CEO Customs v Afiouny & Anor - [2007] NSWSC 497

No judgment structure available for this case.

CITATION: CEO Customs v Afiouny & Anor [2007] NSWSC 497

HEARING DATE(S): 26-30 March 2007

JUDGMENT DATE :
17 May 2007

JURISDICTION: Common Law Division

JUDGMENT OF: Studdert J

DECISION: (1) None of the offences charged against the first defendant has been proved. (2) Each of the offences charged against the second defendant has been proved. (3) The matter is to be relisted on a date to be arranged with my associate for the purpose of hearing submissions as to the penalties to be imposed upon the second defendant and as to the orders to be made to give effect to the findings expressed in the proceedings against the first defendant. (4) Costs are reserved.

LEGISLATION CITED: Customs Act
Business Names Act

CASES CITED: Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2004) 216 CLR 161
Chief Executive Officer of Customs v Pham [2006] NSWSC 1011
Edwards v The Queen (1993) 178 CLR 193
Gill v Chief Executive Officer of Customs (2001) 166 FLR 125
L. Vogel & Son Pty Limited v Anderson (1966) 120 CLR 157
Ludwig's Canberra Bond Cellar Pty Ltd v Sheen (1982) 65 FLR 347
R v Australasian Films Limited (1921) 29 CLR 195
R v K (2003) 57 NSWLR 616
White v Ridley (1978) 140 CLR 342
Wilson v Chambers (1926) 38 CLR 131
Zoneff v The Queen (2000) 200 CLR 234

PARTIES: Chief Executive Officer of Customs (Plaintiff)
Abdul Wahid Afiouny (1st Defendant)
Bilal Afiouny (2nd Defendant)

FILE NUMBER(S): SC 20077/02

COUNSEL: P. Roberts SC (Plaintiff)
G. Thomas/P. Ramos (Defendants)

SOLICITORS: Australian Government Solicitor (Plaintiff)
Vosnakis & Associates (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

STUDDERT J

Thursday 17 May 2007

20077/02 CHIEF EXECUTIVE OFFICER OF CUSTOMS v ABDUL WAHID AFIOUNY & ANOR
JUDGMENT

1 HIS HONOUR: In proceedings commenced by statement of claim the plaintiff, Chief Executive Officer of Customs, brings prosecutions against the first defendant, Abdul Wahid Afiouny, and the second defendant, Bilal Afiouny, under Pt XIV of the Customs Act. The proceedings relate to the alleged importation of cigarettes into this country by two shipments involving three containers. In respect of the earlier shipment of one container, it is contended that the first defendant committed the following offences:

(i) smuggling or attempting to smuggle cigarettes contrary to s 233(1)(a) and s 237 of the Customs Act;

(ii) evading or attempting to evade payment of duty, an offence against s 234(1)(a) and s 237 of the Customs Act;

2 In relation to the second shipment and the other two containers, the first defendant was charged with the like offences and so, too, was the second defendant.

3 As the particulars of the offences pleaded in the amended statement of claim in this matter make clear, the offences charged in relation to each of the shipments represented (on the plaintiff’s case) connected steps in a scheme of tax evasion. However, this does not preclude the plaintiff from prosecutions in relation to each of the offences: see L. Vogel & Son Pty Limited v Anderson (1966) 120 CLR 157. In that case the appellant was charged with offences under the Customs Act and at first instance it was submitted that the appellants should not be convicted of all offences in relation to each series of transactions. That submission was rejected by Kitto J, who said (at 161):

“A submission was made on behalf of the defendants that they ought not to be convicted of more than one offence in respect of each evasion of duty. It was said that in each case the importing with intent to defraud the revenue, the presentation of a false invoice as genuine, the making of a false entry and the production of a document or documents containing an untrue statement or untrue statements were merely steps by which the ultimate offence of evading payment of duty was committed. Each step was undoubtedly one of a connected series of steps, but each was a separate and distinct piece of conduct for all that, and each involved its own deliberate contravention of the Act. Moreover, the ultimate step, the successful getting of the goods through the Customs without payment of full duty, far from being merely the sum of the means employed to that end, was itself a separate piece of conduct in furtherance of the general intent, for it resulted from the defendants' deliberately putting aside the opportunity that still remained to them, even after what they had already done, to pay the full amount of duty.”

4 His Honour proceeded to convict the appellants of all the offences charged.

5 On appeal, his Honour’s analysis was found to be correct, and in their joint judgment Taylor J and Menzies and Owen JJ, having referred to the above passage, said as to it (at 168) “We think these observations are unanswerable.”

6 See also Chief Executive Officer of Customs v Pham [2006] NSWSC 1011 at [43].

7 Each defendant has denied committing the alleged offences.

8 There was an earlier hearing before Newman AJ on 29 March 2005. That hearing proceeded ex parte and each of the defendants was convicted of each of the charges brought. However, each defendant applied to have the judgment and orders earlier made set aside, and that application was heard by Buddin J. The judgment following that application was delivered on 14 July 2006. His Honour ordered that the earlier ex parte judgment be set aside with a view to a rehearing in due course, and eventually the hearing began before me on 26 March 2007.

9 Evidence earlier given before Newman AJ was tendered before me. That evidence consisted of the evidence of a customs broker, Stephen Foster who was employed by Powerhouse Clearances Pty Limited, Rob Karam who was the managing director of Freight Trade International Pty Limited, a company engaged in international freight forwarding operations, and two Customs officers, Brett Barnes and Barry Young. The manager of Orient Overseas Container Lines Australia gave evidence as to the arrival dates in Sydney of the three containers. There was also a deal of documentary material, including in particular bills of lading, various invoices, phone records and other documents to which reference will be made later. Each of the defendants gave evidence before Buddin J last year, and the plaintiff relied upon the evidence of each defendant as containing certain admissions.

10 In the proceedings before me, Mr Foster, Mr Karam and Mr Young were required for cross examination, and each of the defendants gave evidence responding to the offences charged.

The importation of the cigarettes

11 The uncontradicted evidence establishes that a container 00LU3603005 arrived by ship in Sydney on 3 April 2001. On the following day Mr Barnes, the Customs officer earlier mentioned, conducted a search of the container with other Customs officers, and he took a series of photographs (Exhibit OO). When the container was opened, and before the contents were disturbed, what was visible in the twenty foot container were cardboard boxes bearing the description “Aquase”. Boxes bearing this description when opened contained bottles of mineral water consistent with the description of the contents of the container in the relevant bill of lading. However, some seven rows back from the entry point, the content of the container began to differ. What was then seen were boxes that were contained in white hessian-type material. When that material was removed, the cardboard boxes inside bore the words “Dunhill King Size”, and there were also in the container boxes describing the content as “Marlboro” and “Marlboro Lights”. Mr Young, the other Customs officer earlier named, gave evidence that the cigarettes had markings that they had been made in Indonesia. There were 199 shippers of cigarettes in this container, 144 of which were Marlboro King-size cigarettes. There were 34 shippers of Marlboro Light cigarettes, eight shippers of Dunhill International, and thirteen shippers of Dunhill King-size. The unchallenged evidence of Mr Young is that the duty that was payable in relation to the various cigarettes totalled $404,187.

