CEO of Customs v El Hajje

[2005] HCATrans 34

[2005] HCATrans 034

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M171 of 2004

B e t w e e n -

CHIEF EXECUTIVE OFFICER OF CUSTOMS

Appellant

and

NAZIH EL HAJJE

Respondent

McHUGH J
GUMMOW J
KIRBY J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 10 FEBRUARY 2005, AT 10.05 AM

Copyright in the High Court of Australia

MR C.M. MAXWELL, QC:   May it please the Court, I appear with my learned friend, MR P.D. NICHOLAS, for the appellant.  (instructed by Australian Government Solicitor)

MR D.B. BAKER:   May it please the Court, I appear together with my friend, MR G.J. HERBERT, for the respondent.  (instructed by Michael J Gleeson & Associates Pty Ltd)

McHUGH J:   Yes, Mr Maxwell.

MR MAXWELL:   If the Court pleases.  Your Honours, might I point out two introductory matters.  The first is that a point is raised by the respondent about the sentence and it is a correct point.  The wrong provision was applied and the sentence is greatly excessive, the maximum being $11,000.  We will come back to that, but I thought I should indicate that to your Honours straight away, and we will explain how it was that the provision had been amended by the time of the trial, but that appears not to have been adverted to.

The other matter is that the contention by the respondent that the averment provision was not invoked by Customs at the trial is not correct.  That is a matter of agreement between us now.  It is recorded in the trial transcript that your Honours do not have, but which we have copied, should it become relevant. 

Your Honours, this is, as we have sought to demonstrate in the outline of argument, essentially a case about statutory interpretation, and we have really capitulated our argument in paragraphs 32 to 34 of the outline.

KIRBY J:   Well, that is one way to categorise the case. Another way to categorise it is that it involves a question, which neither side seem to be interested to argue, about the extent to which the Parliament can, as it were, push the courts out of any substantial function in disposing of matters by expedience of providing for averments. I mean, both of you agree there is no constitutional question in this case but as far as I am concerned, hovering in the background of this case is a matter that has been awaiting consideration for a very long time. However, I find it difficult to construe statutes in the context of the Constitution without regard to what the Constitution provides. I note what the parties say about there being no constitutional point but I do not necessarily agree with that.

However, you press on with your statutory argument and it may be that the matter can be solved within the four walls of the statute but, if it cannot, at least as far as I am concerned, there may be a constitutional question that I will wish to consider. We cannot ignore the Constitution just because the parties agree.

MR MAXWELL:   With great respect, we of course accept that.  We would simply confirm that we say there is no issue, and indeed the capacity of the Parliament to legislate averment provisions has not seriously been doubted, though a question I think was touched on in Hush’s Case.  We also, with great respect, would not accept your Honour’s characterisation that the averment provision in any material sense shuts the Court out from performing its functions ‑ ‑ ‑

KIRBY J:   Well, the only point that was left was intent, on your argument.

MR MAXWELL:   That is so, but the averment only gets the case going, as it were.  It does not ‑ ‑ ‑

KIRBY J:   You see, we live in a time, not necessarily in this country but in other countries, where in important matters courts are really being excluded from the functions that have been traditional to courts, and if you can just aver everything and essentially put the onus of proof on the accused, then why bother having courts?

MR MAXWELL:   Well, with great respect, the averment provision does not put the onus on the defendant and ‑ ‑ ‑

KIRBY J:   Well, it does, to displace the matters which the Crown or the Commonwealth avers.

MR MAXWELL:   To lead evidence to put matters in issue, yes, but this Court reaffirmed in Labrador recently what the Court had said in Hush’s Case, that it does not remove the onus from the prosecutor, but it is a way of the prosecutor discharging the onus.  That is all it says. 

GUMMOW J:   Milicevic v Campbell is relevant, too.

McHUGH J:   Yes.

MR MAXWELL:   I do not know, your Honour.

McHUGH J:   And I think in one of the Ah Way cases, was it not, back in the first ‑ ‑ ‑

GUMMOW J:   Yes, which is affirmed in Milicevic.

McHUGH J:   Yes.

KIRBY J:   But they were in earlier and, one might say, more naïve times.

GUMMOW J:   Milicevic was in the 1970s.

KIRBY J:   It may be that in the current age, some of those observations have to be reconsidered.  Anyway, I am just putting that on the record, so that you will not assume that I necessarily agree with what the parties say about the constitutional irrelevancy.

MR MAXWELL:   If your Honour please. Might I take the Court to 32 to 34 of our outline and then I will take your Honours to the provision. It is our respectful submission that section 144 of the Excise Act as it stood - and we have set that out earlier in the outline in full on page 2 – that Parliament intended that any and every relevant matter of fact, other than intent, could properly be the subject of an averment. 

KIRBY J:   On your theory the Parliament could also take intent out ‑ ‑ ‑

MR MAXWELL:   Yes, it could.

KIRBY J:   - - - and, against hundreds of years of history, make it possible that in every criminal offence of the Commonwealth the accused has to prove beyond reasonable doubt that they are innocent.

