shall vest in His Majesty." It is clear from that wording, and from the absence of any reference to the necessity of seizure and condemnation, that automatic forfeiture was intended. The word "and" imports that the arising of the cause of forfeiture and the vesting in the Crown occurred simultaneously. It was accepted before Staughton J. that that was the position: see [1982] Q.B. 349, 356A-B. There was also a Customs Act in 1908, but there was no provision linking the two Acts or applying the Customs Act to antiquities. Until 1962, therefore, section 6 (3) provided the only protection for antiquities.

In the Customs Act 1913, "forfeited goods" and "restricted goods" were defined in section 2. Section 47 (5) provided that all goods "shipped on board any ship for the purpose of being exported" contrary to the terms of the prohibitions set out earlier in the section and all goods "waterborne for the purpose of being so shipped and exported, shall be forfeited." The words "shall be forfeited" have constantly been construed in England as forfeited only when seized. Moreover, there is good reason why there should not be automatic forfeiture for the general run of customs goods (e.g., guns), since there could be complications with an extensive range of liabilities. References later in the Act to seizure confirm that forfeiture under section 47 (5) was conditional. Section 47 did not apply to historic articles until that section and the Act of 1913 were brought into the Act of 1962 by section 12 (1) of that Act (but "subject to the provisions" of the Act of 1962). Thereafter historic articles were included in "restricted goods." The effect therefore was that section 12 (1) provided for the conditional forfeiture of historic articles shipped on board or waterborne to avoid a prohibition on export.

If the forfeiture referred to in section 12 (2) were also conditional, that subsection would be wholly superfluous. The subsection must be intended to have some further effect, and the only possibility is automatic forfeiture. That subsection in effect reproduces, with certain changes, section 6 (3) of the Act of 1908. There is no indication that the Act of 1962 has any different purpose, as regards the protection of antiquities, from the Act of 1908, and indeed the preamble to the Act of 1962 is "an Act to provide for the protection of historic articles and to control their removal from New Zealand." It is permissible to have regard to the preamble in order to ascertain the purpose of the Act: secion 5 (e) of the Acts Interpretation Act 1924. Forfeiture under section 12 (1) occurs where there is no particular state of mind in the exporter, for example, in the case of an innocent exporter. Section 12 (2) applies where the goods are "knowingly" exported in breach of the Act, and it also includes attempted exports. The subsection both limits section 6 (3) of the Act of 1908, in that the scope of automatic forfeiture is confined, and

extends it, in that it applies whether the goods have been entered for export or not.

Section 12 (2) is in effect a longstop provision to cater for smugglers. Section 12 (3), imposing an obligation to deliver the article to the minister, and the proviso to that subsection, reinforce the submission. It follows that "forfeited goods" in the latter part of section 12 (2) must mean goods which have been forfeited, and therefore the meaning there is not that in the Customs Act, where the definition is in terms of goods liable to be forfeited. The provisions of the Act of 1962 are expressed to be paramount. and therefore the definition in the Customs Act cannot prevail if it would not fit into the Act of 1962 in any particular context. Sections 253 to 259 of the Act of 1913 set out a code of seizure and condemnation. That procedure is followed if there is a requirement of conditional forfeiture. Where section 12 (2) applies, other remedies have to be pursued, for example, an action in a foreign country, as in the present case.

The Act of 1913 was replaced by the Customs Act 1966. It is now accepted that references in the Act of 1962 to the Act of 1913 must be read as references to the later Act, in accordance with section 21 of the Acts Interpretation Act 1924. There is no material difference between the two Customs Acts. The counterpart in the Act of 1966 of section 47 of the Act of 1913 is section 70. A new section 287 of the Act of 1966, inserted by section 10 of the Customs Acts Amendment Act 1970, makes it clear that forfeiture under the Customs Acts is conditional.

If "shall be forfeited" in section 12 (2) is ambiguous. the ambiguity should be resolved in favour of the plaintiff, since automatic forfeiture would plainly "best ensure the attainment of the object of the Act," and the Act of 1962 should be construed accordingly: section 5 (j) of the Act of 1924. Although the first part of that subsection abolishes the distinction between remedial and penal provisions, it goes on to provide that every Act "shall... receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act." Its predecessor was considered in Smith v. McArthur [1904] A.C. 389. The English common law is, in appropriate cases, to the same effect: see Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251.

