Supreme Court of NSW|1998-07-10|Before: Carruthers AJ

Francis Ivor Kelly Comptroller-General of Customs v Jct Wong and Rizoli Pty Ltd Matter No 12178/89 [1998] NSWSC 709 (10 July 1998)

FRANCIS IVOR KELLY COMPTROLLER-GENERAL OF CUSTOMS v JCT WONG & RIZOLI PTY LTD

The Supreme Court of New South Wales Common Law Division

Having heard detailed submissions from counsel, it is now necessary for me to determine whether the plaintiff has established, to the requisite standard, the various offences alleged in the Further Amended Statement of Claim. As stated earlier, these alleged offences relate to three shipments from Hong Kong to Sydney in 1987. The plaintiff alleges that T-shirts and other clothing were smuggled into Australia in containers declared to be carrying only furniture. In respect of each shipment Rizoli Pty Limited (Rizoli) has been charged with smuggling, contrary to s.233(1)(a) of the Customs Act 1901 as amended (the Act), evasion of duty contrary to s.234(1)(a), and making a false entry, contrary to s.234(1)(d) of the Act. With respect to each of these alleged offences the plaintiff charges that the first defendant was concerned therein. Thus as against each defendant nine offences are alleged.

With regard to the first shipment the plaintiff alleges that the relevant goods were smuggled on board the Asian Pearl which arrived at Port Botany on or about 8 January 1987. With regard to the second shipment the plaintiff alleges the goods were smuggled on the Oriental Expert which arrived at Port Botany on or about 4 February 1987, and with regard to the third shipment the plaintiff alleges that the goods were smuggled on the Khudozhnik Zhukov (the Zhukov) which arrived at Port Botany on or about 24 March 1987. In each case the plaintiff alleges that T-shirts and similar garments were secreted in containers declared to be packed solely with furniture.

With regard to the first shipment the plaintiff has determined that the purchase price for the clothing allegedly smuggled was HK$270,562.50 and the duty payable thereon was AU$193,039.26. With regard to the second shipment the plaintiff has determined that the clothing allegedly smuggled had a purchase price of HK$335,994.00 and the duty payable thereon was AU$224,651.89. With regard to the third shipment the plaintiff has determined that the total value of the clothing allegedly smuggled was HK$303,327.00 and the total duty payable thereon was AU$176,816.75: See the affidavit of Andrew Hosking affirmed 9 March 1998 (Ex C)

As Mr Wong elected not to give evidence it will be relevant for me, in assessing certain aspects of the plaintiff's case, to apply the principles enunciated in Jones v Dunkel[1] but to bear in mind the admonition by the High Court in West v Government Insurance Office of NSW[2] that the rule cannot be employed to fill gaps in the evidence or convert conjecture and suspicion into inference.

The plaintiff's case relied substantially upon a large number of business records seized by Customs officers from Mr Wong's premises on 24 April 1987 in the circumstances explained in the earlier judgment. For convenience I quote a portion from page 19 of my interlocutory judgment dated 29 April 1998:

"The evidence indicates that the documents were handed over voluntarily to Davies and the other Customs officers, but it is convenient to refer to the documents as having been seized (I use that word neutrally) by the officers and taken to the Department's Head Office in Sydney."

Briefly stated the circumstances which brought Customs officers to Mr. Wong's premises were that on or about 23 April 1987 Customs officers in Sydney discovered a quantity of T-Shirts and other clothing secreted within furniture stowed in a container discharged from the Oriental Knight which had sailed from Hong Kong. The Customs Entry was lodged by Renown Customs Pty Limited on behalf of Rizoli and declared only furniture to be the subject of the importation. This led the Customs officers to Mr. Wong's premises where an interview was conducted, admissions made, and documents seized. I shall refer at a later stage to the Oriental Knight shipment in more detail. The plaintiff also relies upon admissions made to the officers on that date, certain Customs documents prepared and lodged with regard to the subject shipments and certain oral evidence by independent persons.

It is convenient now to refer to certain parts of the Act. "Smuggling" is defined in s.4 of the Act (except where otherwise clearly intended) to mean:

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

"A person shall not evade payment of any duty which is payable."

"A person shall not make or give any entry which is false in any particular."

Here it is alleged that the Australian Customs Entry lodged in respect of each of three subject shipments was false in that it was confined to the declaration of furniture and failed to disclose that the subject containers included clothing.

Section 4 provides (except where otherwise clearly intended):

" "Owner" in respect of goods includes any person (other than an officer of Customs) being or holding himself out to be the owner, importer, exporter, consignee, agent or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods."

Section 236 provides:

"Whoever aids abets counsels or procures or by act or omission is in any way directly or indirectly concerned in the commission of any offence against this Act shall be deemed to have committed such offence and shall be punishable accordingly."

The plaintiff's case is that the subject offences in relation to the three shipments were committed as part of a course of conduct being pursued by Mr Wong through the interposition of certain companies which he controlled and with the co-operation and involvement of certain persons in Hong Kong and elsewhere in the Asian region. The prior history can be discerned most relevantly by reference to documents seized by the Customs officers. These documents identify the persons upon whose co-operation Mr Wong was allegedly reliant in the asserted commission of the subject offences. With regard to the three subject shipments the plaintiff relies heavily upon what are referred to as three critical documents; one such document for each shipment. The Plaintiff contends that these documents when viewed in the light of evidence relating to other shipments clearly demonstrate the commission of the subject charges. I have admitted the documentation relating to prior shipments from Hong Kong to Sydney together with the evidence relating to the subsequent shipment of April 1987 on the Oriental Knight. (The High Court has held that it does not matter whether similar facts occurred earlier or later: see Pfennig v The Queen [1995] HCA 7; [1994-1995] 182 CLR 461 at 490).

This material has been admitted upon the basis of tendency evidence and coincidence evidence as it is called in the Evidence Act 1995 or propensity evidence or similar fact evidence as it is referred to in the common law authorities. The relevant principles for present purposes have been authoritatively explained by the High Court in Pfennig at 480-483 as follows (excluding footnotes):

In this Court, in conformity with earlier English authorities, it was accepted that propensity evidence is not admissible if it shows only that the accused has a propensity or disposition to commit a crime or that he or she was the sort of person likely to commit the crime charged. But it was accepted that it is admissible if it is relevant in some other way, that is, if it tends to show that the accused is guilty of the offence charged for some reason other than that he or she has committed crimes in the past or has a criminal disposition (54). It was also accepted that, in order to be admissible, propensity evidence must possess "a strong degree of probative force" (55) or the probative force of the evidence must clearly transcend the prejudicial effect of mere criminality or propensity (56). Very often propensity evidence is received when there is a striking similarity between different offences or between the evidence of different witnesses (57). In particular, it was recognized that the existence of such striking similarity is necessary in cases such as Sutton where the prosecution seeks to lead the evidence on the basis that the similarity between different offences founds a conclusion that they must have been committed by the one person with the consequence that evidence which would be admissible to show that an accused committed one of the offences is admissible to prove that he or she committed another or the others of them.

