BETWEEN : ROBERT WILLIAM SCARFE, DELEGATE OF THE CHIEF EXECUTIVE OFFICER OF CUSTOMS

Customs Act prosecution - Acknowledgement of assistance - No new principles

Customs Act 1901 (Cth)

Bridal Fashions Pty Ltd v Comptroller­General of Customs (1996) 140 ALR 681

Cheung v The Queen [2001] HCA 67

Chief Executive Office of Customs v Tonmill Pty Ltd [2001] WASC 77

Comptroller-General of Customs v Jayakody, unreported; SCt of Vic (Byrne J); No 4657 of 1992; 9 November 1993

Comptroller­General of Customs v Kingswood Distillery Pty Ltd, unreported; SCt of NSW (Sperling J); Nos 12134/92, 10763/93, 14948/90; 5 December 1997

Comptroller-General of Customs v Wong and Rizoli Pty Ltd [1998] NSWSC 711; (1998) 103 A Crim R 491

Evans v Button (1988) 92 FLR 203

Goulding v Penello [1999] WASC 192

Hayes v Weller (1988) 50 SASR 182

Lanham v Brake (1983) 34 SASR 578

Minister for Business and Consumer Affairs v Evans (1984) 54 ALR 128

Minister of State for Customs and Excise v Aunger Accessories Pty Ltd (1969) 16 FLR 94

Murphy, Minister of State for Customs and Excise for the Commonwealth of Australia v H F Trading Co Pty Limited (1973) 47 ALJR 198

Narelle Maree Walsh, Delegate of the Chief Executive Officer of Customs v N and M Gangemi Nominees Pty Ltd [2001] WASC 79

The Chief Executive Officer of Customs v Pavlovich [2001] WASC 173

Trade Practices Commission v Allied Mills Pty Ltd (1981) ATPR 40­241

1 McKECHNIE J: By a Memorandum of Consent Orders the first to third defendants, whom it will be convenient to refer to hereafter as Coflexip, have agreed to compromise a customs prosecution, brought against them in the civil jurisdiction of this Court, by consenting to orders for a declaration that the third defendant has evaded the payment of duty amounting to $691,558.73, and an order for conviction of the third defendant for evading that amount of duty.

2 The Memorandum of Consent Orders is accompanied by a statement of agreed facts, which has been read aloud today by Mr McGowan who appears for the plaintiff, and consequently forms part of the records of proceedings. I am satisfied that the commercial agreement entered into between the plaintiff and Coflexip is in the public interest and I will therefore make orders in terms of the Memorandum of Consent Orders as follows:

"1. An order that the defence of the first, second and third defendants be amended by inserting at the beginning of paragraph 21 the words underlined as follows:

'21. Save that the third defendant admits that it has evaded payment of duty amounting to $691,558.73, the Coflexip defendants deny each and every allegation in paragraphs 16 and 17 of the statement of claim.'

2. A declaration that the third defendant has evaded the payment of duty amounting to $691,558.73, as particularised in the Schedule to the substituted statement of claim, in contravention of s.234(1)(a) of the Customs Act 1901.

3. An order that the third defendant be convicted of evading the payment of duty, amounting to $691,558.73, between 9 October 1995 and 3 July 1998, contrary to s.234(1)(a) of the Customs Act 1901.

4. An order that the third defendant do pay to the plaintiff any penalty fixed by the court.

5. An order that the third defendant do pay to the plaintiff (that is, the ACS) the sums of $32,090.96 and $588.80 for unpaid duty as claimed in the substituted statement of claim.

6. An order that the action against the first, second and third defendants be:

(A) stayed pending the outcome of the plaintiff's action against the other defendants in the Supreme Court proceedings; and

(B) finally dismissed upon an outcome or resolution of the plaintiff's action against the other defendants in the Supreme Court proceedings.

7. An order that the third defendant do pay the plaintiff's costs (including reserved costs and costs the subject of orders already made) fixed in the amount of $85,000.00."

3 I turn to the question of penalty to give effect to O 4 following the conviction. I note the parties have agreed to limit the amount of penalty to the sum of $825,000. I make no comment on that but nevertheless I am required to set a penalty. On the statement of facts as agreed the conduct giving rise to the convictions is admitted by Coflexip and is as set out in par 22:

"The duty which should have been paid by the Third Defendant in respect of the goods the subject of the 70 importations totalled $691,558.73, and by not exporting the goods, omitting to give notice to the Plaintiff and promptly paying duties, the Third Defendant admits that it evaded the payment of duty which was payable within the meaning of section 234(1)(a) of the Customs Act."

4 The overall purpose of Customs Act penalties is set out by Kitto J in L. Vogel and Son Pty Limited v Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia (1967-68) 120 CLR 157, particularly at 164. That decision was subsequently affirmed by the Full Court. I apply those principles which have been followed in this jurisdiction and others since. No argument was addressed to me as to whether the provisions of the Crimes Act s 16A were relevant.

5 Additionally, the following matters seem to be material. There were a great many evasions, 70, occurring over a period of nearly 3 years. The amount involved, nearly $700,000, was considerable. No evidence has been put before me as to an inability to pay a penalty. The circumstances that I have so far outlined in reliance on the authorities would lead me to impose a penalty of around three and a half times the duty evaded.

6 However, there are significant matters of mitigation. By the settlement agreement par 10, Coflexip has agreed as follows:

"10. Coflexip companies to cooperate with ACS

By paragraph 10 the Coflexip companies must promptly comply to the extent that it is within their power to do so, with any reasonable request for cooperation or assistance by the ACS or the Australian Government Solicitor in connection with the prosecution of the Supreme Court proceedings against the remaining defendants. Such cooperation and assistance may include but are not limited to requests for - ..."

7 There then follow five reasonably detailed areas for request. Mr McGowan told me that cooperation and assistance has already been forthcoming and that Coflexip has made available to the plaintiffs present and former officers and employees for the purpose of providing candid statements in relation to all that they know concerning the matters the subject of the action. The statements have been reduced to writing and the plaintiff now has them.

8 Pointedly, Mr McGowan has not made any submissions on behalf of the plaintiff in support of a heavy penalty beyond, very properly, drawing my attention to the relevant authorities. There is a public interest in recognising cooperation and assistance of law-breakers. As was stated in Radebe v The Queen (2001) WASCA 254 at par 33:

"Actual cooperation and substantial assistance should be rewarded by a significant deduction in the sentence in appropriate cases. In order to combat criminal activity, the authorities will often require information and assistance from those who have been within a criminal organisation or have had dealings with them. A reward in terms of sentence for such assistance sends a general message to others in a similar position and encourages them to inform on their colleagues."

9 The decision in Radebe pointed to the need for verification of assistance by the relevant authorities before much account could be taken of it. In the present case, as I have outlined, the assistance of Coflexip has been acknowledged. Principally for the assistance given and to be given by Coflexip, I consider the penalty imposed in all the circumstances should be the minimum penalty prescribed by the Customs Act. I therefore order the penalty for evasion of duty amounting to $691,558.73 by Coflexip Stena Offshore Asia Pacific Pty Ltd to be set at $1,383,117.