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
Jacobs J The Stamp Act 1921 (WA) (as amended) brings to duty any " agreement or any memorandum of an agreement under hand only, and not otherwise specifically charged with any duty, whether the same is only evidence of a contract, or obligatory upon the parties from its being a written instrument " . There are various exemptions, none of which are presently relevant. The question to be determined is whether an airline ticket in the form commonly used, and which I shall later describe in some detail, is such an agreement or memorandum of agreement.
On 11 January 1972 Mr John Clifford Knight went to the office of the appellant and made it known that he required to travel from Perth to Port Hedland (and return). The circumstances were, it is agreed, typical although the circumstances set out in the stated case were such as typically occur in the case of the issue of a ticket for a single, not a return, flight. On a single flight the prospective passenger is informed that a passage is available on the day required and the cost of it. A ticket is then written out in duplicate by a servant of the appellant and tendered to the prospective passenger in return for the price. The passenger holds the ticket and duplicate until the day of travel when he presents his baggage and the ticket to a servant of the appellant, who records upon it the weight of the baggage, removes the duplicate and returns the original to the passenger.
The ticket is in a booklet form and, within the booklet, there are two coupons in the case of a single flight. If it be a return flight, the booklet contains three coupons. The prospective passenger presents the ticket to a servant of the appellant on boarding the aircraft. A seat is allotted to him. He retains the ticket in its booklet. The booklet has a cover whereon appears the name of the appellant and the words " flight ticket " and in red letters " for conditions of carriage see inside of back cover " . The inside of the front cover contains space where information as to coach schedules could be inserted, a notice as to check-in time, and a notice as to onward reservations. On the inside of the back cover and on the back of the ticket coupon which faces the inside of the back cover, there are 12 printed and numbered paragraphs described as " terms and conditions subject to which this ticket is issued to and accepted by the passenger " . On the outside of the back cover, there is information concerning return reservations, a statement of the amount of baggage which each passenger is allowed free of charge, a statement of the hand baggage that may be carried free in the cabin, and other information, including a description of goods which may not be carried in passengers ' baggage.
The respondent Commissioner claimed that the document which I have described was an agreement or memorandum of an agreement, and was chargeable with stamp duty in the sum of 25c. A case was stated for the opinion of the Supreme Court of Western Australia upon the questions: (a) whether the ticket is an agreement or memorandum of agreement; (b) whether the ticket is chargeable with duty as assessed by the Commissioner;
(c) if not, with what duty (if any) is the ticket chargeable under the Act.
The Supreme Court of Western Australia (Jones J) answered questions (a) and (b) in the affirmative. He therefore had no occasion to answer question (c). He found that a binding agreement had been from the moment the servant of the appellant began filling out the ticket in response to Mr Knight ' s request and that the ticket, when made out, became a memorandum of the agreement that had been made. The agreement, he found, was that in consideration of Mr Knight paying the stipulated fare, the appellant would carry him by aircraft to Port Hedland, and that the subsequent presentation of the ticket at the airport for checking of baggage and seat allocation was merely a step incident to the carrying out of the agreement which had been completed at the booking office when the reciprocal offers - the appellant ' s to carry the passenger and the passenger ' s to pay the fare - were made and accepted. As to the special conditions, he took the view that an intending passenger on an aircraft must be taken to know that the ticket will be issued subject to some conditions of carriage and that the airline ' s offer to carry him is not an offer to carry him simpliciter but to carry him subject to those conditions, and that his request is impliedly not for carriage simpliciter but for carriage subject to such reasonable conditions as may be imposed. Jones J continued: " It is true that he has not been specifically told of the conditions which will appear on the ticket and advised to read them before he decides whether to book his flight or not; but when he receives the ticket he will find, if he looks, that on the face of the cover there appears in bold red type ' For conditions of carriage see inside of back cover ' , and that this admonition is repeated on the original and duplicate inside. When he accepts the ticket thus indorsed he has in my view impliedly assented to the conditions. No doubt if, later, he reads the conditions and then decides that they are unacceptable he can revoke his consent, abrogate the agreement and get his money back; in that event any duty paid on the ticket which is the memorandum of the agreement will be refunded, less a spoils fee. No doubt also there is, as Lord Hanworth MR said in Thompson v London, Midland and Scottish Railway Co [1930] 1 KB 48 at 50, ' an implied understanding that there is no condition unreasonable to the knowledge of the party tendering the document and not insisting on its being read - no condition not relevant to the matter in hand ' . But all that does not affect the fact, in my view, that when the passenger pays the fare and receives the ticket a binding agreement has been made, and the ticket is a memorandum of it. " (5 ATR at 46).