The insistence in some of the judgments of this Court on the need to show that propensity evidence was relevant to "some other issue" as one of the prerequisites of its admissibility so as to prove the commission of the offences charged contributed to a misunderstanding of the Makin principles and to statements of principles which lacked a clear and coherent theoretical foundation. So much was recognized by Mason C.J., Wilson and Gaudron JJ. In Hoch v. The Queen (58) where their Honours stated that the basis for the admission of similar fact evidence lies in its possessing a particular probative value or cogency such that, if accepted, it bears no reasonable explanation other than the inculpation of the accused in the offence charged. In other words, for propensity or similar fact evidence to be admissible, the objective improbability of its having some innocent explanation is such that there is no reasonable view of it other than as supporting an inference that the accused is guilty of the offence charged (59). Mason C.J., Wilson and Gaudron JJ. said (60):

"Assuming similar fact evidence to be relevant to some issue in the trial, the criterion of its admissibility is the strength of its probative force . . . That strength lies in the fact that the evidence reveals `striking similarities', `unusual features', `underlying unity', `system' or `pattern' such that it raises, as a matter of common sense and experience, the objective improbability of some event having occurred other than as alleged by the prosecution."

This passage should not be understood as asserting that "striking similarities" or the other characteristics mentioned in relation to propensity or similar fact evidence are essential prerequisites of its admissibility in every case.

An important distinction is to be drawn between cases such as the present case in which the "similar facts" are not in dispute and cases in which such facts are in dispute. Thus, their Honours said (59):

"Where the happening of the matters said to constitute similar facts is not in dispute and there is evidence to connect the accused person with one or more of the happenings evidence of those similar facts may render it objectively improbable that a person other than the accused committed the act in question, that the relevant act was unintended, or that it occurred innocently or fortuitously. The similar fact evidence is then admissible as evidence relevant to that issue."

Where the propensity or similar fact evidence is in dispute, it is still relevant to prove the commission of the acts charged (61). The probative value of the evidence lies in the improbability of witnesses giving accounts of happenings having the degree of similarity unless the events occurred. Obviously the probative value of disputed similar facts is less than the probative value those facts would have if they were not disputed. But the prejudicial effect of those facts may not be significantly reduced because the prejudicial effect that the law is concerned to guard against is the possibility that the jury will treat the similar facts as establishing an inference of guilt where neither logic nor experience would necessitate the conclusion that it clearly points to the guilt of the accused. Because propensity evidence is a special class of circumstantial evidence, its probative force is to be gauged in the light of its character as such. But because it has a prejudicial capacity of a high order, the trial judge must apply the same test as a jury must apply in dealing with circumstantial evidence and ask whether there is a rational view of the evidence that is consistent with the innocence of the accused (62). Here "rational" must be taken to mean "reasonable" (63) and the trial judge must ask himself or herself the question in the context of the prosecution case; that is to say, he or she must regard the evidence as a step in the proof of that case. Only if there is no such view can one safely conclude that the probative force of the evidence outweighs its prejudicial effect. And, unless the tension between probative force and prejudicial effect is governed by such a principle, striking the balance will continue to resemble the exercise of a discretion rather than the application of a principle.

In our view, the principles stated above which derive from Hoch correctly state the law with respect to the admissibility of similar fact evidence."

In the instant case the issue is whether the defendants have committed the offences charged. The tendency and coincidence evidence (as I shall call it) is relied on by the plaintiff in conjunction with other evidence to establish that the defendants had a particular modus operandi with regard to the illegal importation of clothing into this country.

This involves (inter alia) establishing the identity of the persons communicating with each other in the three critical documents.

The tendency and coincidence evidence which the plaintiff has led does, in my view, possess "a strong degree of probative force," which "clearly transcends the prejudicial effect of mere criminality or propensity." The evidence reveals, within the meaning of the authorities, `striking similarities', an `underlying unity', `system' or `pattern'.

It must be noted that no attempt has been made by the defendants to adduce evidence directed to challenging the inferences which the plaintiff seeks to draw from the tendency and coincidence evidence.

I have carefully considered this evidence to which I shall now refer in chronological order. I have, in particular, satisfied myself to the requisite standard that the authors and addressees of the relevant documents are those whom I shall specify.

Mr Wong's full name is John Chu Ting Wong. At all relevant times he resided with his wife Diana Yao Ho Wong at 26 Barwon Avenue, Turramurra. Basically he conducted his importing business, through various companies which he controlled, from those premises, and that is where the relevant documents were available for seizure by the Customs officers. The companies with which he is concerned (and effectively controls) are firstly, The House of Teak Furniture Pty Limited (HTF), which was incorporated under the New South Wales Companies Act 1961 as a company limited by shares in 1982. Mr and Mrs Wong are the sole directors and shareholders of that company.

In 1982 Rizoli, the second defendant, was also incorporated under the New South Wales Companies Act. Again Mr and Mrs Wong are the sole directors and shareholders. On 30 August 1985 Artford Industrial Limited (Artford) was incorporated in Hong Kong under the Companies Ordinance as a limited company. Mr and Mrs Wong were directors and the sole shareholders of that company which was wound up voluntarily in 1995.

In 1982 Mr Wong approached Patrick Louie the principal of Renown Customs Pty Limited (Renown Customs). Mr Louie, who gave evidence at the hearing, understood that Mr Wong had been referred to him by a relative who was a client of Renown Customs. Mr Wong informed Mr Louie that he had established a new company called Rizoli Pty Limited to start importing goods and requested that Mr Louie act as his customs agent to clear the imports. He identified the company as Rizoli and said that it would be importing "mostly furniture". Thereafter Mr Louie and other officers of Renown Customs, cleared imports pursuant to that original arrangement, i.e. invariably nominating Rizoli as the owner of the imported goods. In my view Renown Customs was authorized to so act on behalf of Rizoli albeit there was no written authority in the terms of s 181 of the Act. That section is in my view purely faculative.

