Chief Executive Officer of Customs v Amron [2001] VSC 404

[2001] VSC 404

CUSTOMS AND EXCISE, Penalty; offences substantially contemporaneous and connected; previous convictions of defendant taken into account Customs Act 1901, ss. 233(1)(a); 234(1)(d)(i); 255(1)(4)(a).

2. In these proceedings on 9 October 2001 I gave judgment and declared:

(1) that on or about 9 February 1999 the defendant committed the offence of smuggling contrary to s. 233(1)(a) of the Customs Act 1901 by evading custom's duty of $37,632.81 payable on a quantity of cigarettes;

(2) that on or about 9 February 1999 the defendant committed the offence of knowingly making a statement to an officer of customs which was false or misleading in a material particular contrary to s. 234(1)(d)(i) of the Customs Act 1901.

On that day I ordered:

(1) that the defendant be convicted of the offence of smuggling cigarettes on or about 9 February 1999 contrary to s. 233(1)(a) of the Customs Act 1901;

(2) that the defendant be convicted of the offence of knowingly making a statement to an officer of customs on or about 9 February 1999 which was false or misleading in a material particular contrary to s. 234(1)(d)(i) of the Customs Act 1901.

I now turn to consider what monetary penalty should be imposed on the defendant having regard to the fact that he has been convicted of each of the aforesaid offences.

8. Pursuant to s. 233AB(1)(a)(i) of the Customs Act 1901 as amended by s. 12 of the Customs Legislation Amendment (Criminal Sanctions and Other Measures) Act 2000, which came into effect on 26 May 2000, the penalty for the offence of smuggling is provided as follows:

(1) Where an offence is punishable as provided by this sub-section, the penalty applicable to the offence is: (a) Where the Court can determine the amount of the duty that would have been payable on the smuggled goods to which the offence relates if those goods had been entered for home consumption: (i) where the date on which the offence was committed is known to the court - that date;... (ii) where that date is not known to the Court - the date on which the Prosecution for the offence was instituted; a penalty not exceeding five times the amount of that duty."

The amount of the duty that would have been payable on the goods smuggled by the defendant on or about 9 February 1999 had the goods been entered for home consumption is $37,632.81. Accordingly, the maximum penalty for the offence of smuggling in respect of which the defendant has been convicted is $188,164.05.

13. Before s. 233AB(1)(a)(i) and (ii) were so amended the penalty for the offence of smuggling provided for a minimum penalty which was a penalty of not less than two times the amount of the duty that would have been payable on the goods smuggled. The amendment removed that minimum penalty. Although the amendment by its operation commenced at a time subsequent to the defendant's commission of the offence of smuggling, the effect of s. 4F(2) of the Crimes Act (C'th) is that the amendment is applicable to this case as the penalty is to be imposed by the Court at a time subsequent to the commencement of the amendment.

16. As to the second offence in respect of which the defendant was convicted, under s. 234(1)(d)(i) of the Act, by s. 234(3) of the Act it is provided:

"(3) Where a person is convicted of an offence against paragraph 1(d) in relation to a statement made or an omission from a statement made, in respect of the amount of duty payable on particular goods a court may in relation to that offence impose a penalty not exceeding the sum of $5,000 and twice the amount of the duty payable on those goods."

Accordingly, the maximum penalty that may be imposed in respect of this offence shall not exceed the sum of $5,000 and twice the amount of the duty payable on those goods.

21. The custom's duty that was payable by the plaintiff on the toilet tissue together with the custom's duty payable on the cigarettes which were imported by the defendant total $37,869.72. The defendant paid, or caused to be paid, custom's duty on the importation the sum of $316.22. In consequence of the defendant knowingly making a statement to an officer of customs in the Entry for Home Consumption which was false or misleading, when account is taken of the custom's duty paid by him on the importation, the duty not paid on the goods imported by the defendant was $37,553.50. It is that sum which it is appropriate to have regard to when considering the monetary penalty which should be imposed on the defendant on him being convicted of the offence against s. 234(1)(d)(i) of the Customs Act. Accordingly, any penalty imposed on the defendant following this conviction must not exceed the sum of $80,107.