12 The evidence also establishes that a further two containers with markings OOLU3487610 and TRLU3026840 arrived by ship in Sydney on 17 April 2001. Two days later, on 19 April 2001, Mr Barnes and other officers opened these containers and examined their content. Like the container that had been opened sixteen days earlier, these two containers were twenty foot containers. Again, photographs were taken of the containers and their content. As with the first shipment, when the doors of these containers were opened, the boxes visible suggested that the contents of the containers accorded with the description of the goods in the relevant bill of lading. In one of the containers, there were boxes of biscuits, described as “Tango”. There were cartons of mineral water. There was a small quantity of Lifebuoy soap. However, some seven rows back, there were boxes wrapped in similar fashion to the boxes of cigarettes that had been found in the earlier shipment. The second of the containers opened on 19 April 2001 did contain boxes of mineral water consistent with the description of the goods in the bill of lading, but, once again, after six or seven rows, it was observed that the balance of the packages were wrapped in the same fashion as the cigarette packages had been wrapped in the earlier shipment. These packages, when opened, contained cigarettes. The unchallenged evidence of Mr Young was that the two containers opened on 19 April contained altogether 345 shipper cartons of cigarettes and 3,450,000 cigarettes. The Customs duty properly payable for the cigarettes in the second and third containers was $678,970.

13 I am satisfied beyond reasonable doubt by the evidence before me that cigarettes in the quantities above recorded were shipped to Sydney from Indonesia, arriving on the dates referred to above.

The statutory provisions

14 Before considering the evidence presented against each of the defendants in relation to the alleged commission of the offences under the Customs Act, I direct myself as to certain of the provisions of the Act. Mr Roberts referred me to Pham (supra) and to the comprehensive review of the relevant statutory provisions undertaken by Bell J in that case. I have been considerably assisted by that judgment in my present task.

15 Relevant to the smuggling charge, s 233 provides:

“(1) A person shall not:

(a) smuggle any goods…”

16 Section 237 renders an attempt to commit an offence against the Act punishable for the purposes of a prosecution as if the offence had been committed.

17 Section 233(1)(AA) renders a person who contravenes s 233(1) guilty of an offence punishable upon conviction in the manner prescribed.

18 Section 4 of the Customs Act, being the definition section, defines “goods” as meaning “moveable personal property of any kind…” The same definition section defines “smuggling” as meaning:

“Any importation, introduction or exportation or attempted importation, introduction or exportation of goods with intent to defraud the revenue.”

19 Section 234 provides, so far as is relevant to the second of the offences charged for each container:

“(1) A person shall not:

(a) evade payment of any duty which is payable…”

20 Section 68 addresses the obligation of the owner of goods that are imported into Australia. This section provides relevantly:

“(1) This section applies to:

(a) goods that are imported into Australia…

(2) The owner of goods to which this section applies may, at any time before the ship or aircraft carrying the goods first arrives at a port or airport in Australia at which any goods are to be discharged, enter the goods:

(a) for home consumption; or

(b) for warehousing; or

(c) for transhipment.

(3) If the owner of goods to which this section applies does not enter the goods under subsection (2) for a purpose set out in that subsection, the owner must enter the goods for one or other such purpose after the ship or aircraft carrying the goods first arrives at a port or airport in Australia at which any goods are to be discharged.”

21 Section 71A of the Customs Act makes provision for the making of an import entry:

“(1) An import entry is a communication to Customs of information:

(a) concerning goods to which section 68 applies that are intended to be entered for home consumption, for warehousing, or for transhipment; or

(b) concerning warehoused goods that are intended to be entered for home consumption;

that is effected:

(c) by document; or

(d) except so far as goods intended to be entered for transhipment are concerned – by computer.

(2) A documentary import entry must:

(a) be made by the owner of the goods concerned; and

(b) be communicated to Customs:

(i) by giving or sending it to an officer doing duty in relation to entries under this Part; or

(ii) by leaving it at a place that has been allocated for lodgement of import entries in a Customs office;

at the place at which the goods are to be delivered for home consumption, warehousing or transhipment.”

22 Of relevance in the present case because of evidence as to notifications given, s 71(A)(3) provides:

“A computer import entry must be transmitted by a registered COMPILE user as the owner, or on behalf of the owner, of the goods concerned.”

23 Returning to the definition section, “owner” in respect of goods is defined in broad terms as including

“any person (other than an officer of Customs) being or holding himself out to be the owner, importer, exporter, consignee, agent, or person possessed of, or beneficially interested in, or having any control of, or power of disposition over the goods.”

24 Section 132AA expresses requirements of the statute as to the time at which import duty is to be paid. In relation to goods entered for home consumption, the section provides that import duty is to be paid at the “time of entry of the goods for home consumption”.

25 The third of the offences alleged in relation to each of the shipments is an offence against s 234(1)(d)(i). As far as is relevant, the statutory provision was expressed at the relevant time in these terms:

“(1) A person shall not:

(d) knowingly or recklessly

(i) make a statement to an officer that is false or misleading in a material particular…”

The onus and standard of proof

26 As observed by Gleeson CJ in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2004) 216 CLR 161 esp at [2], the relevant statutory provisions make reference to the concepts of “offences, guilt, conviction and punishment”, It is now firmly settled following the decision in Labrador Liquor Wholesale Pty Limited that conviction in respect of an offence charged under the Customs Act requires proof of the elements of the offence charged beyond reasonable doubt.

27 Section 255 gives probative effect to averments in the statement of claim:

255 Averment of prosecutor sufficient

prima facie

(2) This section shall apply to any matters so averred although:

(a) evidence in support or rebuttal of the matter averred or of any other matter is given by witnesses; or

prima facie

(3) Any evidence given by witnesses in support or rebuttal of a matter so averred shall be considered on its merits and the credibility and probative value of such evidence shall be neither increased nor diminished by reason of this section.

(4) The foregoing provisions of this section shall not apply to:

(a) an averment of the intent of the defendant; or

(b) proceedings for an indictable offence or an offence directly punishable by imprisonment.

(5) This section shall not lessen or affect any onus of proof otherwise falling on the defendant.”

The business of the defendants and the established circumstances of the arrival of the containers

28 The first defendant came to Australia from Lebanon in 1969. After working for British Leyland until 1975 he started his own business roasting nuts. The business was conducted at Marrickville under the name “Venice Nut”. After four or five years he moved to Chapel Street, Lakemba, expanding the business to other food products. That business he sold to his brother in 1995, and the first defendant moved to other premises at Bankstown, and he called this new business “Venice Food”. In 2001 the first defendant was conducting business with his wife, Samira Afiouny, as Venice Food Wholesale Company from 11 Boronia Road, Greenacre. Those premises included a warehouse.