McHUGH J:   I am not sure that there are hundreds of years of history, with great respect to Justice Kirby.  After all, as Justice Dixon convincingly demonstrated in an article in 1935, Woolmington was a departure in the law of murder.  Once death was proved the onus was on the accused to prove it was done without malice.  There is nothing novel about it.

MR MAXWELL:   In any event, your Honour, we do ‑ ‑ ‑

GUMMOW J:   In any event, these averment provisions in revenue matters and customs matters in England go back a very long way.

MR MAXWELL:   Indeed, and we took the trouble to have a look at that, your Honour, and we went back as far as about 1825, and no doubt earlier than that and in those provisions, as in the Excise Act at Federation, 1901 enactment, the provision was more stringent because it was in terms that the averment shall be sufficient proof. In section 144 as originally enacted, the averment “shall be deemed to be proved in the absence of proof to the contrary”, and that was reflecting the English antecedents going back centuries. It was amended in 1918 to introduce the form that the provision now has where the averment is prima facie evidence.

KIRBY J:   You refer in a footnote to a recent parliamentary committee which has passed on these matters ‑ ‑ ‑

MR MAXWELL:   Yes, your Honour, we ‑ ‑ ‑

KIRBY J:   Do we have a copy of that, has that been sent to us?

MR MAXWELL:   We did not furnish it to your Honours because it is simply descriptive by reference to some of the decisions of what has been said about averments.

KIRBY J:   That is true, but it is a highly respected committee with a good secretariat, and it is sometimes is helpful to the Court.

MR MAXWELL:   So it is, your Honour.  We could certainly arrange to furnish the Court with copies.

KIRBY J:   I would like to look at it.

MR MAXWELL:   We have certainly looked at it, and we have made the point in footnote 26, paragraph 38, that concerns about the scope of averment provisions have been ventilated by bodies reviewing Commonwealth law several times.

KIRBY J:   They are not the only actors in this drama.

MR MAXWELL:   That is so, and the House of Representatives Committee usefully summarises those early inquiries and recommendations, and notes that in the end, as is plainly the case, these have been left to the Parliament to deal with and there has been no change.  For example, committees have recommended that averments should be confined to formal matters.  That has never been legislated.

KIRBY J:   Perhaps the matters that cause disquiet within the committee of the Parliament are the matters that cause disquiet to me.

MR MAXWELL:   Indeed, and your Honour will see ‑ ‑ ‑

KIRBY J:   And they have their function to play under the Constitution and so has this Court. Anyway, we will press on. It may not come up.

MR MAXWELL:   That committee usefully summarises, in the paragraphs we have mentioned in footnote 26, the consideration that has gone on in a number of committees, and in Mr Else‑Mitchell’s 1945 article there is a reference to an earlier committee, again considering a narrowing of the scope, but we make the point really in that whole section on page 8 that there are limits on what may be averred.  The statute imposes some, the case law imposes others, and there is no warrant for the Court of Appeal to have imposed a fundamental restriction of its own, that is to say, as the Court declared, it is not a proper subject matter of an averment to aver the ultimate fact, and we say in paragraph 35:

the limit which the Court of Appeal has purported to impose . . . is wholly novel.

We then seek to support that by saying not only is there no support for that restriction in the statute itself or in the case law, but the case law runs all the other way.

The example we give is in paragraph 23, page 6 and your Honours may recall Hush’s Case is the one which had an averment which took hours to read and was, I think, described by Mr Justice Evatt as the most extraordinary document he had ever seen, but ‑ ‑ ‑

KIRBY J:   No, “in the history of the law”, I think he said.

MR MAXWELL:   I think your Honour is right, I should have got that ‑ ‑ ‑

KIRBY J:   Please do not understate it.

MR MAXWELL:   But critically, it was averred and I think it is averment 61, and I can take your Honours to it, that the defendant’s publication:

contained a solicitation of contributions of money for an unlawful association, namely the Communist Party of Australia.

And we have set out in 24 the core element of the statutory offence which was in exactly that language. If your Honours are looking at it, the averment is set out in 48 CLR 494.

KIRBY J:   It looks as though the drafter thought it was necessary to get into the evidence and not to state the ultimate fact.

MR MAXWELL:   Indeed, and we rely on the Court’s clear statement that that is wrong, that you do not aver evidence to say that the Court of Appeal’s instinct was, with great respect to their Honours, wrong.  It is far more appropriate, we have submitted, to aver the ultimate fact than to aver the evidence which you would rely on to establish that fact.  What Justice Buchanan evidently wanted was statements of fact about the steps in the process of manufacture and the nature of the cutting that went on that would enable you to say that this was cut in a particular way and accordingly it was manufactured tobacco.  What your Honours can see was done in Hush was to aver in 61:

you, the said Francis Harold Devanny, published the said Workers’ Weekly which contained a solicitation of contributions of money for an unlawful association, namely, the Communist Party of Australia -

Now, if they had stopped there, the averment would have been unimpeachable but they set out the terms of the solicitation and, as the Court was entitled to do, it examined the entirety of the material and said, no.  When you read the solicitation which begins in quotes:

Prepare for August First -

and goes on to the top of the next page, concluding with:

Funds are urgently needed for the above task.  Rush them in immediately.- W.H. Nugent, Campaign Secretary.

