(b) False statement
74 At the outset, it is important to note that the applicants did not challenge the Tribunal's finding that Mr Martin acted honestly and reasonably when he stated, in his answer to the question posed in s 7 of the form, that he was not party to any eligible sharefarming arrangement.
75 It is necessary, first, to deal with the respondent's submission that even if the Tribunal erred in its interpretation of the word "false", that error, by reason of Pozzolanic, did not give rise to a "question of law". I reject that submission. The word "false" is, as will shortly be seen, a word which has several different shades of meaning. It is capable of meaning purposely untrue or, alternatively, objectively incorrect. A great deal turns upon the context in which the word is used.
76 I do not accept the proposition that whether a statement is "false" is purely a question of fact. The answer to that question may depend upon what meaning is accorded to that word. That in turn may depend upon whether the word is regarded as having been used in its ordinary sense (whatever that might be), or whether it is thought to have been used in some special sense.
77 The word "false" seems to me not to have been used in any "ordinary" sense in the context of the provision in which it appears. The dictionary definition of that word is of no assistance in resolving the question whether it is intended to mean "purposely untrue" or "objectively incorrect". Both meanings are included within that definition. It is only by considering the context in which the word appears, and applying accepted principles of construction, that one can deduce its meaning. This suggests that the meaning of the word raises a question of law and not a mere question of fact.
78 I note that in R v Bonollo [1981] VR 633, the Full Court of the Supreme Court of Victoria held that the word "dishonestly" was used in a special sense. Plainly, the meaning of that word involved a question of law. The meaning of the word "false" is, in my view, no less a question of law.
79 I also note that in Collector of Customs v Agfa-Gevaert Limited (1997) 186 CLR 389 at 396, the High Court expressed reservations regarding the general rules summarised in Pozzolanic. In particular, the Court observed that the distinction between the second and fourth of the five propositions formulated in that case created difficulty. The distinction between meaning (a question of fact) and construction (a question of law) was described as "artificial, if not illusory". That observation is apposite to the respondent's submission.
80 Finally, on this point, I note that in Brutus v Cozens [1973] AC 854, the House of Lords held that the initial question of whether statutory words conform to their ordinary linguistic usage, or are to be understood in some technical or artificial sense is "always a question of law for the courts". The question whether the word "false" conforms to its ordinary linguistic usage, or is to be understood in some special sense is squarely raised in this proceeding. It follows that it gives rise to a question of law. Accordingly, this Court has jurisdiction, under s 44, to consider whether the Tribunal erred in the meaning it accorded that word.
81 That brings me to the central issue in this proceeding. As noted earlier, the expression "false statement" is defined, albeit unhelpfully, in cl 50. There is no dispute regarding Mr Martin's state of mind. Can a person who acts honestly and reasonably when making a statement properly be described as having made a "false statement"? In other words, is moral obloquy an element of "falsity"? Does the word "false" in cl 50 mean "deliberately untrue", or "wrong in fact"?
82 In Sternberg v The Queen (1953) 88 CLR 646, the High Court considered the meaning of the word "false". In that case, a person was convicted of an offence under s 234(d) of the Customs Act 1901 (Cth), as it then was, for having falsely declared the value of goods, for the calculation of duty, upon entering Australia. Mr Sternberg was charged under s 236 with having been concerned in the commission of that offence.
83 The declaration arose out of the completion of a form of entry which was prescribed by the Customs Regulations. The form contained columns and blanks in which all the particulars relating to an import were to be stated. On the back of the form was a declaration to be made by the owner of the goods, or that person's agent. The form said:
"As to the goods mentioned in this entry and herein entered, I declare: 1. That I am the owner of the goods or the agent authorised by the owner. 2. That to be best of my knowledge and belief the description and particulars of the goods as stated in this entry are true and correct in every respect. 3. That to the best of my knowledge and belief no goods are contained in any package specified in this entry other than as appears in the entry. 4. That nothing on my part or to my knowledge on the part of any person has been done, concealed or suppressed whereby His Majesty the King may be defrauded of any duty due."
