Chief Executive Officer of Customs v JMI Trading Pty Ltd [2000] VSC 537

s on or about 28 September the second and third defendant imported or caused to be imported under the name of "Jina Yan Australia", by sea, from Dalian, China 511 cartons containing bottles of Chinese spirit and Chinese wine;

s on or about 20 October 1997 the second defendant and the third defendant by their customs agent, Clarke Customs Pty Ltd, made or gave or caused to be made or given to an officer of customs an Entry for Home Consumption ("the Entry") in respect of that importation together with an invoice numbered S.H.-97819 and packing declaration;

(a) the importation comprised 350 packages containing a total of $7,000 glass ornaments;

(b) the custom's value of the importation was A$18,746.65;

(c) the custom's duty payable in respect of the importation was nil and the total sales tax payable was A$4,949.11;

were each false and false to the knowledge of the second defendant and third defendant;

s the second defendant and third defendant deliberately omitted from the Entry a statement that the importation contained 511 cartons of Chinese wine and Chinese spirit whereas in truth and in fact the importation comprised such goods;

13. It was further alleged and averred by the plaintiff that in fact:

s custom's duty of A$79,516 was payable in respect of the goods the subject of the importation;

s sales tax of A$36,560.32 was payable in respect of the goods the subject of the importation;

18. Further it was alleged and averred by the plaintiff that:

s the invoice stated that the importation comprised 350 cartons containing 7,000 pieces of glass, arts and crafts at a total cost of US$14,000;

s the statements in the invoice as to the nature of goods that comprised the importation were false and false to the knowledge of the second defendant and third defendant;

s the second defendant and third defendant caused no custom's duty to be paid in respect of the importation whereas the total amount of custom's duty payable on the importation was A$79,516.00;

s the second defendant and third defendant paid or caused to be paid A$4,949.11 sales tax in respect of the importation whereas the total amount of sales tax on the importation was A$36,560.32;

25. Further, it was alleged and averred by the plaintiff that:

s such conduct as engaged in by the second defendant and third defendant, as alleged, was engaged in with intent to evade the payment of custom's duty and/or sales tax which was payable and with intent to defraud the revenue;

s the second defendant and third defendant intentionally evaded custom's duty and sales tax in the sum of A$111,127.21 in respect of that importation.

30. The plaintiff further alleged and averred that the second defendant and third defendant in respect of that importation:

(a) smuggled goods in contravention of s. 233(1)(a) of the Act;

(b) evaded the payment of duty and sales tax which was payable on the goods comprising such importation in contravention of s. 234(1)(a) of the Act;

(c) knowingly made statements to an officer in the Entry which were false or misleading in a material particular in contravention of s. 234(1)(d)(i) of the Act or in the alternative, recklessly made statements to an officer in the Entry which were false or misleading in a material particular in contravention of s. 234(1)(d)(i) of the Act;

(d) knowingly omitted from a statement to an officer in the Entry a matter or thing without which, the statement to an officer in the Entry was misleading in a material particular in contravention of s. 234(1)(d)(ii) of the Act or in the alternative recklessly omitted from the statement to an officer in the entry a matter or thing without which the statement was misleading in a material particular in contravention of s. 234(1)(d)(ii) of the Act.

37. In the alternative it was alleged and averred by the plaintiff that the second and third defendant knowingly aided, abetted, procured, counselled or were otherwise directly or indirectly concerned in the commission of the offences as referred to.

40. The plaintiff sought by his statement of claim -

A. Declarations that each defendant had committed the offences alleged.

B. Convictions against each defendant in respect of the offences alleged.

C. The imposition of a penalty in respect of each conviction.

D. Such orders under s. 21B of the Crimes Act 1914 (Cth) as the Court deems fit including an order against the second defendant and the third defendant for reparation of the duty and sales tax short paid in the total sum of A$111,127.21 in respect of the importation.

E. Alternatively an order for the payment of the said amount of duty and sales tax short paid.

48. At an early stage of the trial, the second defendant by and through his counsel pleaded guilty to an offence against s. 234(1)(d)(i) of the Customs Act 1901 that on or about 20 October 1997 he knowingly made to an officer of Customs a statement which was false or misleading in a material particular, namely, a statement in an Entry for Home Consumption that the goods to which the Entry related were glass ornaments. On such plea being entered it was ordered that the second defendant be convicted of that offence. It was further ordered that the second defendant pay a penalty of $5,000 in respect of such offence and further that he pay the plaintiff's costs in respect of the proceedings against him. In addition it was ordered that the "third party proceedings" of the second defendant against the third defendant in respect to the importation referred to, be struck out.

51. The proceedings in the nature of a customs prosecution thereafter proceeded as between the plaintiff and the third defendant Guo Min Wei in accordance with the practice and procedure of the Court in civil cases: s. 247 of the Act.

54. By his defence, the third defendant denied that he had committed any of the offences alleged. He admitted that the goods, the subject of these proceedings, were imported into Australia on or about 28 September 1997 from China but he denied that such goods were imported or caused to be imported by him, further alleging that he did not know that the Chinese wine and spirits were imported into Australia until 22 October 1997 when he was interviewed by custom's officers. He admitted that statements in the Entry were false, but further alleged that he did not prepare the Entry and did not know that the statements were false until interviewed by custom's officers when he was advised that Chinese spirits and not glass arts and craft had been imported into Australia. He denied that he engaged in conduct with intent to evade the payment of customs duty and/or sales tax and further he denied that he engaged in conduct to defraud the revenue. The third defendant further denied that he had committed any offence as alleged against him.

