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Supreme Court 8 May 2006

Comptroller-General of Customs v Stephen Edward Parker

[2006] NSWSC 390

Fraud & dishonesty
CUSTOMS PROSECUTION OFFENCES AGAINST CUSTOMS ACT 1901 IMPORTATION OF GOODS ALCOHOLIC LIQUOR WAREHOUSING OF GOODS DEFERRAL OF DUTY OTHERWISE PAYABLE

Citation: Comptroller-General of Customs v Stephen Edward Parker [2006] NSWSC 390
Court: Supreme Court of New South Wales, Common Law Division
Date: 8 May 2006
Judge(s): Simpson J

Background

The Comptroller-General of Customs brought proceedings against a defendant (Parker) alleging a series of offences involving the importation and warehousing of Scotch whisky between 1987 and 1990. The prosecution arose from a scheme involving goods held in licensed warehouses "under bond," a system that defers the payment of customs duty until goods are released from Customs control. The defendant was alleged to have moved and dealt with those goods without proper authorisation, and to have evaded the duty payable on them.

Customs officers executed a warrant in March 1990 and seized a large volume of documents. The proceedings were commenced in July 1992 but went through multiple amendments before reaching a final hearing in April 2005, more than 15 years after the relevant events. By the time of the hearing, Parker was the only remaining defendant.

The case turned primarily on the analysis of documentary evidence rather than oral testimony. The alleged offences covered 13 counts of evading duty under s 234(1)(a) of the Customs Act 1901 (Cth) and one count of unlawfully moving goods under Customs control under s 33.

  • Whether s 249 of the Customs Act 1901 created a five-year limitation period barring the prosecution, and whether the proceedings were commenced within that period
  • Whether the procedural mechanism used to commence the prosecution (under Supreme Court Rules Pt 20 r 4(5) and r 5A) was inconsistent with s 249 of the Commonwealth statute, such that it was unavailable
  • Whether the Comptroller-General was estopped from pursuing the additional duty evasions because Customs had previously accepted some payments from the defendant, and whether this acceptance constituted a representation on which the defendant relied to his detriment
  • Whether the offence of unauthorised movement of goods under Customs control could be committed by a person who directed or caused the movement but did not physically move the goods himself
  • The proper meaning of "evasion" under s 234(1)(a) of the Customs Act 1901
  • Whether the factual allegations were sufficiently established, including through an accountant's report and statutory averments, given that the defendant did not give evidence

Decision

Simpson J rejected the limitation defence. The court found that the prosecution had been commenced within the permissible period and that the procedural avenue used under the Supreme Court Rules was not inconsistent with the Customs Act 1901. Leave had already been granted to plead the cause of action in that form.

The estoppel argument also failed. The court found no representation by Customs officers to the defendant that acceptance of earlier payments would foreclose pursuit of additional alleged defalcations. There was no evidence that the defendant relied on any such representation or that he was induced to act to his detriment. The defendant's failure to give evidence was a relevant consideration, given the principles established in Jones v Dunkel.

On the movement offence, the court held that the s 33 offence was not confined to persons who physically moved goods. It was sufficient to prove that the defendant caused an unauthorised movement, including by directing or organising it. On the duty evasion charges, the court accepted the meaning of "evasion" as extending to conduct that results in duty going unpaid without authorisation, regardless of the precise mechanism.

The prosecution's case rested heavily on a documentary record and an accountant's report, neither of which was relevantly challenged. The court accepted the factual picture established by those materials, supported by statutory averments, and was satisfied that each of the 14 offences had been made out.

Orders Made

  • Parker convicted of unlawfully moving or interfering with goods subject to Customs control between 1 August 1987 and 31 May 1990 (s 33 offence)
  • Parker convicted of 13 separate offences of evading customs duty under s 234(1)(a) of the Customs Act 1901, on various dates between 1 August 1987 and 31 May 1990, involving Scotch whisky totalling approximately 55,000 litres and aggregate evaded duty exceeding $2.7 million
  • Matter stood over for further consideration of the consequences of the convictions

Key Takeaways

  • An offence of unauthorised movement of goods under Customs control does not require that the defendant personally and physically moved the goods; proof that the defendant caused or directed the movement is sufficient to establish the offence.
  • For an estoppel defence to succeed, a defendant must demonstrate a clear representation by the relevant authority, actual reliance on that representation, and detriment flowing from that reliance. Mere acceptance of payment by Customs did not, without more, constitute a representation foreclosing further proceedings.
  • Where a defendant fails to give evidence, that silence can be taken into account under the Jones v Dunkel principle in assessing whether inferences favourable to the defendant should be drawn, particularly where the defendant was best placed to explain the relevant conduct.
  • An accountant's report adduced to establish the quantum of evaded duty, where not relevantly challenged in cross-examination or by contrary expert evidence, can form a sufficient evidentiary basis for the court's findings.
  • The five-year limitation provision in s 249 of the Customs Act 1901 does not automatically bar proceedings commenced through a Supreme Court statement of claim mechanism, where that procedural pathway is not inconsistent with the Commonwealth statute and leave has been granted to plead in that form.

Legislation and Cases Referenced

Legislation:
- Customs Act 1901 (Cth), ss 7, 8(1), 33, 36, 39, 40AA, 68, 79(1), 82, 90(1), 92, 93, 234(1)(a), 245, 247, 248, 249, 255
- Customs Tariff Act 1987 (Cth), s 21; Customs Tariff Act 1995 (Cth)
- Evidence Act 1995 (Cth); Evidence Act 1995 (NSW), s 20(2)
- Judiciary Act 1903 (Cth), s 78B
- Corporations Act 2001 (Cth), s 1316
- Constitution of Australia, s 109
- Supreme Court Rules (NSW), Pt 20 r 4(5) and r 5A

Key Cases:
- Chief Executive Officer of Customs v El Hajje [2005] HCA 35; 79 ALR 1289
- Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; 216 CLR 161
- Jones v Dunkel [1959] HCA 8; 101 CLR 298
- The Commonwealth v Verwayen [1990] HCA 39; 170 CLR 394
- Azzopardi v The Queen [2001] HCA 25; 205 CLR 161
- Air Link Pty Ltd v Paterson (No 2) [2003] NSWCA 251; 58 NSWLR 388
- The Attorney-General of the Commonwealth v Oates [1999] HCA 35; 198 CLR 162
- Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW) [1949] HCA 25; 79 CLR 296
- Wilson v Chambers and Company Proprietary Limited [1926] HCA 15; 38 CLR 131
- McGee v Yeomans [1977] 1 NSWLR 273