Their Honours concluded that that did not show solicitation of contributions for the Communist Party of Australia but rather in respect of a particular demonstration.

HAYNE J:   Now, is Hush to be understood as a case about what may be averred or, rather, is Hush to be understood as a case about what consequence follows from the making of averment?  What I have in mind particularly is what Justice Dixon says at the foot of 507 over to the top of 508 about the significance to be attached to the making of an averment.

MR MAXWELL:   Yes, your Honour.  We say, with respect, it is both.  Your Honour Justice Hayne in the Labrador Liquor Case cited that passage from Justice Dixon, and we want to come to what the Court said in Labrador.  We also rely on it in our paragraph 16 as giving one of three clear enunciations of what the function of an averment is; the first in paragraph 15 being Chief Justice Jordan, the second being the one your Honour is referring to and the third being from Mr Justice Higgins in Baxter v Ah Way.  But to stay with the passage from Mr Justice Dixon, the averment provision:

“does not place upon the accused the onus of disproving the facts upon which his guilt depends but, while leaving the prosecutor the onus, initial and final, of establishing the ingredients of the offence, beyond reasonable doubt, provides, in effect, that the allegations of the prosecutor shall be sufficient in law to discharge that onus.”

That, in our respectful submission, is the key to this case.  What is the onus his Honour has described?  It is the onus “of establishing the ingredients of the offence beyond reasonable doubt”, and his Honour goes on.  The averment provision means:

“in effect, that the allegations of the prosecutor shall be sufficient in law to discharge that onus.”

Ah Way, as we set out in paragraph 17, emphasises the point, which is not altered by the subsequent amendment of the provision, that the word covers the essential part of the offence and not merely technical averments.

It follows from that, in our respectful submission, and given this Court’s adoption and application of the passage from Mr Justice Dixon in Hush in Labrador Liquor, that one says this is a straightforward averment case, where the prosecutor avers the elements of the offence and is thereby capable of discharging his or its onus of establishing the guilt beyond reasonable doubt.

So, with respect, to answer your Honour’s question better than I did before, we principally rely on Hush for that proposition.  We call in aid the discussion about evidence, both its impermissibility as a subject matter of an averment and the ability of a court to look beyond the averment to any other evidence and decide whether, taking the matter as a whole, it should be satisfied beyond reasonable doubt.  We accept that that is always open - indeed, is a duty of the court - but in this case, there was an averment of all of the elements, and I will take your Honours through it in the amended statement of claim, including that element which requires that the defendant be in possession of manufactured or partly manufactured excisable goods.  That was averred, and it was said, namely cut tobacco, and there was no evidence from the defendant to suggest that it had not been manufactured, it had been cut, for example, for transportation, which is the example his Honour Justice Buchanan used in the Court of Appeal.

As Justice Callinan pointed out at the special leave application, that was, and we respectfully agree, an inapt example, given that there was nothing to suggest to the trial court that it might have been cut for that reason.  Indeed, as his Honour said, it would seem inevitable that cutting of tobacco is a step in the manufacture, but that inquiry does not arise, in our respectful submission, because there is an averment of a matter of fact, namely that these are manufactured goods.  We have given your Honours the citations of decisions in this Court which say the question of manufacture is a question of fact.  That is a question of fact and this is really a syllogism.  Any matter of fact may be averred, this was a matter of fact, it was properly averred, and the Court of Appeal says it is the ultimate fact in issue, the factum probanda ‑ ‑ ‑

GUMMOW J:   This is paragraph 21, is it, of the Court of Appeal’s reasons at page 30?  That is the critical paragraph, I think.

MR MAXWELL:   Exactly so, your Honour. 

GUMMOW J:   It is rather hard to follow the thread of paragraph 21.

MR MAXWELL:   We respectfully agree, and as ‑ ‑ ‑

HAYNE J:   Applying that reasoning, would it be open to Customs to aver that someone was in possession of manufactured or partly manufactured excisable goods, namely whisky?

MR MAXWELL:   Yes.

HAYNE J:   Under the Court of Appeal reasoning would that be open?

MR MAXWELL:   No, because on the Court of Appeal’s view, this notion of them being manufactured goods has some elevated status as described, characterised by his Honour as the ultimate fact in issue, whatever that might mean, and, in our respectful submission, each of the elements of the offence is a fact in issue and each of them must be proved by evidence subject to the calling in aid of an averment provision which enables you to prove facts.

KIRBY J:   Justice Buchanan does not in terms say that it was necessary for you to state the evidence.  He talks of stating any facts that showed that the tobacco in possession of the appellant was cut and he points out that it is possible to cut tobacco otherwise than in the process of the manufacture of goods, so ‑ ‑ ‑

MR MAXWELL:   With respect, his Honour asserts that.  There was no evidence before him to suggest that that was right.  It was a supposition.  But he does say that and, with respect, whether you describe the matters ‑ ‑ ‑

KIRBY J:   But is it not self-evidently true?  I mean, out in the backblocks they can cut tobacco.

MR MAXWELL:   Yes, indeed. 

KIRBY J:   So, in saying it, his Honour was only saying the obvious.  I realise this has a lot of history but, in terms of the principles of pleading, you do not plead evidence.

