Ozzy Tyre & Tube Pty Ltd v Chief Executive Officer of Customs

REASONS FOR JUDGMENT 1 The warrants the subject of challenge in these proceedings authorised the executing officer to search the premises described in the warrant for the kind of evidential material that satisfied all of the three conditions specified in the warrant, and to seize any such thing of that kind found on or in the premises. A warrant framed as a "three condition" warrant is not, for that reason invalid: Dunesky v Elder (1994) 54 FCR 540; Grollo v Macauley (1995) 56 FCR 533; Harts Australia Ltd v Commissioner, Australian Federal Police (1997) 75 FCR 145, although the drafting technique has been criticised: Malubel Pty Ltd v Elder (1998) 88 FCR 242 at 262. 2 The First Condition specified in the warrant is things which are originals or copies of enumerated documents or materials; the Second Condition is things which relate to specified companies, people or places; the Third Condition is as follows: "THIRD CONDITION: Things as to which there are reasonable grounds for suspecting that they will afford evidence as to the commission of the following offences against the laws of the Commonwealth: (a) that Ozzy Tyres and Tubes Pty Ltd did, on or about 13 January, 2000, smuggle goods described on Customs entry 1S.0013.1329J, namely 459 wheels, 60 Tyres, 59 Exhaust Pipes, 300 Nuts for wheels, 75 Turbo Timers and 88 Blow-off Valves (hereinafter 'the goods') supplied by Sunshine Industries Ltd of Japan, in contravention of sub-section 233(1)(a) of the Customs Act, 1901. (b) that Ozzy Tyres and Tubes Pty Ltd did, on or about 13 January, 2000, evade payment of $56,343 in Customs duty on entry 1S.0013.1329J, in respect of its importation of the goods, in contravention of sub-section 234(1)(a) of the Customs Act, 1901. (c) that Ozzy Tyres and Tubes Pty Ltd did, on or about 13 January, 2000, make a statement to Customs that was false or misleading in a material particular in regard to its importation of the goods by understating on the said entry by approximately one-half the true purchase price of the goods, in contravention of sub-section 234(1)(d)(i) of the Customs Act, 1901. (d) that Ozzy Tyres and Tubes Pty Ltd did, on or about 28 January, 2000, smuggle, evade duty in respect of, and make a statement that was false or misleading to Customs in respect of, a further 983 Japanese tyres from Heston Trading Pte Ltd of Singapore (hereinafter 'the further goods') imported on entry 1S.0032.1770E in contravention, respectively, of sub-sections 233(1)(a), 234(1)(a) and 234(1)(d)(i) of the Customs Act, 1901 by again understating to Customs at the time of entry the true purchase price of the further goods by approximately one-half. (e) that Ozzy Tyres and Tubes Pty Ltd did engage in systematic breach of these same 3 Customs Act provisions on its prior importations of car parts, tyres and wheels, its suppliers during the past 5 years being: 1. Sunshine Industries Ltd 2. Sunshine Ind Ltd 3. Heston Trading Pte Ltd 4. Plus K Company Ltd Tokyo 5. Nankang Rubber Tire Corp Ltd 6. Shimizu Enterprise 7. Tong Fong Tyres Pte Ltd" 3 The warrants were issued pursuant to s 198 of the Customs Act 1901 (Cth) ("the Act"). Section 198(3) of the Act requires that there be stated in the warrant: (a) the offence to which the warrant relates; and ... (c) the kind of evidential material that is to be searched for under the warrant. "Evidential material" is relevantly defined in s 183UA of the Act, in relation to an offence, as meaning a thing relevant to the offence. The Act does not follow the form of corresponding provisions in the Crimes Act 1914 (Cth) inasmuch as the latter Act further defines "thing relevant to an ... offence" as meaning (s 3C(1); s 3(1)(b)): "anything as to which there are reasonable grounds for suspecting that it will afford evidence as to the commission of any such offence". There is no corresponding provision in the Act. 4 The applicant's submissions accept, in principle, that the three stages required by the warrant under challenge operate as a refining process which has the legitimate effect of narrowing, by stages, the scope of the enquiry to be undertaken by those executing the warrant. However, it is the third condition which substantially confines the search.

