PELLEGRINO v DIRECTOR OF PUBLIC PROSECUTIONS

Business Franchise Licences (Tobacco) Act 1987 (NSW), s 58 Criminal Appeal Act 1912 (NSW), s 5F Criminal Code Act 1995 (Cth)), ss 130, 131 Customs Act 1901 (Cth), ss 4, 15, 20, 30, 33, 35A, 42, 64, 68, 71A, 118, 153, 183UA, 193G, 197, 104, 204, 205G, 229 Customs Regulations 1926 (Cth), reg 3, Form 68 LEGISLATION CITED: Excise Act 1901 (Cth), s 60 Family Law Act 1975 (Cth), s 95 Fauna Conservation Act 1974 (Qld), s 7 Judiciary Act 1903 (Cth), ss 2, 35A, 68 Navigation Act 1912 (Cth), s 329 Theft Act 1968 (UK), s 5

Burton v Honan (1952) 86 CLR 169 Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279 Collector of Customs (Vic) v Wilh Wilhelmsen Agency Pty Ltd (1956) 102 CLR 147 Commonwealth v District Court of the Metropolitan District (1954) 90 CLR 13 DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 Feely [1973] QB 530 Forbes v Traders' Finance Corporation Ltd (1971) 126 CLR 429 Ghosh [1982] 3 WLR 110 CASES CITED : Goben Pty Ltd v Chief Executive Officer of Customs (1996) 65 FCR 180 Goben Pty Ltd v Chief Executive Officer of Customs (1996) 68 FCR 301 Goben Pty Ltd v Chief Executive Office of Customs (1997) 74 FCR 36 Hedberg v Woodhall (1913) 15 CLR 531 Kitano v The Commonwealth (1973) 129 CLR 151 [The Queen v Gee (2003) 212 CLR 230 R v Woodman [1974] 2 All ER 955 Victoria v The Commonwealth (1937) 58 CLR 618 ("The Kakariki") Walden v Hensler (1987) 163 CLR 561 Yanner v Eaton [1999] HCA 69; (1999) 201 CLR 351

PARTIES: Michael Angelo PELLEGRINO - Appellant Director of Public Prosecutions (Cth) - Respondent

COUNSEL: A Djemal - Appellant I Bourke - Respondent

SOLICITORS: Matouk Joyner Lawyers - Appellant Commonwealth Director of Public Prosecutions - Respondent

IN THE COURT OF CRIMINAL APPEAL CCA 2007/3926 DC 06/11/0652

BASTEN JA HIDDEN J BARR J

11 February 2008 PELLEGRINO v DIRECTOR OF PUBLIC PROSECUTIONS (CTH) Headnote

On 6 February 2006 the Appellant, Mr Pellegrino, and two others, Simon Berry and Bounthavy Phapakdy, were charged with dishonest appropriation of property belonging to a Commonwealth entity, namely the Australian Customs Service ("Customs").

The charge related to a container which, on 4 February 2006, was unloaded at a wharf operated by Patrick Stevedores Operations Pty Ltd at Port Botany. On 6 February 2006 the container was moved from the wharf without the permission of Customs, and was seized by police. The container had been reported to Customs to contain PVC electrical tape, but when searched was found to contain 750 boxes of cigarettes. No import declaration had been made and no duty had been paid in respect of the goods.

On 15 August 2007, Mr Pellegrino filed a notice of motion seeking a permanent stay in relation to count 1 on the indictment. Sorby DCJ dismissed the motion on 21 August 2007. On 28 August 2007, Mr Pellegrino appealed against that judgment, having been granted a certificate by Sorby DCJ for the purposes of s5F of the Criminal Appeal Act 1912.

The Court held, dismissing the appeal: (per Basten JA, Hidden and Barr JJ agreeing)

1. The power of a trial judge to provide a certificate under s 5F of the Criminal Appeal Act 1912 may properly be exercised in circumstances where the appropriateness of an interlocutory appeal is not in doubt or where the trial judge may have particular insight into the proceedings which may not readily be shared by the Court on appeal: [9]. DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226, referred to.

2. Goods which are in the possession, custody or control of another person may nevertheless be subject to the control of Customs. The Customs Act operates automatically so as to confer power on Customs with respect to goods which fall within its classifications, rendering the goods in effect immovable and unusable without the express authority of Customs: [59]. Kitto J in Collector of Customs (Vic) v Wilh Wilhelmsen Agency Pty Ltd (1956) 102 CLR 147; Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279; Kitano v The Commonwealth (1973) 129 CLR 151; Goben Pty Ltd v Chief Executive Officer of Customs (1996) 65 FCR 180; Goben Pty Ltd v Chief Executive Officer of Customs (1996) 68 FCR 301, considered

Yanner v Eaton [1999] HCA 69; (1999) 201 CLR 351, referred to

3. In a practical sense, Customs exercised actual physical control over the contents of the container through its appointed wharf operator and through the deliberate withholding of authority permitting movement of the goods from the wharf: [61].

4. The Appellant failed to establish, that the prosecution could not establish on the agreed facts that the property alleged to have been dishonestly appropriated belonged to the Australian Customs service: [70]. Burton v Honan (1952) 86 CLR 169; Forbes v Traders' Finance Corporation Ltd (1971) 126 CLR 429, considered.

