HIGH COURT OF AUSTRALIA
MACROBERTSON MILLER AIRLINE SERVICE v COMMISSIONER OF STATE TAXATION (WA)
BARWICK CJStephen and Jacobs JJ
3 September 1975 - Perth 10 December 1975 - Sydney
Stephen J In this appeal the question is whether the learned primary judge was correct in regarding an airline ticket issued by the appellant to an intending passenger on one of its scheduled flights as liable to duty as an " agreement or any memorandum of an agreement under hand only " - Stamp Act 1921-1971 (WA) Sched 2.
Until 1970 the United Kingdom stamp duty legislation contained a similar provision and a wealth of authority as to its meaning has developed which is directly applicable to the provisions of the Western Australian legislation. It establishes that a document containing a written offer which is subsequently accepted orally or by conduct does not thereby become either an agreement or a memorandum thereof for the purposes of stamp duty. The leading authority in a long line of precedent cases on the point is the judgment of Hawkins J, at first instance, in the otherwise celebrated case of Carlill v Carbolic Smokeball Co [1892] 2 QB 484 at 490. The point has ever since been regarded as well settled - Monroe - Stamp Duties (4th ed 1964) p 41; Hill - Stamp, Death, Estate and Gift Duties(1970) at p 44, which speaks of " the classic statement of Hawkins J " . I disregard, as presently irrelevant, the special case of a written offer which, after the conclusion of the contract by oral acceptance, is specifically adopted as a memorandum of the contract, " something being said or done by the parties to indicate that in the future it is to be so considered " - per Hawkins J at 490.
Accordingly, in the present appeal it will be critical to determine whether the issue by the appellant of its ticket was merely the making of an offer, to be later accepted either orally or by conduct, or whether, on the contrary, an agreement, of which it contained the terms, was concluded at or before the time of its issue, the ticket either being that agreement or being a memorandum of it. Each of these two latter possibilities will be excluded if that fact be that when the ticket was issued to the passenger no agreement had yet been concluded but instead awaited the passenger ' s acceptance of the offer constituted by the ticket.
The matter came before the learned primary judge by way of a case stated by the Commissioner and no facts appear in that case which relate to the actual circumstances affecting the particular passenger, a Mr J C Knight. Instead the case, while annexing the ticket issued to Mr Knight, speaks of the circumstances of its issue as typical and then goes on to describe such typical circumstances. A prospective passenger makes known his requirement, is informed whether and when the passage is available and the cost, a ticket is then written out in duplicate on a printed form and tendered to the passenger in return for the price; in due course, on the day of travel, the passenger uses his ticket to secure transport of his baggage and himself on the relevant aircraft.
It is to these facts that the accepted doctrine of the formation of contracts must be applied so as to determine whether the ticket is merely an offer, antecedent to agreement, or is itself the agreement or a memorandum of it.
This doctrine, of the formation of contracts by offer and acceptance, encounters difficulties when sought to be applied, outside the realms of commerce and conveyancing, to the everyday contractual situations which are a feature of life in modern urban communities. Contracts for the carriage of passengers, one of the most common classes of contract in a commuter society and one which ordinarily involves the attempted imposition of contractual restrictions upon the passenger ' s rights should he suffer loss or injury, provide an instance of these difficulties. The circumstances in which mass transportation occurs frequently permit of no time for prior negotiation, which would in any event usually be pointless with prevailing contracts of adhesion; moreover the transportation often will begin before there has been any communication at all between the passenger and the carrier ' s agent, the contract being " inferred from the acquiescence of the carrier in the presence of the passenger on the conveyance " - Lord Dunedin in Hood v Anchor Line [1918] AC 837 at 846; [1918-19] All ER Rep 98 at 103 and see Wilkie v London Passenger Transport Board [1947] 1 All ER 258 per Lord Greene MR at 259.
The conventional analysis of the formation of contracts for the carriage of passengers in those somewhat more leisurely transactions which involve the issue of a ticket in return for payment of a fare and the subsequent performance of the contract by the act of transportation, is to regard the ticket as the offer, the contract being made upon acceptance of that offer by the passenger, usually be conduct. Lord Denning describes this analysis, referring to the authorities which establish it, in Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 at 169; [1971] 1 All ER 686 at 689. He does so in the course of demonstrating its inappropriateness in situations in which there in fact exists no opportunity either of considering the terms of the proffered contract or of declining to enter into it on the terms which are offered.
In the present case there is no such inappropriateness, it is just such a case as that for which the conventional analysis was devised. This analysis affords to the intending passenger an opportunity, no doubt but rarely availed of, of ascertaining the conditions which the carrier seeks to impose and of accepting or rejecting them. The conventional long-distance rail or passenger liner situation is therefore applicable, a ticket is purchased in advance of the carriage and that ticket constitutes an offer available for acceptance by the passenger - Watkins v Rymill (1883) 10 QBD 178 per Stephen J at 188, Nunan v Southern Railway Co [1923] 2 KB 703 per Swift J at 707 and Thompson v L M & S Railway Co [1930] 1 KB 41 , per Lord Hanworth MR at 47; [1929] All ER Rep 474 at 478. Although the economics of mass transportation in fact lead to an absence of much real choice on the passenger ' s part whether or not to accept conditions sought to be imposed, he at least retains the ability to learn of those conditions and to refuse to travel by the intended means if he sees fit.