According to the evidence, the first contact that Mr Wong had with persons in Hong Kong, so far as the subject proceedings are concerned, is to be found in a letter dated 1 September 1981 on the letterhead of Po Hing Chang. The letterhead describes that organisation as "Wooden Furniture Manufacturer Exporters and Importers Hong Kong". The letter is addressed to Mr Wong and signed by Yim Kin Cho. That person is variously referred to later by Mr Wong in correspondence addressed to him (or in correspondence referring to him) as "Uncle Cho", "Cho", or "Mr Cho". The evidence does not disclose whether in fact Mr Wong was Mr Cho's nephew or whether it was merely a term of respect or endearment. In any event the relationship was clearly one of mutual trust. The letter of 1 September 1981 refers to the export of furniture from Hong Kong to Australia. It is convenient to note here that all correspondence from Mr Wong to persons in Hong Kong and vice versa is written in Chinese and translations have been made available by independent translators. None of these translations has been challenged. All correspondence from Mr Wong to Hong Kong is written on HTF letterhead. Carbon copies were maintained by Mr Wong and ultimately seized by the Customs officers. Mr Cho generally wrote to Mr Wong on Po Hing Chang letterhead.

The first reference to T-shirts is found in a letter dated 7 November (probably 1982), from Mr Wong to Mr Cho (Ex AF) which includes the following statement:

"As for the next batch of goods. It will be best if it possible to delay until the end of November for delivery, because I have a batch of T-shirts and dry meat, etc. to be put in the container (inside camphor wood chests). The consignment at the end of the month may be shipped by OOCL or Jumbo ship."

Thus the plaintiff asserts that the modus operandi used for smuggling T-shirts allegedly used in the subject January, February, and March 1987 shipments probably goes back to at least November 1982.

Included in the seized documentation was a letter dated 1 May 1983 from Mr Cho to Mr Wong (Ex AA) stating (inter alia) "This time T-shirts 1000 doz packed in 18 cartons". This letter includes a claim for the cost of the furniture in the container (88 x 1300 HK$114,400) together with the cost of labour for packing T-shirts into boxes and for packing the boxes of T-shirts in the container as well as the cost of cartons (HK$993) as part of a running account. No reference is made in the letter to the purchase price of the T-shirts. This supports the inference, which is strengthened by later evidence, that the T-shirts and other items of clothing were being obtained independently by Mr Wong either from a supplier in Hong Kong or mainland China or both. Mr Cho was clearly acting as his agent for the packing of the clothing into the container and making the necessary arrangements for transportation. The container to which the letter referred was loaded on the Asian Pearl on or about 5 May 1983 for carriage from Hong Kong to Sydney.

The documentation declared to Australian Customs includes a copy of a Jumbo Line bill of lading issued to Po Hing Chang (Consignee, " to order", and notify party - "HTF") for the Asian Pearl which sailed from Hong Kong to Sydney on 5 May 1983. That bill of lading is in respect of one 20' container, said to contain: "88 cartons deep carved wooden furniture". Also produced to Customs was invoice number 1150 from Po Hing Chang to HTF dated 4 May 1983 relating solely to 88 sets of deep carved camphor chests with a total value of HK$114,400. Clearly then the declared documentation is to be distinguished from the letter earlier referred to from Mr Cho to Mr Wong as there is no reference to the T-shirts in the official documentation. The Entry for Home Consumption was submitted by Mr Louie of Renown Customs and declares Rizoli to be the owner of the contents of the container which are declared to be solely furniture (Ex BD).

By way of official documentation, on 1 June 1983 Po Hing Chang invoiced HTF for deep carved wooden furniture, as itemised in invoice number 1253, which was packed in a container and shipped on board the Oriental Expert on 2 June 1983 for carriage from Hong Kong to Sydney. That container was cleared by Renown Customs. The vessel arrived in Sydney on 19 June 1983 and the Entry for Home Consumption declared Rizoli to be the owner of the imported goods. The container was declared to contain solely furniture. The bill of lading was confined to furniture (Ex BE).

However the documentation seized by the Customs officers includes a letter on plain ruled paper (Ex AB) addressed to Mr Wong and (I infer), sent by Mr Cho, which states (inter alia):

This time packed in container, T-shirts total 39 items.

Chests 33 pieces (3 of which had been paid last time).

The remainder are "Farley" furniture, and 3 items of articles from your residence for packing."

Thereunder is a claim for "Expenses for packing T-shirts on your behalf total 2,971.00 (2050 doz)". Thereunder are details of how the expenses for packing the T-shirts are calculated. I shall not record the details here but observe that there is a notation "Because this time T-shirts packed in timber crates and more difficult to unpack, so hired one more labourer to assist". This clearly indicates (the plaintiff submits) that when the T-shirts reached Mr Cho in Hong Kong it was necessary for him to repack them for transportation to Australia.

Amongst the documents seized was a carbon copy of a letter from Mr Wong to "Uncle Cho" (Ex AG). It is dated 2 September and I have no difficulty in inferring that it was written in 1983. The letter refers to a consignment of goods on the 14th. This is presumably a reference to furniture. However the letter goes on to state:

"Enclose a receipt for T-shirts. Whoever goes to take delivery can write down at the time the total number of cartons received and the date and hand it over to them. I entrust all of this to you. Please give to the Mr Wong at your end for me, $200 for additional work done for me. If there are other additional expenses, please make payment and I will reimburse you."

The reference to the Mr Wong "at your end" appears to be a reference to a person in Hong Kong named Hon Hee Wong, who was referred to in an invoice from Po Hing Chang dated 24 September 1983, to which I shall later refer. This gentlemen obviously has made some contribution to the packing of the T-shirts and is entitled to remuneration for doing so.

The plaintiff submits that this letter makes clear that the T-shirts are to be part of a consignment of furniture. It confirms that arrangements were made by Mr Wong personally for the T-shirts up to the point that they were delivered to the premises of Po Hing Chang. The quoted paragraph represents clear instructions from Mr Wong to Mr Cho as to the handling of the T-Shirts in Hong Kong and the role which Mr Cho is to play on behalf of Mr Wong.

Mr Cho responded to this letter on 24 September 1983 (Ex AH). The letter opens with the sentence "The goods have been packed and despatched". On the same date an invoice was forwarded to Mr Wong on the letterhead of Po Hing Chang numbered 1262/1263 (Ex AJ). The invoice relates to furniture and then includes a charge as follows:

"(For T-shirts) To payment for charges for transportation to warehouse for T-shirts and labourers for packing in container 1230."

There is also a claim "to payment Hon Hee Wong (in Hong Kong) 200".

These numerals refer to Hong Kong dollars. Importantly in that part of the charges relating to T-shirts is the item:

Thus there is a charge for one half of the container delivery charges which is associated with T-shirts.

Amongst the items seized is a carbon copy of a letter dated 27 October from Mr Wong addressed to Uncle Cho (Ex AK). I have no difficulty in inferring that this letter was written in 1983. It contains the following paragraph:

"Concerning the T-shirts. Our last batch will arrive in Hong Kong during the month. Uncle Cho, you can put your mind at rest concerning this matter. If I am not more than 100% certain, I will not do it. I understand that if things happen, it will be detrimental to you. But from my point of view, it will be even worse. So, you can be rest assured. What is more, the reason why I am able to order such large numbers of camphor chests is all the on-going costs (shipping costs, customs clearance and other expenses) have been calculated on the T-shirts, so that the cost to me for the camphor chests are reduced to the minimum. My whole sale price is the lowest in the whole of Australia."

