Court of Appeal (Qld)|2000-05-22|Before: Jersey CJ, Murdo P, Muir J

JOHN ROBERT PRESTON v CHIEF EXECUTIVE OFFICER OF CUSTOMS [2000] QCA 186 (22 May 2000)

CHIEF EXECUTIVE OFFICER OF CUSTOMS Respondent (Plaintiff)

The learned Judge convicted Mr Preston of a series of contraventions of sections 117, 119 and 120 of the Excise Act committed between 27 October 1995 and 4 January 1996. They were of evading the payment of excise duty, having possession of excisable goods on which duty had not been paid, and conveying such goods. The circumstances of the offences were related as follows by the learned Judge:

"The allegations broadly relate to nine aeroplane flights taking place on dates beginning in October 1995 and concluding in January 1996. In respect of each flight the essence of the allegation is that the defendant represented to a duty free shop that he was a member of air crew intending to travel overseas, was scheduled to make an overseas flight on a particular date in a particular aircraft, ordered a large quantity of cigarettes duty free from the shop, and paid for them on a duty free basis.

The statement of claim further alleges that in fact the first defendant chartered a particular aircraft, loaded the cigarettes which had been ordered and delivered onto that aircraft and flew the aircraft to Port Macquarie where the cigarettes were off-loaded. Thereafter they were released for home consumption. The same process is alleged to have been followed on thirteen occasions and the consequent evasion of excise duty is alleged to amount to $124,361.15. If the amount of duty was evaded, the minimum penalty payable under the Excise Act is $248,722.30 and the maximum penalty $621,805.75. The penalties are of course payable in addition to the payment of the duty."

The learned Judge imposed one overall penalty as was allowed under section 4(k) of the Crimes Act, requiring payment of $497,440.60 within 12 months. Under section 129 of the Excise Act, in respect of the contraventions of section 117 and 119, the penalty was to be a "fine", as it is termed in subparagraph (a), of between two and five times the amount of duty if determinable.

In respect of the contraventions of section 120 the Court was, in terms of subsection 2(b) entitled to impose, as it is there styled, a "fine", again within those parameters between two and five times the amount of duty if determinable. The learned Judge imposed a penalty four times the amount of duty as applicable to all contraventions. In addition to imposing that penalty he also ordered Mr Preston to make reparation of the amount of the unpaid duty, $124,361.15, a course contemplated by section 21(b) of the Crimes Act.

That judgment arose from Mr Preston's failure to comply with an order made by consent on 5 November 1999 that Mr Preston file and serve a notice of intention to defend by 4 p.m. on 19 November 1999, failing which the chief executive officer of Customs was to be at liberty to enter judgment.

Mr Preston failed to deliver such a notice by 19 November, but filed one ten days later. In purported response to the allegations of the chief executive officer's statement of claim, Mr Preston pleaded that he "had no knowledge or recollection of the events and no records of the matters referred to".

Rule 166 subrule 4 of the Uniform Civil Procedure Rules requires in such a case that the party so pleading include "a direct explanation for the party's belief that the allegation...cannot be admitted". Mr Preston failed to comply with that requirement and the chief executive officer, not surprisingly, sought judgment on the basis of Mr Preston's non-compliance with the order of 5 November 1999. Mr Preston cross applied for an order extending the time for compliance.

The learned Judge understandably found it unimaginable that Mr Preston could not say whether or not the allegations were true. The absence of documentation, on which Mr Preston also relied, likewise could not have prevented his delivering a responsive defence to the sorts of allegations made against him in the statement of claim. Mr Preston had sought leave to amend the defence but the Judge held that the proposed amendment would not cure the deficiency of the document. The Judge refused to extend time for compliance, on the basis that Mr Preston had ignored previous timetables and displayed no willingness or capacity to improve his performance.

Because Mr Preston had not complied with rule 166 subrule 4 he was taken to have admitted the allegations because of subrule 5. Judgment followed as a virtual matter of course.

We are informed by counsel for the chief executive officer of Customs that Mr Preston was given the opportunity to make submissions on all issues. This is relevant in the context of his claim, at least made in writing, that he was given no such opportunity in relation to penalty and reparation. I return to this matter shortly.

Mr Preston filed a notice of appeal nine days late on

11 February 2000. It lacked particularity. A purported notice of appeal but in incorrect form had been filed on

Under the timetable set by the registrar, Mr Preston's outline of argument was due by 3 March 2000. It was not delivered. On that day the registrar alerted Mr Preston's solicitors to the need to apply for an extension of time to regularise the notice of appeal filed late. That did not occur.

On 24 March the Australian Government Solicitor informed the solicitor for Mr Preston that if an application to extend time were not made by 31 March, he would apply to have the appeal struck out. Again Mr Preston failed to respond and on 11 April the Australian Government Solicitor filed an application to dismiss the appeal for want of prosecution. That was set down to be heard on 22 May, today. As late as 18 May, Mr Preston filed an application for extension of time for the filing of the notice of appeal and sought leave to amend the notice of appeal.

Mr Preston's dilatoriness and lack of cooperation have not prejudiced the chief executive officer of Customs except possibly as to costs but his approach, explained, if vaguely, by his being out of the jurisdiction and unable to give instructions from time to time, does not engender sympathy. There is, in addition, a demonstrable lack of merit in the proposed appeal.

Mr Preston primarily would contend that the Supreme Court lacked jurisdiction, particularly in relation to the alleged contraventions of section 120 of the Excise Act.