29 In the course of his business the first defendant imported food from overseas and he supplied to retail outlets in Sydney. He employed the services of Mr Foster as his customs broker to address customs requirements when bringing in goods from overseas. I accept Mr Foster’s evidence that he had acted as the first defendant’s agent on a number of occasions between 1997 and 2001, and that he had been involved in the clearance of in excess of fifty containers for the first defendant over that period.

30 The second defendant is one of five children of the first defendant and his wife. He was born in 1981 and married in September 2000. The second defendant and his wife had their honeymoon in Bali and he returned to Bali in January 2001 and again in March 2001. The Business Names Act search (Exhibit CCC) discloses that by this time the second defendant was registered as carrying on business from July 2000 as an “importer of drinks” from 11 Boronia Road, Greenacre. The business name recorded was “Pampa Imports”. The second defendant’s evidence was to the effect that he was starting his own business with the encouragement of his father, and that on the second and third visits to Bali he purchased mineral water there and on the third trip biscuits as well. The second defendant said he made these purchases with a view to selling them in Australia. He said he had no customs broker and asked the first defendant if the services of Mr Foster could be used to process the shipments from Bali.

31 Whether this be the explanation for Mr Foster’s involvement in the relevant importations or not, the evidence establishes that the first defendant contacted Mr Foster on 27 March 2001 and informed him that he was expecting goods from overseas. He requested that Mr Foster act in clearing the goods on his behalf, and he told Mr Foster there would be more than one container. I find that the first defendant forwarded to Mr Foster the relevant bill of lading (Exhibit A). This identified the shipper as “PT Saka Perfecta of Jimbaran, Tuban, Bali, Indonesia” and the consignee as “Venice Nut Food, 11 Boronia Road, Greenacre”. The container in which the goods were being shipped was recorded as OOLU3603005 and the goods were described as “1300 boxes of mineral water”. The bill described the port of loading as “Surabaya, Indonesia” and the port of discharge as “Sydney, Australia”.

32 Mr Foster forwarded a copy of the bill of lading to Freight Trade International Pty Limited (FTI), that company being identified on the Bill as the freight forwarding company. Mr Karam described the company’s responsibility as being to facilitate the carriage of goods between different countries, and he said that as at 2001 FTI had a business relationship with the Indonesian freight forwarder, also identified on the Bill, namely PT Dinamika Expressindo (PTD).

33 PTD subsequently sent to FTI a “Pre Alert” advice (Exhibit M), notifying FTI of the anticipated date of arrival in Sydney, stated as being 2 April 2001. Mr Foster received “Shipment Pre Alert” documents (Exhibit B and Exhibit C) relating to the two pending shipments towards the end of March 2001. On 30 March 2001 the first defendant provided Mr Foster with the invoice and packing list for the first shipment (Exhibit D1 and Exhibit D2).

34 After receipt of the lastmentioned documents, Mr Foster prepared the entry for home consumption for the first container on 30 March 2001. Such was required for duty purposes under the legislation earlier reviewed. That entry was duly transmitted to Customs, as evidenced by the notation on the computer printout (Exhibit E) “Entry No. Is.1089.0801M”. It is to be observed that duty was not payable on mineral water.

35 The first defendant delivered to Mr Foster documentation concerning the second shipment on 3 April 2001, consisting of:

(a) the bill of lading (Exhibit H1);

(b) the packing declaration (Exhibit H2);

(c) the certificate of origin (Exhibit H3);

(d) invoice and packing list (Exhibit H4);

36 The bill of lading for the second shipment identifies the same shipper as the earlier bill. This time the consignee is identified as “Pampa Import, 11 Boronia Road, Greenacre”. The port of loading is stated to be “Surabaya, Indonesia”, and Sydney is noted to be the port of discharge. There are two containers: “OOLU3487610” and “TRLU3026840”, and the goods are described thus: “1300 boxes of mineral water” and “1100 boxes of mineral water and Tango biscuit”.

37 On 10 April 2001 Mr Foster received a shipment pre alert (Exhibit J) informing him that the estimated time of arrival of the second shipment was 10 April 2001. He was later alerted by FTI that there was to be a delay until 16 April 2001.

38 As with the first shipment, Mr Foster prepared the required entry for home consumption, this time on 10 April 2001. The entry gave details of the goods consistently with the description in the bill of lading, and Exhibit L1 records that the entry was transmitted and given entry number Is.1100.07513. I shall return to the significance of this entry number when considering the submissions advanced by Mr Thomas.

39 In view of the issues as they have emerged on the hearing, I do not consider it necessary to refer further to the documentary evidence.

40 I am satisfied beyond reasonable doubt that the importation of the cigarettes was carried out by some person or persons with intent to defraud the revenue and hence constituted smuggling. Smuggling by definition involves the intention to defraud, and this involves “preventing something from getting into the revenue which the revenue is entitled to get”: see R v Australasian Films Limited (1921) 29 CLR 195 at 218; Gill v Chief Executive Officer of Customs (2001) 166 FLR 125 at [47]-[51]; and Chief Executive Officer of Customs v Pham (supra) at [28].

41 The only rational inference from the way in which the cigarettes were stacked in each container is that they were so positioned systematically and deliberately, with the aim of concealment, and notwithstanding the obvious value of the cargo, there was no document provided to alert the customs agent or the freight forwarding company to the true content of the container.

42 In considering the case against the first defendant, the critical factual issue in relation to the various offences charged is whether, prior to detection by the Customs officers, the first defendant knew that the containers, and each of them (considering the offences charged discretely), contained cigarettes. In the case against the second defendant, the critical issue is whether, prior to the discovery by the Customs officers, the second defendant knew that the two containers in the second shipment held the cigarettes found in them.

43 This brings me to a review of the evidence that the defendants gave before me.

The evidence of the defendants

44 The first defendant gave evidence that whilst he was using Mr Foster’s services he brought in up to fifty containers per year. He said that he had not previously had any trouble with Customs. That assertion has not been challenged and is to be taken into account when considering the credibility of his evidence and in determining whether or not on the whole of the evidence the plaintiff has established the commission of the offences charged against this defendant.

45 The first defendant said that he had some discussion with the second defendant before the second defendant went to Bali in March 2001. The second defendant asked the first defendant whether he wanted some mineral water. The second defendant told him he could obtain it cheaply in Bali. The first defendant said he told his son to try to obtain some water there. Previously, according to the first defendant, he had been importing water from Lebanon and then selling it to shopkeepers. There was some discussion about the likely cost and the first defendant gave the second defendant cash, being $7000 for a container of water. He admitted to having telephone conversations with the second defendant whilst the second defendant was away in Bali. He said he never spoke to anybody in Indonesia from PT Saka Perfecta. Nor did he speak to Hilman Ayyoubi, who the second defendant said was his agent in Indonesia.