57. Andrew Kline, a licensed customs broker and the managing director of Clarke Customs Pty Ltd, gave evidence that on 30 October 1997 he received in the mail an envelope containing a number of documents. The envelope in which the documents were contained was addressed to -

"Clarke Customs Pty Ltd (Att: Jackson) 591 Bridge Road Richmond Vic 3121"

"From: Jina Yan Australia No. 1 Tea Tree Place Keysborough Vic 3173 Tele: 03-9798 1540"

There was contained in the envelope an invoice dated 19 August 1997. The invoice was headed "SINOTRANS SHENYANG GROP CORP". It was addressed to - "Jina Yan Australia, 1 Tea Place, Keysborough, Vic 3173, Australia, Tele: 61-3-9798 1540". The quantity and description of goods was stated to be - "Glass arts and crafts, 350 ctns, 7000 pcs". The unit price was stated to be US$2.00 and the amount was stated to be US$14,000. The invoice was numbered "SH-97819". Also contained in the envelope was a "packing list" dated "19-08-97 which bore the same number as the invoice. The "packing list" bore the packing number "A45682". The description of goods was stated to be "class arts", the quantity being stated as "350 CTNS (7000 PCTS)". Also contained in the envelope was a "packing declaration". That document was also headed "Sinotrans Shenyang Grop Corp". Further, in the envelope was a Bill of Lading describing the goods as "glass arts and crafts".

From enquiries made by Kline he ascertained the container said to be containing such goods had been in port for some two and a half weeks. Kline said that he did not know the company "Jina Yan Australia". He said that he rang the telephone number which was on the envelope and spoke to a male person. He said that the person he spoke to did not appear to understand him and he left his name and phone number with that person. The following day Kline rang the telephone number again and asked that someone who had knowledge of the importation to ring him, but there was no response to his call. Kline again rang Jina Yan Australia on 15 October and spoke to a person who he identified to be the same person as he had spoken to on the previous day. Kline said he was put on to a person who spoke English and who said he was "the boyfriend of his daughter". Kline said he did not know who he was talking about. However, on Thursday 16 October, Kline received a telephone call from "Mr Wei" who asked him to come and see him at Keysborough. Kline told that person that he was too busy and that he would have to come and see him. He made an appointment for the person to see him at 11.00 am on 17 October. Within 15 minutes of that phone call Kline received a telephone call from John Ho who asked him whether Wei had been in touch with him and when he told Ho that Wei was to see him the following day, Ho said that Wei and he would be there in half an hour. Subsequent to this conversation and approximately half an hour later the person he identified as Ho and also Wei came to his office. Kline asked Wei what was in the container. He said that Wei produced a sample of a glass ornament. Kline at this meeting asked Wei if he had an "ACN" number to which Wei said, "No". Kline asked him whether he was a private company or a partnership or whatever but Wei did not appear to understand. He said that Wei then held a conversation with Ho and on the completion of this discussion, Wei stated that it was a private importation. Kline asked about sales tax and whether he had a sales tax certificate or whether he intended to pay sales tax. Kline explained that there were only two ways to clear the goods, being the payment of sales tax or quoting a sales tax number. This, he said, was interpreted through Ho. Kline said that Wei got confused and said he had a sales tax number in his car. Both Wei and Ho left the office and returned a few moments later with a piece of paper on which a number was written. Kline said that it appeared to him to be a tax file number. Kline said he calculated duty, sales tax, landing charges and so on and told Ho and Wei that they would have to pay by cash or bank cheque. Kline said that Wei stated that he would have to talk to his partner about the payment. Both Ho and Wei departed from Kline's office a short time later. On Monday, 20 October Kline telephoned Ho and advised him of the amount that was payable on the shipment. Later that day Ho and Wei arrived at Kline's office with a bank cheque for the clearance of the shipment. On receipt of the bank cheque from Wei, Kline handed him an invoice on which there was stamped "paid". Wei informed Kline that he wanted the container delivered at Keysborough on Tuesday, 21 October. Following his meeting with Ho and Wei on 20 October 1997, Kline completed an Australian Customs Entry for Home Consumption from the information that had been furnished to him. The Entry stated that the goods were: "glass ornaments"; the origin of the same was "Chin"; the quantity was "7000"; the invoice price was "$14,000"; that they were duty "free"; and that the Sales Tax was "$4,949.11"; and that the total amount payable was "$4,981.21". The Entry was submitted by Kline.

65. In cross-examination Kline said that when Wei and Ho came to his office on 16 October that was the first time that he had met Wei but that he had known the person called John Ho and that he knew him to be an importer of giftware. He said that Ho had used the office and its services several times previously. Kline said that Ho had dealt with his son. On viewing the envelope which was addressed to the attention of "Jackson", he said that he did not know Jackson but his son was Jason. He said that on previous occasions his son, Jason, had dealt with John Ho. Kline said that he made it plain to the men on 16 October that they had to make a decision quickly otherwise the storage fees being charged would increase. He said that, in fact, he had rung the shipping company and had the charges reduced and that he did this to try and help them. Kline gave evidence that on 20 October he telephoned Ho and informed him of the amount that was payable on the shipment. He said it was Ho who he phoned that day and that Ho knew "the system". Kline agreed that on 17 October and after speaking to a person who Kline had identified as Wei that he had received the telephone call from Ho asking whether Wei had been in touch with him. He said that it was in this conversation that Ho said to Kline that he and Wei would be at his office within half an hour. Kline gave evidence that in the conversation he had with Ho on 16 October Ho did not tell him that he was the author or the "typer" of the documents. Kline said at his meeting with Ho and Wei on 16 October he asked under what name the shipment was to be registered. He said he asked whether it was Jina Yan and that Wei had said "yes" or had indicated "yes". He said that at this meeting most of his questions were directed to Wei not to Ho. He said that during this conversation Wei and Ho had spoken to each other in a foreign language and Ho interpreted for Wei what he had said as to a sales tax number. He was asked whether after Ho had spoken to Wei in a foreign language that Wei then said something in English to him. He said that he could not remember. Kline agreed that Wei was confused regarding the sales tax certificate. He said he thought it was Wei who had told him that it was a private importation. It was put to this witness that it was Ho who had produced the glass item and said something to the effect that the items were something like this. Kline said it was Wei who produced the ornament. The witness said that when he asked Wei what sort of glass ornaments were in the container it was Wei who had produced the glass duck out of a satchel. Kline said that when he asked, "is that all that is in the container?" Wei spoke to Ho and Wei said that there were different types of ornaments not necessarily all the same. Kline agreed that the documents that he had received, the invoice, the packing list and the packing declaration all had a stamp on them with Chinese letters and in terms of the stamp there was nothing unusual about the documents.