MR MAXWELL:   That is so.

KIRBY J:   But you do plead the facts essential to constitute the cause of action.  That was the traditional rule.

MR MAXWELL:   And the rules very clearly still say that, your Honour.  You are prohibited from pleading evidence.

KIRBY J:   And that does seem to be what Justice Buchanan is getting at, that it is not enough for you simply to plead the terms of the statute, that you have to, as it were, give the factual foundation that attracts the statute and, unless there is something in Labrador or in Hush that says that is wrong, I can see very sound reasons of history and principle for upholding what the Court of Appeal has said because it means that you have, as it were, stated what are the central facts that are averred and which are essential to bring the accused within the statute.  If there is a choice, I must say I would think a court would approach averments which are measures enacted by the Parliament protective of the Crown or of the Commonwealth in a fairly stringent way, so that you would accept the approach of the Court of Appeal as one defensive of liberty.  That, as far as I am concerned, is a way in which statutes, especially in the current age, should be scrutinised.  Now, what is wrong with the way his Honour expressed it at paragraph 21 when he says the averment omitted to state any facts that showed that the tobacco in the possession of the appellant was cut in the manner that converted it into the terms of the statute?

MR MAXWELL:   For precisely the same reason that you would not need to – let us say you were relying on the person having been in control of manufactured goods rather than possession.  It might be said there are constitutive facts that would lead you to that conclusion but it is averred and not suggested by the Court of Appeal that it could not have been, that there was possession, custody or control.  In our respectful submission, the error in the court’s analysis is demonstrated by the very language which is used.  If it is right to describe manufacture as a fact in issue, albeit the ultimate fact, it must by definition fall within the scope of the averment provision because it is a fact; it is not said to be a matter of law.

McHUGH J:   Under the common law system of pleading, you did not plead the facts, you pleaded the ultimate facts.  If you were pleading in, say, an industrial accident case, you said the defendant had the care, control and management of certain premises and thereby negligently did so‑and‑so.  I mean, the question of negligence was an ultimate fact that you alleged.

MR MAXWELL:   Indeed.

McHUGH J:   In this particular case, one would have thought the defendant could have had three averments which said: (1) the defendant had possession of manufactured goods; (2) excise had not been paid on those goods; (3) the defendant was not a manufacturer.

MR MAXWELL:   Indeed.  And:  (4) did not have authority.

McHUGH J:   Yes.

MR MAXWELL:   Might I take your Honours to the statement of claim because, in our respectful submission, it is an exemplary example of elegant pleading which does everything that is required and nothing more - not drafted by me.

KIRBY J:   I was wondering.  I was wondering if there was pride of authorship.

MR MAXWELL:   But his Honour Justice Hayne, who did lecture me in pleadings when I came to the Bar, will, I trust, agree with my characterisation.

HAYNE J:   Do not verbal me like that, Mr Maxwell.

KIRBY J:   That is the fact in issue.

MR MAXWELL:   If your Honours would note at the same time what 117 says, which begins at the foot of page 23 of the appeal book and goes over to the top of 24, and it says, if your Honours have it, at the foot of 23:

No person other than a manufacturer shall, except by authority, have in his possession custody or control any manufactured or partly manufactured excisable goods upon which Excise duty has not been paid. –

full stop.  We are not concerned with the “keep or store”.  It is the first limb of 117.  If your Honours go to paragraph 20 at the foot of page 4 to see where the averment appears:

To the extent permitted by law the Plaintiff avers the matters set out in paragraphs 2 to 8, inclusive, paragraphs 11 and 12 and paragraphs 14 to 19, inclusive.

Your Honours are only concerned with, I think, 2 to 8 in relation to the first limb.  Under 2 it is ‑ ‑ ‑

KIRBY J:   What is to be read into “To the extent permitted by law”?

MR MAXWELL:   Meaning if by accident we have mixed fact and law, then we only purport to aver the fact.  I would take it that is what it means, but the words are probably redundant because an averment cannot do more than the law would permit.  So 2 alleges and avers not a manufacturer, 4 Avers that:

the Defendant had in his possession, custody or control manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco –

Particulars are given, as they should be.  5 avers, alleges, that the goods were:

manufactured or partly manufactured . . . by a person not licensed as a manufacturer . . . 

6         No excise duty had been paid . . . 

7         At no time did the Defendant have any permission or authority -

In our respectful submission, if there was dispute about whether they were manufactured goods there would be a trial of fact and each side would lead evidence, the one to show that there was a process of manufacture of which the cutting was a part, the other to show that the cutting had nothing to do with manufacture but, we respectfully submit, that would fall on the evidence side of the line directed at proving or challenging the factual assertion that these were manufactured goods and that the pleading would be liable to be struck out if it had separate paragraphs saying on 1 June the tobacco was dried and then on 1 August it was put in the cutting machine and on 1 September it was packed into plastic bags for transport, in the premises there was manufacture.

It would be a matter for the judge on the strike-out application whether that was evidence or not but, with respect, that is an inquiry that this Court need not engage in if satisfied, as we submit your Honours must be, that the question of manufacture is a fact, albeit regarded by the Court of Appeal as the ultimate fact, and the prima facie evidence provision meant ‑ ‑ ‑

GUMMOW J:   What is the role of this notion of ultimate fact in issue in this realm of discourse? 