IN THE COURT OF CRIMINAL APPEAL CCA 2007/3926 DC 06/11/0652

BASTEN JA HIDDEN J BARR J

11 February 2008 PELLEGRINO v DIRECTOR OF PUBLIC PROSECUTIONS (CTH)

Judgment 1 BASTEN JA: On 4 February 2006 a shipping container was unloaded at a wharf operated by Patrick Stevedores Operations Pty Ltd ("Patrick Stevedores") at Port Botany in New South Wales. The removal of the container from the wharf two days later resulted in charges being laid against the Appellant, Michael Pellegrino, and two others, Simon Berry and Bounthavy Phapakdy. Each was charged with dishonest appropriation of property belonging to a Commonwealth entity, namely the Australian Customs Service ("Customs"). (There was a second charge of stealing the contents of the shipping container from the possession of Patrick Stevedores laid against Mr Pellegrino, but that is not relevant on the appeal.) 2 On 15 August 2007 a notice of motion was filed on behalf of Mr Pellegrino seeking a permanent stay in relation to count 1 on the indictment. It will be necessary to say something more in relation to the procedure adopted at the trial shortly. Suffice it to say at this stage that the motion was argued before the trial judge, Sorby DCJ, on 20 August 2007; his Honour handed down judgment the following day dismissing the motion. On 28 August 2007 Mr Pellegrino appealed against that judgment pursuant to a certificate given by the trial judge for the purposes of s 5F(3)(b) of the Criminal Appeal Act 1912 (NSW). The grounds were identified in the following terms: "(1) His Honour erred in finding there was evidence available to support the element of 'belonging to another, namely the Australian Customs Service, which is a Commonwealth entity' for the offence of theft under s 131.1 of the Criminal Code Act (Cth) 1995. (2) His Honour erred in his finding that the statutory regime of control under the Customs Act (Cth) 1901, could constitute evidence of 'control' for the purposes of proving an essential element of the offence being that 'the property belongs to a Commonwealth entity' pursuant to s 131.1(b) of the Criminal Code Act (Cth) 1995." Jurisdiction 3 The District Court in this matter was exercising federal jurisdiction, the proceedings having been brought by an officer of the Commonwealth and for an offence under Commonwealth law. It follows that any right of appeal from the order made by his Honour dismissing the motion must arise under federal law. On its face, s 68(2) of the Judiciary Act 1903 (Cth) would suffice to render applicable in federal jurisdiction a State law relating to "appeals arising out of any such trial", the term "appeal" being defined in s 2 of the Judiciary Act to include "any proceeding to review or call in question the proceedings decision or jurisdiction of" the trial judge. It is well-established that the operation of s 68(2) is ambulatory and will pick up the provisions of the relevant State law as in operation from time to time: see Commonwealth v District Court of the Metropolitan District (1954) 90 CLR 13 at 20 (Dixon CJ, Kitto and Taylor JJ) applied in The Queen v Gee (2003) 212 CLR 230 at [24] (McHugh and Gummow JJ); see also at [6] (Gleeson CJ), [114] (Kirby J). It is entirely consistent with the reasoning in Gee to conclude that s 5F applies in federal jurisdiction, so as to allow, in an appropriate case, an interlocutory appeal from a decision made in the course of a criminal trial in federal jurisdiction. Whether this was an appropriate case is a different question. 4 On 21 August, following the delivery of the reserved judgment on the previous day, counsel for Mr Pellegrino immediately applied for a certificate under s 5F of the Criminal Appeal Act, the relevant terms of which read as follows: "5F (1) This section applies to: (a) proceedings (including committal proceedings) for the prosecution of offenders on indictment in the Supreme Court or in the District Court; … (2) The Attorney General or the Director of Public Prosecutions may appeal to the Court of Criminal Appeal against an interlocutory judgment or order given or made in proceedings to which this section applies. (3) Any other party to proceedings to which this section applies may appeal to the Court of Criminal Appeal against an interlocutory judgment or order given or made in the proceedings: (a) if the Court of Criminal Appeal gives leave to appeal; or (b) if the judge or magistrate of the court of trial certifies that the judgment or order is a proper one for determination on appeal." 5 The transcript of the hearing of 21 August 2007 indicates that his Honour was initially inclined not to certify on the basis that an application could be made to this Court. However, counsel submitted that the matter was one which should properly be determined prior to the trial, with the possible result of obviating the need for a six week trial: p 3(5). Counsel for Mr Pellegrino was joined in the application by counsel for Mr Phapakdy, a co-accused, on the basis that the matter was one which needed to be determined "at this point in time": Tcpt, p 3(10). The Crown neither supported nor opposed the application. 6 There are no doubt circumstances where it is entirely proper for a trial judge to certify that the matter is appropriate for determination on an interlocutory appeal under s 5F. Nevertheless, the power should be exercised with caution. If the trial judge so certifies, this Court loses the opportunity to consider whether a grant of leave would be appropriate, which function provides an important control over the exercise of appellate jurisdiction in relation to interlocutory judgments or orders. It would appear from the transcript that only the most perfunctory attention was paid to the question of whether certification might be appropriate in the circumstances. His Honour gave no reasons for exercising the power under s 5F(3)(b). 7 In DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226, the High Court considered the operation of s 95(b) of the Family Law Act 1975 (Cth) which conferred on the Full Court of the Family Court power to grant a certificate permitting an appeal to the High Court from the Family Court where "an important question of law or of public interest is involved". The High Court itself had power to grant special leave to appeal pursuant to s 95(a), a power exercised subject to criteria stated in s 35A of the Judiciary Act. 8 The power to control appeals to this Court should not, of course, be seen in the same light, either constitutionally or generally, as the power to control appeals to the High Court from the Full Court of the Family Court, discussed in DJL at [9]-[21] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ). Nevertheless, it is usually desirable that leave be sought in this Court. Whether the trial judge is willing to stay the trial to allow that to be done is a separate question. 9 The power of the trial judge to certify may properly be exercised in circumstances where the appropriateness of an interlocutory appeal is not in doubt and particularly where that factor is combined with lack of opposition from the Director. Similarly, it may properly be exercised where the trial judge feels that he or she has obtained a particular insight into the proceedings which may not readily be shared by this Court. In other cases caution should be exercised because, as the High Court explained in DJL, to make an order engaging the appellate jurisdiction of another court is an exercise of judicial power and not merely the exercise of an administrative function: at [10]. No doubt an appeal could lie under s 5F from the decision of the trial judge to certify, if the Attorney-General or the Director thought it appropriate to challenge such a decision. However, that provides a somewhat convoluted mechanism for giving this Court the power to control its own proceedings. 