First challenge: par (e) 5 The applicant's first submission is that by reason of item (e) the third condition fails to limit the warrants sufficiently. Item (e) is attacked on the basis that it is unlimited as to time (the identification of the suppliers during the past five years does not, expressly or impliedly, limit the period of the offence(s) alleged). Item (e) is unlimited as to the manner of breach of ss 233(1)(a), 234(1)(a) and 234(1)(d) except that the breach(es) must have occurred "on its prior importations of car parts, tyres and wheels". The adjective "systematic" provides no practical limitation at all. A warrant which is entirely unlimited as to the date of the things to be searched for and seized, and as to the date of a controlling offence, is not a proper exercise of the power conferred by s 198. 6 Pars (a), (b) and (c) of the Third Condition each relate to goods in the form of car parts, tyres and wheels supplied by Sunshine Industries Ltd of Japan and described on Customs Entry 1S.0013.1329J. Three offences are alleged to have been committed on or about 13 January 2000 in connection with that entry, namely: (a) smuggle goods, in contravention of s 233(1)(a) of the Act, (b) evade payment of Customs duty in respect of the importation of the goods, in contravention of s 234(1)(a) of the Act, and (c) make a statement to Customs that was false or misleading in a material particular in regard to the importation of the goods by understating on the entry by approximately one-half, the true purchase price of the goods, in contravention of s 234(1)(d)(i) of the Act. 7 Paragraph (d) of the Third Condition relates to goods in the form of tyres supplied by Heston Trading Pte Ltd of Singapore on entry 1S.0032.1770E. The allegation is of commission of the same three offences by "again understating to Customs at the time of entry the true purchase price of the further goods by approximately one-half" (my emphasis). 8 Paragraph (d) is in a "rolled-up" form, not suitable to an indictment. Nonetheless it identifies the conduct which is said to have occurred on about 28 January 2000 which is alleged to constitute the three offences. Understating to Customs at the time of entry of the goods, of the true purchase price by approximately one-half, is said to involve the making of a false or misleading statement to Customs in respect of the goods, as well as evasion of duty and smuggling. I leave aside for later consideration of the significance (if any) of the omission from par (d) of any reference to the mental element of "knowingly or recklessly" which is an ingredient of the offence created by s 234(1)(d). 9 It was not submitted that a warrant under s 198 may only be issued in relation to one offence. The form of warrant the subject of consideration in Harts (supra) is set out at 156 ALR 152, at 161. It alleged the commission of more than one offence, and an example of one such offence is: "a. an offence against Section 29D Crimes Act 1914, namely that between 30 June 1991 and 30 June 1995 at Brisbane and elsewhere in the State of Queensland, Steven Irvine HART did defraud the Commonwealth, namely the Australian Taxation Office." 10 Items (d) and (e) of the present warrant are poorly drafted. Whilst a warrant must comply strictly with the statutory conditions of its issue (George v Rockett (1990) 170 CLR 104 at 111), it should be read fairly and not perversely: Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523, at 546. 11 Paragraph (e) refers to "systematic breach of these same three Customs Act provisions" (my emphasis). There is no offence established by the Act of "systematic" breach of one or more of its provisions. However, "systematic" serves to describe, limit or control the type of breaches of ss 233(1)(a), 234(1)(a) and 234(1)(d)(i) to which par (e) applies. The first two meanings given to "systematic" by the Macquarie Dictionary are: "1. Having, showing, or involving a system, method, or plan: a systematic course of reading, systematic efforts. 2. Characterised by system or method; methodical: a systematic person, systematic habits." 12 When par (e) refers to "systematic breach" the reference is to the same system or method as is described in the preceding paragraphs of the warrant. That is to say a system or method whereby the true purchase price of goods is understated to Customs at the time of entry by approximately one-half. "These same three Customs Act provisions" is a reference back to the three provisions referred to in par (d) of the warrant, and earlier in paras (a), (b) and (c). I reject the submission that the adjective "systematic" provides no practical limitation at all. 13 Then it is submitted that par (e) is not confined to importations in the last five years from the nominated suppliers. Par (e) is unconfined as to time, and the portion of the paragraph which appears after the word "wheels", simply gives some information as to who were the suppliers in the last five years, without confining the operation of the paragraph to that or any other time frame, or, for that matter, to the nominated suppliers. 14 On a fair reading of the warrant, par (e) describes importations of car parts, tyres and wheels during the past five years from the nominated suppliers where the true purchase price of the goods imported was understated to Customs at the time of entry by approximately one-half, resulting in breach of ss 233(1)(a); 234(1)(a) and 234(1)(d)(i) of the Act. The words following "wheels", describe or define the prior importations, otherwise they have no work to do. The position may have been clearer if the word "from" had been inserted after "wheels", but on a fair reading of the warrant as drafted that is, in any event, its effect. 15 Section 198 of the Act does not stipulate, in terms, that a warrant issued on the authority of that section must set bounds to the area of search which the execution of the warrant will involve. However, cases on s 10 of the Crimes Act 1914 - eg Beneficial Finance Corporation v Commissioner of Australian Federal Police (1991) 31 FCR 523, and on s 3E of the Crimes Act, (which replaced s 10 with effect from 30 November 1994) - eg Harts v AFP (supra) - have held that both under the general law and under s 3E a warrant is required to disclose the offence in question so as to indicate the area of the search. Those statements are equally applicable to a warrant issued under the authority of s 198 of the Act. 16 If par (e) were construed in the manner for which the applicant contends, then there would be force in its contention that it fails sufficiently to disclose the offence to which par (e) of the warrant relates so as to indicate the area of the search. However, in the view which I take as to the proper construction of the paragraph, it sufficiently identifies the offences to which the paragraph relates so as to indicate the area of the search. Paragraph (e) is not so vaguely worded that a person affected by it cannot know the object of the search: Ousley v The Queen (1997) 192 CLR 69 at 107.

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