24. The facts surrounding the commission of the offences for which the defendant has been convicted are set out in my judgment delivered on 9 October 2001. The defendant on or about 9 February 1999 knowingly made a statement to an officer which was false or misleading in that the Entry for Home Consumption stated that, in part, the importation contained toys when it did not whereas the importation included cigarettes which were omitted from the Entry. The Entry for Home Consumption was false or misleading and the defendant knowingly made a statement to an officer that was false or misleading in that in the Entry for Home Consumption it stated that the total custom's duty payable in respect of the importation was $316.22 when, in fact, when account was taken of the cigarettes included in the importation, the total customs duty payable on the importation was $37,869.72. The defendant knowingly made a statement which was false or misleading to an officer of customs by the Entry for Home Consumption for the importation as part of the process by which he smuggled the cigarettes by importing the same with intent to defraud the revenue.

27. In Vogel & Son Pty Ltd v Anderson[1] the appellant was charged with committing several offences against s. 234 of the Customs Act 1901. Those offences included the evasion of duty, contrary to paragraph (a); the presentation of documents purporting to be genuine invoices which were, in fact, not genuine invoices contrary to paragraph (c), the making of entries which were false in a particular, contrary to paragraph (d) and producing to an officer a document containing a statement that was untrue in a particular, contrary to paragraph (e). The appellants admitted that they were guilty of 83 offences against s. 234 of the Act. They were further charged with having committed 19 offences of smuggling goods contrary to s. 233(1)(a) of the Act. On the facts before the trial judge, Kitto J, he concluded that on each charge of smuggling the defendants should be convicted and that the appellants also should be convicted of all offences charged.

30. When considering the question of penalty Kitto J[2] said:

"The customs laws represent the judgment of Parliament upon an important aspect of the economic organisation of the community, and the object of the penal provisions is to make that judgment as effective as possible. It is important to remember that customs officers have of practical necessity to rely extensively upon the information supplied to them by importers, for the flow of commerce could not be maintained if every importation had to be fully investigated. Moreover, detection of frauds is not always easy. No doubt ordinary conceptions of honesty and of civic responsibility suffice to ensure a great deal of fair dealing with the customs, but for some people little seems to matter but the fear of the consequences of discovery. The Customs Act makes those consequences potentially drastic. It is for the courts to make them, in suitable cases, drastic in fact, or otherwise traders who are not saved by qualms of conscience from willingness to defraud their fellow citizens may weigh the profits they hope for against the penalties they have cause to fear and find the gamble worthwhile."

34. On appeal it was contended that Kitto J was in error to convict the appellants of all the offences charged in relation to each series of transactions. On dismissing that ground of appeal, the Court held[3] that although it had been said on behalf of the defendants at trial that, "in each case the importing with intent to defraud the revenue, the presentation of a false invoice as genuine, the making of a false entry and the production of a document or documents containing an untrue statement or untrue statements were merely steps by which the ultimate offence of evading payment of duty was committed", the observations of Kitto J were unanswerable when he said[4] that, "each step was undoubtedly one of a connected series of steps, but each was a separate and distinct piece of conduct for all that, and each involved its own deliberate contravention of the Act". However, as is relevant to the matters under consideration at this time, on appeal the Court said:[5]

"... we agree that, in determining the appropriate penalties to be imposed in respect of the numerous offences, it was material to take into consideration - as his Honour did - that though the offences in each group were separate offences in law they were substantially contemporaneous and connected."

In the circumstances of this case the offence committed by the defendant under s. 234(1)(d)(i) of the Customs Act in that he knowingly made a statement to an officer which was false or misleading in a material particular was substantially contemporaneous and connected with the further separate offence committed by the defendant of smuggling the cigarettes.

39. Section 16A of the Crimes Act 1914 (C'th) sets out matters to be had regard to and general principles to be observed in determining the penalty to be imposed on the defendant consequence upon him being convicted of a federal offence. Those matters include the matter of general deterrence[6].