10 The availability of an interlocutory appeal in criminal proceedings should no doubt be assessed against the right of the Attorney or the Director of Public Prosecutions to appeal without leave pursuant to s 5F(2). That power, however, is likely to arise only in circumstances where an indictment has been permanently stayed or a ruling on the admissibility of evidence has eliminated or substantially weakened the prosecution case: see s 5F(3A). It may also have been assumed by the legislature that neither the Attorney nor the Director would use the power inappropriately or in a manner which might delay the expeditious disposal of criminal proceedings. 11 There being no challenge either to the grounds as identified in the notice of appeal, or the fact of certification, this matter should proceed on the basis that Mr Pellegrino is appealing as of right. 12 It should, however, be noted that he is the only Appellant. Neither of his co-accused filed notices of motion seeking to stay the proceedings, but all parties proceeded on the basis that if Mr Pellegrino were successful in his application, the benefits of his success would flow through to the other co-accused. On the appeal, counsel for all three co-accused were heard without objection from the Director. Issues raised before trial judge 13 The application for a permanent stay of charge 1 in the indictment was based on the contention that it must fail because the prosecution could not establish that the contents of the shipping container belonged to the Australian Customs Service, as pleaded. To place the argument in its context, it is convenient to set out the full terms of the charge and the legal provisions relevant to the change and to the argument. The charge read as follows: "That Michael Angelo Pellegrino on or about 6 February 2006 at Sydney, in the State of New South Wales, dishonestly appropriated property, namely the contents of a 40 foot shipping container No CLHU 405133 2 42G1, belonging to another, namely the Australian Customs Service, which is a Commonwealth entity, with the intention of permanently depriving the Australian Customs Service of the property." 14 The charge was based on s 131 of the Criminal Code (contained with the Criminal Code Act 1995 (Cth)) which relevantly provided as follows: " 131.1 Theft (1) A person is guilty of an offence if: (a) the person dishonestly appropriates property belonging to another with the intention of permanently depriving the other of the property; and (b) the property belongs to a Commonwealth entity. Penalty: Imprisonment for 10 years. (2) For the purposes of this Code, an offence against subsection (1) is to be known as the offence of theft. (3) Absolute liability applies to the paragraph (1)(b) element of the offence of theft. … 131.3 Appropriation of property (1) For the purposes of this Division, any assumption of the rights of an owner to ownership, possession or control of property, without the consent of the person to whom it belongs, amounts to an appropriation of the property. …" 15 There was no dispute for the purposes of the stay application as to the identity of the Commonwealth entity, as pleaded, nor that the property was dishonestly appropriated in the relevant sense. The only question was whether the property 'belonged to' the Commonwealth entity at the time it was removed from the wharf operated by Patrick Stevedores. To answer that question it is necessary to refer to a number of definitional provisions relevant to Division 131. First, the term "property" is defined to include "personal property": s 130.1. There was no dispute that the contents of the container constituted personal property, and thus "property". The question of 'belonging to' is defined in s 130.2 in the following terms: " 130.2 When property belongs to a person (1) For the purposes of this Chapter, property belongs to a person if, and only if: (a) the person has possession or control of the property; or (b) the person has a proprietary right or interest in the property, other than an equitable interest arising only from: (i) an agreement to transfer an interest; or (ii) an agreement to grant an interest; or (iii) a constructive trust. (2) Subsection (1) has effect subject to subsections 134.1(9) and (10) (which deal with money transfers)." 16 The argument before his Honour turned on the question of "control" in paragraph (a) of the definition. That term is not defined in the Criminal Code. For the purposes of the stay application, it was necessary to give the term an appropriate meaning and identify whether the ACS had control, in the relevant sense, at the time the container and its contents were removed from the wharf. This in turn required reference to the statutory powers of the ACS conferred by the Customs Act 1901 (Cth). It will be necessary to consider those provisions in more detail shortly: for present purposes it is sufficient to note that the argument in the Court below appears to have focused on two provisions, being ss 30 and 68 of the Customs Act. 17 Section 30 identified the circumstances in which goods imported into Australia were to be "subject to the control of the Customs". Section 68 requires that the owner of goods being imported into Australia must "enter the goods" for home consumption. It defines how that process is effected. It is also necessary to refer to s 33 which renders it an offence for a person intentionally to move, alter or interfere with goods that are subject to the control of Customs, or to permit others to take such action. 18 The thrust of the Appellant's case before the trial judge was that, upon the facts agreed for the purpose of the motion, there was "no evidence" that Customs was exercising any form of actual physical control of the goods, at the time the container was removed from the wharf and that the statutory forms of control conferred by the Customs Act did not constitute a legally relevant form of control for the purposes of s 131.1 of the Criminal Code: Judgment, p 6. Before turning to the manner in which his Honour dealt with the application, it is necessary to set out the factual basis upon which the matter proceeded. The facts 19 The parties tendered before his Honour a document described as "agreed set of facts" which were said by the prosecutor to be "agreed solely for the purpose of the notice of motion": Tcpt, 20/08/07, p 4(3). What precisely was intended by that qualification was not explored. 20 An application for a permanent stay need not be based on a pure question of law. Nevertheless, in the present case counsel submitted that the charge were "foredoomed to fail" and on that basis was "an abuse of process": Tcpt, p 4(12). It appears that the prosecutor conceded that if the charge was "foredoomed to fail" a stay was appropriate and the matter was not analysed further: Tcpt, p 4(20). It was apparent, however, that the facts presented to the trial judge constituted an essential basis of the application. If the qualification imposed by the prosecutor on his agreement to the facts were intended to indicate that he would not be bound by them if the matter proceeded to trial, some further exploration of their status was required. The application appears to have been based on the premise that, even if the Director were able to establish in the prosecution case all of the facts alleged, the charge would nevertheless fail for want of proof of an essential element. Unless the trial judge were satisfied that he was being asked to decide the application on such a basis, it should not have been allowed to proceed. It would be inappropriate to halt a prosecution on the basis that there was no evidence of a particular element, in circumstances where the prosecution case involved further evidence which might satisfy that element. 21 Further, the statement of "facts" involved a number of matters which involved conclusions of law and which, if accepted at face value, were fatal to the application for a stay. Thus it was stated that: "At all relevant times, the container was subject to the control of the ACS by virtue of ss 30 and 68 of the Customs Act 1901."