MR MAXWELL:   I do not know, your Honour.

GUMMOW J:   I do not quite understand it.

MR MAXWELL:   No, with great respect, nor do we and we have had ‑ ‑ ‑

HAYNE J:   In the context of pleadings I can understand material facts being distinguished from evidence.

MR MAXWELL:   Yes, your Honour.

HAYNE J:   But the ultimate fact has a singularity about it which is awkward.

MR MAXWELL:   And which is puzzling because why is it any more ultimate to show manufacture than to show lack of authority, for example.  The failure to show any one of those elements will mean that the charge is dismissed.  The other thing that, with respect ‑ ‑ ‑

KIRBY J:   Well, the problem is and this is, as I understand the reasoning of the Court of Appeal, picking up what Justice Fullagar said in Hayes that the word “manufactured” is the statutory word and it connotes that certain facts have occurred.  It conjures up in the mind images of wheels and pulleys and other such things that are doing the manufacturing and essentially, as I understand what the Court of Appeal is saying, picking up Hayes, is that you cannot just use the words of the statute.  You have to, as it were, give the facts that bring you within those terms.

I have to tell you, Mr Maxwell, if there is any doubt as to the state of the law on this matter, then I will favour the view taken by the Court of Appeal because it restricts the extent to which, by a deft act of a drafter, things are taken out of a court of law into a barrister’s chambers and the matter is cut and dried, if I can use those verbs in this connection, in a barrister’s chambers instead of in a Chapter III court or a court exercising federal jurisdiction.  There are reasons of policy, if I can say so, at least in my mind, unless the law is clear to the contrary for supporting what seems to be said by Justice Fullagar in Hayes and which the Court of Appeal in this case has followed.

MR MAXWELL:   In our respectful submission, the law is clear beyond doubt.

KIRBY J:   Well, you show that and I will conform to the law.

MR MAXWELL:   Indeed.

KIRBY J:   But if there is there is the slightest skerrick of doubt ‑ ‑ ‑

MR MAXWELL:   There is not a shred of authority to support ‑ ‑ ‑

KIRBY J:   Well, there is Hayes.

MR MAXWELL:   No.  With great respect, no.

McHUGH J:   Hayes has nothing to do with this case.

MR MAXWELL:   Hayes has nothing to do with it, with great respect.

McHUGH J:   It seems to me it has nothing whatever to do with the case.

KIRBY J:   Well, it depends on how you read these things.

MR MAXWELL:   No, but, your Honour, I am content to ‑ ‑ ‑

KIRBY J:   If you read them with one eye shut you do not see it.

MR MAXWELL:   I am content ‑ ‑ ‑

McHUGH J:   No, it is a question of getting in the same area of discourse.  They are two completely different areas of discourse.

MR MAXWELL:   It is.  We have sought to address the Hayes point ‑ ‑ ‑

GUMMOW J:   Hayes v Commissioner of Taxation ‑ ‑ ‑

KIRBY J:   Proceed with your argument, Mr Maxwell.  You have to convince me.

MR MAXWELL:   Well, I am just indicating, your Honour, we do not shrink from the challenge of trying to convince the Court that the question is clear beyond doubt about the permissibility of averring this fact.  Secondly, with great respect, it is not right to say that on any view an averment provision or its invocation by a party takes the matter out of the Court’s hands.  It is clear beyond doubt that it does not do that, with respect, because it is always open to a defendant to put a fact in issue.  Once that is done ‑ ‑ ‑

KIRBY J:   True, but it does have the tiny little consequence in the real world of trials of shifting the burden to the accused.

MR MAXWELL:   That is a slightly different way of putting it.  It does not mean that the matter is resolved by the barrister or the pleader.  It simply means that in a case, as it turned out which this was, where there would be no factual issue about manufacture because this driver was just that - he did not manufacture the tobacco, he was paid $500 to drive it – and he did not put in issue the matter of manufacture.  He did not know about it.  But that does not mean that this was somehow removed from the court’s purview by the averment.  It simply meant that a whole lot of time ‑ ‑ ‑

KIRBY J:   Or troublesome time of actually proving your case.

MR MAXWELL:   Well, Parliament throughout the 20^th century has said this is an appropriate way of facilitating proof in a case where matters are not put in issue.

KIRBY J:   Then there is a footnote.  But in facilitating proof Parliament has not meant that the prosecution can simply pick up the words of the statute and assert those words if, within those words, are essential factual elements that need to be asserted to bring the party within those words.

MR MAXWELL:   With great respect, we say Hush’s Case is a classic example of this Court upholding an averment which did precisely that, that is to say a solicitation of funds for an unlawful association.  I mean there would be steps along the way to establish that the Communist Party was an unlawful association.  It was never suggested in any of the judgments that that needed to be done.  The only problem in Hush was that there was other material which showed that it was not a solicitation for that party at all.

The second point is to adopt, with respect, what the presiding judge has said.  The Hayes issue is separate.  That arises where you are looking to appeal on a question ‑ ‑ ‑

GUMMOW J:   Well, his Honour was construing section 196 of the Income Tax Act 1936.