84 Dixon CJ, who delivered the leading judgment, observed that the second, third and fourth statements were made to the knowledge and belief of the declarant. However, the next statement was "that I enter the goods as of the value and of the description and quantities stated in this entry, and for home consumption." That paragraph was not qualified by reference to knowledge and belief.
85 His Honour went on to say that the qualification had not been thought to be desirable in the case of the last statement made by the declarant because "the whole customs duty depends upon the correctness of the entry" in that particular. He went on to say that in a matter of this description, where the importer had knowledge, and the authorities had none, it had been traditional to require a positive statement upon which the assessment of duty could proceed.
86 Dixon CJ concluded that the entry consisted of two parts, the first containing the particulars, and the second the declaration which verified the entry. The requirement that an entry be "false" in any particular could be satisfied by an entry which, in any particular, was contrary to fact. It did not need proof that the person responsible for that entry knew it to be false.
87 As is evident from his Honour's remarks, the form of the document governed the nature of the obligation. It was apparent that the form sought a statement of value as an objective fact, and this meant that the primary offence had been committed. It followed that Mr Sternberg, who was aware that the value for duty had been incorrectly stated, could be convicted of being "concerned" in the commission of that offence.
88 The next occasion upon which the High Court considered the meaning of the word "false", in any detail, was in Cameron v Holt (1980) 142 CLR 342. In that case, the Court held that s 138(1)(d) of the Social Security Act 1947 (Cth) which made it an offence for a person to present to an officer of the Department a statement, or document, which was false in any particular, did not create an absolute offence, and required the prosecution to establish that the person knew that the statement he was presenting was false. The only authorities considered by the Court were those dealing with strict liability in the criminal law. Sternberg was not considered.
89 The High Court returned to the Customs Act and the meaning of the word "false" in Murphy v Farmer (1988) 165 CLR 19. The context was s 229(1)(i). That section provided for the forfeiture, to the Crown, of "all goods in respect of which any entry, invoice, declaration, answer, statement or representation which is false or wilfully misleading in any particular has been delivered …". It was common ground that the defendant had made the statement believing it to be true, but that it was, nonetheless, objectively incorrect.
90 In a joint judgment, the majority of the Court (Deane, Dawson and Gaudron JJ) considered that the word "false" in s 229 was ambiguous. It could be read as "purposely untrue", or simply as "incorrect". Having regard to the fact that the section was properly to be seen as "penal" or "quasi-penal" in character, it should be construed as requiring mens rea.
91 It should be noted that in a powerful dissenting judgment, Brennan and Toohey JJ said at 21:
"It may be accepted that 'false' is not a precise adjective. Nevertheless, it is significant that the Shorter Oxford English Dictionary, 3rd ed (1974), vol 1, p 722 gives as the word's primary meaning: '1. Erroneous. 2. Not according to rule, principle, or law; wrong … 3. Incorrect …' The notion of purposely untrue or deceitful appears as a secondary meaning."
92 It should also be noted that, prior to Murphy v Farmer, s 229 was considered by Lockhart J in Toy Centre Agencies Pty Ltd v Spencer (1983) 46 ALR 351. His Honour concluded that the word "false", in the phrase "false or wilfully misleading" meant untrue in fact, and not wilfully false. It is clear that his Honour's reasoning can no longer stand as a result of the judgment of the High Court in Murphy v Farmer.
93 As a result of Murphy v Farmer, it is now clear that the High Court is unwilling to accept that a statutory provision which has "penal" consequences should be construed as permitting liability to be established without some form of mens rea, at least in the absence of express statutory provision to the contrary. See also Director of Public Prosecutions v Logon Park Investments Pty Ltd (1995) 37 NSWLR 118.
94 It should be noted that there have been various decisions over many years regarding the construction of s 234(d) of the Customs Act. They include: Dawson v Jack (1902) 28 VLR 634, Davidson v Watson (1953) 28 ALJR 63, and Ex parte Falstein; Re Maher (1948) 49 SR (NSW) 133. All have held that the word "false", in the context of that section, meant false in fact, and did not involve any element of wilfulness, or mens rea. As a result of Murphy v Farmer, the correctness of those judgements must be in doubt.
