Court of Appeal (WA)|2008-02-05|Before: Wheeler JA

BRAYLEY -v- MALKOVIC [2008] WASCA 20 (5 February 2008)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BRAYLEY -v- MALKOVIC [2008] WASCA 20

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : BRAYLEY & ANOR -v- MALKOVIC [2006] WASC 94

Appeal - Customs Act 1901 (Cth) - Misleading statement - "Reckless" - Incoming passenger card - Turns on own facts

Customs (Prohibited Import) Regulations 1956 (Cth), reg 4F

1 WHEELER JA: This is an appeal from Hasluck J, who dismissed an appeal from Magistrate Nicholls in relation to a charge of making a misleading statement under the Customs Act 1901 (Cth).

2 The appellant conducted a business relating to the sale and repair of firearms. On 23 February 2003 the appellant arrived at Melbourne International Airport on a Qantas flight from the United States of America, bringing with him a "magazine body" comprising eight hollow tubes. There was evidence that the difference between this and a complete magazine was that the latter had additional parts which include a base plate and spring.

3 The appellant filled out an incoming passenger card (IPC) which asked, "Are you bringing into Australia goods that may be prohibited or subject to restrictions, such as medicines, steroids, firearms, weapons of any kind, or illicit drugs?" The appellant answered "No" to this question. He answered "Yes" to other questions relating (broadly) to food, alcohol and being on a farm, with the result that his luggage was inspected by a quarantine officer, who found the eight magazine bodies sitting on top of the contents inside the bag.

4 The quarantine officer alerted a customs officer, who asked the appellant whether he understood the questions on the IPC, whether he had packed his baggage, whether he was aware of its contents and whether the contents belonged to him. The appellant answered affirmatively to these questions. After inspecting the eight magazine tubes, the customs officer asked the appellant why he did not declare them to Customs. The appellant asked why they would be declared. It was accepted by the magistrate that the appellant then said (Green AB 100): "They're not firearms. They're parts of a firearm ... I've never had a problem with it in the past and have permits for them." The permits were not directly applicable to the items in the appellant's luggage, as they related to whole magazines (amongst other things), rather than magazine tubes and, in any event, the permits were irrelevant because they did not bear upon the answer the appellant was required to give to the question on the IPC.

5 The appellant was subsequently charged under s 234(1)(d)(i) of the Customs Act 1901 which provided:

...

(d) do any of the following:

(i) intentionally make or cause to be made a statement to an officer, reckless as to the fact that the statement is false or misleading in a material particular;

6 The answer "no" to the relevant question on the IPC was identified as the allegedly misleading statement.

7 The Customs (Prohibited Import) Regulations 1956 (Cth) provide in reg 4F that the importation of, inter alia, a firearm, a firearm accessory, a firearm part or a firearm magazine is prohibited (save in certain situations which do not apply here). The complaint averred that pistol magazines are prohibited imports, unless the importer holds an appropriate authorisation. However, it is accepted by both parties, for the purpose of this appeal, and was accepted in the courts below, that magazine tubes of the kind found in the appellant's luggage were not prohibited or subject to any restrictions. Despite the appellant's answer to the customs officer that the magazine tubes were "parts of a firearm", none of them was a "firearm part" as defined in the legislation.

8 It should be noted that there is a distinct offence of importing prohibited goods, created by s 233(1)(b).

9 The magistrate said that he accepted the evidence of the customs officer in relation to his conversation with the appellant, including the fact that the appellant had said that he had permits for the magazine tubes. The magistrate made the following remarks:

The defendant therefore knew that some form of permit applied and saying that the magazine tubes are part of a firearm is a bit like a lawyer's response. The defendant and any reasonable person should have been on notice from the words 'such as a firearm'. He chose not to and therefore in my view he was reckless by filling out the form 'no' in response to the question.