68. Geoffrey Sarkies, a customs officer, gave evidence that on 22 October 1997 at approximately 9.45 am he attended the premises at 1 Teatree Place, Keysborough and introduced himself to the defendant, Wei. He had a short conversation with Wei through his friend "Boris" who appeared to understand English. Sarkies executed a search warrant and the premises were searched by customs officers assisting Sarkies. One of the objects found was a handwritten invoice, addressed to "Jina Yan Australia, No. 172A Tree Place Keysborough". The date appearing on that document was "97.08.19". On the back of the document was Chinese handwriting. Sarkies said that the document was found in the back pocket of a pair of trousers, hanging over a chair. On that document the "Quantities and Description" was stated to be "350 CTNS (7000 PCS) Glass Arts and Crafts". The unit price was stated as "US$2" and the Amount was stated as "US$14000. Further, on that document against the words "Shipped From" was written - "China Dalian", and as against the word "To" was written - "Melbourne Australia". There was produced that which was agreed to be an English translation of the Chinese handwriting on the back of that document. That was:

"Min Wei How are you, because recently business in China have not been completed might need to stay another 20 more days before I could return to Australia, therefore, I could only send you these invoices. Hope you receive them soon. If there is anything you do not know you could contact Ho Jun Bo. Mr Ho Jun Bo to help to explain. Mr Ho's phone numbers are 0412029452, 9428 4988, 9792 9213. Invoices and invoice documents and contents type out yourself. Talk again when I see you. Wan 21-9-97"

Later that day and at approximately 12.50 pm Sarkies conducted an interview with Wei at Customs House. The interview was tape recorded from which a transcript was made. On that day a warrant was also executed at 21 Duke Street, Abbottsford, the business premises of the person referred to in these proceedings as John Ho. Sarkies later examined the ribbon taken from a typewriter found at those premises and by using a photocopy of the typed invoice, packing list and packing declaration and the envelope, previously referred to, he expressed the opinion that it appeared from that examination that the documents and envelope were typed from the typewriter found at premises of John Ho. Evidence was given that Ho had said that he had typed the documents. Sarkies gave evidence that on 12 November 1997 customs seized goods from premises located at 1 Minne Street, Yarraville which was a facility that the Customs Department utilises to inspect goods imported from overseas. The goods seized comprised 300 cartons containing bottles of Chinese spirit labelled "Jianzhuanqujui", 100 cartons containing bottles of Chinese spirit labelled "Dong Bei Te Chan", 66 cartons containing bottles labelled "Green Gram King Wine" and 46 cartons containing bottles of spirit labelled "Seng Long Tonic Wine". The witness gave evidence that the total custom's duty payable on the goods was $79,516.

Sarkies gave evidence that when he conducted the interview with Wei on 22 October 1997, that was done in the presence of another customs officer and an interpreter from the Victorian interpreting and translating service. The transcript of the interview was tendered and received in evidence. Sarkies produced a number of cardboard cartons on which it was indicated that the contents and that the same had been produced from a factory in China.