95 Turning now to the issue whether "false" in cl 50 means "deliberately untrue", or merely "objectively incorrect", it is important to note that the Act itself contains a number of criminal offences. These are quite separate from the power conferred upon the Authority, by cl 50 of the Schedule, to cancel units where a false statement has been made.
96 Each of the criminal provisions contains a mental element which must be satisfied before a person can be convicted.
97 Clause 134 relevantly provides:
" 134 False or misleading statements in claims
Knowledge
(1) A person is guilty of an offence if:
(a) the person makes a statement (whether orally, in a document or in any other way); and
(b) the person does so knowing that the statement:
(i) is false or misleading; or
(ii) omits any matter or thing without which the statement is misleading; and
(c) the statement is made in, or in connection with, a claim for a payment right.
Penalty: Imprisonment for 12 months." (emphasis added)
98 It is clear that in order to establish the guilt of a person charged with an offence under cl 134 the prosecution must prove actual knowledge on the part of the defendant that the statement was false or misleading.
99 It is noteworthy that s 134(4) makes it an offence for a person recklessly to make a statement that is false or misleading. The offence carries a maximum penalty of six months imprisonment. The section relevantly provides:
"Recklessness
(4) A person is guilty of an offence if:
(a) the person makes a statement (whether orally, in a document or in any other way); and
(b) the person does so reckless as to whether the statement:
(i) is false or misleading; or
(ii) omits any matter or thing without which the statement is misleading; and
(iii) the statement is made in, or in connection with a claim for a payment right.
Penalty: Imprisonment for 6 months."
100 The term "reckless" is not defined. However, it is tolerably clear, at least since He Kaw Teh v The Queen (1985) 157 CLR 523 that it is used in a subjective, and not objective, sense.
101 The express inclusion of terms such as "knowing", and "reckless", in the provisions creating the offence of making a false statement, makes their absence from cl 50 particularly noteworthy. The same piece of legislation, dealing with the same subject matter, namely the making of false statements, expressly includes the requirement of knowledge or recklessness when dealing with offences, and yet excludes that requirement when it makes provision for the cancellation of units wrongly granted because of false statements that were made.
102 Plainly cl 50 is not, in any relevant sense, a "penal" provision. Nor can it properly be described as "quasi-penal". Under that clause, the only consequence that flows from a finding that a false statement has been made is that a payment right (which should never have been granted in the first place) can be cancelled, and any monies wrongly paid possibly recovered.
103 Clause 50 stands in stark contrast with the forfeiture provisions considered by the High Court in Murphy v Farmer. There a finding that a "false statement" had been made could have led to the imposition of higher duty, possible pecuniary penalty, and of course forfeiture of the goods.
104 To insist that a person have "knowledge" in relation to cl 50, as the Tribunal appeared to do, is effectively to elevate the recovery mechanism contained in that clause to the requirements contained in the offence provisions of the Act.
105 In my opinion, the structure and text of the Act when read as a whole suggest that the only requirement for a statement to be "false" within the meaning of that term in cl 50 is that it be objectively incorrect. To the extent that the Tribunal introduced an additional requirement of mens rea (or even raised the concept of a "defence" of honest and reasonable mistake of fact) it did so erroneously.
106 I am fortified in that opinion by the judgment of Dixon CJ in Sternberg where his Honour emphasised that the form of the statement governed the nature of the obligation. Mr Martin declared that his answer to the question posed in s 7 was "true and complete". His statement was unqualified by any reference to it being true and complete "to the best of his knowledge and belief": cf Secretary, Department of Social Security v Salvona (1989) 18 ALD 289.
107 I emphasise that nothing I have said should be taken as amounting to a finding on my part that Mr Martin indeed made a false statement. That issue cannot be resolved until the anterior question, whether he was a party to an eligible dairy sharefarming arrangement, has been determined. As I have said earlier, the Tribunal does not seem to me to have finally determined that question. I certainly have not done so.