10 There is a lack of clarity in the submissions made to the magistrate and (therefore) in his Honour's reasons, concerning whether magazine tubes were prohibited or restricted. The magistrate identified "the issue" as whether the appellant was reckless, without directly addressing the question of whether his answer on the IPC was misleading (Green AB 99).

11 The appellant appealed his conviction to Hasluck J, who dismissed the appeal. His Honour accepted the respondent's submission that the question on the IPC card was "designed to elicit information, and to bring to light doubtful cases" and that "[i]f the magazine tubes 'may' be subject to restriction, the question as framed, being wide in its scope, demanded an affirmative answer" [80]. His Honour went on to say that "[t]he question was clearly couched in a general form and was directed to eliciting information which would be of assistance to customs officers in their appraisal of an incoming passenger's belongings" [82].

12 The appellant next appealed to this Court. The sole ground of appeal is as follows:

The learned judge erred in law to hold that the [appellant] committed the offence, under s 234(2) of the Customs Act, of recklessly making a statement misleading in a material particular to a Customs Officer when, having taken the view, which was correct, that the pistol magazine tubes he was bringing into Australia are not prohibited or restricted by the Customs Act, he in [sic] answered 'no' to this question on an incoming passenger card: 'Are you bringing into Australia any goods that may be prohibited or subject to restrictions, such as medicines, steroids, firearms, weapons of any kind, or illicit drugs?'

13 It is clear that this ground does not point to any identifiable error in the learned judge's reasons. The appellant's submissions are less than helpful in their analysis. The appeal must succeed, however, since neither the learned magistrate nor Hasluck J considered how it was that the statement made by the appellant could have been misleading; this issue, in turn, requires attention to the information sought by a question which asks whether goods "may be" prohibited. This issue does not seem to have been the subject of submissions below.

14 It is first necessary to consider the elements of the offence. Part 2.2 of the Criminal Code Act 1995 (Cth) applies to customs prosecutions by virtue of s 5AA of the Customs Act 1901. That Part breaks down the elements of an offence into physical elements and fault elements. Therefore the elements of the offence can be grouped as follows:

(a) The appellant made a statement to an officer (physical element) and the appellant intentionally made that statement (fault element). Both these elements are made out, and are not contested by the appellant.

(b) The statement was false or misleading in a material particular (physical element) and the appellant was reckless as to the fact that the statement was false or misleading in a material particular (fault element). It is important in this context to note that the words "as to the fact" in s 234(1)(d)(i) apparently require that the statement made is in fact false or misleading; the offence is not committed by a person who makes a true statement, not caring whether it is true.

15 The reasons of the learned magistrate do not disclose why it is said that the statement is misleading; as noted earlier, it seems to have been accepted that the main issue was whether the appellant acted recklessly (Green AB 99). Some submissions were made to Hasluck J to the effect that the statement was not misleading, but the appellant seems to have been principally concerned with whether any person was actually misled, which is a slightly different question.

16 In oral submissions before us, the respondent argued that whether a statement is misleading must be determined according to whether an objective hypothetical bystander, looking at the goods, would think that they fell into a category of goods that "may be" subject to restriction or prohibition. It seems to be implicit in this submission that if goods resemble prohibited goods, or fall into some "analogous" category, then a reasonable bystander would form such a view.

17 There are several problems with this submission. The first is that it leads to a result which, in the submission of the respondent, requires a passenger to answer yes to the question, even when he or she is absolutely certain that the goods are not in fact prohibited or restricted. There would be no sensible policy reason for such a construction.

18 It is true, as the respondent points out, that the question on the IPC does not ask whether the goods are "in fact" subject to a prohibition or restriction. The question asks whether the passenger is bringing into Australia goods which "may be" subject to prohibition or restriction. The respondent concluded that the words "may be" are synonymous with "are possibly". This submission is, however, in practical terms impossible to apply. Goods are either prohibited or restricted, or they are not. There is no third category of goods which are "possibly prohibited or restricted". The question must therefore be understood in a different way.