74. As to the transcript of the interview had with Wei, a number of questions and answers were excluded as evidence relied on by the plaintiff. They were questions and answers 177 to 213 inclusive. From the transcript it appears that although a few questions were answered by Wei saying "yes" by far the greater majority of the answers given were given through the interpreter. During the course of that interview Wei acknowledged that his address was 1 Teatree Place, Keysborough. He gave his date of birth as 15 April 1938. The defendant said he was at the time not employed, that he had been receiving unemployment benefit for two and a half years. Wei was shown the envelope addressed to "Clarke Customs Pty Ltd (Att: Jackson)" which had typed on it - "From: Jina Yan Australia, No. 1 Teatree Place, Keysborough, Vic. 3173. Tele. 03-97981540". He said that the address was his, the telephone number belonged to him but the name did not belong to him. He denied that he had sent the envelope to the customs broker. He said he had not seen the envelope before and that he did not know who sent the envelope to the customs broker. Wei said that he had seen the invoice, packing list and packing list declaration and Bill of Lading about a month ago when they were posted to him from China. He was asked who was it that had sent them to him, he replied, "I don't know, probably Yan Jin". He was asked who was Yan Jin and he replied that he was a Chinese man and that he was in business in Australia. Wei said that he first knew that a shipment was coming for Yan Yin to Australia when Yan Yin rang him from China, saying that there will be some merchandise coming to Australia. He said that was about four weeks previously. This conversation, he said, occurred after had received the documents. He was asked, "when the documents arrived were you aware what they were for, did you know why you had received the documents in the mail?" He replied, "Well before he left he told me he was doing some business and he said if I were not here then please receive these goods for me". Wei said that those instructions were given to him in June 1997 and that he was expecting Yan Yin to return to Australia two months from June. Wei said that he did not order the goods set out on the invoice but Yan Yin had done so. Wei said that he had not paid any money to China for the goods. He further said that when the documents arrived he did not understand them but gave them to John Ho who he also referred to as John Bo or Jun Bo. Wei also said that there was a letter there which told him about the incoming of these things and saying that anything he needed to contact Ho. Wei was shown a letter which he identified saying that the letter said that he had already sent off the merchandise, it asked him whether he had received them and then that he was to give the things to John Ho. He said his instructions were for him to hand the documents to John Ho. The letter was translated by the interpreter and read by her in English. The English translation is that to which I have referred to earlier. Wei was asked whether the documents were blank or whether they were typed up. He said he was not sure, he didn't know and that he did not look at them properly. He said that he would not know how to type. Wei further said that after receiving the letter he delivered the documents to Ho and that after that the customs broker, Clarke, sent him a document for him to obtain the merchandise. Wei said that after he received the document he went to see the customs broker. Wei said that he had received telephone calls that he could not understand. When asked how did he know to go to Clarke Customs to clear the shipment he said that John Ho went with him. He said that John Ho knew about the matter and that he took him there. Wei further said that they told him how much he had to pay and that he showed them a glass ornament. Wei said that the ornament was from John Bo's storeroom and that he had said that he would need to be able to explain clearly, so that they were to bring in a sample. When asked how did John Ho know that there were ornaments in the container he said, "because it was written on there". Wei said that he did not understand that you have to pay duty on all goods or some things that come into Australia that some goods were dutiable and some were not dutiable. Wei was asked, "Were you concerned that you may be showing the customs broker something totally different to what was in the container?" He replied, "I wasn't concerned because I believed from what was written there that - I assumed that merchandise were these". Wei further said that the merchandise did not belong to him that "he" just told him to clear them or get them and then put them at his place and that "he" will get them. He denied that he was working as an agent for Yan Yin. Wei further said that he was notified by Clarke Customs that $8,458.45 was to be paid and that he paid that amount. When it was put to Wei that he was the one that had paid the duty, sales tax and all other sundry charges for Jina Yan Australia, that he was, in fact, representing the person or company importing the shipment, he denied that, saying that he was not in joint partnership with him or working in his company. Wei said that, "he" just rang him up and he, Wei, helped him to clear the shipment because it was already two weeks at customs and that he had not the money and that he had to borrow some money to pay that. It was put to Wei that at his house there had been found an envelope with a number written on it. Wei said that was his tax number. He said he had written that, that customs wanted his tax number so he gave it to them. It was put to Wei that he had not asked the interviewer what was wrong with the shipment, the container that was to arrive for Jina Yan. Wei replied that he had been wanting to ask what happened, that the customs said that they were going to deliver the container about 10.00 am that morning so he had got two people to help. He was asked whether he had any idea what was in the container. He said that he did not, but assumed that there was glass ornaments because he had known "him" from before and he had imported those kinds of things before. Wei was told that the container had been examined and a large quantity of Chinese spirits had been found in the container. Wei replied, "Then I don't know what to do. I have to wait for them to come back to deal with it". Wei further said that he did not import the things, that they did not belong to him, that "he" rang him up, asked him to clear the shipment for him and that he did not want them as they were not his business. Wei was told that customs viewed the matter very seriously and he was asked whether there was anything further that he wished to say. He replied, "I am also very angry about what happened because of this. If I had known what was to come about I would not have helped him". To further questions directed to him Wei said that Yan Yin knew John Ho. Wei said that he was to get no payment to help Yan Yin and that he was not to get a share of the container. He said that when he found he had to pay a bill of over $8,000 he had to borrow, and that he had tried to ring Yan Yin but could not find him. He said that he believed that after Yan Yin came back and got his container of merchandise that he would sell "them" and pay him back. He said that it was correct that he hardly knew the man. Wei was further asked whether there was anything else he wished to tell the Customs officers to which he replied - ... "I am innocent of this matter I don't know that this is what actually happened and if I had known I would not have done - helped him at all".

77. In cross-examination Sarkies said that the premises of Yun Bo He at Duke Street, Abbottsford had been searched and that was where he got the typewriter. He further said that in those premises there were items of ornamental giftware, China items and decorative items. Sarkies said that Yun Bo's business card was found at Wei's place and that the card said that Bo was a giftware wholesaler or something of that kind.

