Citation: CEO of Customs v Liang [2004] NSWSC 1240
Court: Supreme Court of New South Wales
Date: 21 December 2004
Judge: James J
Background
The Chief Executive Officer of Customs brought a prosecution under Part XIV of the Customs Act 1901 (Cth) against two defendants: a man who operated an importing business under the name New Century Clothing Co, and his de facto wife who was involved in the management of that business. A third defendant, the incorporated company through which the business later operated, had been deregistered and the proceedings against it were discontinued before hearing.
Between January and December 1998, the business made 38 importations of clothing from a Hong Kong supplier. For each importation, a freight forwarder lodged an entry for home consumption with Customs, declaring a value for the goods on which duty was calculated and paid. The central allegation was that the values declared were false: the actual prices paid to the overseas supplier were significantly higher than those stated in the entries, with the result that less customs duty was paid than was properly owed.
The defendants admitted the importations and admitted that they had given instructions for the entries to be lodged, but denied that the declared values were false. The case against them was largely circumstantial, turning on documentary evidence including a stock report maintained by the business.
Legal Issues
- Whether the plaintiff proved beyond reasonable doubt that the values declared in the customs entries understated the true prices paid to the overseas supplier for each shipment.
- Whether each defendant committed offences of smuggling under s 233(1)(a) of the Customs Act (importing goods with intent to defraud the revenue).
- Whether each defendant committed offences of evading payment of duty under s 234(1)(a) of the Customs Act.
- Whether each defendant committed offences under s 234(1)(d)(i) of intentionally making a false statement to a customs officer, while being at least reckless as to its falsity.
- In respect of shipments 24 to 38 (made through the company), whether the defendants aided and abetted the company's commission of those same offences under s 236 of the Customs Act.
- What standard of proof applied to a customs prosecution following the High Court's decision in CEO of Customs v Labrador Liquor Wholesale.
Decision
Following CEO of Customs v Labrador Liquor Wholesale Pty Limited (2003) 201 ALR 1, James J confirmed that the plaintiff bore the onus of proving all elements of each offence beyond reasonable doubt. This represented the criminal standard, notwithstanding that the proceedings were brought as a civil customs prosecution.
The court's findings turned heavily on a document described as a "stock report" maintained by the business, which contained two columns of figures for each item in each shipment. The plaintiff argued, and the court accepted, that the figures in the "cost" column represented the true prices paid to the supplier, while the lower figures in the "quoted prices" column corresponded to the amounts declared in the customs entries. This conclusion was supported by a series of corroborating documents, including letters, order forms, and a supplier price list, where the prices shown aligned far more closely with the "cost" column than with the "quoted prices" column.
James J rejected the defendants' explanations of this documentary evidence as not even reasonably possibly true. Both defendants were found to be thoroughly dishonest witnesses. The court also accepted the evidence of the translator who had rendered the Chinese-language documents into English, finding that any minor translation errors were immaterial given the volume of material involved.
As to the second defendant's personal liability, the court was satisfied beyond reasonable doubt that she was in joint control of the business alongside the first defendant. Despite her attempts at trial to distance herself from the business's operations, numerous business documents referred to her, were sent by her, or were addressed to her. She also admitted to receiving a share of the profits. The court drew the inference that she was well aware of the false statements being made about the prices of the goods. Both defendants were found guilty of all offences charged.
Orders Made
No orders were made in this decision.
Key Takeaways
- Following CEO of Customs v Labrador Liquor Wholesale Pty Limited (2003) 201 ALR 1, a customs prosecution under Part XIV of the Customs Act 1901 (Cth) requires proof of all offence elements beyond reasonable doubt, applying the criminal standard.
- A conviction for smuggling under s 233(1)(a) requires proof that the accused imported goods with intent to defraud the revenue; a conviction under s 234(1)(d)(i) requires proof of an intentional false statement to a customs officer, with recklessness as to its falsity being the minimum fault element.
- Where a prosecution relies on a circumstantial case, it is sufficient if the only reasonable inference available from the proved circumstances is guilt; explanations offered by the accused need only be rejected as not reasonably possibly true.
- Under s 236 of the Customs Act, a person who aids, abets, counsels, procures, or is in any way directly or indirectly concerned in the commission of an offence is deemed to have committed that offence and is punishable accordingly.
- A defendant's involvement as a joint controller of an importing business, demonstrated through documentary evidence and admissions about profit-sharing, can be sufficient to support findings of liability even where that defendant seeks at trial to minimise their role.
Legislation and Cases Referenced
Legislation:
- Customs Act 1901 (Cth), ss 4, 233(1)(a), 234(1)(a), 234(1)(d)(i), 236, 244, 255, Parts XIII and XIV
- Evidence Act (NSW)
- Financial Transaction Reports Act (Cth)
Cases:
- Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2003) 201 ALR 1 (High Court)
- Wilson v Chambers (1926) 38 CLR 131 (High Court)