19 As the respondent points out, the question in issue in this case is different in form from the other questions on the IPC. Those questions plainly refer merely to matters of objective fact, and not possibilities. For example, question six merely asks whether the passenger is bringing into Australia "any food". It is contended that the words "may be" are intended to broaden the ambit of the question here in issue. It appears to me, however, that there are two possible readings of those words. One is that the question is, in effect, a catch-all question intended to deal with all goods which may be prohibited or restricted from time to time which are not specifically referred to in the other questions. Put in this way, the words "may be" should simply be understood as "are [under the regulations applying at this date]". Alternatively, the words "may be" may be understood as directed to the passenger's state of mind. In that reading, the words "may be" would be understood as "which you honestly and reasonably believe to be".

20 There are perhaps indications favouring both constructions on the form. Although it is not necessary to determine for the purposes of the present appeal, it seems to me that the former construction is the preferable one. The former construction would be one consistent with all of the remaining questions on the IPC concerning goods which are brought into Australia, none of which appears to contain any reference to the passenger's state of mind.

21 There does not appear to be any useful reason, in relation to some classes of goods, for seeking the opinion of the passenger as opposed to seeking a statement of objective fact.

22 In relation to all of the questions the problem of the ignorant, or confused, or uncertain passenger is dealt with by the overriding direction to answer "Yes" if the passenger is not sure. That instruction, preceding the entire list of questions, reads:

YOU MUST ANSWER EVERY QUESTION - IF UNCERTAIN, X Yes.

23 In order to be misleading, conduct must contain or convey a misrepresentation: Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177. On the objective construction of the question, which I prefer, there was plainly no misrepresentation here, since the goods in question were neither prohibited nor subject to restrictions. Alternatively, if the question sought the appellant's honest and reasonable opinion, then, for the reasons which I develop under the heading "whether the appellant's answer was reckless", it is my view that it was not open to the magistrate to find that the appellant was not of the opinion that the goods were neither prohibited nor subject to restriction.

Whether the appellant's answer was reckless

24 By virtue of s 5.4 of the Criminal Code (Cth), a person will be reckless if:

(a) he or she is aware of the substantial risk that the circumstance exists or will exist; and

(b) having regard to the circumstances known to him or her, it is unjustifiable to take the risk.

25 The issue which arises here is whether the appellant considered that there was a "substantial risk" that the magazine tubes were subject to restriction or prohibition. As the magistrate pointed out, the evidence was that the appellant had travelled quite frequently, and that he had, in fact, brought such items back to Australia "several times before" (Green AB 99). When asked by his counsel at trial what his understanding was in relation to the legal status of a magazine tube the appellant replied as follows (Green AB 56):

A magazine tube, in my understanding, is not a restricted part. Firearms are, whole magazines are. There are also some restrictions on certain particular parts - gas pistons, and there is some restricted parts - but a magazine body, springs, those sorts of things, are not, under my understanding of the Customs [Prohibited Imports] Regs - - are not, and it actually talks about them in the very end. Basically, it's small parts that are not restricted.

It appears that the respondent accepts that this understanding was correct.

26 Both the magistrate and Hasluck J placed weight on evidence that the appellant had shown the permits to the customs officer, in order to reach the conclusion that the appellant was unsure of the legal status of the magazine tubes. The magistrate said of this evidence:

Indeed, he had produced permits so he knew there was an issue in relation to an authority to bring [the magazine tubes] into the country. (Green AB 99)

27 It seems that the issue of the permits was also the basis on which Hasluck J concluded that the appellant was unsure of the status of the magazine tubes. Hasluck J said:

To my mind, the learned Magistrate acted correctly in giving weight to that part of the evidence in which the ...appellant sought to justify his negative answer ... by producing the permits. This evidence strongly suggested that the ... appellant recognised that there could be a degree of ambiguity as to the status of the magazine tubes and sought to resolve that ambiguity, or tip the balance in his favour, by producing permits which might be sufficient to appease the Customs Officer and persuade him that the items were infused with an aura of legitimacy. [87]

28 However, in evidence, the appellant explained why he had produced the permits, saying in effect that he was trying to avoid having a complicated conversation about the detail of the Customs Act 1901. The questions asked of the appellant in cross-examination, and the answers he gave, are as follows:

Those items in your baggage. You knew they were prohibited or restricted?---No, they are not restricted. Nor are they prohibited.