If "control" were a fact, and if the statement set out above were a matter of fact, then "control" was conceded. 22 Other matters of "fact" were formulated in terms which involved statutory concepts. For example, it was stated that on 25 January 2006 the goods were "reported" to the ACS by an entity identified as "Mediterranean Shipping Company (Aust) Pty Ltd", the involvement of which was otherwise unidentified. The facts further stated: "The container arrived at Patrick Stevedores at Port Botany, New South Wales, on 4 February 2006 on board [a vessel] from Singapore." 23 Patrick Stevedores was identified as the entity which was "appointed to operate the wharf and container terminal". When, in the course of argument, counsel was asked what that meant, the Court was referred to s 15 of the Customs Act. However, that section provides that the Chief Executive Officer of Customs may "appoint" wharves and fix the limit of those wharves: it says nothing about appointing persons to operate a wharf and container terminal. 24 The facts stated that at about 7.50pm on 4 February, "the container was transferred from the ship to the wharf" and placed in a particular position, by an employee of Patrick Stevedores. The facts continued: "There is no further record of any operational movement of the container." 25 One of the co-accused, Mr Phapakdy, was stated to be employed as a security guard at Patrick Stevedores and was required "to ensure that the correct paperwork was presented by the truck drivers as they exited the facility". It may perhaps be inferred, although it was not expressly stated, that there was no "paperwork" permitting the removal of the container from the wharf at the time of its removal, namely 5.53pm on Monday, 6 February. Mr Phapakdy was observed by police "to allow the prime-mover and trailer to leave the terminal" with the shipping container on the trailer. 26 Two further matters of importance were stated: first, when the goods carried in the container had been "reported" to Customs on 25 January 2006, they were described as "750 cartons of PVC electrical tape". (This appears to have been an "impending arrival report" under s 64 of the Customs Act.) When the container was searched it was found to contain "750 boxes of cigarettes which equates to 8,556,000 cigarettes". The statement did not identify when the container was searched and its contents identified, but counsel submitted that the appropriate inference was that that occurred when the prime-mover and trailer were stopped by police shortly after leaving the terminal on 6 February. 27 The other matter arose from two statements to the following effect: "ACS records indicate that a 'held' status was placed on the container. This indicates that there was an impediment to the release of the goods into home consumption. The records also indicate that no import declaration was ever made, nor any duty paid, in respect of the goods. … The prime mover and trailer was stopped by a marked police vehicle on Foreshore Drive, Botany. The container was seized by the New South Wales Police and delivered to the ACS." 28 The full import of these "facts" requires reference to the provisions of the Customs Act. Relevant provisions of Customs Act 29 It was an agreed fact that the terminal where the container was stored was appointed as a wharf under s 15(2) of the Customs Act. Such an area may constitute a "waterfront area" within the meaning of s 20, if it is "signposted" so as to give a clear indication to persons present in the area that it is "an area under Customs control" and that they require appropriate identification to be there: s 20(8), waterfront area (b). In such an area, a customs officer is entitled to request a person to leave if he or she is "unable to establish his or her identity or to explain his or her presence" in the area: s 20(5). Failure to comply with such a request renders the person liable to a penalty: s 20(7). 30 Although again the facts were somewhat imprecise, it might be inferred from the fact that the facility had "entry and exit gates", controlled by a security guard, that the appointed wharf was physically secured in a manner which prevented the unauthorised movement of goods. That might also be inferred from the legal obligation imposed on the operator of the wharf to ensure payment of duty on any goods received at the wharf: ss 35A and 42 and Customs Regulations 1926 (Cth) reg 3 and Form 68. Further, a wharf appointed under s 15 is a "Customs place" as defined in s 183UA(1), for the purposes of Division 1 of Part XII of the Customs Act. Section 197, which is within that Division, provides: " 197 Power to stop conveyances about to leave a Customs place (1) If a conveyance is about to leave a Customs place, an officer of Customs may: (a) require the conveyance to stop; and (b) check to establish that there is appropriate documentation authorising the movement from the Customs place of any goods in or on the conveyance that are subject to the control of Customs within the meaning of section 30." 31 As noted above, a critical provision in the Customs Act for the purpose of the analysis is s 33 which provides: " 33 Persons not to move goods subject to the control of Customs (1) If: (a) a person intentionally moves, alters or interferes with goods that are subject to the control of Customs; and (b) the movement, alteration or interference is not authorised by this Act; the person commits an offence punishable, on conviction, by a penalty not exceeding 500 penalty units." 32 Section 33 has other provisions relating to movement not described as intentional, movement by an employee and movement pursuant to the direction or permission of another person. It is not necessary to consider these various provisions, the question being whether a movement "not authorised by this Act" either alone, or in combination with other provisions, confers on Customs a degree of control sufficient to satisfy the language of the Criminal Code. 33 Section 33 applies to goods "that are subject to the control of Customs". Section 30 provides that goods shall be "subject to the control of Customs" in a number of circumstances including "goods to which section 68 applies that are unshipped" for a period from the time of their importation until the time of their delivery into home consumption. Section 68 applies, amongst others, to goods that are "imported into Australia", subject to exceptions. The facts as stated do not in terms adopt the language of s 68, nor negative the exceptions. Nevertheless, it seems to have been assumed that the goods were "imported into Australia" and did not fall within any of the exceptions. That assumption should be adopted. Further, it was accepted by the Appellant that the goods had been unshipped and, prior to their removal from the wharf in the circumstances which became the subject of the charge, had not been delivered into home consumption or otherwise dealt with in a manner which would render them no longer subject to the control of the Customs. It was, as noted above, accepted that the goods were at the relevant time "subject to the control of the Customs" within the meaning of s 30 of the Customs Act. That in turn means that they could not lawfully be moved or removed from the wharf without authority under the Act. 34 Further assumptions were made which were not clearly reflected in the statement of facts. First, pursuant to s 68(2), the owner of the goods may "enter the goods … for home consumption" prior to their first arrival at a port in Australia at which the goods are to be discharged. If that does not happen, the owner "must enter the goods" for a relevant purpose, after the ship first arrives at the port at which they are to be discharged: s 68(3). The only information about the goods referred to in the statement of facts was the "report" made on 25 January 2006 relating to 750 cartons of PVC electrical tape. The further statement that "no import declaration was ever made" in respect of the goods would appear to imply that the goods were not "entered" for the purposes of s 68. The term "import declaration" in the statement of facts appears to be an adaptation of the term "import entry", which is used in s 71A of the Customs Act. The statement of facts assumed that an import entry was required and that duty was payable in respect of the goods and stated that no entry was made and no duty had been paid prior to their removal from the wharf. Whatever the significance of a "held" status in Customs records, it appears to have been accepted that one consequence of that status was that no authority had been granted by Customs for any movement of the goods from the wharf. 