46 Directed to the bills of lading, the first defendant said that he believed them to be genuine.

47 Mr Young, the Customs officer, appeared at the Greenacre premises on 6 April 2001 and presented a search warrant. Phone records and money transfer records were seized. Later further records were taken from the first defendant’s premises and from the second defendant’s premises. Referring to the presentation of the search warrant at Greenacre, it was then that the first defendant was told that the container that had arrived held cigarettes. He said he was asked whether he was smuggling cigarettes. He conveyed in response that what he had sought to import was water.

48 After becoming aware that the first container held cigarettes, he spoke to the second defendant, indicating in effect: “I don’t want headache, I don’t want this container, I don’t want another container, I don’t want nothing.” He said he spoke to Mr Foster before the second shipment arrived, saying he did not want the other containers. He thought he probably told Mr Foster this on 10 April 2001.

49 The first defendant said that earlier when he sent the bills of lading and other documents to Mr Foster, he believed that they were genuine. He said he sent no money overseas to Bali whilst his son was there.

50 In cross examination the first defendant said that there was a fork lift at the warehouse and that when containers were delivered to the warehouse and offloaded they were taken into the warehouse, if need be by fork lift. He said that goods mistakenly came to the warehouse addressed to Venice Nut rather than Venice Food. He said he did not take notice of the name of the consignee on the first of the bills of lading, he just passed it on to Mr Foster. The first defendant maintained throughout his cross examination that he had no knowledge that there were cigarettes being sent out from Indonesia.

51 The second defendant gave evidence as to having made two trips to Bali after the honeymoon visit. I referred to the evidence to that effect earlier. He said that he ordered a container of mineral water on the first of these two trips in December 2000 or January 2001. Whilst in Indonesia on his honeymoon he had met Hilman Ayyoubi who thereafter became his agent, buying goods in Indonesia. He paid for that mineral water by money transfer (Exhibit 5), the invoice showing the supplier and the total cost (Exhibit 6).

52 In relation to the three containers in question, the second defendant said that he travelled to Indonesia with his brother, Whalid, who gave no evidence before me. He said that they went to Indonesia on 10 March 2001. This accords with the travel itinerary, Exhibit UU, although that suggests that the second defendant travelled to Bali with “Mrs W. Afiouny”. The second defendant said that he was carrying money and that his brother had approximately $9000 cash too. That money was given to Whalid by his father to buy water for the first defendant. According to the second defendant, he gave the name Venice Nut Food for the order for the first defendant, and he also gave the name on the second bill of lading, being Pampa Import. He explained this difference, saying that the first container was “for my Dad” and the second and third containers were “for myself”.

53 His evidence was it was his belief that the first container would hold only water. He said that the water cost to buy, approximately, twenty-five to twenty-six cents per bottle, and that he expected to sell it in Australia for forty-eight to fifty cents per bottle. He said that he expected the water purchased this time to be the same as the water purchased on the previous visit, namely “Aquase”. But he acknowledged that the invoice (Exhibit D1) for the first shipment did not identify the brand of the water. The second defendant said that he expected the water in the second and third containers to be Aquase as well, but, once again, the invoices for those containers did not identify the brand of the water. The second defendant said that he thought he could sell the biscuits at a profit of twenty-five cents per packet. He had only purchased a small quantity of biscuits.

54 According to the second defendant, he paid Hilman Ayyoubi to buy the goods, using the cash brought from Australia by himself and his brother, and there was also a money transfer from Sydney of some $10,000. That transfer was arranged with his sister, who worked at a bank in Sydney, and is evidenced by Exhibit QQ. $3000 of the $10,000 transferred was the second defendant’s money and the remaining $7000 was his brother’s money.

55 According to the second defendant, he was present at the premises at Greenacre when the Customs officers came there with search warrants. Reading them, he became aware that cigarettes had been found in the first of the containers. He said that he never intended any cigarettes to be put in any one of the three containers and he denied knowing that there were any cigarettes in them. He gave evidence of the seizure of records referred to earlier. He said that after the visit of the Customs officers he discussed with his father what was to happen to the second and third containers. His father gave him instructions to return them. He said he later spoke to his brother-in-law about the problem.

56 A document admitted into evidence as Exhibit U bore the letterhead “Pampa Imports, 11 Boronia Road, Greenacre, New South Wales, 219, Australia…” It reads:

“Dear Rob Karam

I would like to return the following 2 containers to Jakarta as the quality is not acceptable. The bottles and packaging of the products are very poor.

One container has water in it with the serial number being CL2793031 and container number being OOLU348761/0/00

The second container has water and biscuits with the serial number being CL2793037 and container number TRLU302684/0/00.

Yours kindly

Director

Bilal Afiouni”

57 It purports to be signed by Bilal Afiouny as director. The second defendant denied that this was his signature and denied having written the letter. At the head of the document appears the name “Ramez Nabhan”, who the second defendant said was married to his aunt. The second defendant denied any knowledge of the writing of the letter and said he gave nobody any direction to write it.

58 I shall return to consider the significance of this document later. Of course, at the time Exhibit U was written the second defendant had not seen the content of the two containers. The facsimile was transmitted on 12 April 2001, days before the arrival of those two containers in the second shipment.

59 I observe here that Exhibit U originated after the defendants became aware that the cigarettes in the first container had been discovered. On the evidence of the defendants, the decision was taken jointly by them that they did not want to take delivery of the second and third containers for fear that there may be cigarettes in those containers as well.

60 As to Customs’ procedures, the second defendant acknowledged he was aware that documents sent to the customs clearing agent would be used to clear the goods through Customs, but he said he believed that the contents of the documents were true, and I infer that he was including here an expression as to his belief in the accuracy of the bills of lading.

61 The second defendant was cross examined about the circumstances of the visit to Indonesia in March 2001. He and his brother travelled business class, and he said the tickets were approximately $3600. The hotel accommodation cost some $900. He said the intention whilst in Indonesia was to make sure everything was all right to load water. He said that the earlier shipment following the second visit had cost $7000-$7500, and the shipping costs were additional. He said, however, that he had profited at the rate of $3 per box after paying everything. He had not totalled up all the costs involved in the purchases in March 2001.

62 The second defendant was also cross examined about the inconsistency in the evidence given before Buddin J and the evidence-in-chief before me about the brand of water he was expecting. In March 2006 he had said he was expecting water but he did not know what brand (T 23 of evidence before Buddin J). This differed from the evidence-in-chief before me when he said he was expecting Aquase brand.

63 The second defendant was also cross examined about the difference in the account as to money taken to Indonesia which he gave in the proceedings before Buddin J. Before me the second defendant said he took $9000-$10,000 in cash to Indonesia and his brother had the same amount, so that between them they had $18,000-$20,000 in cash. He said that they gave Hilman Ayyoubi approximately $16,000, or $14,000-$16,000. However, when the second defendant gave evidence in March 2006 he told the court that he had taken $10,000 but he could not remember how much he spent on the mineral water and the Tango biscuits. He was unable to say whether it was $2, $20, $200, $2000 or any specific amount. He said he did give Hilman Ayyoubi money but he could not recall how much (T 50 of evidence before Buddin J). There was no mention in that earlier evidence of the second defendant’s brother accompanying him and providing funds for Hilman Ayyoubi.

