CEO of Customs v Coulton - [2005] NSWSC 869

No judgment structure available for this case.

CITATION:
CEO of Customs v Coulton [2005] NSWSC 869

HEARING DATE(S): 4 April 2005, 21 April 2005, 18 July 2005

JUDGMENT DATE :

1 September 2005

JUDGMENT OF:
Simpson J

DECISION:
(i) in respect of the first importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $135,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $135,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $45,000; (ii) in respect of the second importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $180,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $180,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $72,000; (iii) in respect of the third importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $540,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $540,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $225,000; (iv) I order that, pursuant to s21B of the Crimes Act 1914, the defendant pay to the plaintiff reparation of $83,215.08; (v) pursuant to s263 of the Customs Act 1901, I order that the defendant pay the plaintiff's costs of the proceedings.

CATCHWORDS:
proceedings criminal in nature - importation of tobacco - admission of guilt - convictions - three offences of smuggling - three offences of evading payment of duty imposed by the Customs Act 1901 - three offences of knowingly or recklessly making to a Customs officer a statement that was false or misleading in a material particular - penalties provided by the Act - legal principles applicable - subjective circumstances - principle of totality - deterrence, general and specific - penalties selected to fit the scale of seriousness of each offence, based principally upon the amount of duty evaded

LEGISLATION CITED:
Crimes Act 1900 (NSW)
Crimes Act 1914 (Cth), s4K, s16A(1), s16A(2)(c), s21B
Customs Act 1901, s233(1)(a), s233AB(1), s234(1)(a), s234(1)(d)(i), s234(2)(a), s234(2)(c), s263

CASES CITED:
Cameron v The Queen [2002] HCA 6 (14 February 2002)
Chief Executive Officer of Customs v Mourad El Sayed [2003] NSWSC 1092, unreported, 26 November 2003
Comptroller-General (Customs) v Wong and Rizoli Pty Ltd (1998) 103 A Crim R 491
L Vogel and Sons Pty Ltd v Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia [1967] HCA 46; 120 CLR 157
Murphy, Minister of Customs and Excise for the Commonwealth of Australia v H. F. Trading Company Pty Ltd (1973) 47 ALJR 198
Pearce v The Queen [1998] HCA 57; 194 CLR 610
R v Bugeja [2001] NSWCCA 196, unreported, 11 May 2001
R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383
R v Todd [1982] 2 NSWLR 517
R v Williams [2005] NSWSC 314

PARTIES:
Chief Executive Officer of Customs - Plaintiff
Mark Coulton - Defendant

FILE NUMBER(S):
SC 20057/03

COUNSEL:
MA Wigney - Plaintiff
M Gelbert - Defendant

SOLICITORS:
Australian Government Solicitor
Dennis & Company

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SIMPSON J

Thursday 1 September 2005

20057/03 CEO Customs v Mark Coulton
JUDGMENT

1 HER HONOUR: By statement of claim filed on 6 March 2003 the plaintiff, the Chief Executive Officer of Customs (appointed under the Customs Act 1901 (“the Act”)), sought against the defendant, Mark Coulton, a series of orders under the Act. The orders sought were:-

Crimes Act 1914

2 On 11 November 2003 the defendant filed a defence to the proceedings, putting in issue a number of the facts and circumstances alleged by the plaintiff in the statement of claim. Eventually, the matter was set down for a contested hearing to commence on 4 April 2005. On that day the defendant consented to the orders outlined in (i) to (iii) above, and nine orders of conviction were accordingly made.

3 The present judgment, therefore, concerns the consequences which flow from those orders, that is, whether penalties ought to be imposed, and if so, the quantification thereof; whether an order for reparation ought to be made; and whether the defendant ought to be ordered to pay the costs of the proceedings.

4 The facts of the offences were put before me by way of an agreed statement, together with detailed documentation. The statement reveals the following. Each smuggling offence was linked with a corresponding evasion of duty offence and an offence of making a false statement. That is, the offences fell into three groups, each group being made up of one offence of smuggling, one offence of evasion of duty, and one offence of making a false statement. In short, the defendant engaged in three separate enterprises of importation of tobacco, each of which involved him in committing three separate offences against the Act. Each enterprise involved the defendant in unlawfully importing into Australia of a quantity of tobacco, evading duty payable under the Act on that importation, and knowingly or recklessly making materially false statements to Customs officers.