MR MAXWELL:   Which was appealed on a question of law.

GUMMOW J:   Not fact.

MR MAXWELL:   Indeed.

GUMMOW J:   The question was, was this receipt income.

MR MAXWELL:   Indeed, and, as we have pointed out in our submission, in any event this Court has said recently in Vetter that what was said in Hope by Justice Mason about ordinary English words and whether the facts fall within those words being a question of fact in any event, so even if we were in that field of discourse, the question of whether something is manufactured is a question of fact, if more than one view is reasonably open.  So Hayes is the wrong case even for that proposition, in our respectful submission.  It has been overtaken by all the discussion that has gone on with Agfa-Gevaert and then Vetter about the difficult distinction between questions of law and questions of fact.

Moreover, his Honour, having made the Hayes point, does not go on to say, “And therefore it’s a question of law which is impermissible under section 114(2)(b).”  It is not excluded as a question of law point.  It is excluded as an ultimate fact in issue point, which is altogether different.  His Honour is characterising it as a factual matter, but somehow ultimate fact in issue beyond the reach of an averment.  Might we also make this point.  The Hayes reference to factum probandum, which I ‑ ‑ ‑

GUMMOW J:   It comes out of Wigmore, does it not?

MR MAXWELL:   It comes out of Wigmore.  We have had a look at Wigmore, and factum probandum is just the fact to be proved, and the facta probantia are the facts by which that fact is proved.  Evidence, Wigmore says, is a relation between two facts, that which is to be proved, the factum probandum, and the fact by which you prove it, the factum probantis – something like that.  And so at every stage you have a factum probandum which you prove by evidence, so a factum probandum is not synonymous with “ultimate fact in issue” as paragraph 21 would suggest.  The factum probandum is lack of authority, in your possession, was manufactured goods, and in respect of each of those, there would be facta probantia.  There would be evidence you would lead if you needed to, to prove the fact to be proved and it follows that the category of reference, ultimate fact in issue, is, in our respectful submission, to be rejected by this Court as having no known status, but in any event, no relevance in relation to an averment provision which deals with every matter of fact without differentiation.

KIRBY J:   And that would include income, would it?  Nowadays, you assert.

MR MAXWELL:   We make the point that ‑ ‑ ‑

KIRBY J:   Despite what Justice Dixon said.

MR MAXWELL:   Yes.  Well, let me give a better example.  We would accept that if it was averred that copyright subsisted in a work, that would not be a matter of fact.

KIRBY J:   What about the income example?

MR MAXWELL:   Well, there was a difference in ‑ ‑ ‑

KIRBY J:   Because that is closer to this one.

MR MAXWELL:    ‑ ‑ ‑ view in that case.  Some of the judges said this was straightforwardly a matter of fact.  Justice Starke at 146 point 9 said that.  Justice Dixon said there is a possibility that the allegation – this is at 147 - that an amount answers the description of income might be a matter of law.  The matter is left open.

KIRBY J:   What is the discrimen which was in Justice Dixon’s mind, that as it were, hives off income possibly.

MR MAXWELL:   His Honour said this:

the possibility of there being matter of law arises only from the circumstance that the word “income” has a legal meaning.

KIRBY J:   Now, given that the word “manufactured” is used in the statute, why does not a manufactured good have a legal meaning?

MR MAXWELL:   Well, because the word “manufacture” is an ordinary English word ‑ ‑ ‑

KIRBY J:   But so is “income”.

MR MAXWELL:   Except that it has been given ‑ ‑ ‑

KIRBY J:   Picked up a lot of baggage. 

MR MAXWELL:   It has been given legal – it is a bit like the word “false” which is invested with legal meaning by reference to particular contexts.  We note that issue raised by Justice Dixon and we give another example.  Indeed, in paragraph 30, the Queensland Full Court in Macarone disallowed as an allegation of law an averment that some activity was unlawful by virtue of a statutory provision.  Well again, that looks like an averment of law, a conclusion that it is unlawful.

We make the point in 31, the averment in the present case is not of that kind at all.  We happen to have three cases, all of which are in our list of authorities, Jack Zinader, MP Metals and Genex Corporation – Nos 6, 7 and 10 on our list – which say manufacture is a question of fact, “manufacture” is an ordinary English word.  There has been some exposition of what it means, but that does not mean it has a legal meaning.  It just means that the question of fact, “What does that word mean?”, has been ruled on.

KIRBY J:   What are some examples of words that have been accepted as being questions of law?  Leave aside “income”, which does not seem to be resolved.

MR MAXWELL:   I think they are the only two examples we are aware of.  On the other side, we would draw attention to the fact that an averment that someone was an immigrant was regarded as a good averment in Ah Mook ‑ ‑ ‑

KIRBY J:   What year was Ah Mook?

MR MAXWELL:   I think it is (1924) 34 CLR 591. In Gallagher, a case cited in our footnote 22, Victorian Supreme Court, “smuggle” was properly averred.  In Lanham, our footnote 22 again, an averment that something was not “agricultural” was, again, regarded as a proper matter for averment.  You could not aver that the assessable income was so much because that is really like saying, as a matter of law, the Income Tax Assessment Act treated X dollars as assessable, and you probably could not aver that X was a trespasser, but maybe you can.  We accept, as we must, the statute says you cannot aver matters of law.  This was a matter of fact. 