64 When asked about the difference in his evidence, the second defendant gave the following responses to the following questions (T 198):

“Q. The evidence on the last occasion, you couldn't remember how much you gave to Hilman Ayyoubi. You couldn't even remember if $2, $20, $200 or $2,000. It could have been anything is what you said?
A. The reason is why, I was too scared to mislead or say something which was not true in front of the judge, in front of your Honour. This is the reason, half these questions you asked me before, I told you I didn't know, I didn't want to mislead or say something I would be accounted for.

Q. When I asked you the question how much money you gave to Hilman Ayyoubi, you remembered, did you, at that stage that in fact you had given him in the order of $14,000 Australian, is that right?
A. Approximately between $14,000 and $16,000.

Q. You remembered that as a fact when I asked you that question in 2006?
A. I can't remember back then.

65 And then later (at T 199):

66 And then (at T 200) when he was asked further about the recollection of giving $14,000-$16,000 to Hilman Ayyoubi, he gave the following responses to the following questions:

“Q. Did you forget at some stage that this had happened?
A. When you went over a period of time, yes, I did forget it.

Q. So the period of time when I asked you this question you had forgotten that this had happened?
A. Yes.

Q. When did it recur to you it had actually happened?
A. Preparing towards this hearing.

67 I record here that I found the conflicting evidence given by the second defendant as to what funds he provided to Hilman Ayyoubi, and his explanation for the inconsistency, to be unsatisfactory and unconvincing.

68 This brings me to a consideration of certain matters raised by Mr Thomas other than the issue of knowledge.

69 Firstly, Mr Thomas submitted by reference to the pleadings that the plaintiff is alleging the commission of offences in respect of the first container shipped as against the first defendant only. No fault was pleaded as against the second defendant in relation to that first shipment. Mr Roberts responded to this by submitting that the evidence now before the Court would have supported the charging of offences against each of the defendants in relation to the first shipment. However, that there is now evidence which would have supported a charge against the second defendant does not bear upon the issue as to whether or not the offences charged against the first defendant concerning the first shipment have been proved. It is too late now to charge the second defendant with offences in relation to the first container.

70 I consider that Mr Roberts is correct in his submission. Whether or not the first defendant is to be found guilty of offences in relation to the first shipment depends upon an assessment of the evidence presented against him in relation to that shipment.

71 Secondly, Mr Thomas submitted that the second shipment did not arrive until 17 April, by which time instructions to reject it had been given. It was submitted that these instructions bore upon the proof of the various offences charged in relation to the second shipment.

72 According to both defendants, after Customs officers attended at the warehouse on 6 April and they became aware of the seizure of the cigarettes from the first container, the decision was made to reject the containers. The second defendant said in the evidence he gave before Buddin J in March 2006 that he tried to make arrangements to send back the two containers involved in the second shipment but he did not recall what he did in this regard. Before me, the second said that he spoke to his brother-in-law, Sam, who offered to help and the second defendant said (at T 181) that he had a brief conversation with Mr Karam, suggesting that Mr Karam speak to Sam. (For completion, I note that before Newman AJ Mr Karam gave evidence that he spoke to Sam about the possibility of returning the containers to Indonesia (T 40, 29 March 2005)).

73 The first defendant said that he told his son, the second defendant, that he did not want another container and that he spoke to Mr Foster to tell him this. He agreed with Mr Foster that it was on 10 April, four days after the Customs officers had attended the warehouse, that he spoke to Mr Foster.

74 Before Newman AJ in March 2005 Mr Foster gave evidence that the first defendant telephoned him at 4.40 pm on 10 April and advised that he no longer wanted the second shipment because there was a problem with the earlier one.

75 Mr Foster gave evidence before Newman AJ in March 2005 that Customs officers attended his premises on 5 April 2001 and informed him they had discovered a quantity of cigarettes secreted in the container. Mr Foster’s evidence at that time was that he did not alert the first defendant as to the discovery. Mr Foster said before me that he assumed the Customs officers would not have wanted him to pass on that information. According to Mr Foster, and I am referring now to the evidence he gave before me, the first defendant told him he did not want the containers. He advised the first defendant he would need something in writing from the first defendant. He sent to the first defendant a draft letter (see Exhibit 3). I do not find that the first defendant gave the written instructions that were requested.

76 Mr Foster was somewhat hazy in his recollection of events when he gave evidence before me, and his worksheets which were introduced into evidence (Exhibit 2) are not particularly helpful. To the extent that he was reliant upon his memory now, I consider his recollection was likely to have been better when he gave evidence in 2005, and I find that the instructions to reject the containers were given orally by telephone at 4.40 pm on 10 April 2001, as he stated before Newman AJ.

77 Mr Foster said in relation to the “home consumption” document for the second and third containers that the document had been prepared but not transmitted. Later in his evidence he said that the document had obviously been lodged. Later still he said the “home consumption” document (Exhibit L1) was lodged, as appears on the face of the document, at 11.38 am on 10 April 2001. Mr Thomas was granted leave to further cross examine the witness after the luncheon adjournment on 28 March 2007 (T 119) concerning the lodgement or transmission time of the “home consumption” document. The witness said that he had spoken to a colleague during the adjournment and confirmed that the lodgement time on the document is the time of entry and the time at which the entry number is given.

78 Having reflected on this issue, I find that Mr Foster did transmit the home consumption document (Exhibit L1) to Customs on 10 April at 11.38 am, being the time appearing on the document. This was some six hours before the first defendant gave instructions to cancel the second shipment.

79 Mr Thomas submitted that in any event Mr Foster knew of the seizure of the cigarettes days before those instructions were given and he should not have proceeded to lodge the home consumption document without specific instructions to do so. I am not persuaded by that submission. The first defendant knew four days before he spoke to Mr Foster that there had been the discovery of the cigarettes and he did not act on that knowledge before 4.40 pm on 10 April. In the circumstances I do not find that the knowledge which Mr Foster had gained from his discussion with the Customs officers had the effect of terminating his agency in the manner for which Mr Thomas contends. His relevant instructions and authority remained current as at the time of the relevant lodgement.

80 Mr Thomas next submitted that instructions to reject the shipment had been given on 10 April and it followed that there was rejection seven days before the shipment arrived in Sydney. He submitted that this was relevant to the charges as to the second shipment.

81 On 11 April 2001 there was a communication from PTD to FTI indicating that if the cargo had not arrived the shipper wanted it returned to Indonesia without the container being brought down from the vessel (Exhibit S). Two hours later there was a further communication from PTD to FTI asking FTI to disregard the earlier communication. Then, on 14 April 2001, PTD communicated with FTI again advising they had instructions from “Mr Andi Chandra” that he would like the containers returned to Jakarta “due to quality of the bottles and packaging of the products are very poor”. It is not clear who Mr Andi Chandra is. The same communication was repeated, this time marked “Urgent” on 19 April 2001 (see Exhibits V and W).