5 All offences were committed in 1999. Although not all importations were effected in precisely the same way, there was a marked pattern of similarity between them.

6 Late in 1998, in the Netherlands, and using a false name (Mark Wilson), the defendant purchased 349,000g of Drum tobacco, packed in 6,980 x 50g pouches. The pouches were packed so as to disguise the true identity of their contents. Using the same false name, the defendant arranged for the tobacco to be shipped to Guam. Using his own name, he obtained a licence to import tobacco into Guam. Thereafter he had the tobacco shipped to Australia, packaged as coconut soap. It arrived on 3 January 1999. The defendant instructed a licensed customs broker to submit importation documents identifying the substance as coconut soap, and made other false statements. Duty of $75,165.37 was payable on the quantity of tobacco. Duty of $154.67 was payable on the quantity of coconut soap declared, and this amount was paid. Duty of $75,010.70 was thus avoided.

7 The consignment of tobacco was seized by Customs officers on 15 January 1999.

8 The second shipment involved 383,000g of Drum tobacco, contained in 7,660 x 50g pouches. It was shipped to Australia from the USA, concealed in eight plastic motor oil drums, and was so described, on the defendant’s instructions, in shipping and importation documents. The defendant instructed another licensed customs broker to complete the Australian documentation, for the importation of motor oil, on which no duty was payable. The shipment arrived on 15 March 1999. Duty of $83,215.08 was payable on the relevant quantity of tobacco. The drums were released to the defendant, and the tobacco, presumably, was then marketed.

9 The third shipment comprised 1,069,000g of Drum tobacco, contained in 21,380 x 50g pouches, sent to Australia from the USA. It arrived on or about 13 May 1999, and was again concealed in motor oil drums, and was again so misrepresented in shipping and importation documents. Acting on the defendant’s instructions, the same licensed customs broker submitted to Customs documents identifying the goods as motor oil, again attracting no duty. Duty payable on the relevant quantity of tobacco was $232,263.51.

10 This tobacco also was seized by Customs officers on its arrival in Australia. The total duty evaded was $390,489.29.

penalties provided by the Act

smuggling offences

11 Maximum and minimum penalties are prescribed by s233AB(1) of the Act in respect of the offences of smuggling. Where (as here is the case) the amount of duty evaded is ascertainable, the minimum penalty is twice the amount of duty payable; the maximum penalty is five times that amount. The range of penalties available for the smuggling offences is, therefore:

first shipment: $150,330.14 - $375,862.00
second shipment: $170,430.16 - $426,075.40
third shipment: $464,527.02 - $1,161,317.60

evasion

12 By s234(2)(a), penalties identical to those prescribed for the smuggling offences, both maximum and minimum, are prescribed for the offences of evasion.

false statement

13 In respect of offences of making false statements, s234(2)(c) prescribes a maximum penalty of $5,000, plus twice the duty payable. No statutory minimum is prescribed for these offences.

14 The total penalties applicable to the defendant’s offending range from a minimum of $1,570,575.80 to a maximum of $4,726,727.50.

15 The defendant did not give evidence. There is no direct evidence before me of his financial position. On his behalf was tendered some correspondence from the Australian Customs Service (“ACS”) to him, including, in 2000, two demands for the payment of the duty evaded. There was also a letter, dated 2 July 1999, not further explained, that showed that property (foreign currency, travellers’ cheques, and a significant sum of Australian currency) had been seized during the execution of a search warrant, presumably at his home. ACS officers at that time formed the view that the cash and the travellers’ cheques were located under such circumstances as to permit an inference that they were:

“evidential material related to offences the subject of the warrant and are things that could reasonably be suspected of being unlawfully obtained”.

Crimes Act 1900

(NSW)

16 It is not clear to me how this advances the defendant’s case in relation to penalty.

17 Also tendered was medical and psychological material which was admitted on a confidential basis and subject to non-disclosure directions. Accordingly, I do not propose to say more about the substance of that evidence, other than to note that the defendant suffers a significant health problem and that I have taken that into account as a relevant subjective circumstance. It is sufficient to observe that the defendant has made out a strong subjective case, based on his personal circumstances. That is not to say that the offences are mitigated, but rather that compassion permits a measure of mitigation in the penalties to be imposed.