The plaintiff submits that it is clear from this paragraph that Mr Cho has expressed concern about the secreting of the T-shirts and Mr Wong is endeavouring to put his mind at rest. Further it demonstrates that the evasion of duty on the T-shirts was subsidising the furniture side of Mr Wong's business activities. On 19 December 1983 Mr Cho wrote to Mr Wong (Ex AL) informing him inter alia "The merchandise was packed and despatched on 16th December". On the same date invoices numbered 11273/1274 from Po Hing Chang to Mr Wong were forwarded to Mr Wong. These include charges for 45 cartons of T-shirts along the lines of similar charges that had been rendered in relation to the transportation and packaging of T-shirts i.e. half the container delivery charges and a payment of $200 to Hon Hee Wong (Ex AM).

On 24 April in the year I infer to be 1984, Mr Wong wrote to "Uncle Cho" (Ex AN) informing him that a booking had been made on a ship sailing on the 9th. The letter stated in part:

"When packing into container, pack in first the shoes, then T-shirts followed by furniture. The last to be put in are teak and camphor chests. Please pay for me HK$200 to that Mr Wong as additional expenses."

The plaintiff submits that this instruction was clearly an attempt to avoid detection by Customs officers of the T-shirts within the container.

Mr Cho responded to this letter on 15 May 1984 (Ex AO) stating "The goods have been despatched". This letter is linked with two invoices of the same date addressed to Mr Wong numbered 1292 and 1293 (Ex AP) which include (in addition to furniture) a charge for "Payment on your behalf transportation to warehouse for T-shirts and shoes and packing in container charges 1,390".

On 24 May, in the year I infer to be 1984, Mr Wong wrote to "Uncle Cho" a letter (Ex AQ) including the following paragraph:

"The next batch of T-shirts will be delivered in July and October. So, it is necessary for you to give quotations early."

It is clear from the earlier part of the letter that the reference to "quotations" is a reference to prices for camphor chests and tables.

On 9 September 1984 Mr Cho wrote to Mr Wong (Ex AR) informing him that certain specified furniture was ready to be packed into a container on 25 September. The letter also reads:

"[Am I] to arrange with Mr. Chan at that time to take T-shirts and pack them in together. Please advise."

This is the first reference to Mr Chan whose full name is Thomas Wai Yiu Chan. He obviously (as will be seen later) has a connection with the Hong Kong Industrial and Commercial Bank Limited, whose letterhead he used for correspondence with Mr Wong. Mr Chan is referred to in an invoice dated 8 October 1984 from Po Hing Chang to Mr Wong (Ex AS) which includes the following:

"Payment for charges for transportation to warehouse for T-shirts and packing in containers. 1,930

Payment for transport labourers, truck and Mr Chan's expenses 300

On 16 October 1984 Po Hing Chan's invoice number 2904 (Ex AT) was addressed to Mr Wong with the notation "Mr Chan to receive merchandise on his behalf", and a further notation "Deliver to No.9, Wing Hong Street Yee Lee Warehouse and hand over to Mr Chan". Although these instructions were contained in an invoice form no prices were included in the document. This document clearly came from Mr Cho and it appears that a new arrangement had been made whereby the furniture from Po Hing Chang was to be delivered to Mr Chan in Hong Kong for the purpose of despatch to Mr Wong in Australia. In so far as the documents seized from Mr Wong's premises by Customs officers are concerned, this is the last document emanating from Mr. Cho.

The remainder of the seized documents commence from February 1986.

On 22 February, in the year I infer to be 1986, Mr Wong in Sydney wrote to a person in Hong Kong addressed as Mr Wong (Ex AZ). Presumably the addressee was Mr Hon Hee Wong to whom reference has already been made. I quote this letter in full:

For the past few days, I had returned to Hong Kong because my father's health was bad. I returned yesterday to receive the documents for the forthcoming consignment. As for the matter of Hong Kong transportation, everything has been arranged. The name of the company and address are as follows:

Tel; 0-790881 (Mr Thomas W. Y. Chan) Mr Wai Yiu Chan

As for the merchandise listed in your confirmation order dated 2/2/86, I think that they can be delivered immediately. So, upon receiving your letter, I have immediately arranged a container to go to Hong Kong. A 90-day D/A has been issued to Hong Kong. This way clearly [arranged] so that payment will be made by the Industrial & Commercial Bank when the date is due.

On the outside of the wrapping papers, do not put on any MARK. But each item must be written clearly in Chinese what it is. For example if a ROLL TOP DESK consists in 4 items, write Roll top desk 1/1. Roll top desk ½............. Roll top desk ¼; Roll top desk 2/1, etc, etc. Let them in Hong Kong do this for a few times and [they] will know which is to go with what soon. I leave everything in your care.

On receipt of this, please forward immediately a CATALOGUE to Mr Chan in Hong Kong.

As I read this letter, in the light of the evidence as a whole, it is an indication that Mr Chan who is associated with the Hong Kong Industrial and Commercial Bank Limited is taking over the role previously performed by Mr Cho in relation to the despatch of containers to Mr Wong in Australia.

The letter gives Mr Hon Hee Wong specific instructions to avoid putting any mark on the outside of the wrapping papers. The plaintiff contends that the reason for this instruction is obvious, as is the instruction that markings on wrapping papers containing items should contain a description written in the Chinese language.

The letter also demonstrates that Mr Chan was to act through Artford, a company of which Mr and Mrs Wong were directors and the sole shareholders. There is subsequent correspondence from Mr Chan to Mr Wong and it is generally on the letterhead of the Hong Kong Industrial and Commercial Bank Limited.

On 3 September 1986 Mr Wong wrote to Mr Hon Hee Wong (Ex AY) placing three orders for furniture and stating that he has made arrangements to despatch a container at the end of October. The letter goes on to say "I am thinking of despatching a container to Hong Kong" The letter continues:

"The company in Hong Kong and its correspondence address are:

But all letters are to be sent to the following address:

"That Mr Chan is a good friend of mine in Hong Kong. He is looking after everything."

It may be (the plaintiff contends) that the reference to "everything", includes the despatch of T-shirts and the like.