80. The defendant gave evidence through an interpreter. He said he was unemployed and that after arriving in Australia in 1985 he had worked in a bakery until he became unemployed in 1995. He said he could not read English. The defendant said that in May 1997 he met Yan Yin who ran a business in Dandenong. The defendant said that he had provided his telephone number to this person. He said that in June 1997, Yan Yin spoke to him and informed him that he had no place to live. He asked the defendant whether he could live at his place for two weeks. The defendant said that this person stayed at his house for two weeks and at the end of that period he left to go to China. The defendant said that this person told him that he was going to China to purchase paintings and art crafts. The defendant said that he had no dealings with the customs authorities in Australia other than this matter. The defendant said that before he left for China, Yan Yin said he was going to purchase goods, that he had no place to store them and he agreed that the goods could be stored in a garage at his home. The defendant said that he received from China a letter including a note from Yan Yin. He identified the handwriting on the back of the handwritten invoice as the letter. The defendant said that after he received a telephone call from Yan Yin and that in the telephone conversation Yan Yin informed him that the items that were being sent from China to Australia were art crafts. The defendant gave evidence that he telephoned Jun Bo's office. He said that Bo asked him to come in and bring, "all the things" with him. He said he had never met Jun Bo before. He said that he showed the letter and documents to Bo, that Bo asked him to leave the things at his place, that he left the documents and forms with Bo and when he left the premises he took with him the letter that he had received from Yan Yin. The defendant said that he got a letter from customs, that he went to see Jun Bo who told him that the letter was from customs for them to get the goods. The defendant was asked, "Did you take anything with you, that's you personally, when you went with Jun Bo to this office?" and the defendant replied, "Jun Bo grabbed an art craft from his garage and they told me to go to the customs and to tell them that - because I don't understand, so he told me to tell them that this kind of stuff is in there." When shown the glass duck which had been previously produced by Kline, the defendant said it was something like that. When asked who gave it to the "customs man", the defendant said, "Jun Bo gave it to me and asked me to give it to him, and I give it to him". The defendant further said that after he had given the documents and forms that were in the envelope to Jun Bo and that he never saw them again. The defendant was asked whether he and Jun Bo spoke, "once you'd got the price from the customs man" to which the defendant replied, "I talked with Jun Bo about - the first is that I didn't have any money - I didn't have money. The second is because I didn't have the money what should I do. Jun Bo told me to borrow some money and pay the bill and when Yan Yin came back he would pay me back plus interest, and he said if I didn't pay the bill after three days it would incur a cost of $100 per day". He was asked where he got the money, and the defendant said that he had a $1,000 deposit and that he borrowed about $8,000. The defendant further said that Jun Bo together with the customs man told him that he should wait at home on the 23rd. The defendant further gave evidence that he spoke a few words to the "customs man", in Chinese and Jun Bo interpreted and that he did not comprehend what was being said in English. The defendant was asked did he know anything about there being alcohol in the container prior to being told that in the interview. The defendant replied, "I told him I didn't know". The defendant further said that before Yan Yin left he told him that he was going to send some arts crafts but when the customs man told him there was alcohol he was very angry because he thought it was against the law.

83. In cross-examination it was suggested to the defendant that he knew at the outset before Yan Yin went to China, that he, the defendant, would be the person clearing the goods. He replied, "No he didn't tell me that". It was further put to the defendant, "And it was after you did your job that Yan Yin was to come and collect the goods from your garage?" The defendant replied, "Yan Yin did not come. He wrote a letter to me and asked me to see Jun Bo and Jun Bo told me to get the goods out of customs and to store in my garage, when Yan Yin came back he would collect them". He was asked, "Do you think you were tricked by Yan Yin?" To which he replied, "Yes". It was put to the defendant that when he received the documents with the message from Yan Yin he knew that the documents were invoices. The defendant replied, "No I didn't know". In giving evidence in cross-examination the defendant further said that it was not until that day, that is, the day on which he was being cross-examined, that he read every line of the letter from Yan Yin. It was put to the defendant that he gave the documents to John Bo knowing that he would type up the invoices and knowing that they would be presented for the purpose of entering the goods through customs. The defendant replied, "I didn't know". The defendant said he was given the glass duck by Jon Bo and asked to take it to the "customs". He said that he put the glass duck on the desk. He agreed that he showed the glass duck. He said that before they went into the office, Jon Bo gave it to him and he brought it in. He agreed that he knew that the glass duck had come from Jon Bo's storeroom and when it was put to the defendant, "You had no idea whether glass ducks or that kind or something similar were in the container or not?" He replied, "No I didn't know". The defendant further said that what had happened was that Yan Yin told him that he was going to send some art crafts but the customs told him that there was alcohol so he was very angry and wanted to find Yan Yin and also he wanted to ask him for his money. He said he expected the goods to be delivered to his garage because the "customs" man told him about that and he found two friends to come to help him. One was Ching and the other was Boris.

86. In these proceedings when determining whether, on the evidence before the court, the plaintiff has proved that the third defendant has committed any offence against the Customs Act 1901 (Cth), as alleged in these proceedings, it is necessary that the plaintiff prove each and every element of the relevant offence on the balance of probabilities: Comptroller-General of Customs v Jayakody[1]; Wong v Kelly[2]. In the latter of the two cases referred to, Stein J.A., with whom Mason P. and Meagher J.A. agreed, at paragraph 64 of his judgment said that the trial Judge, Carruthers A.J., was right to treat the proceedings before him, in which the appellant was found guilty of a number of offences against The Customs Act 1901, as civil and not criminal proceedings and to apply the standard of proof in Briginshaw[3].

89. In Briginshaw v Briginshaw the court held that on a petition for divorce on the ground of adultery, the standard of proof required by The Marriage Act 1928 (Vict) was not that of proof beyond reasonable doubt, which obtains in respect of issues to be proved by the prosecution in criminal proceedings. At p. 368-9 Dixon J. said:

`Upon an issue of adultery in a matrimonial cause the importance and gravity of the question make it impossible to be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose and inexact. Further, circumstantial evidence cannot satisfy sound judgment of a state of facts if it is susceptible of some other not improbable explanation. But if the proofs adduced when subjected to these tests satisfy the tribunal of fact that adultery was committed it should so find."

93. However, in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Ors[4] Mason C.J., Brennan, Deane and Gaudron JJ. said:

"The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so where the matter to be proved involves criminal conduct or fraud. On the other hand the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary `where so serious a matter of fraud is to be found'. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that on the balance of probabilities a party to civil litigation has been guilty of such conduct. As Dixon J. commented in Briginshaw v Briginshaw[5]: `The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved...' There are however, circumstances in which generalisations about the need for clear and cogent evidence to prove the gravity of fraud or crime are, even when understood as not directed to the standard of proof, likely to be unhelpful and even misleading."

97. The first offence alleged to have been committed by the third defendant is that he was smuggling goods in contravention of s. 233(1)(a) of the Act. "Smuggling" is defined in s. 4 of the Act as follows:

"Smuggling means any importation, introduction or exportation or attempted importation, introduction or exportation of goods with intent to defraud the revenue."