18 The proceedings are criminal in nature, and the principles applicable to sentencing Commonwealth offenders are relevant. Circumstances adverse to the defendant that are said to aggravate the offences must be proved beyond reasonable doubt; the provisions of Part 1B of the Crimes Act 1914 govern the imposition of penalties. In particular, s16A(1) requires a court to:

“ ... impose a sentence or make an order that is of a severity appropriate in all the circumstances of the offence.”

19 Sub-s(2) provides a list of matters that, so far as they are relevant and known to the court, the court must take into account. The sub-section is, in reality, a fairly conventional catalogue of sentencing considerations. In addition to the requirements of Part 1B, subss4K(3) and (4) provide:

if those charges

form, or are part of, a series of offences of the same or a similar character

(4) If a person is convicted of two or more offences referred to in sub-section (3), the court may impose one penalty in respect of both or all of those offences, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if a separate penalty were imposed in respect of each offence.” (emphasis added)

20 The plaintiff has explicitly submitted that the offences fall into the worst category of case and, accordingly, call for the imposition of the maximum penalty. (That submission was somewhat modified, as will appear below.) In support of the submission that the offences fall into the worst category, counsel for the plaintiff described the defendant’s conduct as:

“... sophisticated, premeditated, highly planned, and involved high level dishonesty and deceit.”

21 Counsel went on to characterise the defendant’s criminality as follows:

“His fraudulent scheme to smuggle tobacco into Australia without paying duty involved the use of false names, fictitious business names, the improper use of genuine business names without the consent of the proprietors of the business, a web of false telephone numbers and addresses and the making of many false statements. He duped many innocent persons and businesses into being the unwitting agents of his fraud. The quantities of tobacco and money involved in each shipment were large.”

22 Although, in the somewhat attenuated recital of facts I have earlier given, the detail of what is here spelled out does not emerge, this is not an unfair description and, indeed, no issue was taken with it by counsel for the defendant.

23 Counsel for the plaintiff accordingly called for the maximum penalty to be imposed in respect of each smuggling offence, but, in recognition of the principle of totality, sought only the minimum penalty in relation to the evasion offences; and, in respect of the false statement offences, sought that the maximum fine of $5,000 be imposed, but without any additional penalty referable to the quantum of the duty evaded.

24 Does the (accurate) characterisation of the offences above justify a conclusion that they fall into the worst category, permitting the imposition of the maximum penalties? One circumstance on which reliance was placed by the plaintiff was the large amount of duty evaded. This creates a practical difficulty. Counsel conceded that this court does not have the benefit of accumulated familiarity with offences against these statutory provisions, giving a sense of the relativity of the objective gravity of one offence against the pattern of offences with which the court commonly deals. Such accumulated familiarity is available to the court in more commonly prosecuted offences, even under the Customs Act, where, for example, drugs are involved. The amounts of duty evaded are indeed very large, but where the defendant’s offences fall in relation to other offences of their kind is not at all clear to me and I am not able to use that as a criterion for coming to the conclusion urged upon me. I accept that the extent of organisation, the network of false names and false documentation, and the clear picture of an enterprise, and one which was continuing, is all relevant to the assessment of criminality involved. I have no doubt that the offences are very serious instances of offences of their kind.

25 No doubt for good reason, I have not been provided with an array of comparable cases, or statistical material, from which to discern the proper place of the defendant’s offences in any hierarchy of offences of their kind. Serious as they obviously are, I am unable to conclude that the defendant’s offences are in the worst category of cases, such as to justify even consideration of the imposition of the maximum penalty in respect of any one or more of the offences. That does not make the penalty task any easier.

26 I was referred to one decision, that of Mathews AJ in Chief Executive Officer of Customs v Mourad El Sayed [2003] NSWSC 1092, unreported, 26 November 2003.

27 After a contested hearing her Honour found that defendant guilty of one offence of smuggling, one offence of evasion of duty and one offence of making a false statement (that is, a single instance of each of the offences of which the present defendant is guilty), and one offence of unlawful importing. The first three offences concerned an importation of cigarettes (6,969,000 in number) and the evasion of duty $1,438,750 payable thereon. (The unlawful importation offence concerned a separate consignment, of 15 kilograms of tobacco leaf. It is relevant to mention that offence, having regard to the need to sentence the defendant in respect of his overall criminality. It is not otherwise relevant to the present sentencing exercise.)