82 Later correspondence reflects the search for agreement as to who was to pay costs associated with the return of the shipment.

83 This much is clear, that no effective measure was taken to stop the arrival of the shipment in Sydney before it did arrive. In these circumstances, do the instructions that were given by the first defendant on 10 April break the chain of causation when consideration is being given to the various offences charged? In my opinion, this question is to be answered in the negative. The arrangement put in place for the shipment was not displaced by the first defendant’s request which proved to be ineffective, and no effective measure was taken by the second defendant either.

84 The decision of White v Ridley (1978) 140 CLR 342 is in point. In that case the applicant delivered a box to an air carrier in Singapore to be consigned to Australia. There was cannabis concealed in the box. The applicant reached Australia before the box left Singapore and upon becoming aware he was under suspicion he instructed the carrier to stop the despatch of the box. He did not say what was in it and the carrier did not act on the instructions. The applicant was convicted of the offence of importing a prohibited import. It was held by majority in the High Court that the applicant had been properly convicted.

85 Stephen J, with whom Aickin J agreed, said at 354:

“If the applicant's arrangement with the airline be viewed in isolation its incriminating quality lies in the fact that it was calculated to result in the importation of the cannabis into Australia. Since that importation in fact occurred, what can the applicant now rely on as sufficient to disarm the arrangement of its incriminating character? Only, I think, some event which may be seen to deprive the arrangement of its quality as the cause of the importation; that is, the intervention of some new cause for which the applicant was not responsible and which displaced the original arrangement as the event to which the importation can be causally assigned.

Some such new cause might have so intruded itself between the applicant's original arrangement with Singapore Airlines and the subsequent arrival of the box in Australia as to deprive that arrangement of its character as the cause of the importation. That arrangement would then have become no more than a part of ‘the setting in which another cause operates’ (Reg v Smith [1959] 2 QB 35, at p 43), if the new cause were of so overwhelming a nature as to relegate the applicant's arrangement to a quite subsidiary causal position. Thus in Smith it was said that had the original wound inflicted by the accused been transformed by a new causal event into ‘merely part of the history’, it would then have been proper to regard the victim's death as not flowing from that wound.

In my view the facts of this case disclose no such new cause. The factor upon which the applicant must rely to free him from criminal responsibility must spring from his attempt to stop the importation. However, I regard this as giving rise to no new cause which displaces, as the cause of importation, his original arrangement with the airline; all that happened was an ineffective attempt to deflect the course of events which the applicant had set in train. Because it was ineffectual, leaving unimpaired as the cause of the importation the applicant's arrangement with the airline, it provides no answer to the case made against the applicant.”

86 And later (at 357):

“In my view not only do the stated facts disclose no new cause intervening between the applicant's original arrangement with Singapore Airlines and the arrival of the cannabis in Australia but what they do reveal, an unsuccessful, tardy and reticent attempt, after apprehension of detection, to arrest a train of events which he himself set in motion, has no effect in law upon his criminal liability.”

87 Aickin J agreed with the reasons expressed by Stephen J.

88 Gibbs J, as he then was, came to the same conclusion but for different reasons. His Honour considered that the applicant had failed to do all that he might reasonably have done to stop the importation. His Honour said (at 352):

“Nevertheless it is clear that the applicant did not do all that he reasonably could to attempt to prevent the airline from effecting the carriage which he had requested it to perform. He did not disclose to the airline, in his telex, that the box, which he had said contained a stereo receiver, in fact contained cannabis. If he had done so the airline would have become aware of the importance of stopping the carriage, but as things were the airline had no reason to take any extraordinary steps to retrieve and off-load the box. It is easy to appreciate the applicant's reasons for not wishing to state in his telex that the box contained cannabis, but his failure to do so meant that he did not do all that he reasonably could to undo the effect of his request to the airline to carry the box to Australia. In these circumstances the sending of the telex was not sufficient to absolve the applicant from responsibility when the airline, acting upon his previous instructions, brought the box into Australia. The applicant was therefore rightly convicted.”

89 Returning to the present case, the arrival of the shipment evidences the ineffectiveness of any step taken to prevent that event. Adopting the analysis by Stephen J in White v Ridley, nothing happened to change the course of the importation. To adopt the test used by Gibbs J, neither defendant did all that might reasonably have been done by way of attempt to stop the importation. The first defendant took no action for four days after the visit by the Customs officers, and he then spoke to Mr Foster at a time when it was too late to prevent the “home consumption” entry. The second defendant was unable to state what steps he took to stop the arrival of the containers, except to speak to his brother-in-law. When one looks at Exhibit U, the assertions in it were plainly untrue, whoever the author was.

90 This brings me to the core issue of knowledge, an element that the plaintiff must prove in relation to each of the offences charged.

The issue of knowledge as to the content of the containers

91 It is convenient to consider firstly the case against the second defendant.

The case against the second defendant

92 The second defendant at no time admitted knowledge that the containers brought into Australia in the second shipment contained cigarettes. As to the first shipment, his case was that he first became aware that there were cigarettes concealed in the container when the Customs officers attended the warehouse on 6 April 2001.

93 In seeking to establish the case against the second defendant, the plaintiff relied upon circumstantial evidence. That evidence consisted of the following:

(i) The manner in which the cigarettes were concealed in the containers invites the conclusion that their presence could only be discovered by unloading the containers. Their presence would not have been discovered simply by opening the door and taking a cursory look at what was inside. Rather, as I observed earlier, these cigarettes were positioned systematically and deliberately for the specific purpose of concealment.

The second defendant gave an explanation for using two different ships. He said he told Hilman Ayyoubi “not to send them in one go for payment arrangement” (see evidence of second defendant given on 14 March 2006 at T 17). What he meant by this was not made clear, and I accept, as Mr Roberts submitted, that no satisfactory explanation was offered as to why the shipments were arranged as they were.

(iii) The bill of lading for the second shipment, as for the first one, stated as the address of the consignee 11 Boronia Road, Greenacre. The first defendant’s evidence was that goods consigned to that address were unloaded there using a fork lift for goods on a pallet. Both defendants worked at that address, the first defendant in his business and the second defendant in his father’s business as well as in his own business. The delivery address stated evidences that the second defendant intended that the goods in the containers were to be taken to that address at Greenacre.

(v) Mr Roberts next pointed to the conduct of the second defendant after he became aware that Customs officers had discovered a large quantity of cigarettes in the first of the containers. The second defendant’s behaviour invited consideration of the following:

(i) Why did the second defendant not tell the Customs officers that this was one of three containers that he had arranged to ship, and that there were another two containers still to arrive pursuant to the acquisition and shipping arrangements he had made? Mr Roberts submitted if he was innocent and if he was concerned about what might be in the second shipment, the obvious course for the second defendant would have been to make full disclosure to Customs officers and give them information concerning the awaited shipment and seek guidance as to what was to be done.

