Chief Executive Officer of Customs v John Martins Au

LOWER COURT Local Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT Magistrate L Stapleton JUDICIAL OFFICER :

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COMMON LAW LIST

20175 of 2002 CHIEF EXECUTIVE OFFICER OF CUSTOMS (Plaintiff) v JOHN MARTINS AU (Defendant)

JUDGMENT 1 Shaw J: On 26 April 2002 a statement of claim was filed in this Court by the Chief Executive Officer of Customs (the plaintiff) alleging breaches of s 255 of the Customs Act 1901 (Cth) (the Act) to the effect that the defendant smuggled cigarettes in large quantities, and that these cigarettes were allegedly seized by the customs officers, and that there was a substantial sum of customs duty owing and payable but which was not paid at the time of the importation and remains unpaid. 2 As I understand it, such material is colloquially referred to as "chop chop", being illicit tobacco that has been grown and clandestinely distributed and sold on without government intervention or taxation (see, for example, G Geis, S Cartwright and J Houston, "Public Stealth: Australia's Black Market in Cigarettes", (2003) 38(3) Australian Journal of Social Issues, 363-378). 3 The question before the Court as presently constituted, by consent, is a separate issue as to whether the prior proceedings, namely an application before the Local Court of New South Wales has resulted in res judicata, issue estoppel and/or abuse of process. 4 Proceedings before Magistrate Stapleton on 8 May 2001 led to in the prosecutor seeking leave to withdraw the charge, the defendant consenting to that application, and the magistrate marking the papers "withdrawn, dismissed" in relation to each charge. The question of costs of the Local Court proceedings was expressly reserved. There is no evidence before this Court as to the result in relation to the costs application, but counsel has informed me, and it does not seem to be disputed, that a costs order was made in the Local Court for costs against the prosecutor. 5 Before the Local Court, there was an information laid which came before the magistrate but there was no summons issued. As I have indicated, the evidence shows that the proceedings were "withdrawn" and "dismissed". Thus, the question is whether the proceedings can be brought again in this Court to prosecute what are essentially the same allegations as were before the Local Court, and which were the subject of orders of the court. There is no detailed or specific explanation as to why these allegations have been abandoned and then brought again. 6 It is common ground that the relevant proceedings, both in the Local Court and in this Court, constitute a Customs prosecution. These are penal provisions within the province of the federal legislation with respect to Customs. A Customs prosecution is defined, under s 224 of the Customs Act as meaning proceedings by the Customs for the recovery of penalties under the Customs Act.