42. One of the matters to be taken into account in determining the penalty to be imposed on the defendant is the character, the antecedence of the defendant. There was, tendered on behalf of the plaintiff, three certified extracts of the Magistrates' Court of Victoria at Melbourne from the Registrar of that Court on 9 April 1998. In each case the informant was stated to be "Schindlauer, Barbara" and the defendant was stated to be, "Astta, Aly". It is apparent from the extracts that the surname of the informant and defendant in each case is the name stated first. As to the first extract, it is stated that the "defendant" was charged that at St Albans on or about 18 September 1997 he committed a breach of s. 35 of the Excise Act (C'th), in that he manufactured excisable goods without a licence. It appears from the extract that the "defendant" pleaded guilty to the charge and that with conviction he was fined $750.00 with $412.50 costs. As to the second extract, it appears that the "defendant" was charged that at St Albans on or about 18 September 1997 he committed a breach of s. 117 of the Excise Act in that he had in his possession excisable goods. As appears from the extract the "defendant" pleaded guilty and that with conviction he was fined $500.00 and an order was made for the forfeiture and disposal of goods. From the third certified extract the "defendant" was charged that at St Albans on or about 18 September 1997 he committed a breach of s. 120(1)(iv) of the Excise Act in that he evaded payment of duty which was payable. From the extract it appears that the "defendant" pleaded guilty and that with conviction he was fined $5,000 and ordered to pay $780.91 compensation.

45. The question that arose having regard to the three convictions as appearing from the certified extracts was whether the defendant, the subject of those three convictions, was the defendant in these proceedings. At the time that the defendant in these proceedings was interviewed by customs officer, Brereton, there was also in attendance customs officer, Des Seear. That fact appears from the transcript of the interview tendered in the proceedings. At an early point in the interview the defendant gave his name as Alex Amron and when asked whether he was known by any other name, he answered "Aly Astta" and further said that he was not known by any other name. The defendant said that he was formerly known by the name Aly Astta but he had changed his name to Alex Amron. On the hearing of these proceedings relevant to penalty, Seear gave evidence that he was formerly employed by the Australian Customs Service and that he was in attendance when the defendant was interviewed on 12 February 1999 relevant to the present proceedings. Seear, on 24 October 1997, interviewed Aly Astta relevant to the charges laid, the subject of the aforesaid three certified extracts. At that time the person interviewed by him gave his name as Aly Astta. Seear gave evidence to this Court that the person who was interviewed on 12 February 1999 in respect of these proceedings and who called himself Alex Amron was the same person that he had interviewed on 24 October 1997 and who was charged with the offences the subject of convictions as stated in the certified extracts. He also said that in the course of the interview on 12 February 1999 the defendant, Alex Amron, said that he was previously known as Aly Astta, as appears from the transcript of that interview.

48. There was also tendered on behalf of the plaintiff on this hearing interrogatories 1(a), (b) and (c) delivered on behalf of the plaintiff for the examination of the defendant and the defendant's answers thereto. By these answers the defendant deposed that he had changed his name from Aly Astta to Alex Amron on or about 19 March 1998 by completing the appropriate change of name forms in the Victorian office of Births Deaths and Marriages and that he had not ever been known by any other name. I am satisfied that the defendant in the present proceedings, Alex Amron, is the same person who was convicted and fined by the Magistrates' Court of Victoria at Melbourne on 9 April 1998 under the name of Aly Astta as set out in the three certified extracts.

51. There was also called as a witness on the proceedings as to penalty, Barbara Schindlauer who was the informant in the proceedings before the Magistrates' Court on 9 April 1998. She is employed as an investigations officer by the Customs Office. She said that the charge brought against the defendant on which he was convicted on 9 April 1998, that he committed a breach of s. 35 of the Excise Act was, in particular, that he had, on or prior to the 18th day of September 1997 at 7 Cordelia Grove, St Albans in the State of Victoria, contrary to s. 35 of the Excise Act 1901, manufactured excisable goods, namely tobacco, without a licence granted under that Act. As to the charge relating to the second conviction she said, that it was that the defendant had possession, custody or control of manufactured or partly manufactured goods, namely tobacco, without the appropriate licence. She said that with respect to the third conviction, the charge was that the defendant, contrary to s. 120(1)(iv) of the Excise Act, evaded the payment of duty which was payable. Barbara Schindlauer gave further evidence that at the hearing before the Magistrates' Court the defendant pleaded guilty to each of the offences and that there was read to the Court a summary of matters relevant to the offences which she said the defendant accepted as a fair summary of the facts. It is sufficient to say that each of the matters the subject of the convictions concerned the possession and manufacture of tobacco goods and the failure to pay and evasion by the defendant of payment of duty which was payable on tobacco goods.