28 Her Honour appears to have been unaware of the minimum penalty that then applied to the offence of smuggling. The maximum penalty applicable was, as now, five times the value of the duty payable. The minimum and maximum penalties prescribed for the offence of evasion were, as now, respectively, twice and five times the amount of duty payable; and the maximum penalty applicable to the offence of making a false statement was, as now, $5,000, together with twice the value of the duty payable.

29 Of these penalties, Mathews AJ said:

“58 Under the second offence, I am required to impose a minimum penalty which is much greater than any penalty I would have considered imposing had there been a discretion in the matter. On all accounts it will be ruinous for the defendant. However there is no choice in the matter, as [counsel for the defendant] conceded. …”

30 Whilst I share her Honour’s distaste for the magnitude of the applicable penalties, and for imposing “ruinous” penalties, I have difficulty reconciling her approach with the need to accord due deference to the supremacy of Parliament in prescribing penalties. Parliament has spoken, and it is the task of this court to implement its will. In this regard it is apposite to recall the observations of Kitto J, as long ago as 1967, in L Vogel and Sons Pty Ltd v Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia [1967] HCA 46; 120 CLR 157. At p 164 his Honour said:

“The duty evaded has now been paid, and I understand that when the evasions were discovered the defendants gave the Customs every assistance in their investigations. But when all the considerations relied upon by the defendants have been given due attention the case still cannot be regarded as

Customs Act

31 It is, however, appropriate, in the determination of penalties, to bear in mind that, although each importation involved three separate offences, each of those three separate offences was substantially contemporaneous and connected with each other: Murphy, Minister of Customs and Excise for the Commonwealth of Australia v H. F. Trading Company Pty Ltd (1973) 47 ALJR 198.

32 Quite obviously, the legislature has determined that, in sentencing for customs offences, deterrence, both general and individual, is a factor of very considerable weight. Penalties imposed are required to reflect the serious inroads made on the revenue by customs offenders, and to render customs offending a very unattractive proposition. Some slight amelioration for that rather stern approach might be permissible by reason of s4K(4) of the Crimes Act. Nevertheless, I do not think it right to impose only a nominal penalty in respect of the false statement offences. Given that the defendant’s smuggling and evasion offences are subject to a minimum penalty, it is not, in any event, open to me to impose a nominal penalty in relation to those offences.

33 The principle of totality has to be given due weight. Further, it is of some significance that the defendant was, by the time of the second and third importations, a repeat offender. That, in itself, modifies any expectation of leniency he might otherwise have harboured. It is a factor relevant to be taken into account pursuant to s16A(2)(c) of the Crimes Act.

34 It is unnecessary to make specific reference to every consideration listed in s16A(2). I have already referred to those that are relevant in the present case.

35 The defendant is entitled to some reduction in penalty in recognition of his acknowledgement of his guilt and his consent to the findings of guilt. It is appropriate to assess the extent of that reduction by reference to the decision of this court (in relation to prosecutions brought under state legislation) in R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383; Cameron v The Queen [2002] HCA 6 (14 February 2002); R v Bugeja [2001] NSWCCA 196, unreported, 11 May 2001.

36 In this case, by reason of the very belated acknowledgement of guilt, the utilitarian value of the defendant’s admissions was diminished. The plaintiff was fully prepared to present the case, witnesses were arranged, and five days of court time had been set aside. Accordingly, the defendant could not hope to have his sentence reduced by anything approaching the maximum 25% specified in the Thomson and Houlton guidelines. Moreover, while the hearing would inevitably have involved a significant number of witnesses, and a good deal of documentary material (and would therefore have had a degree of complexity), it is not the sort of case in which witnesses have been spared any emotional trauma associated with giving evidence. The witnesses would largely have been Customs officers and customs brokers, giving evidence in their professional capacities. They have, obviously, been spared inconvenience. I am unable to see that the penalties should be reduced by any more than 10%. That is the discount I propose to apply.

37 Further, the consent to the findings of guilt is not indicative of any remorse or contrition, and there is no other evidence from which remorse or contrition could properly be inferred.

38 Counsel for the defendant pointed to the delay in the institution of proceedings and in their resolution. Relying upon the observations of Street CJ in R v Todd [1982] 2 NSWLR 517, he argued that lengthy delay in bringing criminal proceedings to finality:

“... calls for a considerable measure of understanding and flexibility of approach ...”