I do not think, with respect, that either on principle or on authority the transaction can be analysed in this way. It would mean that the agreement preceded the notification in the ticket of the special conditions upon which the passenger would be carried. It is true that a passenger may be taken to know that the ticket to be issued will be subject to some conditions of carriage, but can it be said that his request is one for carriage subject to such reasonable conditions as may be imposed? I do not think that this can be so. The airline will carry, on the conditions which it proposes and, if the conditions are accepted, they become part of the agreement for carriage. If they are not accepted, there is no agreement, and therefore no question of abrogating an agreement already made. It may be that if an unreasonable condition is included in conditions which are not, and not likely to be, read then there may be no acceptance by conduct or implied consent of the offer containing that condition (cf Parker v South Eastern Railway Co (1877) 2 CPD 416 at 428; [1874-80] All ER Rep 166 ); but that is different from saying that the presence of such a condition entitles a party to an existing agreement to abrogate that agreement.
It is well accepted that, although an intending passenger requests a ticket and might thereby be regarded as making an offer, in fact the carrier " makes an offer by tendering the ticket, and the contract is formed only by acceptance of the ticket immediately after payment of the fare. This is the view taken, though not always explicitly stated, in the line, by this time numerous, of authorities on such cases. Thus detailed analysis of the process justifies the summary view of lay common sense, which surely is that the party offering terms to be accepted is the railway company or other public undertaker " . Pollock, Principles of Contract13th ed at p 41. See also Salmond and Williams on Contracts p 75.
The authorities are very numerous, and I do not think that it is necessary to go to any of them except perhaps to make reference to Hood v Anchor Line (Henderson Bros) Ltd [1918] AC 837 ; [1918-19] All ER Rep 98 . The question there was whether special conditions had been brought to the notice of a person purchasing a ticket or his agent who made the actual purchase. That is the common question which arises in the so-called " ticket cases " and it arises, of course, because the proffer of the ticket is regarded as an offer which may be accepted or declined, and the offer will not include a special condition unless it has been sufficiently brought to the attention of the offeree.
An argument was presented in Hood v Anchor Line (Henderson Bros), Ltd, supra , that the contract was complete as soon as the cheque had been paid and the ticket had reached the hands of the passenger ' s agent, and that any knowledge subsequently acquired of the conditions could not vary the contract. Lord Finlay LC at AC 843; All ER Rep at 101 said: " It is quite true that, if the contract was complete; subsequent notice would not vary it, but 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 " .
It is true that Lord Parmoor at 847 said: " The contract under which the respondents undertook to convey, and did convey, the appellant as a passenger in their oceangoing steamer was concluded when the agent of the appellant received the document or ticket in return for the cheque handed by him to the respondents " . But, on the following page, it becomes clear that he was not expressing any view different from that of Lord Finlay LC because in reference to the notice drawing attention to the special conditions he said: " The object of a notice is to call the attention of the intending passenger to the conditions of the proposed contract, and a clearly printed notice on the enclosing envelope, and on the face of the ticket, is as effective for this purpose as if the representative of the respondents had, at the time when he issued the ticket, verbally called the attention of the appellant to the conditions, and asked him to read them. 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 they thereupon become evidence of the contract or carriage made between such passenger and the carrier " ([1918-19] All ER Rep at 103).
We may take it, therefore, that principle and authority lead to the conclusion that the appellant, when through its servant it handed over the ticket to Mr Knight, should be regarded as the offeror and that Mr Knight should be regarded as the offeree. Thus there was an offer in writing and an acceptance of the offer orally or by conduct.