7 Other relevant provisions of the Customs Act include s 247 which provides as follows: Every Customs prosecution … may be commenced, prosecuted and proceeded with in accordance with any rules of practice (if any) established by the court or Crown suits in revenue matters or in accordance with the usual practice and procedure of the court in civil cases or in accordance with the directions of the court or a judge. 8 With some possible tension between this provision and s 247, s 248 provides that subject to the provisions of the Customs Act: the provisions of the law relating to summary proceedings in force in the State or Territory where the proceedings are instituted shall apply to all Customs prosecutions before a court of summary jurisdiction in a State or Territory…. 9 In Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 201 ALR 1; (2003) 77 ALJR 1629, the High Court of Australia, as I apprehend the reasoning of the justices in that case, did not characterise the proceedings in a Customs prosecution as either criminal or civil. What their Honours did conclude is that in order to obtain a conviction of a defendant for any of the offences specified in the statute, the elements must be established beyond reasonable doubt (that is, on the conventional criminal onus of proof). Secondly, provisions of a Queensland statute with respect to evidence in civil cases were held to be applicable to the trial of the proceedings bought by the Customs. 10 Thus, it was held by Gleeson CJ that the common law required that it must be established that the elements of the alleged offence should be found beyond reasonable doubt. As Kirby J said in that case, questions arise "upon which the law does not speak with a clear voice" (p 9). Despite the fact that the legislative regime in respect of Customs prosecutions contemplates the need for proof beyond reasonable doubt, and despite using the conventional language of criminal law (conviction or acquittal), the High Court in Labrador declined to characterise the proceedings as either in the category of criminal or civil proceedings. It is plain that a penalty is sought, but there is the hybrid category of a civil proceeding for a penalty into which the current proceedings may full. 11 I turn to consider what actually occurred before the magistrate in relation to the prior proceedings. It was common ground that the prosecutor (the present plaintiff) wanted to withdraw, or perhaps seek leave to withdraw the charges. There was some reservation put by the defence in relation to costs. Senior counsel for the defendant suggested that the formula which was appropriate should be "withdrawn and dismissed", qualifying that by suggesting that it may be "surplusage". However, it should be noted that the prosecutor did not concede that withdrawal and dismissal would lead to the result that the proceedings could not be brought again. The legal representative of the prosecutor said that that was so "because there has never been a hearing on the merits". It is said by the plaintiff that the defendants in the Local Court were represented by experienced senior counsel who acquiesced in this course and that no point was taken in the proceedings at first instance arising from the disposal of the Local Court proceedings to the effect that another proceeding could not be initiated as a result of the withdrawal or dismissal of the information. 12 It is reasonably clear from the authorities that the mere withdrawal of an information or complaint does not preclude subsequent proceedings based upon the same allegation. However, the "dismissal" of the proceedings before a court of competent jurisdiction might, arguably, lead to res judicata or issue estoppel and/or abuse of process if some subsequent proceedings based on precisely the same facts and circumstances were to be alleged in the same or another court. 13 A power to dismiss proceedings is given to the magistrate in terms of the legislation applicable at the relevant time by s 80 of the Justices Act 1902 (NSW) in these terms: After hearing what each party has to say and the witnesses and the evidence adduced, the said Justice or Justices shall consider and determine the whole matter, and convict or make an order upon the defendant or dismiss the information or complaint, as the case may require. 14 I can see no inconsistency between the federal legislation with respect to Customs and the New South Wales statute which was applicable at the relevant time, namely the Justices Act 1902 (NSW), and no such inconsistency has been asserted which, if it were, would require notification to the Attorneys-General pursuant to s 78B of the Judiciary Act 1903 (Cth). 15 Accordingly, the question is whether there was a "hearing" within s 80 of the Justices Act 1902 (NSW). There was certainly not a hearing on the merits, because the procedural course taken was by consent. Nonetheless, it seems to me that there was a hearing. The parties appeared with their legal representatives and they put to the court what they desired to do and the fact that no witnesses were called is legally irrelevant. 16 The substance of the matter is that there was a hearing. The transcript records that each party said what they wanted to say before the magistrate. It was in those circumstances that the initiating process, the information, was dismissed in accordance with s 80 of the Justices Act 1902 (NSW). 17 The wording "hearing" can be used in a general, non-technical, sense: Hope v Threlfall (1854) 2 Eq R 307; 23 LJCh 631 per Turner LJ. As I have indicated, it is my view that there was the prerequisite occurrence of a "hearing" prior to that order having been made by consent. Ancient case law seems to establish with tolerable clarity that there was a "hearing" of a summons if the defendant attended on the return day and claimed and obtained the dismissal of that summons, with the complaint having been withdrawn: Bradshaw v Vaughton (1860) 30 LJCP 93; Tunnicliffe v Tedd (1847) 17 LJCP 176; R v Stamper (1841) 1 QB 119. 18 Of course, it is open to the legislature to specify the criterion of a hearing "on the merits": Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430 at 435-436 per Hunt J but it has not done so in the applicable section of the Justices Act 1902 (NSW). As I have indicated, s 248 of the Customs Act expressly contemplates the possibility of an "order of dismissal" and an appeal which may lie from such an order of dismissal. That is precisely the order which occurred here. 19 So, here we have the dismissal of proceedings, which the plaintiff argues was ultra vires or otherwise invalid, in relation to the order made by the magistrate which is said to permit the plaintiff to bring proceedings in this Court in substantially the same form as those that were before the Local Court. It seems to me that there is at least an arguable case of double jeopardy. 20 I need to consider the somewhat arcane question as to whether the prior proceedings before the Local Court preclude the plaintiff from taking these proceedings in this Court. 21 I have taken due account of the discussion by James J in Director of Public Prosecutions v Goben [1999] NSWSC 696 in which His Honour discussed orders which had been made that an information be dismissed, the summons be struck out and the proceedings be dismissed generally. In that case James J considered the judgment of the High Court of Australia in John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508 and His Honour concluded after analysing that judgment that: It is clear that their Honours were using the word "dismiss" in the sense of quashing proceedings which were incompetent and were not using the word in the sense of dismissing proceedings pursuant to a statutory power to dismiss proceedings which were competent. 22 Some legislation avoids this consequence by expressly referring to the requirement of a hearing "upon the merits". The applicable legislation in the current case does not contain that qualification. Hence, it seems to me that there was a hearing and that there was a dismissal of the information itself (not merely a dismissal of the summons) and that therefore the matter was finally disposed of in a court with the requisite jurisdiction. 23 In R v Phipps, ex parte Alton [1964] 2 QB 420 Lord Parker CJ with the support of the other members of the court said (see p 428): I conceive it would have been possible for counsel for the applicant at once to object to the suggested withdrawal of process; to insist so far as he could having regard to the fact that he had incurred costs, that this inquiry should begin; that he should then have an opportunity of having it dealt with summarily; and, the prosecution offering no evidence have the charge dismissed and so acquittal and such costs as he could get under the [relevant legislation]. 24 Lord Parker then went on to suggest that an accused person has the right to object to a suggested withdrawal of proceedings and that there was, consequentially, a discretion which the magistrate had as to whether that withdrawal should be allowed or not. Lord Parker then pointed out that counsel was present and that there did not seem to be an appreciation of the "difference between withdrawal and dismissal." His Lordship went on to say (p 429) that where, instead of counsel, the defendant in person appeared: The magistrate ought to further and explain to him the difference between dismissal and withdrawal, and to allow him to address the court as to the manner in which the discretion should be exercised. 25 Here, counsel was present and orders were made quite expressly and by consent containing the dichotomy between leave to withdraw and dismissal. In Lawson v Wallace [1968] 3 NSWR 82 the Court of Appeal considered the effect of the use of the word "dismissed" when applied to a summons in a civil action. In those circumstances the court held that it did not prevent the matter being brought again but, importantly, in relation to criminal matters Asprey JA said: Where, however, the complaint itself has been dismissed there has been an adjudication that the subject matter of the complaint has not been established. 26 And, at p 86, His Honour again adverted to dismissal of the initiating process in the context of the criminal law and said: Where an information has been laid and the proceedings are of a criminal nature and the prosecution does not desire to proceed the defendant may be in a stronger position to object to the granting of leave for the withdrawal of the information and successfully insist upon its dismissal so that he has the benefit of an acquittal. 27 His Honour then adverted to the English case to which I have referred above at paragraph [23], namely, R v Phipps, ex parte Alton. 28 I appreciate that the discussion of the "dismissal" of the information in the Local Court was in the context, it seems, of consequences as to costs. Nonetheless, it seems to me that I should focus upon the formal order of the court below which was quite expressly and in an unqualified way to dismiss the information, not merely the summons (of which there was none) and that I should accept the consequences of that curial order as precluding the bringing of a further action based, it is conceded, on essentially the same grounds and facts in this Court. Accordingly, I would find that there is either a res judicata, an issue estoppel or an abuse of process or all of these which precludes the statement of claim going forward in this Court. It follows that I should dismiss the statement of claim and order that the plaintiff pay the defendant's costs of these proceedings. 29 I make orders accordingly.