“This delay has not been the fault of either the plaintiff or the defendants, but is merely a consequence of the overburdened resources of the Supreme Court. Be that as it may, Mr Wong has had the pressure of these proceedings hanging over his head for some nine years.”

39 The cause of most of the delay in the present case was not explained. It is certainly not comparable to the delay in Wong’s case. Here, the offences were committed in the early part of 1999. Since two of the shipments were seized by ACS, it is apparent that the plaintiff was aware of the possibility or likelihood of at least two sets of charges at about the time of the commission of the offences. Nevertheless, a statement of claim was not filed until March 2003. The material provided to explain the nature of the offences establishes to my satisfaction that there was a considerable amount of investigation undertaken on behalf of the plaintiff. Just why that took so long I cannot say. There is no reason to infer that it was attributable to any conduct on the part of the defendant.

40 I would make one further observation here. The penalty proceedings were fixed for final submissions on 21 April 2005, just two weeks after the defendant’s admission of his guilt. On the morning fixed for hearing, the court was notified that the defendant’s solicitor had temporarily left the jurisdiction and was unable to be available to represent him. That extraordinary discourtesy to the court is not to be visited upon the defendant, but that part of the delay is hardly a circumstance that can be taken into account in his favour.

41 Responding to the defendant’s submission concerning delay, counsel for the plaintiff argued that the delay was not unusual and that it did not justify any significant reduction in the penalties to be imposed. He referred to the sentencing remarks made by Wood CJ at CL in R v Williams [2005] NSWSC 314. There his Honour observed that delay in the prosecution of cases such as that before him (a case of corporate fraud) was not unusual, and was often occasioned by difficulty of detection and the need for investigation. That does not seem to me to be apposite in the present case: the plaintiff knew of two of the shipments at the time they entered Australia. Counsel for the plaintiff responded that it was still necessary for Customs to link the importation with the defendant, and to make extensive investigations into the relevant chains of events.

42 I simply do not have the material to make an assessment of the cause of, or any justification for, the delay in the commencement and prosecution of the proceedings. In sentencing, I do bear in mind that there has been significant delay, and I give it some limited weight, but it is not a matter that weighs heavily in the balance.

43 Counsel for the defendant also argued that I should take the course provided for by s4K(4) of the Crimes Act, and impose one penalty in respect of each offence of its kind. This was the course taken by Carruthers AJ in Wong. Wong had committed exactly the same offences as the defendant, and in respect of three shipments of imported goods (not tobacco). Carruthers AJ imposed the minimum penalty (that is, twice the duty evaded) in respect of each of the smuggling and evasion offences, and declared that those penalties were to incorporate the penalties applicable to each of the other smuggling and evasion offences. He took a similar course in relation to the false entry offences, imposing a single fine, which encompassed all false entry counts.

44 Counsel for the plaintiff opposed the submission that I should adopt a similar course, arguing that each shipment represented a separate and discrete set of offences, and ought not attract the beneficial provisions of s4K(4) (if they are, indeed, beneficial). Contrary to the submission put on behalf of the plaintiff, I am satisfied that all offences did, within the meaning of the subsection:

“ ... form, or [were] part of, ... a series of offences of the same or a similar character.”

45 It would, therefore, be open to me to impose a single penalty in relation to the three smuggling offences, another in relation to the three evasion offences and a third in relation to the three false statement offences. (This is because the course is permitted to be taken where the offences are “against the same provision ...”)

46 The conclusion that the offences were, within the meaning of s4K(3), part of a series of offences of the same or a similar character does not necessarily lead to a conclusion that a single penalty should be imposed. That remains discretionary. In any event, the court is not limited when sentencing under s4K(4) to the maximum penalty available in respect of a single offence. The subsection makes it clear that the maximum penalty that may be imposed under its provisions is the total of those that could have been imposed if each offence had been the subject of a separate penalty. Where the subsection is silent, and rather mysterious, is in its application to offences for which a statutory minimum has been prescribed. In Wong Carruthers AJ obviously took the view that the subsection left open the imposition of the statutory minimum applicable to a single offence, even when the imposition of the penalty relates to a number of offences. I have doubts about whether that was the intention of the legislature. The imposition of a single monetary penalty in relation to a series of offences is obviously a matter of convenience, but I doubt that it was intended that the use of the power conferred by the subsection would enable a court to avoid the effect of the statutory minimum sentences. It is for that reason that I earlier queried whether s4K(4) is, in reality, a beneficial provision.