The documentation to which I shall now refer is proximate in time to the three shipments, the subject of the charges. The first is a letter dated 8 December 1986 from Mr Chan to Mr Wong (Ex AU). That letter demonstrates clearly the role which Mr Chan was then playing in Hong Kong on behalf of Mr Wong in Sydney in relation to the importation into Australia of T-shirts and the like. Despite its length I quote the letter in full:

Summarising the numerous telephone conversations and your letter[s] [I] now make the following conclusions:

(1) The 20/80 T/C fabric was supplied by King Fook (that is the Shanghai factory; have also ordered 1500 T-shirts and 1500 doz. vests). By preliminary agreement, [they] can supply 10,000kg. Quotation and delivery date have not been confirmed, but delivery about May, 1987.

(2) Enclose sample of black colour S.J. Please note the size measurement, cloth fabric and `pleated' (WAIST BAND). Please telephone immediately to advise about everything so that corrections can be made early.

(3) 3000 doz S.J. have arrived in Hong Kong. According to what was said in your letter, this problem is rather complicated, but requires final resolution. What is your opinion if our side requests the mainland to make compensation of 5-10%?

(4) The remainder 3000 doz S.J. and 2000 doz. black colour S.J. the factory has provided assurance concerning the quality of the cloth fabric. (You can compare with the black S.J. enclosed). As for the `pleating', may try to use 4-ply instead of the present 2-ply. Sample will be forwarded shortly. But, please take note and advise about the size. Is it necessary to allow for shrinkage of 11/2 inch. Wish you will advise also.

(5) Concerning label, the Southern Cross sample. On 6/12, Mrs Wong telephoned to confirm that the clients liked the dark blue colour type, Can order be placed? What about quantity distribution? Is it the same as that in your letter of 26/11 regarding the PACIFIC T. labels, including WASHING LABEL and make it "ALL COTTON"? Are the size measurements to be 38, 40, 42, 44, 46, etc?

(6) Black colour mercerised cotton can be shipped on time at the end of December, & the first batch arriving Hong Kong early January. At the moment, I have been chasing after them for early delivery.

(7) As for deposit payment, there are also great difficulties. I believe your end may also have problems that are hard to describe. But I have done the best I can at this end also. Further, I have paid for you the part payment for the 3500 doz T-shirts the last time. There are no more means available to me. Delivery date is getting close, but we have delayed making payment for the deposit. You can imagine and understand the situation of the other side. Since we have been doing business for some time now, I wish we can try to accommodate each other within our means.

(8) Mrs Wong telephoned on 6th December to say there were difficulties with the deposit for the 14,000. doz T-shirts and 6,000 doz vests due for delivery in April/May next year. Payment can only be made in February '87. The effect of this is enormous, since the deposit (T-shirt @ $97.50 x 14,000 x 10% is $136,500 and vest @ $81.95 x 6,000 x 10% is $49,170 making a total of $185,670) payment cheque has been issued, and the payment day is the 15th December. If payment in fact cannot be met, and I have discussed with the other side, their reaction is since this a specially arranged "cut-in" order for production in the first quarter, it can be postponed to the second quarter for delivery. But it is hoped the contract may be amended for quantity instead of being cancelled, ie. reducing the quantity from 20,000 doz. to a few thousand doz. This will lessen the chance for the factory to refuse accepting future orders. I think you understand the reason. This 20,000 doz is a specially arrange supply order. The cotton futures market for the current year has already stopped due to supply sources not meeting demands. But the agreed price is still the same as the old $97.50 per doz, though cotton thread has gone up 20% during the same period.

To sum up the quantity can be reduced to the lowest but relationship and faith with the other side is to be maintained. This is planning for the future. If the contract is cancelled, the consequences would be enormous.

(9) The situation with the ARTFORD a/c is as follows:

(i)L/C's are (a) Shanghai camphor chests issued for US$8,935.70 equiv HK$70,000-

(ii) T/R's are (a) Previous Taiwan furniture $70m000 - and

(b) The HAN Lien INTERNATIONAL CORP, furniture which arrived day before yesterday and were out into storage at the Castle Peak warehouse on 6th December. $77,500-

(iii) ATFORD O/D account, outstanding is about $500,000 of which $100,000 will fall due at the end of this month. Please note, this $100,000 came from the T/R in the authorised letter and is for temporary purposes. The current amount in T/R has reached $160,000. O/D should be reduced correspondingly.

(10) About paper napkins. As I understand it, a set of necessary machinery with guillotine and press costs about HK$200,000. The pattern embossing round cylinder has to be ordered separately . The cost differs with the pattern, the same for the lettering press. But I can make enquiries for the cost of a second-hand machine. Since currently paper cost is high, business is not good. I believe buying a second-hand machine should be economical. Will make more enquiries before advising further.

(11) It is claimed that the current stock of T-shirts in Hong Kong is second grade. I have investigated the matter and declare it to be absolutely false. The reasons: (1) Swan Brand is currently the best equipped T-shirt factory in Shanghai. Products quality is strictly checked before allowed to be exported. (2) The cloth fabric is a raw material under constant production, and is supplied by Swan itself.

(12) Enclose S.J. 2 pieces. The black colour piece is exactly one from the 2,000 doz we have ordered. The yellow piece is for reference only, to compare the quality of the cloth fabric. The most important is to note the black one regarding the parts to be observed as described in para. (2) above.

On 18 December 1986 Mr Chan wrote a further letter to Mr Wong (Ex AV) along similar lines to the letter of 8 December 1986 which I have quoted in full above. It is clear from this letter that T-shirts and other garments are being manufactured in Shanghai.

The Asian Pearl Shipment of January 1987 (the first series of charges)

On 25 December 1986 Asean Cargo Services issued a bill of lading to Artford for the carriage on the vessel Asian Pearl from Hong Kong to Sydney of a 20' container said to contain 149 packages of teakwood furniture. The consignee was HTF. Artford issued to HTF an official invoice dated 28 December 1986 in relation to the furniture stowed in the container which was shipped on board the Asian Pearl on or about 28 December 1986 (Ex H). No reference was made in this invoice to any other contents of the container.

One of the critical documents seized by the Customs officers is a letter from Mr Chan to Mr Wong which is dated 3/1/86 but was clearly written on 3/1/87 (Ex X). That letter expressly states that the container shipped on the Asian Pearl contained "2775 doz into 111 cartons @ 25 doz/carton". This is specifically a reference to T-shirts. The letter sets out the container expenses associated with the T-shirt part of the shipment together with other items in the nature of a running account. The accounting specifies that the purchase price of the T-shirts within the container amounts to HK$270,562.50, being "2775 doz T-shirt @ $97.50".

The Asian Pearl berthed at Port Botany on or about 8 January 1987 and the container was cleared by Renown Customs in accordance with the arrangements made in 1982 between Mr Wong and Mr Louie. In the Entry for Home Consumption Rizoli was declared to be the owner of the goods within the container which were declared solely to be furniture (Ex H). Thus it is clear that Australian Customs were unaware of the importation of the T-shirts into Australia, and no duty was paid thereon.