35 The Customs Act also contains certain penal provisions, pursuant to which certain goods are forfeited to the Crown: s 229(1). Forfeited goods include: "(a) All goods … which are smuggled, or unlawfully imported, exported or conveyed. … (g) All goods subject to the control of the Customs that are moved, altered or interfered with except as authorised by this Act. … (o) All dutiable goods concealed in any manner." 36 The primary facts stated indicate misdescription of the goods and would support the inference that they were dutiable and that they had been concealed so as to avoid payment of duty. Because the absence of authority to move should also be inferred, they were forfeited immediately they were moved. 37 The case below was argued on the basis that the goods were subject to the control of Customs and in that sense were in the control of a Commonwealth entity. It was not argued that the Customs, or the Commonwealth, had possession or property in the goods. Dealing with the matter on that basis, it is nevertheless a significant statutory feature, relevant to the concept of control, that immediately the goods were moved without the authority of the Customs, they were forfeited to the Crown. Accordingly, when seized, subject to the requirements of the law enforcement agency, they should properly have been returned, in law, to the Customs, a step which was in fact taken as the facts reveal. The "facts" thus demonstrate that the Commonwealth had a proprietary interest in the goods at the time of their removal from the wharf. Criminal Code: meaning of "control" 38 The thrust of the argument for the Appellant was that the concept of "control" when used in the context of property, and as an extension of the concept of "possession" or "a proprietary right or interest", was not apt to refer to a legal power, but should be understood as referring to the physical exercise of such a power. That conclusion was said to flow from a number of cases discussing the concept of control in relation to the law of theft which, it was said, informed the content of the concept when used in the Criminal Code in 1995. 39 The Appellant also referred to a number of cases discussing the meaning of "subject to the control of the Customs", being the phrase used in the Customs Act. Those cases were of only indirect relevance, unless it could be said that the term "control" in the Criminal Code was intended to pick up and apply the term used in the Customs Act. However, if it were so intended, it seems almost inevitable that the present appeal must fail. 40 The thrust of the Appellant's argument was that the term "control", in the context of the Criminal Code, was intended to identify a primary right of an owner of moveable property. It thus referred to physical control of property, which is the interest protected against dishonest appropriation. That concept was developed by the general law, without reference to or knowledge of the kinds of regulatory control which may be conferred by statute on government authorities. The distinction is made explicit by the Customs Act, which identifies the "owner" in respect of goods as "any person (other than an officer of Customs) … having any control of, or power of disposition over the goods": s 4. 41 Reliance on the definition of "owner" in the Customs Act provides, however, a somewhat unstable basis for the Appellant's argument. If the concept of "control" in provisions such as s 30 of the Customs Act is to be treated as having its own special meaning, so, arguably, does the statutorily defined concept of "owner". The argument is further weakened by the apparent assumption of the drafter that a restricted definition is being given to the term "owner", which would include an officer of Customs, were such persons not expressly excluded. 42 The contention of the Appellant obtains some limited support from the legislative history. Although s 130.1 is restricted to property belonging to a Commonwealth entity, and thus envisages as an essential element of the offence an entity which is likely to be statutorily defined and regulated, the reports which gave rise to the Code contain no suggestion that the concept of control in the description of "belonging to" was adopted with any consideration other than general law principles in mind. Section 131.1 in its present form was introduced by the Criminal Code Amendment (Theft, Fraud, Bribery and Related Offences) Act 2000 (Cth). The revised explanatory memorandum for the Bill noted at par 56 that: "One effect of the section is that co-owners or people with different rights to a piece of property can be guilty of theft from one another. For example, one owner of property can be guilty of theft from another owner (eg theft by one business partner from another), or an owner can be guilty of theft by taking his or her property away from someone who has possession or control of it (eg an owner who dishonestly took back his or her own goods from a pawnbroker). … The Commonwealth can co-own property with someone else - so this interpretative provision is as relevant to it as the Model Criminal Code provision upon which it is based (section 14.5)." 43 The reference to the Model Criminal Code provision is a reference to that contained in the "Final Report of the Model Criminal Code Officers Committee of the Standing Committee of Attorneys-General", released in December 1995. That Committee was not specifically concerned with theft from government entities and the discussion in chapter 3 of the Final Report, in relation to s 14.5, is broadly concerned with the meaning of "dishonesty" and in particular the test discussed by the UK Court of Appeal in Feely [1973] QB 530, as modified in Ghosh [1982] 3 WLR 110 at 118-119. 44 Reference was also made to the UK Court of Appeal decision in R v Woodman [1974] 2 All ER 955. The accused were charged with theft of scrap metal from a property occupied by a business known as English China Clays, which had sold the scrap metal to a third party. Part of the scrap metal was not removed, but English China Clays was not aware of its existence. It was that which was the subject of the theft. The Court accepted that the scrap metal had in fact been sold to the third party, but nevertheless upheld the conviction based on the fencing of the property by English China Clays, with a clear intention to exclude trespassers, and thus to control the scrap metal, although it neither retained a proprietary interest in it, nor knew of its existence. The scrap metal was found to "belong to" English China Clays, based on s 5(1) of the Theft Act 1968 (UK) which was in relevantly identical terms to the equivalent provisions of the Criminal Code. The case might be distinguished from the present on two bases: first, in the present case Customs had actual knowledge of a container with its contents on premises which it was able to control, but, on the other hand, the actual degree of physical control was apparently exercised by Patrick Stevedores. Woodman and other cases dealing with the relevant intention or state of knowledge of a person said to be in possession or control of goods provide limited assistance in the present case. The question really turns on whether Customs were exercising statutory control over the goods in circumstances where they knew of their presence, believed them to be in a secure environment and had provided no-one with authority to move the goods. 