Automatic forfeiture does not involve a less liberal construction than conditional forfeiture (where there is a right of challenge before forfeiture becomes complete) since if the goods have gone from the country the procedure for seizure and condemnation is irrelevant anyway. The only action that can be taken is a suit in the foreign country. If it is successful, there is nothing to prevent the minister from then exercising his discretion under the proviso to section 12 (3) of the Act of 1962. He could for example invite the exporter to apply for a permit. Moreover, it would be open to the "owner" to prove that he did not have the relevant knowledge at the relevant time, and there would be judicial protection to that extent.

The judgment of Staughton J. [1982] Q.B. 349 was right for the reasons he gave, although he did not deal with the "superfluity" point. In the judgments of the Court of Appeal, Lord Denning M.R., ante, p. 17G, and Ackner L.J., ante. p. 26D, wrongly took into account the marginal note to section 12, "Application of Customs Act 1913."

Section 5 (g) of the Acts Interpretation Act 1924 provides that marginal notes are not to be deemed part of the Act. After 1956 the headings of sections came after the section numbers, but in Daganayasi v. Minister of Information [1980] 2 N.Z.L.R. 130 it was held that they were still marginal notes. Lord Denning M.R., ante, p. 19A. was quite wrong to suggest that the Act of 1962 would have effect beyond the territory of New Zealand, cf. Staughton J. [1982] Q.B. 349, 355C. The Customs Acts define the time of exportation in such a way as to keep the ambit of the Acts well within the New Zealand territorial limits: see section 69 of the Act of 1966. Lord Denning M.R.'s "territorial theory of jurisdiction" is not quarrelled with, but it has no application.

[LORD FRASER OF TULLYBELTON. Argument will be heard from all parties on the first preliminary issue before the second issue is dealt with.]

Gray following. The arguments before the trial judge and the Court of Appeal were the same and were based on (1) internal, linguistic, considerations and (2) the purposive point. The time provisions show that, in the case of an export by aeroplane, the time of export is when the plane gets to the end of the runway. If the defendants are right, the article only then becomes liable to forfeiture; that is absurd in practical terms. It is accepted that there is a difficulty with "attempted to be exported" if the plaintiff is right, but "exported" does also appear in section 12 (2). There are strong indications in section 12 (3) that automatic forfeiture is intended. That subsection says that where a historic article is forfeited, it "shall be delivered" to the minister. That would be odd wording to use if the article were only in jeopardy. In the proviso there is a reference to the minister returning the article to the person who "was" the owner immediately before the forfeiture. That also is anomalous if the defendants are right: the owner might never have ceased to be the owner at all. The "superfluity" point was not raised below.

The purposive argument has been repeated before the House. Section 12 (2) will always in practice be directed at the person who has decided to smuggle goods out. In that context automatic forfeiture better serves the purpose of the Act.

Paul Baker Q.C. and Nicholas Patten for the first defendant. As a pure matter of language "shall be forfeited" could connote either liability to divestment or immediate divestment. In the Customs Acts and the Act of 1962 it means liable to be divested, and "forfeited goods" means goods in respect of which a cause of forfeiture has arisen. When the Act of 1913 was passed, it was well established in English law, and had been for a number of centuries, that "shall be forfeited" meant "shall be liable to be forfeited." Section 12 is set in a very strong historical context.

The plaintiff's "superfluity" argument is based on a misapprehension. Section 12 (1) of the Act of 1962 sets out by applying the whole of the Customs Act, but "subject to the provisions" of the Act of 1962. Section 12 (2) then deals with forfeiture and applies those provisions of the Customs Act relevant to forfeiture; since those provisions are thereby made part of the Act of 1962, their application must be excluded in

subsection (1), because that subsection is "subject to the provisions of this Act." Section 12 (1) is therefore not concerned with forfeiture at all. It is section 12 (2) which deals with forfeiture, but there again the application of the Customs Act is modified. Section 5 of the Act of 1962 creates the offence of removing or attempting to remove a historic article, knowing it to be a historic article, without a written permit. It is an offence with mens rea. Section 12 (2) picks that up: goods knowingly exported or attempted to be exported in breach of the section "shall be forfeited." The provisions regulating the process whereby the cause of forfeiture comes about are therefore self-contained within the Act of 1962, and since section 12 (2) is also "subject to the provisions of this Act," the Customs Act is not had regard to for that purpose, and in particular section 70 of the Act of 1966, which creates an absolute offence which bites at a different stage. The Customs Act provisions which are imported are those laying out a code of forfeiture. Section 15 of the Act of 1962 makes the position clear.