The Oriental Expert Shipment of February 1987 (the second series of charges)

On 28 January 1987 Asean Cargo Services issued a bill of lading to Artford for the carriage of one 20' container said to contain teakwood furniture on the Oriental Expert from Hong Kong to Sydney. The consignee was specified as HTF. On 23 January 1987 an official invoice was forwarded from Artford to HTF in relation to furniture shipped on board the Oriental Expert on or about 22 January 1987. There was no reference in that invoice to any item other than furniture.

The second critical document seized from Mr Wong's home was a "blank" ruled page (Ex Y) with what was obviously a running account which corresponded precisely with the earlier account sent by Mr Chan to Mr Wong (Ex X). I am clearly satisfied that that account relates to

T-shirts and labels included in the abovementioned container loaded on board the Oriental Expert. The account refers to a total of 3,200 doz

T-shirts and 1,270 doz Southern cross labels. The total amount charged for these garments and the labels is HK$335,994.

The Oriental Expert berthed at Port Botany on or about 4 February 1987. The container was again cleared by Renown Customs and the Entry for Home Consumption declared solely furniture as being stowed within the container. Again the owner was declared to be Rizoli (Ex J). It is again clear that Australian Customs were unaware of the importation of the T-shirts and labels into Australia and no duty was paid thereon.

On 17 February 1987, Mr Chan wrote to Mr Wong a letter (Ex AW) which gives much insight into the arrangements for the manufacture within Asia of T-shirts and other garments and their importation into Australia via Hong Kong and Mr Chan's involvement in the arrangements. I quote the letter in full

"Summarising phone call last night 17/2/87. Enclose S.J. sample 5 pieces, 4 of which are from the present stock of 3000 doz. now in storage). It is necessary to find a quick solution, since storage charges per carton per month is $10.-; 10doz/carton = 300 cartons). To-day, there was a customer trying to negotiate to buy that batch of S.J.. But this evening., I learnt from the phone call that your client over there can make a decision after viewing samples on Friday. So, have put off that customer.

Another matter is the current stock of 3000 doz still in China. The fabric material is slightly heavier, the same as the earlier sample.

Next is the problem of the fabric material. Inside the odd S.J. sample are two pieces of fabric material. One is Tientsin grey cloth of which there is about 1000 kg. In Hong Kong. Price is $45.-Kg. This cloth has not been pattern-set, nor bleached. The cotton thread is fine and smooth The result should be satisfactory after bleaching and pattern-set. (Each Kg. $45.- already includes the cost of bleaching and pattern-setting.)

In addition, there is current stock of 6000 kg. of Shanghai Swan Brand grey cloth. This is the merchandise that I negotiated to purchase in Canton last week. The price is rather cheap at $42.-/Kg. Which includes bleaching and pattern-setting. Furthermore, there could be a discount of 2-3%. Arrives in Hong Kong early March. Also, concerning locally woven grey cloth. Sample will be ready in a week and will be forwarded immediately. It is claimed to be better woven than the Tientsin material.

The other piece of fabric is the trousers' sample of your last visit to Hong Kong. The fabric is No.6060 grey cloth. But your last fabric sample and trousers' sample has been starched, so it was harder., Preliminary quotation from a small scale factory is $87.-/doz.

What is the situation with the 25,000 doz Swan Brand? Quotation for T-shirts @ $92. - and vests @ $73. - (of which 34 and 36 will amount to about 2000 doz. = less than 10%). Current market situation for cotton thread `32' gauge fine-comb is $6,500-$6,800.-/bag.

Regarding the 2000 doz black S.J.. What is the situation since the contract has been temporary cancelled. And what about the polyester/cotton sample that was given to you last time you returned to Hong Kong?

3000 doz v-neck vests may arrive in Hong Kong on 25/2/87

On 6 March 1987 Mrs Diana Wong (on behalf of HTF)sent a telegraphic transfer from Sydney in the sum of HK$209,488 to Mr Chan at the Hong Kong Bank head office (Ex BP). This remittence was acknowledged by Mr Chan in a letter to Mr Wong dated 17 March 1987 to which I shall shortly refer. This remittence represented AU$40,000.

The Zhukov Shipment of March 1987 (the third series of charges)

On 12 March 1987 Asean Cargo Services issued a bill of lading to Artford with respect of one 20' container said to contain 231 cartons of furniture (Ex K). The consignee was specified as HTF. The shipment was from Hong Kong to Sydney by the Zhukov.

On 11 March 1987 an official invoice was submitted from Artford to HTF in respect of 231 packages of furniture to be shipped on board the Zhukov around 10 March 1987 (Ex K).

On 17 March 1987 Mr Chan wrote a long letter to Mr Wong (Ex Z) which (inter alia), details the T-shirts and other garments shipped on board the Zhukov on 12 March 1987. This is the third critical document seized by Customs officers. Included as part of the running account as between Mr. Chan and Mr. Wong (to which reference has already been made) is the aggregate value of those items being HK$303,327. As I have already indicated the running account allows Mr Wong a credit of HK$209,488 being a telegraphic transfer dated 7 March 1987. That item is referred to in the running account as "goods payment".

The opening balance of this running account very closely matches the closing balance in the "blank" ruled page referred to under the Oriental Expert shipment (Ex Y).

Although it is not necessary to quote this lengthy letter in full it is noted that the letter specifically refers to the Zhukov container carrying 500 dozen T-shirts, 1500 doz vests and 500 dozen sloppy joes.

The Zhukov arrived in Sydney on or about 24 March 1987 and the container was cleared by Renown Customs. The Entry for Home Consumption makes no reference to the container including anything other than furniture and the owner is declared to be Rizoli (Ex K).

When Customs officers interviewed Mr Wong on 27 April 1987 in relation to the Oriental Knight shipment they accompanied him to his storage premises at 5-7 Clegg Street, Artarmon. At that address they located a quantity of T-shirts. Mr Wong admitted that they were part of an earlier shipment than the Oriental Knight and no duty had been paid on them.

Customs officer Davies then said to Mr Wong with reference to that batch of T-shirts:

"So, all these boxes of imported T-shirts were illegally imported by you without payment of duty. Is that correct?"

"One of the Russian. I think that Khudozhnik Zhukov". (Ex BG pp16-17)

Again it is clear that Australian Customs were unaware of the importation of the T-shirts, vests and sloppy joes into Australia by the Zhukov, and that no duty was paid on them.

The bill of lading, issued by Asean Cargo Services on 3 April 1987 to Artford in relation to this shipment, was for 235 cartons said to contain furniture shipped on board the Oriental Knight on 3 April 1987. The consignee was HTF.

An official invoice (declared to Australian Customs) dated 6 April 1987 was issued by Artford to HTF and related solely to 235 cartons of furniture. (Ex BF).