45 Control of moveable property for statutory purposes is a well-established statutory device. Apart from the Customs Act, it was found in the Fauna Conservation Act 1974 (Qld), which provided a scheme for licensing and regulating the taking of native fauna and provided that fauna taken otherwise than in accordance with the Act "is the property of the Crown and under the control of the Fauna Authority": s 7(1). The nature of the proprietary interest thus created in the Crown was discussed in Walden v Hensler (1987) 163 CLR 561 and again in Yanner v Eaton [1999] HCA 69; (1999) 201 CLR 351. The statutory vesting was designed in part as a basis for a claim for royalties which had not been paid. In Yanner, the Court was concerned with the effect of such a provision on native title rights and interests. The joint judgment (of Gleeson CJ, Gaudron, Kirby and Hayne JJ) contains the following comments on the concept of "property" in such circumstances. "17 The word 'property' is often used to refer to something that belongs to another. But in the Fauna Act , as elsewhere in the law, 'property' does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing. The concept of 'property' may be elusive. Usually it is treated as a 'bundle of rights'. But even this may have its limits as an analytical tool or accurate description, and it may be, as Professor Gray has said, that 'the ultimate fact about property is that it does not really exist: it is mere illusion'. Considering whether, or to what extent, there can be property in knowledge or information or property in human tissue may illustrate some of the difficulties in deciding what is meant by 'property' in a subject matter. … 18 Nevertheless, as Professor Gray also says, 'An extensive frame of reference is created by the notion that "property" consists primarily in control over access. Much of our false thinking about property stems from the residual perception that "property" is itself a thing or resource rather than a legally endorsed concentration of power over things and resources.'" 46 The importance of distinguishing between the concept of property as a physical object and as a term used "to denote the legal interest (or aggregate of legal relations) appertaining to such physical object" was emphasised by Gummow J at [85]-[86], quoting Professor Hohfeld. 47 It is quite possible that a statutory regime may regulate the rights of owners with respect to moveable property without extinguishing their rights in relation to the property, or indeed conferring on a government officer any right of control over the physical object. On the other hand, a statutory scheme may take the further step of conferring a right of control on a government officer. In the latter case it is at least possible that, because property consists primarily in control over the moveable object, the government or relevant government agency thereby acquires a right akin to the right of an owner, within the sphere of protected interests, which can be dishonestly appropriated. 48 Owners may have rights to use and deal with goods as they wish; to prevent others, without their consent, from interfering or dealing with the goods, and to transfer those rights or powers to third parties, whether for valuable consideration of otherwise. None of these rights is necessarily an essential element of ownership of the goods, but each may be a protected interest. For example, an interest in goods need not necessarily be susceptible of transfer or assignment: see Yanner at [85] (Gummow J). Nor does an owner cease to have any interest in the goods because they are with a bailee who has an exclusive right to possession, at least for a period. On the other hand, there is no necessary reason why the law should not protect an exclusively restrictive right, namely the right to prevent any other person, including the person having custody or possession of the goods from time to time, from moving or using the goods in any way. It is a right of the last kind which constitutes part of the control conferred on Customs by the Customs Act. 49 Each statutory scheme must be construed in its own terms. The Appellant sought to rely upon the early authority of Hedberg v Woodhall (1913) 15 CLR 531 for the proposition that the words "have in his possession or control", in relation to any fish below a certain size, in the Fisheries Act 1889 (Tas), supported the view that such a phrase involved only the single concept of physical control. No doubt in that context it did, so that an information laid in those terms was not duplicitous or uncertain, but that provides little assistance in the present legislative context. Nevertheless, the Appellant argued that in truth possession and control were to be treated as a common element and noted the comment of Mason J in Kitano v The Commonwealth (1973) 129 CLR 151 at 170 that "[g]oods subject to the control of Customs are not as such in the possession of the Customs (see s 35A)". 50 Kitano involved a dispute between two men, each of whom claimed possession of a yacht. Prior to obtaining a "certificate of clearance" from Customs, the yacht was subject to the control of Customs and could not leave Australia. Customs issued a certificate of clearance to Mr Matsushita who promptly sailed the yacht away. Mr Kitano claimed that the certificate had been wrongly issued and, as a result, there had been a conversion by Mr Matsushita of goods which were subject to the control of Customs. The Commonwealth was thus said to have converted the yacht and the goods on board. The circumstances in which the yacht came to be subject to the control of Customs were curious, as his Honour noted at pp 169-170. In any event, as a matter of fact, it was not suggested that Customs had immediate possession or physical control of the yacht, although its departure without a certificate of clearance, would have rendered the master liable to an offence under s 118. 51 There are other circumstances in which goods legally subject to the control of Customs are not in any physical sense within that control. As noted by Kitto J in Collector of Customs (Vic) v Wilh Wilhelmsen Agency Pty Ltd (1956) 102 CLR 147 at 156-157, the Act contemplates that goods which no longer exist, are missing, or have never entered Australian waters, but which are contained in a report of a ship's cargo may be within the control of Customs, under the Customs Act, for the purpose of rendering the shipper liable for duty. 52 Collector of Customs (NSW) v Southern Shipping Co Ltd (1962) 107 CLR 279 dealt with goods which were "subject to the control of the Customs" but which were in the "possession, custody or control" of another person, that person being the defendant shipping company which was in an analogous position to that of Patrick Stevedores in the present case. The goods having been stolen from the wharf, the question was whether the shipping company was liable for duty payable on the goods pursuant to s 60 of the Excise Act 1901 (Cth). Not only did the statutory control of Customs not relieve the shipping company of its liability as the party with possession, custody or control of the goods, but neither did the lodging of the key to the warehouse in the Customs office. However, because it is clear that more than one party may have possession or control over goods at a particular time, statutory provisions imposing liability for duty are of limited assistance in this context. 53 Reference was also made in the course of the hearing to a number of judgments in the matter of Goben Pty Ltd v Chief Executive Officer of Customs in the Federal Court of Australia. In the first reported decision, Beazley J considered whether s 58 of the Business Franchise Licences (Tobacco) Act 1987 (NSW), under which a State officer purported to take the tobacco into the custody of the Chief Commissioner was invalid because inconsistent with goods to which ss 30, 33 and 153 of the Customs Act applied. Her Honour held that there was no necessary inconsistency because the State law permitting tobacco to be "taken and kept in custody by the Chief Commissioner" did not require that there be a physical taking or movement of the goods: Goben Pty Ltd v Chief Executive Officer of Customs (1996) 65 FCR 180 at 189. Her Honour stated: "The taking and keeping in custody can be effected by the identification of the goods with a direction to the then holder of the goods that they are not to be interfered with. Such a taking and keeping in custody of the goods is not inconsistent with any control of Customs. Customs continues to regulate what can be done physically with the goods whilst so ever they are subject to its control."