It has been established by a long line of authority that an offer in writing which is accepted orally or by conduct does not thereupon become an agreement or memorandum of agreement within the meaning of the Stamp Act. The words which appear in the schedule to the Stamp Act go back unchanged to the language of the English Stamp Act 55 Geo III, c 184, and it has been consistently held that no document can require a stamp unless it be an agreement or memorandum of agreement at the time when it comes into existence unless thereafter it is acknowledged by the parties thereto to be the agreement between them. In this respect, the law which developed in respect of a memorandum of agreement under the Stamp Act diverged from the law which had developed in respect of an agreement or memorandum of agreement sufficient to satisfy the Statute of Frauds. I do not think that it is necessary to go through the various cases to this effect. I shall do no more than mention some of them: Edgar v Blick (1816) 1 Stark 464 ; 171 ER 531 ; R v Inhabitants of St Martin ' s, Leicester (1834) 2 Ad & E 210 ; 111 ER 81 ; Drant v Brown (1825) 3 B & C 665 ; 107 ER 879 ; Hudspeth v Yarnold (1850) 9 CB 625 ; 137 ER 1036 ; Vollans v Fletcher (1847) 1 Ex 20 ; 154 ER 9 . A more recent decision is that of Hawkins J in Carlill v The Carbolic Smoke Ball Co [1892] 2 QB 484 at 490: " If at the time no concluded contract had been arrived at by the contracting parties, it certainly could not in any sense be treated as an agreement, nor could it be treated as a memorandum of an agreement, for there could be no memorandum of an agreement which had no existence. No document requires an agreement stamp unless it amounts to an agreement, or a memorandum of an agreement. The mere fact that a document may assist in proving a contract does not render it chargeable with stamp duty; it is only so chargeable when the document amounts to an agreement of itself or to a memorandum of an agreement already made. A mere proposal or offer until accepted amounts to nothing. If accepted in writing, the offer and acceptance together amount to an agreement; but, if accepted by parol, such acceptance does not convert the offer into an agreement nor into a memorandum of an agreement, unless, indeed, after the acceptance, something is said or done by the parties to indicate that in the future it is to be so considered. "
A ticket issued for carriage of a passenger, whether it be a simple ticket for carriage from one place to another with no special conditions or a ticket incorporating special conditions by reference or a ticket which itself sets out special conditions, provides evidence that some executory contract of carriage exists but as such has never been regarded as the actual agreement for carriage or as a memorandum of the agreement for carriage. The more special conditions appear on it, the more it presents the appearance of an agreement in or reduced to writing, but the appearance is deceptive. The travel ticket as such is a voucher, like any other ticket. Lawful possession of it, by reason of the agreement made at or about the time of its issue, may allow the holder thereof or the person named thereon, as the case may be, to have the actual benefit of the preceding agreement for carriage; but it must be noted that mere possession of the ticket or mere naming thereon as the passenger will not entitle a person to that benefit unless he was one of the parties to the executory contract of carriage made when the ticket was issued.
The ticket or the accompanying documents may contain the express promise to carry as in Hood v Anchor Line (Henderson Bros) Ltd, supra , but usually this is not so. It is not so in the present case. Nor does the ticket usually identify in terms the promisee as distinct from the proposed beneficiary of any executory contract of carriage made by its issue. There may be an identity between the proposed passenger and the party to that executory contract or there may not. It may happen that the actual purchaser of the ticket is the agent of the intending passenger but this may not be so. An employer may see to the purchase of a ticket for an employee whose journey the employer requires. It would be artificial to regard the employee as the contracting party when he neither makes the contract nor pays for the ticket.
But at the same time there can be no doubt that the passenger, even if he did not obtain the issue of the ticket and the accompanying promise of carriage, does enter into a contractual relationship with the carrier. However, his contract arises when he presents the ticket and embarks on the carriage. He will be bound by any special conditions of the carriage, not because he was a party to the executory contract when the ticket was issued but because he presents the ticket and embarks on the carriage with knowledge of the conditions upon which the carrier accepts him for that carriage. Where the agreement for carriage at or about the time of the purchase of the ticket is not made by the proposed or named passenger, and probably even where it is so made, there are really two agreements: first, the executory agreement which is made by the tender of the ticket to the purchaser and its acceptance in return for the price, and, secondly, the agreement between the actual passenger and the carrier which arises upon the passenger presenting himself with the ticket to the carrier. Thus the ticket is an offer capable of acceptance by the promisee on the executory contract of carriage and, after that acceptance, will be an offer to the proposed passenger capable of acceptance by him by presentation of that ticket. But in neither case is it the actual agreement of carriage or a memorandum of that agreement. In Cooke v Midland Railway Co (1892) 9 TLR 147 ; 57 JP 388 , an employer bought railway tickets in bulk for his employees. It was held that nevertheless there was a contract between an employee and the railway company, and that the railway company was liable for breach of contract to the employee. In Hobbs and Wife v London and South Western Railway Co (1875) 10 LR QB 111 ; [1874-80] All ER Rep 458 , the plaintiff Hobbs took tickets for his wife and children for travel from Wimbledon Station to Hampton Court Station. They all took places in the train, but the train went on another branch, and they all were obliged to get out at Esher Station, some miles further away from the plaintiff ' s house. The wife caught cold on the long walk, and it was held that she was entitled to damages and so was the husband on his separate account. Blackburn J at 119; 462 stated that the duty of the railway company was a duty arising out of a contract. It is clear that the wife must have been regarded as a contracting party by embarking on the railway carriage with her ticket.