Yet, you hand over these ... five permits. If they didn't apply to those parts in your baggage why did you hand them over?---Because I have dealt with customs ongoing, over and over again. To sit there and discuss the finer points of the Customs PI Act, prohibited imports Act, with a normal customs officer - - they do not know the customs - - they know the broad strokes of it but not the specifics. To try and explain that a magazine is a restricted item but a body is not a restricted item - - a normal customs officer doesn't know that. You end up - - I've got less - - or about an hour approximately to catch the next plane. I've got the paper work there. It was easy - - he was a nice officer as well. It wasn't a problem. He didn't seem overly fussed with it. 'Let's get on with it' and that was it.

You thought you'd get away with it?---If ... I've gone off and got the permits before I left so everything is above board, I've got the magazines, if they were whole magazines, in my bag, what sense would it make for me not to declare them? There is no money to be paid, there is no - - no anything. There's nothing to be gained by me doing that. (Green AB 86)

29 That appears to be a logical explanation as to why the appellant produced the permits, which is consistent with his evidence as to his knowledge of the legality of bringing in the magazine tubes. In the case of CEO of Customs v Labrador Liquor Wholesales Pty Ltd [2003] HCA 49; (2003) 216 CLR 161, it was held that to obtain a conviction for offences under the Customs Act 1901, including under s 234(1)(d), the elements of the offence must be established beyond a reasonable doubt. As noted by Gummow J:

The form in which all of these provisions [including s 234(1)(d)] are cast is significant. It indicates that what is sought against the respondents are convictions for offences against the laws of the Commonwealth. Ordinary understanding then would suggest that what is required for that result is proof beyond reasonable doubt. [14]

30 Neither the magistrate nor Hasluck J discussed the requisite standard of proof, although I would assume that both understood it to be beyond reasonable doubt. However, it is difficult to see how it could be established beyond reasonable doubt that the mere production of the permits meant that the appellant was unsure as to the status of the items and was therefore "reckless" as to his answer to the question on the IPC, given the accuracy of his understanding concerning the status of magazine tubes.

31 Given the uncontested evidence of the appellant's knowledge and previous experience with importing the relevant items, it is plain that he had a reasonable basis for concluding that there was not a "substantial risk" that the items were restricted or prohibited, and thus it cannot be said that he acted "recklessly".

32 In a document entitled "appellant's outline of submissions in reply to respondent's further outline of submissions", the appellant sought to raise an issue concerning the authority of customs officers to ask questions which are contained on the IPC. It appears that the submission which was sought to be made was that neither s 71 nor s 195 of the Customs Act 1901 authorised the asking of the question in issue here. When it was pointed out to counsel for the appellant that his sole ground of appeal, however broadly understood, could not encompass this submission, he sought to amend the ground of appeal. However, it was conceded that this point was not taken before Hasluck J, and it does not appear to have been in issue before the magistrate. It was not necessary to deal with it in order to determine the appeal. Leave to amend was therefore refused.

33 I would therefore allow the appeal and substitute an order that the conviction of the appellant in relation to the charge under s 234(1)(d) of the Customs Act 1901 be quashed.

(Prohibited Import) Regulations 1956

BRAYLEY -v- MALKOVIC [2008] WASCA 20 (5 February 2008)

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BRAYLEY -v- MALKOVIC [2008] WASCA 20 (5 February 2008)

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