(ii) The other consideration invited is why should the second defendant assume there would be, or may be, cigarettes in the second and third containers if the second defendant was not equipped with the requisite knowledge.

(vi) Mr Roberts next drew attention to Exhibit U (see [56] above as to the terms of this). Although the second defendant denied that he was the author of Exhibit U, it was plainly written with the objective of having the goods in the second and third containers returned to Indonesia, and that is consistent with the second defendant’s asserted wish after the cigarettes in the first container had been discovered. Whoever prepared Exhibit U had the details as to the relevant containers. Apart from Mr Karam and Mr Foster and the two defendants, the evidence does not disclose anyone else here who would have had that knowledge. The second defendant said he enlisted the aid of his brother-in-law, Sam, but the second defendant’s evidence in the proceedings before me was that he did not tell his brother-in-law what the numbers of the containers were and he had given the relevant documents to his father, the first defendant. Exhibit U was written with the objective of diverting the consignment and it was submitted this was indicative of an awareness that cigarettes would be found if the containers arrived.

Edwards v The Queen

Zoneff v The Queen

R v K

Edwards

(viii) Mr Roberts submitted that the potential profit to be made from the visit of the second defendant and his brother to Indonesia in March 2001 would not have justified the expenditure and the amount of time spent by the two men in Indonesia. Hence, it was submitted the trip must have had some other undisclosed purpose, namely to arrange for the shipment of cigarettes.

The second defendant had on a previous visit purchased mineral water, and it was submitted that bearing in mind that previous visit and the presence of an agent in Hilman Ayyoubi in Indonesia, it was difficult to see how a ten day trip for two men was justified simply to arrange for the purchase of more mineral water and a modest acquisition in relation to biscuits.

At best it would seem, from the second defendant’s evidence, he could hope to make twenty-five cents per bottle on resale, and when one allows for the cost of the trip, the time spent in Indonesia, the cost of accommodation and shipping charges, any profit would have been modest indeed.

94 How does Mr Thomas respond to the plaintiff’s case against the second defendant?

95 Mr Thomas submitted that there was no direct evidence that the second defendant knew he was making arrangements pursuant to which cigarettes would be shipped to this country. There was no evidence that he was present when the goods were loaded into the containers. He submitted that the second defendant maintained that he had no relationship with PT Saka Perfecta. Further, he submitted, that the fact that he named Pampa Imports for the purposes of the shipping documents was consistent with the second defendant’s assertion that he was entering into what he perceived to be innocent transactions. Likewise, the fact that the address 11 Boronia Road, Greenacre appeared on the bill of lading was consistent with the second defendant’s assertion that he thought this was an innocent transaction. He was making no attempt to conceal the identity of the consignee or the place of delivery.

96 I consider that the case as presented against the second defendant is a strong one. I referred earlier to particular areas where I regarded the second defendant’s evidence as unsatisfactory. Mr Thomas referred in submissions to the second defendant’s assertion that he had never had any dealing with PT Saka Perfecta. Certainly he gave evidence to this effect in March 2006. However, the second defendant’s signature does appear on the letter of agreement stated as being between the second defendant and PT Saka Perfecta (Exhibit JJ). This document has not been executed for PT Saka Perfecta but the signature that appears on that document purporting to be that of the second defendant matches the signature which the second defendant acknowledged to be his on Exhibit 5, a document completed with the National Bank. I do not accept that he had “never heard of Saka Perfecta” as he claimed, or that he had no dealings with it. Not only does the name appear on Exhibit JJ, the document signed by him, but it also appears on the bills of lading.

97 Notwithstanding the evidence which the second defendant gave, and mindful as I am that the offences charged against the second defendant are limited to the second shipment, the evidence satisfies me beyond reasonable doubt that the second defendant was aware of what was coming to Australia in each of the three containers. I find the circumstantial evidence against the second defendant as summarised above to be compelling. I add that, putting aside the position of the first defendant, the evidence leaves open no reasonable possibility that there was some person other than the second defendant who may have been in a position to make the shipping arrangements in Indonesia and who could also have been in a position to take control of the cigarettes when the containers arrived in Australia.

98 This brings me to a consideration of the offences charged against the second defendant.

The offence of smuggling: s 233(1) of the Act

99 I am satisfied beyond reasonable doubt that the second defendant was involved in the importation of the cigarettes in the second and third containers, and that he knew the cigarettes were concealed in those containers. I am also satisfied beyond reasonable doubt that the second defendant, knowing as he did of that concealment, participated in the importation with the intention of defrauding the revenue.

100 I am satisfied beyond reasonable doubt that the elements of the offence of smuggling have been proved against the second defendant.

Evading payment of duty: s 234(1)(a) of the Act

101 I am satisfied beyond reasonable doubt that the second defendant, being involved in the importation of the containers in the second shipment as the proprietor of Pampa Imports (wrongly named Pampa Import on the bill of lading), was the “owner” of the goods within the broad definition of that word in the Customs Act. I find he had control or power of disposition of the goods as the proprietor of Pampa Imports. The second defendant had a legal obligation to pay customs duty on the cigarettes and he failed to do so. I find that failure to have been deliberate.

102 The concept of evasion was considered by Knox CJ in Wilson v Chambers (1926) 38 CLR 131 at 136 in the context of considering s 234 of the Customs Act. It means something more than a mere failure to pay. The Chief Justice said (at 136):

“The distinction in meaning between the words ‘evade’ and ‘avoid’ is well established, and a charge of evading payment is not made out by evidence which proves no more than that the person charged failed or omitted to pay an amount payable by him. There was nothing to suggest that the agreement to sell the paint to the ship was other than a genuine agreement, nor did the evidence tend to show that the respondents did not honestly believe that in the circumstances it was not necessary to enter the goods or to pay duty in respect of them, or that their intention in selling the goods was to escape payment of duty.”

103 In the present case, I am satisfied that more than a mere failure to pay has been proved against the second defendant. Bell J’s attention was drawn in Pham to Ludwig’s Canberra Bond Cellar Pty Ltd v Sheen (1982) 65 FLR 347 and to the dicta of Gallop J in that case at 354. The passage warrants repetition here:

Income Tax (Management) Act 1936

Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW)

some blameworthy act or omission on the part of the taxpayer is contemplated. He said an intention to withhold information lest the Commissioner should consider the taxpayer liable to a greater extent than the taxpayer is prepared to concede is conduct which, if the result is to avoid tax, would justify finding evasion

Australasian Jam Co Pty Ltd v Federal Commissioner of Taxation

It is appropriate in my view to apply the meaning enunciated by Dixon J in the penal provisions now under consideration, namely, that the word “evade” means more than the intentional withholding of information or the mere furnishing of misleading information, but requires some blameworthy act or omission on the part of the appellants .”

104 I am satisfied beyond reasonable doubt that the failure by the second defendant to pay duty was a failure in circumstances that made that failure blameworthy in the sense discussed in Ludwig’s. Hence, I am satisfied beyond reasonable doubt that the second defendant’s conduct was such as to constitute evasion of the payment of duty as alleged.