Staughton J. accepted [1982] Q.B. 349, 360E, that linguistic considerations pointed to conditional forfeiture, but went on to say, at p. 362D, that that was displaced by "subject to the provisions of this Act." He did not indicate what such provisions led him to that conclusion. There are none; the provisions of the Act are consistent with the meaning based on linguistic considerations. Section 12 (3) is barely workable under automatic forfeiture. It is obviously directed to customs officers who, when they seize an article, must proceed as there stated, rather than under section 286 of the Act of 1966.

The Antiquities Act 1975, which has replaced the Historic Articles Act 1962, deals with the whole matter in much greater detail and undoubtedly provides for automatic forfeiture. However, it is not legitimate to construe the Act of 1962 by reference to that Act.

Section 5 (j) of the Acts Interpretation Act 1924 does not have the wide ambit claimed for it. Its function was to abolish the distinction between remedial and penal provisions. The latter part of the subsection is prefaced by "and shall accordingly ..."; it is there to give effect to the first part. Staughton J. agreed with this view: see [1982] Q.B. 349, 360-361. In any event the subsection can only be used if there is ambiguity or doubt. It cannot be imposed if the language is clear. In Smith v. McArthur [1904] A.C. 389 there was a deadlock, and the Act was unworkable if a literal construction was given. Fothergill v. Monarch Airlines Ltd. [1981] A.C. 251 was a very special case on an international convention. The underlying idea was the desirability of unifying the rules throughout all the countries concerned. There is no such issue in the present case. The case was introduced by the judge and not by any of the parties.

Even if purpose is considered, it does not assist the plaintiff. The purpose of the Act of 1962 is not stated to be to vest articles in the Crown. If it were, the qualification "knowingly" in section 12 (2) would be unaccountable. The defendants' construction would afford a good measure of protection. The Act of 1962 has an overall deterrent effect. Section 69 of the Act of 1966 defines export so that it is complete by the time the

article has left New Zealand territory. A ship could be stopped before it reached the territorial limit.

The Maori Antiquities Act 1908 is a side-issue. The Act of 1962 covered a much wider range; it cannot be suggested that it was simply a consolidating Act.

Colin Ross-Munro Q.C. and Gerald Levy for the third defendant. The first defendant's submissions are adopted, but with a difference. Section 12 (1) of the Act of 1962 brings in the whole of the Customs Act, including the forfeiture provisions in section 70 (7) of the Act of 1966. The point of section 12 (2) is to make it quite clear that a historic article which is exported or attempted to be exported in breach of the Act is liable to be forfeited, in short compass, and without having to amend the Customs Act by numerous insertions in it. Effectively, section 12 (2) contains further and better particulars of section 12 (1).

The plaintiff's attempt to establish that "shall be forfeited" in section 12 (2) has a different meaning from elsewhere fails for three reasons. (1) The Maori Antiquities Act 1908 does not help in the construction of section 12 (2). If that is wrong, that Act supports the defendants if anything, since the word "vesting" in section 6 (3) does not appear in the Act of 1962. (2) If the words have a clear meaning, one should not look to the purpose in order to give a strained meaning to the language. (3) Section 12 (1) says that all the provisions of the Customs Act are to apply, which must include, as well as the forfeiture provision, those relating to seizure, notice, the 2-year limit on seizure, territorial limits and condemnation: see sections 279-282 of the Act of 1966.

There are four reasons why the plaintiff's submissions on automatic forfeiture are wrong. (1) If automatic forfeiture were intended, the draftsman could not have been more inept, since there would be no need to refer to the applicability of the Customs Act at all, and it would have been perfectly easy to say expressly that title vested in the Crown. (2) It would be strange, even if not impossible, that in one and the same section there were contained the Customs Act rŽgime of conditional forfeiture and a completely different system of automatic forfeiture. (3) All the Customs Act provisions relating to seizure, condemnation etc. would be inappropriate, but section 12 (2) says that (all) the relevant provisions are to apply "in the same manner as they apply to goods forfeited under the Customs Act." (4) The transfer of title to the Crown would depend on whether the export or attempted export was done "knowingly." That would be an imprecise and unsatisfactory test.

The plaintiff's submissions are not only startling to English eyes but are not justified in New Zealand law and involve bringing in automatic forfeiture and all that is entailed by it by a side-wind and by inference.