The proceedings were brought by the chief executive officer of Customs as proceedings for the recovery of "penalties". If properly so characterised, they were therefore "excise prosecutions" in terms of section 133. Such prosecutions may be brought in the Supreme Court under section 134 and dealt with in accordance with this Court's civil procedure as provided for by section 136. The learned Judge proceeded in that way.

Mr Preston relies now on Comptroller-General of Customs v. D'Aquino Brothers Proprietary Limited, 135 Australian Law Reports 649. Whatever was there held in relation to "customs prosecutions", the Court affirmed the correctness of an approach to excise prosecutions consistent with this Court's having the jurisdiction exercised here by the chamber Judge, certainly in relation to the contraventions of sections 117 and 119.

Mr Taylor's submission focused on section 120, which refers relevantly to the imposition of a "fine" in subsection 2B, albeit a fine calculated by reference to duty. His argument proceeded that proceedings in respect of the relevant contravention must therefore amount to prosecution for a criminal offence, rendering this Court's civil procedure, exercised here by the chamber Judge, inappropriate. The submission stems from section 133 which provides that:

"Proceedings by the Customs for the recovery of penalties under any Excise Act...are herein referred to as excise prosecutions."

It is those proceedings which then fall to be conducted under section 136 in accordance with the Court's civil procedure.

Mr Taylor drew attention to section 129, which prescribes the penalty applicable to contraventions of sections 117 and 119, highlighting the circumstance that section 120, however, refers as relevant to a fine. In fact, there are references in section 120 to both fines and penalties. One is driven to the conclusion that the terms are used interchangeably. That certainly emerges from section 129. Section 129 says that the "penalty" applicable to the offences with which it is concerned is to be, in the case of paragraph A, a "fine" calculated by reference to duty in a particular way.

The reason why special provision needed to be made for the prescribing of penalty in the case of section 120, by contrast with sections 117 and 119, is that it deals with a large number of offences and there was need to provide particular penalties for those offences. Sections 117 and 119 fall into a different category and the legislature obviously felt it convenient to deal with the penalties applicable to those offences in a composite way through section 129.

It is, to my mind, significant, as I have said, that section 129 appears to use the words "penalty" and "fine" interchangeably and, secondly, that there is no rational basis for concluding that section 120, in using the terms "fine" and "penalty", is not proceeding on the same basis: that is, that the terms are, in reality, interchangeable. There is no apparent reason, in short, explaining the disparate use of those terms in section 120. I would therefore reject the first and major point taken by Mr Taylor.

In Mr Preston's written material, he contends additionally that the concepts of privilege to avoid self-incrimination and an arguably applicable standard of proof beyond reasonable doubt should be regarded as modifying the operation of the Uniform Civil Procedure Rules in this situation precluding his Honour's reliance for deemed admissions on Rule 166 subrule 5. It is significant, in the first place, that Mr Preston did not claim privilege in his defence, so that the privilege, if it existed, was probably waived. But that aside, the contention ignores section 136 of the Excise Act providing that such a prosecution might be proceeded with in accordance with this Court's usual civil procedure. In my view, the Uniform Civil Procedure Rules apply with full force.

Other matters raised in the notice of appeal and the written material concern the learned Judge's balancing of the various factors which bore upon the exercise of his discretion in refusing to extend time or allow amendment. His Honour's approach, which he comprehensively explained, was orthodox and appropriate and not vulnerable to challenge consistently with House v. The King (1936) 55 Commonwealth Law Reports 499.

I said I would return to the contention that the learned Judge set the penalty and ordered reparation without allowing Mr Preston an opportunity to make submissions. This contention was made in Mr Preston's written outline. There was no sworn material from his side to that effect, as one might reasonably have expected, were the matter to be pursued.

The form of the transcript at page 9 of the judgment suggests that there was an opportunity for submissions prior to the imposition of the penalty and the order of reparation. We are informed by Mr Maguire, who was present at the hearing, that submissions were made on behalf of the chief executive officer of Customs, and that there was opportunity for the solicitor appearing for Mr Preston also to make submissions, but that he did not avail himself of that opportunity. There is, in these circumstances, nothing in the point. It is in any event frankly inconceivable that the learned Judge would have proceeded, peremptorily excluding submissions from one side of the record having received relevant submissions from the other.

As I said earlier, the circumstances in which Mr Preston seeks a favourable exercise of discretion today to extend the time for the filing of the notice of appeal and for amendment are not compelling, but there is, in addition, such demonstrable lack of merit in the proposed appeal as to render the allowing of the matter to go forward now entirely out of the question.

I would order, on the application of the chief executive officer of Customs, that the appeal be dismissed for want of prosecution. I would refuse Mr Preston's application for extension of time and amendment.

THE PRESIDENT: I agree with the orders proposed by the Chief Justice and with the reasons he has given.

MR MAGUIRE: I ask for costs of the appeal, your Honour.

MR TAYLOR: I cannot argue against that, your Honour.

THE CHIEF JUSTICE: The orders will be: that the appeal is dismissed for want of prosecution with costs to be assessed, and that Mr Preston's application for extension of time and amendment is refused, with costs to be assessed.

JOHN ROBERT PRESTON v CHIEF EXECUTIVE OFFICER OF CUSTOMS [2000] QCA 186

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Judgment (39 paragraphs)

JOHN ROBERT PRESTON v CHIEF EXECUTIVE OFFICER OF CUSTOMS [2000] QCA 186 (22 May 2000)

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