We thought of some other examples that were like manufactured goods, which we say could be properly averred:  hand‑made bricks, hand‑woven cloth, prefabricated concrete.  All of those things – “Is this prefabricated concrete?” is a question of fact, but to prove that it is prefabricated concrete there would need to be evidence led about how it was fabricated and when.  Or that these are hand‑made bricks – you would need to give evidence about the process of making them by hand, but the averment that they are hand‑made bricks would, we say, be a proper averment.  It is just a matter of fact, and it saves time by establishing that, prima facie, and then the matter will or will not be put in issue, depending on what the defendant says.  Your Honours, might I go - and I am almost finished - to two decisions.  If I might take your Honours to Neil Pearson & Co ‑ ‑ ‑

KIRBY J:   It seems to be contemplated in section 144(2)(b) that you can get matters averred that are mixed questions of law and fact. Has there been a case on that paragraph?

MR MAXWELL:   Chief Justice Jordan deals with the difficulty of, I think he says, having the sediment of fact and pouring off the liquid of law, or some metaphor like that. 

KIRBY J:   What is that case?

MR MAXWELL:   This is in O’Sullivan, the discussion about that difficulty.

McHUGH J:   Well, the term “trespasser” itself may be a mixed question of fact and law.  It is a question of law no doubt so far as it implies ownership of land, no lawful authority.

MR MAXWELL:   Indeed.

McHUGH J:   But insofar as there is a fact that ‑ ‑ ‑

MR MAXWELL:   That you were at a certain place at a certain time.

McHUGH J:   Yes.

MR MAXWELL:   Yes, your Honour, and presumably there if that is, with respect, the correct characterisation, the averment would fail because you cannot unpick an averment that X was a trespasser.

KIRBY J:   I understand that your answer to the matter that concerns me is that one can have sympathy for this rider which the Court of Appeal has endeavoured to apply to the principles of averments and pleadings but it comes headlong against a provision of the statute of the Federal Parliament in section 144 and, unless that section is invalid, the Court must give effect to that section which permits you to aver facts and if within the authorities this is a fact, then that is it. That raises for me possibly the question of the validity of the section which neither party wants to argue.

MR MAXWELL:   Your Honour, with respect, has the short point.  Clear provision, can aver any fact, this is a fact properly averred.

KIRBY J:   There is one way you could sustain the view of the Court of Appeal and that is by saying that you cannot aver as a question of fact the words of the statute.

MR MAXWELL:   Well, that seems to be what was in the Court of Appeal’s mind.

KIRBY J:   You have to provide the facts, not the evidence, but the facts, the central facts that bring you within the terms of the statute, otherwise you debase the court process by reducing it simply to the assertion of the terms of the statute, thereby switching the burden of proof.

McHUGH J:   That is contrary to what Justice Higgins decided in Baxter v Ah Way and to my knowledge has been the practice for the last 40 years in these customs prosecutions that you can aver an element of the offence.

MR MAXWELL:   Indeed.

KIRBY J:   It would not be the first time that something done for 40 years has been reconsidered in this Court.

MR MAXWELL:   No, we accept that.

McHUGH J:   It is more than 40 years, it is a century.

KIRBY J:   Sometimes the circumstances of the age make one more alert to the issues and one can possibly see in this age things dealing with long‑term prisoners, refugees or suspected terrorists which make one sensitive to the question which is now before the Court.  We are not just dealing with customs averments.  We are dealing with averments under statutes of the Federal Parliament.

MR MAXWELL:   But, to take your Honour’s example, if it is right that you cannot aver the fact in the language of the statute, that would apply to each of the elements of this offence, so you could not aver lack of authority.  What would you aver?  You would have to aver that at no time had – I mean, it is difficult to see how else one would do that in relation to the authority or not being a manufacturer.

McHUGH J:   Well, you could aver, on this theory, the individual facts.

MR MAXWELL:   Yes, you can.  And we say that is exactly when you get into what Wigmore would call the evidence.  The facta probantia by which you will prove that which you have to prove, which is lack of authority, not a manufacturer, and manufactured goods.

McHUGH J:   Not necessarily.  I mean, the law draws a distinction between a fact in issue and the facts relevant to a fact in issue, and the evidence which proves the facts relevant to the fact in issue.

MR MAXWELL:   I accept that, with respect, yes.

HAYNE J:   The averment provisions have to be understood in the light of the other provisions of Part XI, including, for example, 136, 137, their references to civil practice.  Those references at least contemplate – perhaps require – that there will be pleadings.  The averment provisions then have to be understood against a background in which there may be pleadings, pleadings which, at least, I think, at the time these provisions were introduced, would have permitted and required pleading of material facts, would have forbidden pleading of evidence.  Now, once you are in the realm of material fact, there seems something, at least, to be said for the proposition that those pleadings of material fact may, to some extent, track closely the words of the section.