In considering a question of foreign law, the House of Lords is entitled to form its own view of the effect of a foreign statute or decree. It will of course pay attention to the opinions of experts and/or the findings of foreign tribunals, but it is not bound by either. It is a different type of finding of fact from the normal variety, since law is incorporated in it: see Dalmia Dairy Industries Ltd. v. National Bank of Pakistan [1978] 2 Lloyd's Rep. 223. If it were a question of, say, Argentinian law, the

court as a matter of practical common sense would be bound by what a witness said, since it would not be familiar with the system of law. That is not the present case. In extreme cases the court can reject the opinions of both expert witnesses and come to its own conclusion: see Russian Commercial and Industrial Bank v. Comptoir d'Escompte de Mulhouse [1925] A.C. 112, 124-125, 128-129, 134, 145, and in the Court of Appeal [1923] 2 K.B. 630, 643, per Bankes L.J. Staughton J.'s approach was correct but he came to the wrong conclusion.

Morritt Q.C. replied.

[LORD FRASER OF TULLYBELTON. Their Lordships do not at present wish to hear argument on the second issue, but they may wish to do so in due course.]

Their Lordships took time for consideration.

April 21.LORD FRASER OF TULLYBELTON. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Brightman, and I agree with it. For the reasons there stated I would dismiss this appeal.

LORD SCARMAN. My Lords, I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brightman. I agree with it. For the reasons he gives I would dismiss the appeal.

LORD ROSKILL. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Brightman. For the reasons he gives I too would dismiss the appeal.

LORD BRANDON OF OAKBROOK. My Lords, I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Brightman. I agree with it, and for the reasons which he gives would dismiss the appeal.

LORD BRIGHTMAN. My Lords, this appeal arises out of the trial of a preliminary issue in a suit brought by the New Zealand Government against the exporter and purchaser of a tribal antiquity. The facts as pleaded in the amended statement of claim, upon the basis of which the issue fell to be tried, are as follows. In or about 1972 one Manukonga found in a swamp in the province of Taranaki a valuable Maori relic, described as a series of five carved wood panels that formed the front of a food store. In 1973 Manukonga sold the carving to the third defendant Mr. Entwistle who was a dealer in primitive works of art. The carving was to the knowledge of Mr. Entwistle an historic article within the meaning of the Historic Articles Act 1962 of New Zealand. Later in the same year the carving was exported from New Zealand by or on behalf of Mr. Entwistle. No permission under the Historic Articles Act 1962 authorising the removal of the carving from New Zealand had been obtained by him. In the same year Mr. Entwistle sold the carving to the first defendant Mr. Ortiz for $65,000. In 1978 Mr. Ortiz consigned

the carving to Messrs. Sotheby Parke Bernet & Co. (Sotheby's) in England for sale by auction.

In June 1978 the Attorney-General of New Zealand (suing on behalf of Her Majesty the Queen in right of the Government of New Zealand) issued proceedings against Mr. Ortiz and Sotheby's and (by amendment) Mr. Entwistle. The New Zealand Government claims a declaration that the carving is the property of Her Majesty the Queen; as against Mr. Ortiz and Sotheby's an order for delivery up of the carving; and as against Mr. Entwistle damages for conversion.

Under a consent order Sotheby's retain possession of the carving pending the outcome of the action, and proceedings against them have been stayed.

In 1980 the Queen's Bench master, whose decision was upheld on appeal, ordered the trial of two preliminary issues, first, whether on the facts pleaded "Her Majesty the Queen has become the owner and is entitled to possession of the carving... pursuant to the provisions of the Historic Articles Act 1962 and the Customs Acts 1913 and 1966." And secondly "whether in any event the provisions of the said Acts are unenforceable in England as being foreign penal, revenue and/or public laws."

It is not in dispute for the purposes of the preliminary issues that the carving was exported in breach of the Act of 1962. The resolution of the first issue depends on whether, on the true construction of section 12 of the Act of 1962, incorporating certain provisions of the Customs Act, the carving was forfeited immediately it was unlawfully exported, so that it thereupon became vested in the Crown; or whether the unlawful export of the carving merely rendered it liable to forfeiture in the future, the forfeiture taking effect only upon the seizure by the New Zealand customs or police, which has not taken place. There is an express provision in the Customs Act 1913, and it is a necessary implication from a provision in the Customs Act 1966, that forfeiture under those Acts is not complete until seizure.