101. In Vogel & Son Pty Ltd v Anderson[6] Taylor, Menzies and Owen JJ., after referring to the definition of "Smuggling" in s. 4 of the Act, said at pp. 166-7:

"This does not, of course, mean that whenever a false entry or a false invoice relating to imported goods is made or produced to an officer with intent to defraud the revenue the offence of smuggling is committed. But it is committed whenever the importation of goods is accompanied by an intention on the part of the importer to defraud the revenue by making a false entry or by the production of a false invoice.

In Barendse v Comptroller-General of Customs[7], the Court of Criminal Appeal, NSW constituted by Beazley J.A., Grove and Ireland JJ. at p. 231 and after quoting the definition of "smuggling" as contained in s. 4 of the Act in the judgment of the court said:

"An intention to defraud the revenue has been described as an `intention to prevent something getting into the revenue which the revenue is entitled to get'[8]. The meaning of `defraud' was explained in re London and Globe Finance Corp[9] as follows: `To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. To defraud is to deprive by deceit; it is by deceit to induce a man to act to his injury. More tersely, it may be put, that to deceive is by falsehood to induce a state of mind; to defraud is by deceit to induce a course of action.'"

"It is essential to the concept of smuggling that the revenue is entitled to something. It is also essential that it be proved that there was an intention to deprive the revenue of that to which it was entitled. That `something' quite simply, is the duty payable on goods imported into the country, which, in turn is assessed on the customs value of the goods."

111. The second offence alleged by the plaintiff to have been committed by the third defendant was that in contravention of s. 234(1)(a) of the Act he evaded the payment of duty and sales tax which was payable on the goods comprising the importation. In Wilson v Chambers & Co Pty Ltd[10] Knox C.J. at p. 136 said:

"The distinction in the meaning between the words `evade' and `avoid' is well-established and a charge of evading payment is not made out by evidence which proves no more than that the person charged failed or omitted to pay an amount payable by him."

"Clearly in my opinion, the word `evade' in the Act does not necessarily involve any device or underhand dealing for the purpose of escaping duty; but on the other hand it involves something more than a mere omission or neglect to pay the duty. It involves in my opinion the intentional avoidance of payment in circumstances indicating to the party that he is or may be under some obligation to pay duty. The circumstances may consist of knowledge, or neglect of available means of knowledge, that the omission to pay is or may be in contravention of the Customs Law."

119. In Gallagher v Sendak[11] Vincent J. at 745, when considering the substantive offence of evading the payment of duty in breach of s. 234(1)(a) of the Act, expressed the view at p. 745 that of the members of the court in Wilson v Chambers who expressed their view as to the meaning of the word "evade" the most helpful of the formulations adopted by the various judges was that of Starke J. which I have cited.

122. In Denver Chemical Manufacturing Co v Commissioner of Taxation[12] Dixon J. in the context of s. 210 of the Income Tax (Management) Act 1936 which permitted the Commissioner to amend an assessment where there had been an avoidance of tax due to evasion, said at p. 313:

"I think it is unwise to attempt to define the word `evasion'... It is probably safe to say that some blameworthy act or omission on the part of the taxpayer or for whom he is responsible is contemplated. An intention to withhold information lest the Commissioner should consider the taxpayer liable to a greater extent than the taxpayer is prepared to concede, is conduct which if the result is to avoid tax would justify finding evasion."

126. In Ludwigs Canberra Bond Seller Pty Ltd v Sheen[13] Gallop J., when dealing with the meaning of the word "evade" in s. 234 of the Customs Act after citing extracts from the judgments of members of the court in Wilson v Chambers and Co Pty Ltd including those of Knox C.J. and Starke J. and after referring to the decision of Dixon J. in Denver Chemical Manufacturing Co v Commissioner of Taxation his Honour at p. 354 said:

"It is appropriate in my view to apply the meaning enunciated by Dixon J in the penal provisions now under consideration, namely, that the word `evade' means more than the intentional withholding of information or the mere furnishing of misleading information but requires some blameworthy act or omission on the part of the appellants."

130. In Defiance Enterprises Pty Ltd v The Collector of Customs (Queensland)[14] Lee J., when determining whether there had been an "evasion" of duty payable under s. 2341(a) of the Act and after referring to the judgment of Higgins J in Wilson v Chambers & Co Pty Ltd and the judgment of Dixon J in Denver Chemical Manufacturing Co, held at p. 724 that on the evidence he was satisfied that there was:

"No blameworthy act and no other conduct which would justify a finding of an evasion of duty."

134. In my view it is appropriate when considering whether, on the evidence before the Court, it has been proved that a person has "evaded" the payment of any duty which is payable under s. 234(1)(a) of the Act it is appropriate to have regard to and apply the meaning of "evade" as enunciated by Dixon J in Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW) and applied by Gallop J in Ludwigs Canberra Bond Seller Pty Ltd v Sheen, that is, that which must be proved is that the person concerned did more than furnishing misleading information to an officer or withholding information from an officer, for it must be proved also that by doing that the person engaged in some blameworthy act or omission.

137. By his defence in these proceedings Wei admitted that the goods, the subject of these proceedings, were imported into Australia, although he denied that he imported them. Before Yan Yin left Australia he had told Wei that he was doing some business and if he was not here to "please receive these goods". It was after Yan Yin had left Australia that Wei received a telephone call from Yan Yin from China telling him that some merchandise was coming to Australia. It was after this telephone conversation with Yan Yin, that Wei received the letter from Yan Yin together with numerous documents. These he took to John Ho and following this he and Ho visited Kline. In the meantime the documents relevant to the importation of the goods had been typed by Ho and sent to Kline in an envelope identifying Wei's address as the sender of the letter. It was during the visit to Kline, with Ho, that Wei requested the goods to be delivered to his home in Keysborough. In these circumstances I am satisfied that Wei imported the goods into Australia.