47 It is unnecessary to resolve this question, because I am satisfied that it is inappropriate to take the course offered by s4K(4). Although the offences were part of a course of conduct, they were separate and distinct offences, and ought be penalised accordingly.

48 I have two conceptual difficulties in imposing penalties. Firstly, the total penalties applicable, which I have set out above, even at their minimum, are of a level seldom encountered in sentencing practice. They are confronting in their magnitude. It is difficult not to draw back in surprise when the minimum and maximum penalties, in respect of each offence, are quantified; the more so when the total available penalties are quantified. In this respect, I share the instinctive reaction of Mathews AJ to the magnitude of the penalties prescribed, particularly the statutory minimum. But, for the reasons I have already given, to allow that to influence the penalty decision would circumvent the will of the legislature. The legislature has (and for very good reason – as explained in L Vogel and Son Pty Ltd v Anderson) determined that penalties for customs offences are to be of a very high order indeed, and has, by prescribing minimum penalties, ensured that it will be effected. That is the clearest possible indicator that Parliament intended the penalties prescribed for customs offences to be taken seriously by the courts.

49 Counsel who appeared for the plaintiff proposed that the defendant be sentenced as follows:

(i) in relation to each smuggling offence, by the imposition of the statutory maximum penalty;

(ii) in relation to each evasion offence, by the imposition of the statutory minimum penalty;

50 I have already given my reasons for not accepting that the maximum penalty for the smuggling offences should be imposed. That is not to say that the offences should not be treated as serious; it is simply to say that I am not persuaded to the requisite level that they represent offences in the worst category of their kind.

51 Moreover, I do not accept that the evasion offences should be treated as the least serious of their kind, which would be the inference if the imposition of the minimum penalties available were imposed. The course proposed on behalf of the plaintiff, it seems to me, is contrary to the now well-established sentencing principle laid down by the High Court in Pearce v The Queen [1998] HCA 57; 194 CLR 610. Of course, imposing less than the maximum in relation to the smuggling offences, and more than the minimum in relation to the evasion offences, may well yield a result, in monetary terms, similar or identical to that proposed by the plaintiff, but that result will have been achieved by the application of orthodox sentencing principle.

52 If I were to impose the penalties proposed by the plaintiff, the penalties would be as follows:

TABLE 1

Smuggling $	Evasion $	False statement $	TOTAL $
Shipment 1	375,826.85	150,330.74	5,000.00	531,157.59
Shipment 2	426,075.40	170,430.16	5,000.00	601,505.56
Shipment 3	1,161,317.60	464,527.02	5,000.00	1,630,844.60
TOTAL	$2,763,507.75

53 If, on the other hand, in respect of each offence, I were to impose a penalty of 60% of the available maximum, the following would result:

TABLE 2

Smuggling $	Evasion $	False statement $	TOTAL $
Shipment 1	225,496.11	225,496.11	93,198.44	544,190.66
Shipment 2	255,645.24	255,645.24	105,258.09	616,548.57
Shipment 3	696,790.56	696,790.56	281,716.21	1,675,297.33
TOTAL	2,836,036.56

54 I am not satisfied that either course represents good sentencing practice. In my opinion, the second and third sets of offences ought to carry progressively heavier penalties than the first. Each offence should be given its full weight.

55 The penalties I would impose, absent the admissions of guilt, and the discounted penalties I will impose (subject to rounding off), are set out below:

TABLE 3

Shipment 1	$	less 10% $
Smuggling	150,000.00	135,000.00
Evasion	150,000.00	135,000.00
False statement	50,000.00	45,000.00
TOTAL	$350,000.00	$315,000.00
Shipment 2	$	less 10% $
Smuggling	200,000.00	180,000.00
Evasion	200,000.00	180,000.00
False statement	80,000.00	72,000.00
TOTAL	$480,000.00	$432,000.00
Shipment 3	$	less 10% $
Smuggling	600,000.00	540,000.00
Evasion	600,000.00	540,000.00
False statement	250,000.00	225,000.00
TOTAL	$1,450,000.00	$1,305,000.00

56 In selecting these penalties I have endeavoured to fit each of the offences into a scale of seriousness, based principally upon the amount of duty evaded.