However, on 10 April 1987 there was a letter written by Mr. Chan to Mr. Wong (Ex AC) indicating that the Oriental Knight had sailed from Hong Kong on 4 April 1987 and that T-shirts were contained in the consignment to Mr. Wong. The letter contains an account summary, the opening balance of which is the same figure as the closing balance in the account summary for the Zhukov shipment (Ex Z).

The Oriental Knight berthed at Port Botany on or about 17 April 1987. The Entry for Home Consumption declared Rizoli to be the owner of the contents and makes reference only to furniture being within the container. However, when the container was opened by Customs officers it was found to contain 47,940 T-shirts and singlets.

When interviewed by Customs officers on 27 April 1987 Mr. Wong eventually made full admission as to his knowledge of the garments shipped on the Oriental Knight and secreted within the container declared solely to contain furniture.

I note the following questions by Officer Davies and Mr. Wong's answers.

"Mr. Wong, we have discovered through your admission, that you did in fact know that this large quantity of T-shirts was imported by you on the Oriental Knight. I now show you Artford Industrial Ltd. Invoice reference AUS/HT dated 6 April, 1987 for furniture addressed to House of Teak Furniture Pty. Ltd. Did you order these goods?"

"Did you also order the T-shirts that have just been seized from the container?"

"Did you intend to defraud the revenue by not paying Customs Duty on the T-shirts imported into Australia?"

"Well, you have declared the furniture on the Customs entry, but you have not declared the T-shirts, so by not declaring the T-shirts was it your intention to defraud the revenue?"

"My intention to reduce the cost of the T-shirts."

"Right, how did you think you would do that, how did you think you would reduce the cost?"

"Do you admit that you omitted to pay Customs duty on the T-shirts?"

"Alright, let's clarify that. You've made a Custom Entry?"

"I've made a false declaration on the Customs Entry. My intention to reduce costs of the T-shirts and the duty and by declaring that amount my intention to pay less duty."

"So you admit that you did not pay the Customs Duty on the T-shirts?"

"I work out the duty reduced, amount of duty payable on the T-shirts."

"But if you didn't declare the T-shirts, you were paying nothing."

"Well we are talking about the T-shirts. Do you admit that you did not pay the duty on the T-shirts?"

"Right and you paid the correct duty on the furniture"

"O.K. so we have the furniture on one side. Now we are just looking at the

T-shirts. I'm just asking you, do you admit that you did not pay the duty on the T-shirts?"

"I'll just show this Entry again, Australian Customs Entry No. IS 71110101E dated 21 April, 1987. The entry is in the name of Rizoli Pty. Ltd. from Artford Industrial Ltd. for furniture. Now did you authorise Customs Agency Renown Customs to enter the shipment on your behalf?"

"Yes, just gave them invoice, no knowledge of what's inside the container"

"I'll now show your invoice from Artford Industrial Ltd. again, reference AUS/HT dated 6 April 1987 for furniture, addressed to House of Teak Furniture Pty. Ltd. Did you authorise Customs Agents, Renown Customs to deliver this invoice to Customs?"

"Can you tell us about anyone else who is involved in the importation of T-shirts?"

The admissions made by Mr. Wong were confined to the Oriental Knight shipment and to earlier shipment on the Zhukov.

With regard to the Oriental Knight shipment, Rizoli was charged with attempting to defraud the Commonwealth pursuant to sections 7 and 29D of the Crimes Act (Cwth) 1914, and Mr. Wong was charged with being knowingly concerned in Rizoli's attempt to defraud the Commonwealth pursuant to sections 5, 7 and 29D of the Crimes Act.

Each pleaded guilty in the Local Court and both were committed for sentence to the District Court.

On 30 June 1989 Rizoli and Mr. Wong were each fined $60,000 and allowed twelve months to pay by his Honour Judge Shadbolt.

Relevantly the information laid against Rizoli provided:

"RIZOLI PTY LIMITED of 42 PACIFIC HIGHWAY, ST LEONARDS in the State of New South Wales did on or about the 21st day of April 1987 at Sydney in the State of New South Wales attempt to defraud the Commonwealth in that through Customs Agents Renown Customs Pty Limited it lodged with the Australian Customs Service an Entry for Home Consumption document numbered IS.7111.0101E supported by a false invoice dated 6 April 1987 showing a purchase price of $US6,057.50 for certain goods, being 610 items of wooden furniture packed in a total of 235 cartons, purchased by the House of Teak Furniture Pty Limited from Artford Industrial Limited, knowing that 170 of the said cartons contained items of clothing, being singlets and t-shirts, and one carton contained clothing labels, thereby attempting to evade Customs duty in the sum of $270,628.14 (Australian) contrary to the Act in such case made and provided;"

Mr Wong pleaded guilty to being knowingly concerned in the offence by Rizoli as pleaded above.

I have admitted and considered evidence under the tendency and coincidence rules which establishes a course of conduct by Mr Wong Rizoli and others between 1982 and January 1987, the time of the first charge, together with the evidence relating to the Oriental Knight shipment. I have then considered the evidence relating directly to each of the subject shipments both oral and documentary in the light of the evidence admitted under the tendency and coincidence rules where relevant to determine whether the charges have been made out.

A fundamental aspect of the plaintiff's case is the direction in 1982 by Mr Wong to Mr Louie on behalf of Renown Customs, that his importations would be in the name of Rizoli a new company which he had formed. No other company was mentioned to Mr Louie. There is no evidence as to the reason Mr Wong nominated Rizoli as the importer, but no doubt he had some reason for doing so. In any event all subsequent importations were cleared on the basis that Renown Customs declared in the Customs Entry that Rizoli was the owner of the goods within the containers. It must be borne in mind that in the declarations to the Customs Department the only imports disclosed were furniture.

The evidence is abundantly clear, to my mind, that from 1982 until 1987 Mr Wong was making arrangements for T-shirts and like garments to be secreted in shipments of furniture stowed within 20' containers for carriage from Hong Kong to Sydney. Until 1984 his agent, for the purpose in Hong Kong was Mr Cho. Thereafter it was Mr Chan. Other persons in Hong Kong and elsewhere obviously co-operated but it is not necessary to pursue that aspect of the matter. However, it could be noted that one such person was obviously Mr Hon Hee Wong.