140. The next question to be addressed in these proceedings is whether it has been proved, to the required standard, that Wei smuggled the goods the subject of these proceedings. For that to be established, as I have previously referred to, it is necessary for the plaintiff to prove that Wei imported the goods with intent to defraud the revenue.

143. On behalf of the plaintiff it was submitted that the court should conclude that by Wei receiving the documents, and sending them to John Ho to be typed in Australia and by furnishing those documents to Kline, Wei had represented that the documents as typed in Australia had their origin in their completed form in China. It was put that Wei in this fashion had falsely represented the origin of the documents. Further, it was submitted that by the content of the documents themselves Wei had falsely represented the kind or nature of the goods imported. It was submitted that having regard to each of these matters and in combination that it should be concluded that by importing the goods Wei had the necessary intent, that is, to defraud the revenue.

146. In my view the evidence given by Wei in cross-examination that he did not know whether glass ducks of a kind produced to Kline or something similar cannot provide evidence from which it is to be inferred that Wei did have the necessary intent. This evidence as given by Wei in cross-examination, must be viewed in the light of other evidence given by Wei. I accept that Wei had a telephone conversation with Yan Yin and that he was told by Yan Yin that items being sent from China were "art crafts". It was after this conversation and after receiving the letter and documents from Yan Yin that Wei turned to Ho for assistance. It was after turning to Ho for assistance that Wei went with Ho to Kline's office which Wei referred to as the "customs". It was Kline's company, Clarke Customs Pty Ltd, that Ho had previously had dealings. It was that company that received the aforesaid letter containing the documents typed by Ho. It was when Wei was being first interviewed by Sarkies that Wei was informed as to what, in fact, was in the container. Wei had not been involved when any steps which caused the Chinese wine and spirits to be placed in the container and conveyed to Australia and there imported. Wei had been told by Yan Yin that that which was being sent to Australia was "art craft". Ho took from his garage the glass duck that Wei handed to Kline. It was Ho who told Wei that this was the kind of stuff that was in the container. Wei had acted on that which he had been told by Yan Yin and further that which he was told by Ho to do. Wei did not, in fact, know what was in the container but he acted on that which was told to him by Yan Yin and the directions that were given to him by Ho. In such circumstances the fact that Wei did, in fact, not know what was in the container when he, with Ho, met Kline does not satisfy me that Wei was engaged in some act or omission which would justify me concluding that Wei by his acts relevant to the importation of the goods contained the container was done with an intent to defraud the revenue.

149. It was submitted on behalf of the plaintiff that I should reject that Wei could not understand spoken English and could not speak English. It was submitted that, in fact, it should be concluded that Wei could understand spoken English and that he could speak some English. It was submitted that by Wei standing mute at the commencement of his evidence when he was asked some questions in English that he engaged in an act of misrepresentation to the Court that he could not understand the English spoken word and could not speak in English.

152. During the course of being formally interviewed by Sarkies, although the interview was conducted with the assistance of an interpreter, it appears that Wei was able to speak some English. Further, from the evidence of Kline, I accept that during his meeting with Wei and Ho some of the conversation was had by Wei with him in English. Notwithstanding these matters the fact that Wei did not respond to some questions put to him at the commencement of his evidence does not lead me to conclude that he was seeking to represent to the Court that he had no understanding of spoken English and had no capacity to speak English. A person who has limited understanding of spoken English and limited capacity to talk English could well be expected, in the formal atmosphere of a trial court, to seek to rely entirely on an interpreter available to him in order that he could understand properly the question being addressed to him and he could properly answer such questions. Having observed Wei during the course of the trial and observed him when he gave evidence I have reached the conclusion that by standing mute to some questions directed to him at the commencement of his cross-examination he did not seek to misrepresent to the Court his capacity to understand the English spoken word and to speak English.

155. I am satisfied that Wei, before being interviewed by Sarkies, had no direct knowledge or understanding that that which the container, in fact, held were bottles of Chinese wine and spirits. Wei had been told by Yan Yin that he was sending to Australia "art crafts". This was accepted by Wei. Wei had relied on Ho and when being given the glass duck by Ho before visiting Kline Ho had told him to say that that was the "kind of stuff" in the container. This Wei had accepted and that was the reason why Wei gave the glass duck to Kline.

158. During the course of Wei's interview with Sarkies he answered in the affirmative to the question put to him, "Do you think you were tricked by Yan Yin". I am satisfied that as a probability Wei was tricked and used by Yan Yin and that he was also misled and used by Ho. I have reached the conclusion that until Wei was informed by Sarkies as to what was the true content of the container, Wei had an understanding and belief that that which was held in the container was art craft and glassware of a nature given to him by Ho to present to the "customs". I am not satisfied that by his actions and conduct Wei sought to falsely represent to customs the nature of the goods in the container when he knew or believed that the description given by him to Kline was false. I am not satisfied, on the evidence, that by importing into Australia that which was, in fact, in the container Wei did so with intent to defraud the revenue.

161. The next matter that must be addressed is whether it has been establish on the evidence in these proceedings that Wei evaded payment of duty and sales tax which was payable on the goods imported. For the reasons previously expressed, in my view, it is necessary to look beyond the fact that Wei in his meeting with Kline furnished information which, in fact, was wrong and misleading. It is also necessary to determine whether there was "some blameworthy act or omission" on the part of Wei to the extent that it ought to be concluded that he acted in breach of s. 234(1)(a) of the Act thereby exposing him to the imposition of a penalty under the Act. It was in consequence of Wei being tricked by Yan Yin and also misled by Ho and used to import what was, in fact, Chinese wine and spirits, that caused Wei to represent that the goods being imported were other than they were, resulting in no customs duty being paid on the goods when duty was payable and not paying the correct amount of sales tax. In my view, through the combined acts of these two people and being so used by them, Wei represented the goods in the container to be other than that which they were in fact. I am not satisfied that he did this in order that no customs duty should be paid on the goods or that the sales tax to be paid would be much reduced from that which was, in fact, payable on the goods that were in the container. I am satisfied on the evidence that Wei had no familiarity with customs processes at the time relevant to these proceedings. I am not satisfied that Wei, in the circumstances of this case, engaged in some blameworthy act or conduct which would justify it being determined that he evaded the payment of duty and sales tax which was payable on the goods and thereby acted in contravention of s. 234(1)(a) of the Act.