54. For the purpose of determining the appropriate penalties to be imposed on the defendant with respect to the two convictions before this Court and as relevant to his character and antecedence I take into account the fact that the defendant was on 9 April 1998 at the Magistrates' Court of Victoria at Melbourne convicted of the aforesaid three offences. Those offences were committed in September 1997 and the defendant was convicted in April 1998, less than a year before the offences relevant to these proceedings.

57. At no time during the trial of the proceedings or on delivery of judgment or on the hearing relevant to penalty did the defendant appear. To the extent that it is necessary to have regard to such matters as the age, means, and cultural background of the defendant, that which is known by me relevant to those matters is that to be obtained from his record of interview. The defendant was born on 1 October 1958 and is presently 43 years of age. He is an Australian citizen, having resided in Australia for over 18 years. At the time of being interviewed on 12 February 1999 he was a married man and his occupation was that of a wholesaler, selling and buying goods and selling and buying imported goods. Other than that no personal circumstances of the defendant are known to the Court. The fact that the defendant was a wholesaler of goods, it is to be concluded that he expected to profit by his conduct which led to him being convicted in these proceedings, had that conduct not been detected because he would have imported cigarettes without paying customs duty on the same.

60. Each of the offences on which the defendant has been convicted are serious offences. Each offence committed by the defendant concerned the commission of a deliberate act by him. It would appear that notwithstanding that the defendant had been previously convicted of three offences under the Excise Act, in the circumstances of this case he was willing and prepared to take the gamble that it would not be discovered that he had knowingly made to an officer a false or misleading statement, on the Entry for Home Consumption, and that it would not be discovered that he imported the cigarettes. He did this with intent to defraud the revenue. At trial Marianna said that on the scale of very rare to very common it was very rare for shipping containers to be opened and examined by customs officers. One would expect that to be the case for otherwise as said by Kitto J in Vogel & Son Pty Ltd v Anderson at p. 164:

"The flow of commerce could not be maintained if every importation had to be fully investigated."

It is appropriate in such a case as this that not only should I have regard to the matter of general deterrence when fixing the appropriate penalty to be imposed on the defendant which I do, but I should also have regard to the deterrent effect that the order I make should have on the defendant.

65. The two offences on which I have ordered the defendant be convicted, while being separate offences in law, they were connected and the conduct of the defendant leading to his conviction was "substantially contemporaneous". However, it is necessary for me to ensure that the severity of the sentence is appropriate to the conduct of the defendant in respect of which he has been convicted. I regard the offence of smuggling as the more serious offence of the two on which the defendant has been convicted. The conclusion that I have reached is that for the offence of smuggling there should be imposed on the defendant a monetary penalty of $90,000. I have also concluded that with respect to his conviction under s. 234(1)(d)(i) of the Customs Act, when taking into account that the defendant's deliberate conduct led to his conviction for this matter but it was substantially contemporaneous and connected with conduct in respect to which the defendant was convicted of smuggling, the monetary penalty that should be imposed on him for this offence is $10,000.

(1) that with respect to the conviction of the defendant of the offence of smuggling contrary to s. 233(1)(a) of the Customs Act 1901 it is ordered that the defendant pay to the plaintiff a monetary penalty of the sum of $90,000;

(2) that with respect to the conviction of the defendant of the offence of knowingly making a statement to an officer of customs which was false or misleading in a material particular contrary to s. 234(1)(d)(i) of the Customs Act 1901 it is ordered that the defendant pay to the plaintiff a monetary penalty of $10,000.

In these proceedings the plaintiff has sought an order for costs. Pursuant to s. 24(1) of the Supreme Court Act 1986 the Court is vested with a discretion as to costs in a civil proceeding. The present proceedings, although in the nature of a customs prosecution, they are brought in accordance with the practice and procedure of the Court in civil cases. In a case such as the present costs may be awarded as in civil proceedings. In my view in the circumstances of this case there is no reason why costs should not follow the event. In my view the plaintiff's costs of the proceedings should be paid by the defendant. Accordingly, I further order:

(3) That the defendant pay the plaintiff's costs of the proceedings.

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[6] Director of Public Prosecution (C'th) v el Karhani (1990) 97 ALR 373.