I turn in more detail to the statutory provisions. The Historic Articles Act 1962 repealed the Maori Antiquities Act 1908, which itself consolidated earlier enactments. The Act of 1962 is described in the long title as "An Act to provide for the protection of historic articles and to control their removal from New Zealand." Section 2 contains a definition of "historic article." It is not in dispute that the carving falls within this definition. The definition is a wide one, and includes not only artifacts, but also documentary matter and certain specimens of animals, plants and minerals. Section 4 enables the Minister of Internal Affairs to acquire an historic article by purchase or gift. Section 5 describes what acts are unlawful in particular relation to an historic article, and it is the only section to do so. Unless a person transgresses section 5, he is at liberty to dispose of or deal with an historic article in the same manner as he may dispose of or deal with any other article. This section, which is crucial to the construction of section 12, reads as follows, so far as relevant:

"(1) It shall not be lawful after the commencement of this Act for any person to remove or attempt to remove any historic article from

New Zealand, knowing it to be an historic article, otherwise than pursuant to the authority and in conformity with the terms and conditions of a written certificate of permission given by the Minister under this Act. (2) Every person who contrary to the provisions of this section removes or attempts to remove any article from New Zealand, knowing it to be an historic article, commits an offence, and shall be liable on summary conviction to a fine not exceeding £200...."

Sections 6 to 11 deal with applications for permission to remove an historic article from New Zealand and incidental matters. Section 12, which is the section that falls to be construed, reads as follows:

"(1) Subject to the provisions of this Act, the provisions of the Customs Act 1913 shall apply to any historic article the removal from New Zealand of which is prohibited by this Act in all respects as if the article were an article the export of which had been prohibited pursuant to an Order in Council under section 47 of the Customs Act 1913. (2) An historic article knowingly exported or attempted to be exported in breach of this Act shall be forfeited to Her Majesty and, subject to the provisions of this Act, the provisions of the Customs Act 1913 relating to forfeited goods shall apply to any such article in the same manner as they apply to goods forfeited under the Customs Act 1913. (3) Where any historic article is forfeited to Her Majesty pursuant to this section, it shall be delivered to the Minister and retained in safe custody in accordance with his directions: Provided that the Minister may, in his discretion, direct that the article be returned to the person who was the owner thereof immediately before forfeiture subject to such conditions (if any) as the Minister may think fit to impose."

Section 16 empowered the Governor-General by Order in Council to make regulations for certain purposes, including regulations providing for such matters as are contemplated by or necessary for giving full effect to the provisions of the Act. Your Lordships have not been made aware of any relevant regulations.

The Act of 1962 is no longer in force. It was repealed by the Antiquities Act 1975 as from April 1, 1976. However, the New Zealand Government do not claim that they are able to base the Crown's claim to ownership on any provision of the Act of 1975, which therefore can be disregarded.

Section 12 of the Act of 1962 was expressed to operate by reference to the Customs Act 1913. The provisions of that Act are to apply to an historic article, the removal from New Zealand of which is prohibited by the Act of 1962, as if the article were an article the export of which had been prohibited pursuant to an Order in Council under section 47 of the Act of 1913. The Act of 1913 was repealed by the Customs Act 1966, which came into operation for all relevant purposes on January 1, 1967. Section 70 of the Act of 1966 is the section which corresponds to section 47 of the Act of 1913. It is common ground (although at one time disputed) that in consequence of section 21 of the Acts Interpretation

Act 1924, section 12 of the Act of 1962 must for present purposes be read as referring to the Customs Act 1966, and in particular to section 70 thereof.

The immediate effect of notionally including, without qualification, an historic article as a prohibited export under section 70 of the Act of 1966 is that a contravention of the prohibition would render the exporter liable to a fine and would render the article subject to forfeiture, in the terms of subsections (6) and (7), which read:

"(6) If any person exports, or ships with intent to export, or conspires with any other person (whether within New Zealand or not) to export any goods contrary to the terms of any such prohibition in force with respect thereto he commits an offence and shall be liable to a fine not exceeding £500 or three times the value of the goods, whichever sum is the greater. (7) All goods shipped on board any ship or aircraft for the purpose of being exported contrary to the terms of any such prohibition in force with respect thereto, and all goods waterborne for the purpose of being so shipped and exported, shall be forfeited."

A further effect of notionally including, without qualification, an historic article in section 70 would be to bring into operation in relation thereto all the other provisions of the Customs Act 1966 which are incidental to subsections (1), (6) and (7). For instance, section 69 defines the time at which goods on board a ship or aircraft are deemed to be exported. Section 212 confers on a person in the employment of the customs the right to question a person who is on board a ship or aircraft as to whether he has in his possession restricted or forfeited goods; "restricted goods" includes prohibited exports. Sections 213 to 218 confer rights of search and discovery of documents. Section 225 regulates the sale of forfeited goods. Section 254 prescribes a penalty for concealing restricted goods on a ship or aircraft. Of particular significance are sections 274 and 275, which read as follows, so far as material:

"274. When it is provided by this Act or any other of the Customs Acts that any goods are forfeited, and the goods are seized in accordance with this Act or with the Act under which the forfeiture has accrued, the forfeiture shall for all purposes relate back to the date of the act or event from which the forfeiture accrued.