(Supplementary) JUDGMENT 30 Shaw J: In this matter I delivered the substantive judgment on 17 September 2004. 31 Upon the matter being called on for judgment, counsel for the plaintiff correctly drew attention to an argument which had been put by the plaintiff and which is expressly contained in the reply filed by the plaintiff on 3 October 2003 to the effect that the charges were withdrawn by the informant with the leave of the magistrate and that the charges "could not then be dismissed …and were not dismissed". In other words it is said that the order made, as I understand, by consent was beyond the power of the magistrate in so far as it contained a dismissal of the proceedings. 32 I do not accept the proposition that the order made by the magistrate was beyond her power. The informant applied to withdraw the charges. Senior Counsel for the defendant proposed that, in addition, there should be a dismissal of the proceedings. Although the prosecutor expressly asserted that the proceedings could be brought again there was no express objection to the dismissal of the charges. 33 In my opinion, s 80 of the Justices Act (1902) (NSW), subject to there having been a "hearing" empowers the magistrate to dismiss an information or complaint. If no party desires to call a witness, then nonetheless in my view there has been a hearing if the parties have put whatever they want to put before the tribunal. A "hearing" does not require evidence. Many hearings occur before courts which simply invoke submissions on legal or discretionary questions. Moreover, assuming the law governing civil proceedings is applicable to the proceedings before this court, the Local Courts (Civil Claims) Act 1970 by s 75A renders the course of events a mere irregularity which does not nullify the proceedings or any step in the proceedings, or any judgment or order made in the proceedings. 34 I decline to accede to the submission of the plaintiff that the charges were "not dismissed" in the Local Court. There was an express, unqualified dismissal of the proceedings and I am of the view that that was in the power of the magistrate to so order. 35 As to the question of costs, I see the force of the submission that the plaintiff's application for leave to amend arises from matters belatedly raised by the defendant although any assessment of costs should take account of the fact that the imported High Court judgment in Labrador 16 October 2003. 36 Nonetheless, I am of the view that the defendant should have his costs of the substantive proceedings, save and except that any costs associated with the belated amendment to the proceedings should be the plaintiff's costs in the cause. **********

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