Knowingly or recklessly making a false or misleading statement: s 234(1)(d) of the Act

105 It is alleged that the statement knowingly or recklessly made to a Customs officer which was misleading in a material particular was the entry for home consumption document: IS1100.0751J (Exhibit L1).

106 Plainly, that statement was false in a material particular. It referred only to mineral water and biscuits. There was no reference to the cigarettes. Mr Foster made the home consumption entry on instructions, in the sense of acting on the shipping documents provided. Whilst they were passed on to him by the first defendant, I am satisfied that they came from the second defendant. I am satisfied beyond reasonable doubt that the second defendant knew that the information so given to his agent was false when it was given, so I am satisfied beyond reasonable doubt that he is liable for what Mr Foster did as his agent, and that the commission of this offence has also been proved.

107 For the reasons stated, I am satisfied beyond reasonable doubt that each of the offences charged against the second defendant has been proved.

The case against the first defendant

108 I return now to the case against the first defendant and the issue of knowledge.

109 The first defendant made no admissions, asserting he had given his son money to buy mineral water and that it was his belief that the bills of lading were genuine.

110 I reviewed earlier the elements of the circumstantial evidence available against the second defendant (at [93](i)-(viii)). The plaintiff is also essentially dependent upon circumstantial evidence in seeking to establish a case against the first defendant, but such evidence as is available against the first defendant is not as extensive as the evidence against the second defendant. The first defendant did not go to Indonesia, and there is no evidence that he was involved in the decision the second defendant made that the containers should be separated, for delivery by two different shipments. Not being in Indonesia, the first defendant did not have the opportunity to see to the loading of the cigarettes. For him there was no ten day period in Indonesia to account for, as there was for his son. It was not the first defendant but the second defendant who incorrectly nominated “Venice Nut Foods” as the consignee on the first bill of lading, Exhibit A, or “Pampa Import” as the consignee on the second bill of lading, Exhibit H1.

111 No inconsistencies emerged in the evidence given by the first defendant, and this, too, is by way of contrast with the evidence given by the second defendant.

112 In considering whether the plaintiff has proved the requisite knowledge in the first defendant, I am mindful of the following:

(i) That the cigarettes were concealed in each of the containers in a similar way, but, of course, the first defendant was not present in Indonesia when the loading took place and he was not in a position to be able to see or to supervise the loading process;

(ii) The contents of each container were consigned for delivery to 11 Boronia Road, Greenacre, and I have referred earlier to the evidence as to what happened to deliveries to that address. It was almost inevitable that the first defendant would become aware of the importation of the cigarettes unless, after arrival in Sydney, there was some change in the delivery instructions. Satisfied beyond reasonable doubt as I am as to the second defendant’s awareness as to what was being imported, is it reasonably possible that he gave the Greenacre address for the delivery when in Indonesia without alerting his father in advance as to what was being shipped? Is it conceivable that the second defendant was putting off telling his father about the cigarettes until they arrived, or that he contemplated altering the place for delivery of them once they had arrived, or that he perceived there was some way of completing the unloading without his father’s knowledge? This case differs significantly from Pham (supra). In Pham there was a controlled delivery of cigarettes to the warehouse owned by the defendants, one of whom assisted in unloading the first container and the other of whom was present at the premises for some of the time. The unloading was seen and recorded on videotape. There is no such evidence here.

(iii) The first defendant did not tell the customs officers there were other containers expected when he was interviewed by the customs officers, and what was considered in [93](v) and (vi) has to be weighed in the case against the first defendant as well as in the case against the second defendant.

113 For the reasons I have identified, I consider the case against the first defendant to be distinguishable from and weaker than the case presented against the second defendant. Mr Thomas submitted that it was a reasonable possibility that the first defendant was acting innocently in transmitting the relevant documents to Mr Foster and that he did believe the bills of lading accurately described what was being shipped. Ultimately I have concluded that I should accept that submission. I am not satisfied beyond reasonable doubt that the first defendant had the requisite knowledge of the content of any of the three containers before the discovery of such by the customs officers. Since knowledge is an essential ingredient in each of the offences charged against the first defendant, I am not satisfied beyond reasonable doubt that any of the offences charged against the first defendant has been proved.

Formal findings and orders

114 1. None of the offences charged against the first defendant has been proved.

2. Each of the offences charged against the second defendant has been proved.

3. The matter is to be relisted on a date to be arranged with my associate for the purpose of hearing submissions as to the penalties to be imposed upon the second defendant and as to the orders to be made to give effect to the findings expressed in the proceedings against the first defendant.

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Citations

CEO Customs v Afiouny [2007] NSWSC 497

Most Recent Citation

CEO Customs v Afiouny [2007] NSWSC 724

Cases Citing This Decision

1

CEO Customs v Afiouny & Anor [2007] NSWSC 724

Cases Cited

11

Statutory Material Cited

2

R v Tadrosse [2005] NSWCCA 145

CEO of Customs v Pham [2006] NSWSC 1011

Chief Executive Officer of the Australian Customs Service v Karam [2011] NSWCA 224

CITATION:	CEO Customs v Afiouny & Anor [2007] NSWSC 497
HEARING DATE(S):	26-30 March 2007
JUDGMENT DATE :	17 May 2007
JURISDICTION:	Common Law Division
JUDGMENT OF:	Studdert J
DECISION:	(1) None of the offences charged against the first defendant has been proved. (2) Each of the offences charged against the second defendant has been proved. (3) The matter is to be relisted on a date to be arranged with my associate for the purpose of hearing submissions as to the penalties to be imposed upon the second defendant and as to the orders to be made to give effect to the findings expressed in the proceedings against the first defendant. (4) Costs are reserved.
LEGISLATION CITED:	Customs Act Business Names Act
CASES CITED:	Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2004) 216 CLR 161 Chief Executive Officer of Customs v Pham [2006] NSWSC 1011 Edwards v The Queen (1993) 178 CLR 193 Gill v Chief Executive Officer of Customs (2001) 166 FLR 125 L. Vogel & Son Pty Limited v Anderson (1966) 120 CLR 157 Ludwig's Canberra Bond Cellar Pty Ltd v Sheen (1982) 65 FLR 347 R v Australasian Films Limited (1921) 29 CLR 195 R v K (2003) 57 NSWLR 616 White v Ridley (1978) 140 CLR 342 Wilson v Chambers (1926) 38 CLR 131 Zoneff v The Queen (2000) 200 CLR 234
PARTIES:	Chief Executive Officer of Customs (Plaintiff) Abdul Wahid Afiouny (1st Defendant) Bilal Afiouny (2nd Defendant)
FILE NUMBER(S):	SC 20077/02
COUNSEL:	P. Roberts SC (Plaintiff) G. Thomas/P. Ramos (Defendants)
SOLICITORS:	Australian Government Solicitor (Plaintiff) Vosnakis & Associates (Defendants)