"275. (1) Any officer of customs or member of the police may seize any forfeited goods or any goods which he has reasonable and probable cause for suspecting to be forfeited... (4) No goods shall be so seized at any time except within two years after the cause of forfeiture has arisen."

Section 278 requires immediate notice of seizure to be given to a person known or believed to have an interest in the goods. Section 279 provides that goods seized as forfeited shall be deemed to be condemned unless forfeiture is disputed in the prescribed manner. Section 280 deals with proceedings instituted in the Supreme Court for the condemnation of goods seized as forfeited. Section 282 is to the like effect in relation to a magistrates' court. Section 283 provides that conviction of an offence

which gives rise to forfeiture shall have effect as condemnation, without suit or judgment, of any goods that have been seized and in respect of which the offence was committed. Section 286 provides that "All forfeited goods shall, on forfeiture, become the property of the Crown ..." Section 287 empowers the Governor-General to waive a forfeiture.

It follows from the wording of section 274 of the Act of 1966, and from the definition of "forfeited goods" in section 2 as goods "in respect of which a cause of forfeiture has arisen," that goods which are declared by the Act to be forfeited are in most instances more accurately described as "liable to forfeiture," and that no actual forfeiture takes place and there is accordingly no transfer of ownership until the goods have been seized. This was, perhaps, more clearly expressed in the corresponding section of the Act of 1913, which reads as follows:

"251. When it is provided by this Act or any other Customs Act that any goods are forfeited, the forfeiture shall take effect without suit or judgment of condemnation so soon as the goods have been seized in accordance with this Act or with the Act under which the forfeiture has accrued, and any such forfeiture so completed by seizure shall for all purposes relate back to the date of the act or event from which the forfeiture accrued."

Counsel for the New Zealand Government conceded before your Lordships (although it was at one time disputed) that there is no relevant distinction between these two sections.

The two preliminary issues were tried by Staughton J. [1982] Q.B. 349. The first issue raised a question of foreign law. A question of foreign law is a question of fact upon which the trial judge requires the assistance of evidence from foreign lawyers. The learned judge had the advantage of expert evidence from Dr. Inglis Q.C. on behalf of the New Zealand Government and Mr. Thomas Q.C. on behalf of Mr. Ortiz. The witnesses were divided as to whether the Customs Act 1966 provided for automatic forfeiture or whether seizure was a necessary preliminary. On this issue the judge accepted the evidence of Mr. Thomas that the Act did not provide for automatic forfeiture. That view of the effect of the Act is no longer challenged. There was a similar divergence of view between the experts as to whether or not there was automatic forfeiture under section 12 (2) of the Act of 1962. On that aspect, the learned judge expressed himself as follows [1982] Q.B. 349, 362:

"My conclusions on this issue are therefore, as follows: (1) the words 'shall be forfeited' are equally capable of meaning shall be forfeited automatically or shall be liable to forfeiture; (2) the reference to the Customs Act 1913 and now to the Customs Act 1966 where the same words mean 'shall be liable to be forfeited,' points to the words having that meaning in the Historic Articles Act 1962; (3) that is not conclusive because section 12 of the Historic Articles Act 1962, when it refers to the Customs Act, does so 'subject to the provisions of this Act': (4) the purpose of the Act of 1962 may properly be taken into account by a New Zealand court and points firmly in favour of automatic forfeiture. On these grounds I accept the evidence of Dr. Inglis that it does so provide."

The judge then turned to the second issue, which he decided in favour of the plaintiff for reasons which need not be recounted.

Mr. Ortiz and Mr. Entwistle appealed. ^* In reserved judgments the Court of Appeal. ante, p. 13E, unanimously decided that there was no ambiguity in section 12 (2) of the Act of 1962; that forfeiture under that section took effect only upon seizure; and that, since the carving had not been forfeited, the Crown was neither the owner nor entitled to possession of the carving.

That decision was sufficient to dispose of the preliminary issues. If the first issue were decided against the New Zealand Government, there was no need to discuss and decide the second issue, as O'Connor L.J. pointed out. The court did, however, deal with the second issue, and expressed opinions thereon. I imagine that this course was taken for the assistance of your Lordships' House, in case your Lordships should form a contrary view on the first issue, in which event it would have been helpful to have had the opinions of the Court of Appeal. It was perhaps with this sort of consideration in mind that the order made by the master directed a trial of the second issue "in any event." My Lords, I take the view that the opinions expressed by the learned Lords Justices on the second issue were, in truth, obiter. Indeed, that would also seem to have been the view of the Lords Justices themselves, because in the report of the case in the Weekly Law Reports, which, as your Lordships know, will have been seen in proof by the Lords Justices, the appeal is treated in the headnote [1982] 3 W.L.R. 570, 571 as disposed of upon the first issue alone. Your Lordships have heard no argument on the second issue, and I venture to think that, in any event, your Lordships would not wish to be taken as expressing any conclusion on the correctness or otherwise of the opinions so expressed.