Her Honour concluded that the position of the Chief Commissioner (NSW) was no different to that of a consignee or owner claiming an entitlement to deal with the goods, that right being subject to the control of Customs: p 193G. 54 A second decision (of Davies J) in Goben Pty Ltd v Chief Executive Officer of Customs (1996) 68 FCR 301, was not concerned directly with the nature of the "control" exercised by Customs. The case involved a challenge to the decision of the State official to seize the goods under the State Act. The question was whether Goben Pty Ltd had the tobacco in its "possession, custody or control for sale" at a time when the tobacco was subject to the control of Customs. At p 304, his Honour stated: "There was, I think, some misapprehension in the submissions presented on behalf of Goben as to the nature of the control of Customs. Customs does not enter into possession, custody or control of the goods as those words are understood in ordinary parlance. … The Customs Act places no restriction upon the dealings which may take place with respect to goods which are in Customs' control. The property in the goods may pass. Rights to possession, custody or control may pass. The Customs Act requires, however, that until the goods are delivered into home consumption in accordance with an authority to deal … the goods … may not be moved without the authority of Customs." 55 The statement that the Customs Act places "no restriction upon the dealings" which may take place with respect to goods, is intended to refer, not to physical movement of the goods or physical control of the goods, but the legal entitlement to the goods. Thus, to the extent that an interest in the goods can be passed without physical delivery, such rights can be transferred. As his Honour further said at pp 308: "It was submitted by counsel for Goben that the tobacco was not at the time in the possession, custody or control of Goben as it was in Customs' control or, to use the words of s 30 of the Customs Act , 'subject to the control of the Customs'. However, for the reasons I have already given, I think it is not inconsistent with the concept of Customs' control that goods, subject to such control, should be in the possession, custody or control of others. Section 35A of the Customs Act has this precise fact as its foundation." 56 After reference to a passage in the judgment of Mason J in Kitano, referred to above, his Honour stated at p 305: "Thus, the term 'the control of [the] Customs' refers to and comprehends the totality of the rights which the Customs Act confers upon Customs. Ordinarily, the rights which Customs exercises are rights which are expressed in other provisions of the Customs Act rather than flowing from the term itself. An important element of the control is that expressed in s 33 of the Customs Act … ." 57 His Honour also noted (at p 304) that, as described by Wollaston, Customs Law (1904), the term in s 30 "is not limited to the actual control or possession of the goods". Further, where the statutory formalities have not been complied with, imported goods "are subject to the control of the Customs, even though not in the hands of the latter, and though in the actual possession and custody of others". 58 Both the decisions of Beazley J and Davies J were taken on appeal to the Full Court: see Goben Pty Ltd v Chief Executive Office of Customs (1997) 74 FCR 36. Both decisions were, in substance, upheld, although the answer given to the separate question identified by Beazley J was limited to a finding of no inconsistency "in the events which have happened". That followed from the treatment of the constitutional question of inconsistency being determined by analogy to Victoria v The Commonwealth (1937) 58 CLR 618 ("The Kakariki") in which it was held that both Commonwealth and State could legislate for the removal of wrecks, there being no inconsistency until the power conferred under Commonwealth law was exercised. 59 In a sense Goben illustrates the way in which Customs has actual control over the goods which are described as being subject to its control. Although, putting to one side questions of forfeiture, it may not have the power to dispose of the goods, it can prevent any person having or claiming to have an interest in the goods removing them from the wharf. Thus, to the extent that the Chief Commissioner had taken and was keeping the goods in custody, that custody remained subject to the absolute limitation on movement or interference with the goods without Customs' consent. That situation may be contrasted (as it was in Goben) with the position of the wreck of the Kakariki. Although it might be said that the Commonwealth had power to take control of the wreck, pursuant to s 329 of the Navigation Act 1912 (Cth), until it sought to exercise its powers there was nothing to prevent a State authority from exercising an identical power under State law. By contrast, the Customs Act operates automatically so as to confer power on Customs with respect to goods which fall within its classifications, rendering the goods in effect immovable and unusable without the express authority of Customs. 60 The phrase used in s 30 is a definitional phrase and is apt for its purpose: it engages constraints imposed elsewhere and powers which may or may not be exercised in particular cases. It is true that does not refer to goods being "under" or "in" the control of the Customs, but merely "subject to" such control: see Goben, 65 FCR at 188F (Beazley J). However, the restraint imposed by s 33 goes further. Whether a person appropriating goods which have been smuggled into the country, the existence of which remain unknown to Customs officers, can be liable for an offence under s 131.1 of the Criminal Code need not be considered. 61 Customs were aware of the existence of the container load of goods, though it is not known whether they were aware of the nature of the goods before they were seized. The container, it may be inferred, was held in a secure area under the control of Patrick Stevedores. Customs had indicated an intention that the container with its contents not be moved from the wharf. It did not exercise control over the goods through its own officers, but it may be inferred that it was party to the security arrangements given effect by Patrick Stevedores. The precise legal relationship between Patrick Stevedores and Customs is not known, but the statutory scheme bound Patrick Stevedores, as much as it did the consignee of the goods, not to move the goods, or permit another person to move the goods without the authority of the Customs: s 33(5). In a practical sense, Customs exercised actual physical control over the contents of the container through its appointed wharf operator and through the deliberate withholding of authority permitting movement of the goods from the wharf. 