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Supreme Court 23 November 2001

CEO of Customs v Camile Trading & Ors

[2001] NSWSC 1075

Fraud & dishonesty
PRACTICE AND PROCEDURE SUFFICIENCY OF STATEMENT OF CLAIM OFFENCES AGAINST EXCISE ACT 1901 WHETHER CIVIL PROCEEDINGS MAINTAINABLE PT XI EXCISE ACT. AIDING AND ABETTING OFFENCES ALLEGED AGAINST THE EXCISE ACT

Citation: CEO of Customs v Camile Trading & Ors [2001] NSWSC 1075
Court: Supreme Court of New South Wales, Common Law Division
Date: 23 November 2001
Judge(s): Studdert J

Background

The Chief Executive Officer of Customs brought civil proceedings in the Supreme Court seeking the conviction of four defendants for alleged breaches of the Excise Act 1901 (Cth). The first defendant was a petroleum wholesaler that operated without the required excise manufacturer's licence, and the second defendant was its director. The third defendant was a licensed manufacturer of petroleum products, and the fourth defendant was its director.

The substance of the allegations was that the first and second defendants had been blending diesel, unleaded petrol, and leaded petrol unlawfully over a number of periods between 1992 and 1996. The third and fourth defendants were alleged to have aided and abetted those breaches by supplying white spirits with knowledge that they would be used in the unlawful blending process.

The third and fourth defendants (the appellants) applied before Master Harrison to have the amended statement of claim dismissed, struck out, or stayed as against them. The Master refused the application. The appellants then appealed to Studdert J.

  • Whether civil proceedings under the Excise Act 1901 could be maintained in the Supreme Court for the recovery of fines and convictions for excise offences.
  • Whether the statement of claim disclosed a reasonable cause of action sufficient to survive a summary dismissal application under Supreme Court Rules Pt 13 r 5.
  • Whether the pleading adequately complied with the requirements for pleading material facts under Pt 15 rr 7 and 26, including in relation to the appellants' alleged knowledge and the "advice" they gave.
  • Whether s 5 of the Commonwealth Crimes Act (dealing with aiding and abetting) applied so as to support the claims against the third and fourth defendants in these civil proceedings.
  • Whether specific paragraphs of the amended statement of claim were embarrassing or deficient in form.

Decision

Studdert J dismissed the appeal on all grounds. His Honour upheld the Master's conclusion that the proceedings were properly maintainable as civil proceedings in the Supreme Court, consistent with the structure of Part XI of the Excise Act, which contemplates the recovery of penalties through civil proceedings. The court confirmed that the high threshold for summary dismissal, as established in cases such as General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, had not been met.

On the aiding and abetting question, the court accepted that s 5 of the Commonwealth Crimes Act applied to the alleged conduct of the third and fourth defendants. The court found that the appellants' challenge to this aspect of the pleading did not disclose a basis for striking out the relevant paragraphs.

Regarding the sufficiency of pleading, Studdert J considered each of the appellants' specific objections in turn and rejected them. In relation to the pleading of "advice," the court found that the material fact was the advice itself as identified in the pleading, and that nothing more was required under Pt 15 r 7. On the pleading of knowledge, the court held that the knowledge alleged in the relevant paragraphs constituted properly pleaded material facts going to each of the principal offences, including knowledge that the supplied white spirits would be used in unlawful manufacturing, that blended products would be transported in breach of s 61, and that excise duty would be evaded contrary to s 120(1)(iv).

Two of the appellants' specific objections concerning paragraphs 693 and 694 appeared to the court to have been directed at an earlier version of the pleading rather than the current amended statement of claim. Those objections were not upheld because they did not apply to the paragraphs in their current form.

Orders Made

  • The appeal was dismissed.
  • The appellants were ordered to pay the respondent's costs of the appeal.

Key Takeaways

  • Civil proceedings under the Excise Act 1901 for the recovery of penalties and convictions for excise offences were held to be properly maintainable in the Supreme Court of New South Wales under the structure of Part XI of that Act.
  • Section 5 of the Commonwealth Crimes Act, concerning aiding and abetting, was found to apply in the context of civil excise prosecutions, supporting claims against parties alleged to have assisted in the commission of excise offences.
  • A pleading of "advice" given by a defendant does not require particularisation of the underlying facts that led to the advice; the advice itself constitutes the material fact for the purposes of Pt 15 r 7 of the Supreme Court Rules.
  • Allegations of knowledge in a pleading of aiding and abetting are properly pleaded as material facts where they go directly to an element of the principal offence, such as knowledge of unlawful manufacture, unlawful movement of goods, or evasion of duty.
  • In dismissing the appeal, the Supreme Court confirmed that the threshold for summary dismissal or striking out is a high one, and objections directed at an earlier form of a pleading will not succeed where the current amended pleading does not exhibit the same deficiency.

Legislation and Cases Referenced

Legislation:
- Excise Act 1901 (Cth), ss 34, 35, 61, 120, Part XI
- Commonwealth Crimes Act (Cth), s 5
- Supreme Court Rules, Pt 13 r 5; Pt 15 rr 7 and 26
- Customs Act (Cth)
- Income Tax Assessment Act (Cth)
- Criminal Appeal Act (NSW)
- Companies (Western Australia) Code

Cases:
- Dey v Victorian Railway Commissioners (1949) 78 CLR 62
- General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
- Webster & Anor v Lampard (1993) 177 CLR 598
- Air Services Australia v Zarb (unreported, NSWCA, 26 August 1998)
- Controller General of Customs v D'Aquino Bros Pty Limited (1996) 135 ALR 649
- Controller General of Customs v Kingswood Distillery Pty Limited (unreported, Sully J, 5 August 1996)
- Mallan v Lee (1949) 80 CLR 198
- Hamilton v Whitehead (1988-1989) 166 CLR 121
- Johns v The Queen (1980) 143 CLR 108
- Giorgianni v The Queen (1985) 156 CLR 473