My Lords, I am in respectful agreement with the decision on the first issue reached by the Court of Appeal, although I express my reasons differently.

Section 12 (1) of the Act of 1962 says:

"Subject to the provisions of this Act, the provisions of the Customs Act 1913 shall apply to any historic article the removal from New Zealand of which is prohibited by this Act ..."

That raises the question, what articles are forbidden to be removed from New Zealand by the Act? In my opinion, the answer is, those articles defined by section 2, the removal of which is not authorised by a certificate of permission given by the Minister of Internal Affairs, although there is no offence unless the removal is done knowingly. I shall refer to an historic article, the removal of which is forbidden by section 5 (1), as a "protected chattel."

Continuing with my analysis of section 12 (1), I find that the provisions of the Customs Act 1913 are to apply to a protected chattel

* Note. There was also a respondent's notice served by the Attorney-General seeking to affirm the judge's order on additional grounds.

"in all respects as if the article were an article the export of which had been prohibited pursuant to an Order in Council under section 47 of the Customs Act 1913."

This formula, if unqualified, would have the effect of applying to a protected chattel all the provisions of the Act of 1966 which are appropriate. I have already suggested a number of provisions of the Act of 1966 which are thus introduced, notably section 69 (time of exportation), subsections (4) and (5) of section 70 (fine and forfeiture for contravention), and section 274 (relation back of forfeiture and necessity for seizure). The interpretation section is also introduced, the most important definition being that of "forfeited goods" - "goods in respect of which a cause of forfeiture has arisen under the Customs Acts." The definition of "restricted goods," as inclusive of goods the exportation of which is prohibited by the Customs Acts, is also important as it provides the lead-in to a number of sections of the Act of 1966.

However, this application of the Act of 1966 takes effect "subject to the provisions of this Act." The provisions of the Act of 1962 are, therefore, paramount, and in consequence the incorporated provisions of the Act of 1966 are subject to the provisions of sections 5 and 12 (2) and (3) of the Act of 1962.

Section 5 (1) of the Act of 1962 creates the one and only offence which is peculiar to an historic article, namely, the removal of it or an attempt to remove it from New Zealand, with knowledge that it is an historic article, otherwise than pursuant to a written certificate of permission. For that offence section 5 (2) imposes a liability on summary conviction to a fine not exceeding £200. It is at that point that we find the first qualification upon the general application of the provisions of the Act of 1966 to a protected chattel. Under section 70 (6) of the Act of 1966, the pecuniary penalty for exporting, or shipping with intent to export, any goods contrary to the prohibition in section 70 (1) is a fine not exceeding £500 or three times the value of the goods if greater. Only the lesser penalty prescribed by the Act of 1962 can be imposed for the unlawful removal or attempted removal from New Zealand of a protected chattel.

The application of the Act of 1966 is also subject to section 12 (2) of the Act of 1962. There are two limbs to this subsection. The first limb provides that an historic article "knowingly" exported or attempted to be exported in breach of the Act of 1962 shall be forfeited to the Crown. It is clear from section 5 that the adverb "knowingly" applies not to knowledge of the fact of export or attempt thereat, but to knowledge that the article is an historic article as defined. What the first limb of subsection (2) does, is to introduce the penalty of forfeiture for committing an offence under section 5 (1), as a penalty which is additional to the fine that can be imposed under section 5 (2). But, as in the case of the fine, there is no penalty of forfeiture unless it can be said of the exporter (remover) that he knew at the time the offence was committed that the article was an historic article.

The second limb of section 12 (2) provides, again subject to the provisions of the Act of 1962, that

"the provisions of the Customs Act [1966] relating to forfeited goods shall apply to any such article in the same manner as they apply to goods forfeited under the Customs Act [1966]."

The effect is to apply to an historic article, known to be such, which is exported or attempted to be exported in breach of section 5 (1), the whole range of provisions of the Customs Act 1966 relating to "forfeited goods," but subject again to the paramountcy of the Act of 1962. These provisions include, most importantly, section 274 which implies that forfeiture takes effect only on seizure and provides that the forfeiture then relates back to the date when the cause of forfeiture arose.