This course of conduct enabled Mr Wong to avoid incurring duty on the T-shirts and similar garments. In the letter dated 27 October 1983 to Mr Cho, (Ex AK) he explained that the "ongoing costs" in the nature of "shipping costs, customs clearance and other expenses" had been applied in the conduct of his business to the T-shirts, which allowed him to reduce the cost of purchase of camphor chests to a minimum, thereby having the lowest wholesale price for such furniture in Australia. Interestingly, when interviewed by the Customs officers in 1987, Mr. Wong stated that by not paying duty on the T-shirts his intention was "to reduce costs of the T-shirts" (Ex BG). Although for the sake of convenience I refer here to Mr Wong, it goes without saying that much of his business activities were conducted through the three companies which he controlled Rizoli, HTF and Artford. However having said that, a running account was from 1984 maintained between Mr. Chan and Mr. Wong personally which included the cost of acquisition of the T-shirts and other garments. This running account was to be distinguished from the invoices which were forwarded for the furniture from Artford to HTF.

The circumstances relating to the Oriental Knight shipment, in respect of which the relevant admissions have been made, fit quite neatly into the pattern of conduct by Mr. Wong and Rizoli in relation to the shipments prior to those of January, February and March 1987. Those last three shipments (the subject of the charges) likewise fit neatly into that pattern.

It is necessary at this stage, however, to consider specifically the involvement of Rizoli bearing in mind certain submissions made by counsel for the defendants.

It was argued firstly by counsel for the defendants, upon the assumption that T-shirts and other garments were secreted within each of the three containers, that they were not smuggled into Australia by Rizoli. The true smuggler, it was argued, would be HTF because it was the legal owner of the smuggled goods. Likewise as to the evasion of duty charges, it was contended that it was HTF which would have evaded the duty because it was the legal owner of the goods. Thirdly it was contended as to the making a false entry charges that likewise HTF and not Rizoli would have made the false entry.

In support of this contention counsel for the defendants sought to rely upon the evidence that the T-shirts had been paid for by HTF through telegraphic transfers from Sydney to Hong Kong. Secondly, HTF was nominated as the consignee in each of the bills of lading. I must say, leaving aside the other difficulties with this submission, I find it difficult to see how the defendants can rely upon the bills of lading for this argument as those documents were created solely in relation to the transportation of the furniture. Thus their legal effect could not extend beyond the furniture.

I was referred to the following observations by Mahoney JA in Collector of Customs (NSW) v Darch,[3] where his Honour referred to the definition of `owner' in s4(1) of the Act, viz:

" `Owner' in respect of goods includes any person (other than an officer of Customs) being or holding himself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods"

"The application of this definition in a context such as the present is, as the argument indicated, not without difficulty. Literally applied according merely to the terms of the definition, there would, in a case where an owner of goods engaged an agent to act for him on the importation of goods, be two owners, the true owner and the "agent". Where the goods were imported under a contract requiring them to be sent to a "consignee" or to a bailee having a beneficial interest in them, such persons would, in addition, be owners. It is, I think, clear that the definition is one to be applied according to the circumstances of particular cases. Section 4(1) commences with the words, "In this Act except where otherwise clearly intended ..." and the principle that regard is to be had to intendment is, I think, one particularly relevant in relation to this definition."

Priestley JA agreed with the judgment of Mahoney JA and Davies J inferentially agreed with his views in Ace Customs Services Pty Limited v Collector of Customs (NSW).[4]

Counsel for the defendants also relied upon the decision of the High Court in Wilson v Chambers & Co Pty Limited[5] which it was contended is authority for the proposition that one cannot avoid payment of duty unless one is under some obligation to pay it: see for example per Starke J at 151. This obligation, it was argued, must be a legal obligation.

It is perfectly true that the concept of owner is under the general law a word strongly indicative of proprietary rights as Davies J pointed out in Ace Customs. It is also perfectly appropriate, if I may respectfully say so, that the extensive definition of owner in s.4(1) is one to be applied according to the circumstances of particular cases. The definition is so wide that such must necessarily be the true position. Clearly, however, the legislature formulated the definition of "owner" in such wide terms in order to protect the revenue from those who would attempt to defraud it by non-payment of duty on goods imported into this country.

When one is dealing with a criminal enterprise it is appropriate that the definitions of "owner" and "smuggling" be given their fullest effect. There is no reason at all why they should be refined as may be appropriate in what would otherwise be a lawful enterprise.

Here the Court is apparently concerned with a criminal enterprise, and as Herron CJ said R v Vandine:[6]

"The Court is entitled to take a commonsense view of criminal activities."

The definition of "owner" in the context of the present case should have its full effect. Thus in respect of the T-shirts and other garments secreted within the containers in the three subject shipments I am satisfied that Rizoli held itself out "to be the owner, importer... consignee... or person possessed of, or beneficially interested in, or having control of or power of disposition over the goods." For present purposes it is enough that Rizoli held itself out to be the owner of the goods. Indeed the Customs Entry in all cases described Rizoli as the owner.

That being so, Rizoli was the person liable to declare the goods upon their importation into this country and the person liable to pay duty thereon: see s.36 of the Act.

It was submitted during the course of argument that the assertion in the Customs Entry that Rizoli was the owner of the furniture declared to be within the subject container could not extend to an assertion of ownership of any garments secreted within the furniture. I do not accept this argument because Rizoli effectively asserted that it was the owner of all the contents of the container which enabled it to have the container cleared, knowing that garments were secreted therein. The assertion, that only furniture was included in the container, constituted in each case the false entry.

I am satisfied to the Briginshaw standard of proof (bearing in mind the gravity of the matters alleged), in respect of each of the three subject shipments, that the specified items of clothing were secreted in the containers, that the defendants were aware that they were in the containers, that the defendants knew that they were subject to duty and that the defendants knew that they had an obligation to disclose their importation for the purpose of the calculation of duty. Finally that the defendants knowingly secreted the goods in the containers and did not disclose them for the purpose of evading duty and thereby defrauding the revenue. And, in fact, duty was evaded and false entries were made to achieve that purpose: See L Vogel & Son Pty Ltd v Anderson[7]. Indeed if it were necessary, I would be satisfied of these matters on the criminal standard of proof.

In respect of each of the nine offences Rizoli must be taken to be the principal and the conduct of Mr Wong falls within s.236 of the Act in that he was concerned in the commission of each of the offences.

It should be noted that although there were some conflicts in the evidence of Customs officers Davies and Gubbins to which I have referred in some detail in the interlocutory judgment of 29 April 1998. I accept them both as credible witnesses. Those discrepancies were due no doubt in part to the fact that it is now 11 years since they commenced this investigation and Davies has for many years been away from the Department in private employment. Indeed I accept all the oral evidence as having been given by credible witnesses.

Francis Ivor Kelly Comptroller-General of Customs v Jct Wong and Rizoli Pty Ltd Matter No 12178/89 [1998] NSWSC 709

At a glance

Court

Decision date

Before

Source

Judgment (209 paragraphs)

Francis Ivor Kelly Comptroller-General of Customs v Jct Wong and Rizoli Pty Ltd Matter No 12178/89 [1998] NSWSC 709 (10 July 1998)

Parties

Cases Cited (4)