It thus appears that, although a passenger by possession of a ticket or by embarking on the travel may accept the offer constituted by the ticket and be a contracting party to a contract of carriage, it is not a contract of carriage which is in writing by virtue of the ticket; it is a contract which may arise only by presentation of the ticket.
Where the original contracting party and the passenger are different, there are on analysis found to be the two contracts. In the present case, the purchaser of the ticket and the passenger were the same person, but it cannot be said that the ticket itself was the agreement. The ticket nowhere states the parties to the executory contract of carriage created at the time of its issue. It is to be observed that, by the special conditions, the expression " the passenger " means the passenger to whom the ticket is issued or who is carried by virtue of the issue thereof. The form of ticket is not a promise by the appellant to X in consideration of him paying the fare to carry X from point A to point B, and if the promisee is not certainly stated, then it does not appear to me that the document could be regarded as the agreement with that promisee or as a memorandum of that agreement. Despite some earlier authority to the contrary, Ramsbottom v Mortley (1814) 2 M & S 445 ; 105 ER 446 , and statements of text writers, eg Halsbury 3rd ed vol 33, p 295, the agreement or memorandum of agreement which is brought to duty, though it may not need to be signed, must contain all the terms of the agreement including the parties. This appears from the later case, Ward v Lord Londesborough (1852) 12 CB 252 at 259-260; 138 ER 900 at 903. Maule J stated that Ramsbottom v Mortley, supra , was certainly inconsistent with what was said in Moore v Garwood (1849) 4 Ex 681 ; 154 ER 1388 , and further said that, to make an agreement chargeable with stamp duty, it must contain the whole terms agreed on. It is clear that, in that case, the Court declined to take the view that any writing which contained some evidence of a contract but not the whole evidence, was a sufficient memorandum, the view which had been taken in the earlier case. I think that this must be correct. Though the words in the schedule distinguish the case where an agreement or memorandum is only evidence of a contract and the case where an agreement or memorandum is obligatory upon the parties from its being a written instrument, it seems to me that these words in the schedule are intended to distinguish between the formal signed instrument in writing and the memorandum which the parties intend to contain all the terms of a preceding oral contract. In each case all the terms must be expressed and, if the document is not signed, then the identity of the contracting parties must otherwise appear. For this reason also, I cannot regard a ticket which names a passenger, but does not expressly state an agreement with that passenger, or anyone else, to carry him, and thus does not name the passenger as the obligee under a presently constituted agreement, as anything more than what it purports to be, a ticket.
There is a further reason which may be shortly mentioned why, even if an agreement or memorandum of agreement might otherwise be discernible from the ticket, there is certainly no agreement constituted by the ticket in the present case. Clause 2 of the special conditions reads as follows: -
" 2. The Companies reserve the right at any time to abandon any flight or, whether the scheduled flight on which the passenger or goods were booked takes place or not to cancel any ticket or booking of any passenger or goods or to carry the passenger for portion only of any booked flight. In the event of a flight being abandoned or altered by the Companies wholly or in part or a ticket or booking being cancelled by the Companies wholly or in part, the passenger shall be entitled only to a refund of so much of the passage money as shall be proportionate to the part of his flight so cancelled or abandoned and the Companies shall not under any circumstances be under any further or other liability to the passenger for failure to carry him at the booked or scheduled time or at all. "
By this clause, any enforceable promise to carry which might on the present assumption be implied between airline and passenger from the issue of the ticket is negatived. The ticket may be cancelled by the company at any time and all that will then happen will be that the passenger shall be entitled to a refund, and the company shall not under any circumstances be under any further liability to the passenger. If there could be extracted otherwise from the document an agreement between the appellant and the passenger it would, by such a clause, be made nugatory. The appellant undertakes no executory obligation which creates rights in an obligee. The ticket contains the provision that no claim for refund of the fare will be considered if the passenger is not ready at the aerodrome or other place of departure 15 minutes before the stated or advertised time of departure (cl 3). This provision would be valid if the consideration was the mere issue of the ticket but it is difficult to see how otherwise it would be valid in view of the insertion of cl 2. If the ticket itself is the consideration then this is a further ground for the conclusion earlier expressed that a ticket as such is no more than a voucher.
For all these reasons, therefore, I am of the opinion that the ticket is no agreement or memorandum of agreement, that the appeal should be allowed, and that the questions (a), (b), and (c) in the case stated, should be answered as follows:
- (a) No.
- (b) No.
- (c) None.
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