164. The next matter which must be addressed is whether Wei, by his actions and conduct, knowingly or recklessly made a statement to an officer that was false or misleading in a material particular or omitted from a statement made to an officer any matter or thing without which the statement was misleading in a material particular. In R v Nuri[15] the Court of Criminal Appeal constituted by Young C.J., Crocket and Nathan JJ. at p. 543 when considering the expression, "recklessly" said:

"It has for long been employed in statutory offences. Presumably conduct is relevantly reckless if there is foresight on the part of an accused of the probable consequence of his actions and he displays indifference as to whether or not those consequences occur."

168. The statement in the invoice, completed in type, by Ho as to the description of the goods imported was false and misleading in a material particular as the description of the goods as therein described was otherwise than what was a true description of the goods. In a like manner the packing list which describing the goods to be "class arts" was false and misleading. These documents were completed by Ho in type and sent to Kline in order that he may submit an Entry for Home Consumption to customs, which he did. These documents in their completed form were not seen by Wei. The conclusion I have reached is that even had these documents been seen by Wei it is unlikely that he could have read and understood the documents as completed by Ho. The statements in the invoice as to the description of the goods was also false insofar as it did not state that the goods, the subject of the invoice, were cases of Chinese wine and Chinese spirits. By such omission the statements were false and misleading. In a like manner the statements in the Entry completed and submitted by Kline were false and misleading. Wei had been told by Yan Yin in the telephone conversation he had with that person from China that the goods were "art craft". It was Ho who gave to Wei the glass duck to give to the "customs man" as a sample of the goods to be imported. At the meeting of Ho and Wei with Kline it was Wei who gave Kline the glass duck as a sample of a glass ornament to be imported. It was following Kline receiving the documents in the mail and meeting with Ho and Wei that Kline completed the Entry and submitted the same to customs. Insofar as it is alleged that by the provision of the documents to Kline as completed by Ho and that which was said and done by Wei in his meeting with Kline that he knowingly made a statement to an officer in the Entry which was false or misleading in a material particular or that Wei knowingly omitted from a statement to an officer in the Entry a matter or thing without which the statement was misleading in a material particular I am not satisfied that Wei knowingly did or knowingly omitted to do such matter and thing.

171. For it to be established that by his actions and words Wei recklessly made a statement to an officer in the Entry which was false or misleading or alternatively that he recklessly omitted from a statement to an officer in the Entry a matter or thing without which the statement was misleading in a material particular it is necessary that it be established that Wei knew that the description of the goods as provided to Kline would probably lead to the goods not being truly described in the Entry and he was indifferent as to whether or not such would be the case. I am not satisfied on the evidence that Wei recklessly made statements to an officer in the Entry which were false or misleading in a material particular or that he recklessly omitted from a statement to an officer in the Entry a matter or thing without which the statements were misleading in a material particular.

174. I am not satisfied to the degree that I must be in these proceedings that in the circumstances of this case that Wei knowingly or recklessly made a statement to an officer in the Entry which was false or misleading in a material particular or that he knowingly or recklessly omitted from a statement in the Entry a matter or thing without which the statement was misleading in a material particular.

177. For these reasons I am not satisfied that Wei -

(a) smuggled the goods comprising the importation in these proceedings in contravention of s. 233(1)(a) of the Act;

(b) evaded the payment of duty and sales tax which was payable on the goods the subject of these proceedings in contravention of s. 234(1)(a) of the Act;

(c) knowingly made statements to an officer in the Entry which were false or misleading in a material particular in contravention of s. 234(1)(d)(i) of the Act;

(d) recklessly made statements to an officer in the Entry which were false or misleading in a material particular in contravention of s. 234(1)(d)(i) of the Act;

(e) knowingly omitted from a statement to an officer in the Entry a matter or thing without which the statement was misleading in a material particular in contravention of s. 234(i)(d)(ii) of the Act.

(f) recklessly omitted from a statement to an officer in the Entry a matter or thing without which the statement was misleading in a material particular in contravention of s. 234(1)(d)(ii) of the Act.

186. For these reasons the proceedings of the plaintiff against the defendant, Wei, must be dismissed. It is ordered that the proceedings of the plaintiff against the third defendant, Wei, be and are dismissed.

[1] (unreported, Byrne J, 9 November 1993)

[2] [1999] NSWCA 439; (1999) 154 F.L.R. 200

[3] [1938] HCA 34; (1938) 60 C.L.R. 336

[4] [1992] HCA 66; (1992) 110 A.L.R. 449 at 449-50

[7] (1996) 93 A.C.R. 212

[8] see Australasian Films Ltd [1921] HCA 11; (1921) 29 C.L.R. 195 at 218

[9] [1903] 1 Ch 728, Buckley J. (at 732-733)

[10] [1926] HCA 15; (1926) 38 C.L.R. 131

[11] [1988] V.L.R. 731

[12] [1949] HCA 25; (1949) 79 C.L.R. 296

[13] (1982) 56 F.L.R. 347

[14] (1990) 96 A.L.R. 697

[15] [1990] VicRp 55; [1990] V.R. 641