62 Although the precise relationship between Customs and Patrick Stevedores may be significant and is not known, it cannot be said at this stage that the prosecution is foredoomed to fail. The trial judge was therefore right to refuse a stay and dismiss the Appellant's motion on this basis. Forfeiture of goods 63 It has long been established that the occurrence of facts or events referred to in s 229 gives rise to an immediate forfeiture of affected goods, without the need for any specific act on the part of the Customs or the courts. As explained by Windeyer J (Barwick CJ agreeing) in Forbes v Traders' Finance Corporation Ltd (1971) 126 CLR 429 at 439, "forfeiture of a thing by virtue of s 229(j) results simply from its actual use by some person in an unlawful activity as there described. Whether the owner of it knew of the use to which it was put is immaterial": see also at 433 (Menzies J), 447 (Gibbs J). Further, as explained by Dixon CJ in Burton v Honan (1952) 86 CLR 169 at 176 (McTiernan, Webb and Kitto JJ agreeing): "On authority it is clear that under the provisions of s 229, provided the facts exist which justify a forfeiture, the title to the goods vests in the Crown when the forfeiture takes place in consequence of the occurrence of the facts. No further proceedings are requisite to make title, although of course further proceedings may be necessary either to vindicate the title of the Crown or to exclude the claim of some person asserting a right to the goods." 64 The provisions in relation to forfeiture were, as Dixon CJ noted, separate from those relating to seizure of the goods. Thus, s 203 provides that a warrant to seize goods may issue where an authorised person has reasonable grounds for suspecting that the goods are "forfeited goods". The procedures by which an owner may make a claim for the value or return of the goods were described by Dixon CJ as "elaborate provisions" in Burton at p 176: they are now far more elaborate, but they do not affect the legal operation of s 229. 65 If the contents of the container were forfeited goods, they were the property of the Crown, which would be understood as a reference to the Commonwealth of Australia, as a body politic: see Yanner at [96] (Gummow J); see also s 205G. Although the Commonwealth entity identified in the indictment was the Australian Customs Service, it is clear that Customs will have immediate control of the goods, as in the case of goods seized under a warrant: see s 204(2) and (3). It was not contended that, if the contents of the container were forfeited goods, the indictment was inappropriate in nominating Customs as the Commonwealth entity. 66 It is arguable that the goods were forfeit because they were "concealed" for the purpose of par (o), or became forfeit immediately they were moved or interfered with in any way, as described in par (g), or because they were "smuggled" for the purposes of par (a). The term "smuggling" is defined in the Customs Act to mean "any importation … of goods with intent to defraud the Revenue": s 4. On the agreed facts, the goods had been falsely identified in the report to Customs, which would have provided a basis for arguing that the goods were indeed smuggled. 67 In any event, the Appellant did not seek to submit that there was no evidence to support the contention that the goods belonged to the Commonwealth because they were forfeited goods. Rather, in written submissions filed after the hearing, the Appellant sought to argue that the Director had never put his case on that basis and should not be permitted to do so now. 68 The basis upon which it is said that the Director is to be constrained in the manner in which he contends that the goods belonged to Customs is unclear. It appears to reflect a confusion that underlies the primary case put for the Appellant. That case was summarised in the additional submissions as follows: "The Appellants maintain their position on the appeal that should the Crown continue to assert that the fact that the goods were 'subject to the control' of Customs under s 30 of the Customs Act evidences that the goods belonged to the Commonwealth, then there is no evidence upon which a jury could conclude that the goods belonged to the Commonwealth." 69 In the original submissions for the Appellant it was contended that "there is simply no evidence to support an essential element of the offence, that is, that the property alleged to have been dishonestly appropriated belonged to a Commonwealth entity being the Australian Customs Service". 70 The confusion evident in these submissions derives from a failure to distinguish between "no evidence" and the legal effect of particular statutory provisions. If the contention was that the description of the goods as "subject to the control of the Customs" in s 30 of the Customs Act was insufficient to vest that degree of control in Customs which would satisfy the definition of "belonging to" in the Criminal Code, that much may be accepted. The only fact necessary to satisfy that contention is that the goods were within the statutory description because they had been imported, but had not been released for home consumption. The agreed facts relied upon for the purposes of the application, however, went much further. They revealed that the goods in question were the contents of an identified container, that the Customs were aware of the presence of the container at an appointed wharf, that the goods had not been the subject of a Customs declaration, that no duty had been paid and that Customs had taken a positive step of labelling the goods in their records in a manner demonstrating there was no authority to release them. Other relevant facts have been referred to above. From those facts, it would be open to a jury to conclude that Customs had the legally relevant degree of control over the goods at the time they were removed from the wharf. That would be sufficient to require the rejection of the application for a stay. However, the agreed facts, which were before the trial judge for the purposes of the application also permitted an inference based on a different legal analysis, involving the conclusion that the goods were forfeited. Given that the Appellant had agreed that those facts should be before the trial judge in considering the application, it is difficult to understand on what basis it can be said that the Crown would not be allowed to put them before the jury at the trial. The Appellant's claim was that, by reference to the agreed facts, the prosecution must fail. Whether that application should have been entertained in the absence of agreement that there was no other relevant fact available to the prosecution, need not be addressed. The Appellant has simply failed to establish, on the agreed facts, that the prosecution could not establish the relevant element of the offence. 71 It follows that the trial judge was correct to dismiss the application for a stay. The appeal against that decision should be dismissed. 72 HIDDEN J: I agree with Basten JA. 73 BARR J: I agree with Basten JA. **********

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