57 The total penalties imposed are $2,052,000.00.

58 In respect of the second shipment only, the plaintiff seeks an order for reparation in the amount of duty evaded, $83,215.08. No reason was advanced why such an order should not be made; and I can think of none. I will make such an order.

59 Similarly, the plaintiff seeks an order that the defendant pay the costs of the proceedings. S263 of the Act provides for such an order. To decline to make it would be to deprive the plaintiff of the benefit of some of the penalties imposed. I will make the order sought.

Orders

The orders I make are

Customs Act

(iv) I order that, pursuant to s21B of the Crimes Act 1914 , the defendant pay to the plaintiff reparation of $83,215.08;

(v) pursuant to s263 of the Customs Act 1901 , I order that the defendant pay the plaintiff’s costs of the proceedings.

**********

Citations

CEO of Customs v Coulton [2005] NSWSC 869

Most Recent Citation

Cases Citing This Decision

10

Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (No 2) [2006] QSC 40

Chief Executive Officer of the Australian Customs Service v Karam (No 2) [2013] NSWSC 33

Chief Executive Officer of Customs v Samisoni Volita Havili Kaufusi [2012] NSWSC 200

Cases Cited

6

Statutory Material Cited

3

Cameron v the Queen [2002] HCA 6

Chief Executive Officer of Customs v Mourad El Sayed [2003] NSWSC 1092

Pearce v The Queen [1998] HCA 57

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CITATION:	CEO of Customs v Coulton [2005] NSWSC 869
HEARING DATE(S):	4 April 2005, 21 April 2005, 18 July 2005
JUDGMENT DATE :	1 September 2005
JUDGMENT OF:	Simpson J
DECISION:	(i) in respect of the first importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $135,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $135,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $45,000; (ii) in respect of the second importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $180,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $180,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $72,000; (iii) in respect of the third importation: (a) the defendant is convicted of the offence of smuggling. I order that he pay a penalty of $540,000; (b) the defendant is convicted of the offence of evading payment of duty imposed by the Customs Act. I order that he pay a penalty of $540,000; (c) the defendant is convicted of the offence of knowing or recklessly making to a Customs officer a statement that was false or misleading in a material particular. I order that he pay a penalty of $225,000; (iv) I order that, pursuant to s21B of the Crimes Act 1914, the defendant pay to the plaintiff reparation of $83,215.08; (v) pursuant to s263 of the Customs Act 1901, I order that the defendant pay the plaintiff's costs of the proceedings.

CATCHWORDS:	proceedings criminal in nature - importation of tobacco - admission of guilt - convictions - three offences of smuggling - three offences of evading payment of duty imposed by the Customs Act 1901 - three offences of knowingly or recklessly making to a Customs officer a statement that was false or misleading in a material particular - penalties provided by the Act - legal principles applicable - subjective circumstances - principle of totality - deterrence, general and specific - penalties selected to fit the scale of seriousness of each offence, based principally upon the amount of duty evaded
LEGISLATION CITED:	Crimes Act 1900 (NSW) Crimes Act 1914 (Cth), s4K, s16A(1), s16A(2)(c), s21B Customs Act 1901, s233(1)(a), s233AB(1), s234(1)(a), s234(1)(d)(i), s234(2)(a), s234(2)(c), s263
CASES CITED:	Cameron v The Queen [2002] HCA 6 (14 February 2002) Chief Executive Officer of Customs v Mourad El Sayed [2003] NSWSC 1092, unreported, 26 November 2003 Comptroller-General (Customs) v Wong and Rizoli Pty Ltd (1998) 103 A Crim R 491 L Vogel and Sons Pty Ltd v Anderson, Minister of State for Customs and Excise for the Commonwealth of Australia [1967] HCA 46; 120 CLR 157 Murphy, Minister of Customs and Excise for the Commonwealth of Australia v H. F. Trading Company Pty Ltd (1973) 47 ALJR 198 Pearce v The Queen [1998] HCA 57; 194 CLR 610 R v Bugeja [2001] NSWCCA 196, unreported, 11 May 2001 R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383 R v Todd [1982] 2 NSWLR 517 R v Williams [2005] NSWSC 314
PARTIES:	Chief Executive Officer of Customs - Plaintiff Mark Coulton - Defendant
FILE NUMBER(S):	SC 20057/03
COUNSEL:	MA Wigney - Plaintiff M Gelbert - Defendant
SOLICITORS:	Australian Government Solicitor Dennis & Company