Since the application of such forfeiture provisions is expressed to be "subject to the provisions of this Act," and since section 12 (2) of the Act of 1962 is the enactment which imposes forfeiture for an offence under section 5 (1) of the Act of 1962, it seems to me that section 70 (7) of the Act of 1966 is overridden by section 12 (2) of the Act of 1962. A further minor result of the paramountcy of the Act of 1962 is that the power conferred on the Governor-General by section 287 of the Customs Act 1966 to waive a forfeiture will not apply in the case of the forfeiture of an historic article; such power is vested by section 12 (3) of the Act of 1962 in the Minister of Internal Affairs.

So, as it seems to me, the position of the Crown and the wrongdoer under the Act of 1962 is clear. The offence is created by section 5 (1). The pecuniary penalty is defined by section 5 (2). The penalty "in rem" is created by section 12 (2). The process of forfeiture is regulated in accordance with the provisions of the Act of 1966, in particular, the necessity of seizure (to be followed by actual or deemed condemnation) before the forfeiture is completed, at which stage it relates back to the accrual of the right to forfeit. There being no seizure in the instant case, the conclusion is inescapable that the ownership of the carving and the right to possession thereof have not become vested in the Crown.

Counsel for the appellant sought to argue that subsection (2) of section 12 imposed automatic forfeiture for a "knowing" export of an historic article, as a remedy additional to conditional forfeiture for an "unknowing" but illegal export under the Customs Act 1966 as applied by subsection (1). He accepted that there could be no forfeiture without seizure in the case of an "unknowing" export or attempted export, but he argued that there was no reason in the case of a "knowing" export or attempted export to introduce into a subsection (2) forfeiture, the requirement of seizure before the forfeiture takes effect. He sought to bolster the argument by reference to the supposed effect of the earlier Maori Antiquities Act 1908, which was said by both expert witnesses to have had the result of imposing immediate forfeiture without seizure if a Maori antiquity were "entered for export" contrary to the Act. It was said that it would be unlikely that the repealing Act, with its stated object of protecting historic articles and controlling their removal from New Zealand, would have deliberately reduced that protection, and lessened the chances of reversing an unlawful removal by requiring seizure before forfeiture. I am, however, by no means convinced that the Act of 1908 on its true construction did provide for forfeiture without seizure,

which would be quite contrary to the general pattern of a Customs Act. Reference to the Act of 1908 is of limited value in this case, and I express no opinion upon the point. Counsel also referred to section 5 (j) of the Acts Interpretation Act 1924, which bids the court to give to a statute

"such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Act... according to its true intent, meaning and spirit:..."

Counsel submitted, and I am disposed to agree, that the recovery of unlawfully exported historic articles would be best ensured if title thereto were to vest in the Crown independently of seizure.

In my opinion there is a fatal flaw in the argument of counsel. There is no offence committed under the Act of 1962 by the export of an historic article unless it is done "knowingly." No cause of forfeiture is capable of arising by reason of an "unknowing" export of an historic article, apart from a forfeiture for an offence under the Customs Act which has nothing to do with the fact that the subject matter of the export is an historic article. There are not two possible causes of forfeiture of an historic article, one cause arising under the Customs Act 1966 based upon an "unknowing" export or attempt thereat, and the other arising under section 12 (2) of the Act of 1962 based on a "knowing" export or attempt thereat. It is only to section 12 (2) of the Act of 1962 that one can look in order to find a cause of forfeiture of an historic article as such. Then, to ascertain the process of forfeiture, one turns to the Act of 1966. There one finds that section 274 requires seizure as a preliminary to forfeiture. The contingent nature of the forfeiture is underlined by the reference in section 12 (2) to "the provisions of the Customs Act 1913 relating to forfeited goods," which must inevitably be read as "the provisions of the Customs Act 1966 relating to goods in respect of which a cause of forfeiture has arisen under the Customs Act." It is not in my opinion possible to reach any conclusion save that (a) the penalty of forfeiture of an historic article as such is imposed only for an offence under section 5 (1) of the Act of 1962, and (b) such forfeiture is not complete until seizure.

I have every sympathy with the appellant's claim. If the statement of claim is correct, New Zealand has been deprived of an article of value to its artistic heritage in consequence of an unlawful act committed by the second respondent. I do not, however, see any way in which, upon a proper construction of the Act of 1962 and in the events which here happened, the Crown is able to claim ownership thereof.

I would dismiss the appeal.

Solicitors: Allen & Overy; Joelson Wilson & Co.; Samuels & Green.

M. I. H.