The general run of so called " ticket cases " involving contracts of carriage has been concerned with mishaps occurring during transportation and with the effect, if any, which conditions, sought to be imposed upon the passenger by the ticket issued to him, may have upon his rights against the carrier. The precise time at which the carrier ' s offer is accepted has not been the central question, although it has been indirectly involved in the central question of whether or not the conditions on the ticket have been incorporated as terms of the contract. The authorities make it clear that, in the absence of particular conduct on the part of the passenger, acceptance of the offer which a carrier makes when a ticket is issued does not occur immediately upon its receipt by the passenger; the whole concept of a passenger ' s acceptance of ticket conditions and of the need adequately to draw those conditions to his attention - Balmain New Ferry Co Ltd v Robertson (1906) 4 CLR 379 per Griffith CJ at 387 - is dependent upon this.
It is enough to refer to three authorities, over a span of almost a hundred years, in which, when the ticket itself contains conditions or a reference to conditions elsewhere available, the passenger ' s acceptance of the carrier ' s offer is treated as occurring some time after issue of the ticket. In Parker v South Eastern Railway Co (1877) 2 CPD 416 ; [1874-80] All ER Rep 166 Bramwell LJ, on three occasions, at CPD 426-428, refers to the passenger being afforded, if he wishes, the opportunity of reading the conditions on a ticket which is proffered to him before becoming bound by them, that is before the contract can be regarded as concluded, and see also per Baggallay LJ at CPD 425. Then in Hood v Anchor Line Lord Finlay LC and Lord Parmoor each refer to this. Lord Finlay said, at AC 843; [1918-19] All ER Rep at 101, that " when the passenger or his agent gets the ticket he may examine it before accepting, and if he chooses not to examine it when everything reasonable has been done to call his attention to the conditions he accepts it as it is " .
Lord Parmoor said, at AC 848-9; All ER Rep at 103: " If an intending passenger, either personally or through his agent, has reasonable notice that the ticket or document handed to him by a carrier contains certain conditions, and accepts the document or ticket as handed to him without objection, and without taking the trouble to make himself acquainted with such conditions, he must be taken to have assented to them, " - and see also per Viscount Haldane at 845; 102. In the Shoe Lane Parking Case Lord Denning, at 169; [1971] 1 All ER at 689, refers to the acceptance of the ticket and its retention without objection as being regarded as an acceptance because of the theory " that the customer, on being handed the ticket, could refuse it and decline to enter into a contract on those terms " . Megaw LJ at 173-174; 693, says, of customers of a car park to whom tickets are issued which refer to conditions displayed on the premises, that they must have " a fair opportunity, before the contracts are made, of discovering the conditions by which they are to be bound " . Such a customer, who, by the issue of a ticket, becomes the recipient of an offer, must be afforded an opportunity of learning, from the ticket, what are the terms of that offer before he can be said to have accepted it.
The cases, including some of the few passages which I have cited, are replete with references to passengers who elect not to read ticket conditions, no doubt the common behaviour of most passengers; they, it is said, do not thereby escape being bound by those conditions. This rule of law, which is directed to identifying the agreed terms of the particular contract, does not detract from but, rather, supports the proposition that acceptance, and the resultant formation of the contract, does not occur upon tender of the ticket. It occurs after that event, either when the passenger has by actual conduct intimated his acceptance of the offer, for instance by immediately boarding the vehicle in question, or, absent any such conduct, when a reasonable time has passed during which the passenger has had an opportunity of reading the conditions appearing on the ticket and has not then rejected the offer and demanded the return of his fare. In other words, acceptance will normally be by conduct and this conduct will consist either of an overt act consistent only with acceptance or, in its absence, of the passenger ' s failure to reject the offer after he has had an opportunity of learning of the conditions upon which carriage is offered.
Those cases in which a contract is concluded which incorporates ticket conditions despite the passenger ' s failure to read them are instances either of the occurrence of such an overt act or of the passing of a reasonable time without rejection. In the latter case there is involved the concept of effective acceptance without actual communication to the offerer; but when, as here, the offeree, by tendering his fare, has performed his part of the bargain in advance his acceptance may readily be inferred from his failure, within a reasonable time after receipt of his ticket, to reject the offer and demand the return of his fare - Williston on Contracts 3rd ed vol 1 para 91C. What will be a reasonable time within which to reject proffered terms will be a question of fact in every case dependent upon all the circumstances, including, no doubt, the length and complexity of the conditions which form part of the offer. What Hawkins J, in Watkins v Rymill at 180, and Megaw LJ, in the passage cited from the Shoe Lane Parking Case, each referred to as " a fair opportunity " of reading the tendered ticket will provide the test, recourse being had, for this purpose, to familiar standards of reasonableness.
If this, then, be the correct view of the time of formation of such a contract as the present one, it necessarily follows that in the typical circumstances referred to in the stated case the completed ticket itself will not, when it comes into existence, then record any existing agreement nor itself be an agreement; it will be no more than a written offer open for acceptance. Hence it is not dutiable as an " agreement or any memorandum of an agreement " for the purposes of the Stamp Act.
The conditions appearing in the appellant ' s ticket are not easy to interpret; they appear to relieve the appellant very substantially from performance of those obligations relating to the carriage of the passenger which are to be implied from the description, in the ticket, of the destination, the flight number and the departure time and date. However I think it unnecessary to arrive at any conclusion as to whether the presence of these conditions is such as to prevent the formation of any contract between the appellant and its passenger before transportation commences. It is enough for me to conclude that at date of issue the ticket was not an agreement or any memorandum of agreement.
I would therefore allow this appeal.
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