MR MAXWELL:   With great respect, we would adopt that, and one would regard the task of the pleader, relying on a statutory provision, to identify the material facts in order to establish the contravention. 

KIRBY J:   But the task is ultimately that which the statute permits.  The statute has said you cannot plead law ‑ ‑ ‑

MR MAXWELL:   That is so.

KIRBY J:    ‑ ‑ ‑ and the Court of Appeal appears to have thought that in pleading the terms of the statute, you are pleading law.

MR MAXWELL:   And, with respect, that was wrong.

HAYNE J:   So if the excisable good in question were alleged to be brandy, how would the pleader plead the nature of those goods?  Would it suffice to plead that the goods were brandy?  Would it be necessary to go on to allege in the pleading, as distinct from the particular, that it had been produced by a method of distillation?  The circumstances in which there is a fight about whether you are dealing with wine or brandy are hardly beyond the realm of experience.

MR MAXWELL:   No.

HAYNE J:   But what is the relevant material fact to be pleaded?  And how do you do it?  Then how do you relate that to the averment provision?

MR MAXWELL:   In our respectful submission, you do it as it was done here.  You allege, you aver, the element of the offence “in possession of manufactured goods, namely cut tobacco”.  If you did not allege that, the pleading would be liable to be struck out.  There is a material fact necessary to the cause of action which has not been pleaded.  In accordance with what your Honour said a moment ago, one looks to the statute for precisely that guidance and one adheres to the language of the statute precisely because one wants to avoid the risk of somebody saying, “Well, that’s not what the statute requires.”

KIRBY J:   Now, I know nothing about tobacco; I have seen photographs of tobacco leaves from time to time.  But what one has to ask is what did the Court of Appeal contemplate would be pleaded in order to attract, in its theory of the requirement, the avoidance of the suggestion that the pleader was pleading a question of law?  Now, would it be pleaded accurately by stating the goods were tobacco, the tobacco was in leaf form but not in its natural state, it had been cut and processed, and whatever else was done to it that makes it – if you had to prove that it was manufactured, what else is there?  It is not a big ask to have to, as it were, plead the facts that you can then say, using your syllogism argument, “And therefore this was manufactured goods”.

MR MAXWELL:   With respect, we do not dispute that it may not be a difficult task.  I mean, if you did not have the averment provision ‑ ‑ ‑

KIRBY J:   I realise you say it is not – I am trying to test the Court of Appeal’s theory against what is the burden and obligation placed on the pleader.  Now, I know nothing about tobacco.  If I fell over a bale of manufactured or unmanufactured tobacco I would not know, but your client would know.  Now, can you give me a hint as to what is the difference between a manufactured tobacco product and a natural tobacco product?

MR MAXWELL:   Well, tobacco is stripped from the plant as large leaves.

KIRBY J:   Yes.

MR MAXWELL:   It is cured and then cut.  It is cut in order to – I think there is evidence, not in the Court’s book, about the size of the pieces, and it is necessary to do that because the leaf is large and unmanageable for the purposes of manufacture.  So one of the early steps in the changing of the nature of the thing, which is the meaning of “manufacture” so the cases – is the cutting.  It is no longer a big leaf, it is now in small pieces which are then eventually I think shredded before being wrapped in paper and having a filter tip put on the end.

If your Honours looks at the top of page 28 his Honour Justice Buchanan formulates in a number of different ways what his Honour would have wanted to have heard – at the top of the page – and this is dealing with the evidence rather than the averment:

Neither Mr Brobbel nor any other witness stated how the tobacco was cut.

Well, that is clearly a matter of evidence, in our submission.

No witness stated what constituted steps in the manufacture of tobacco.

Well, that is evidence, in our submission.  If you needed to prove it you would have somebody doing what I imperfectly did a moment ago and say, “I’ve worked in the tobacco industry for 30 years and this is what is involved in manufacturing tobacco.”  That is the evidence that the averment provision relieves you from having to call, in our respectful submission.  Then at the bottom of the page his Honour said in the last line:

The witness did not, however, condescend to describe the form the cut tobacco took.

Well, that is plainly evidence.  Then once his Honour moved to discuss the averment, what his Honour wanted appears in the middle of paragraph 21, line 23 on page 30, the start of the sentence:

The position would have been different if the matter averred had been a statement that it is a process in the manufacture of tobacco that tobacco leaf be cut in a particular manner and that tobacco leaf cut in that manner was in the possession of the appellant.

It could have been done that way but it was not and, in our respectful submission, it did not need to be, and then his Honour says at the bottom of the page:

The averment implied that particular circumstances existed and fell within the statutory description of manufactured or partly manufactured excisable goods.  The existence of those circumstances involved questions of fact –

see S v Crimes Compensation Tribunal –

but the circumstances were not averred.  The averment omitted to state any facts that showed that the tobacco in the possession of the appellant was cut in a manner that converted the tobacco into manufactured goods.

We say, if you needed to prove that this tobacco was manufactured, it might not be possible for Customs to do it, which of course is precisely why the averment provisions went in hundreds of years ago because smuggling was a vice and very often the authorities would not know what had occurred, and this was avowedly to facilitate the proof of matters which might not or might not all, be in the knowledge of the prosecutor, and we looked at what Wollaston says about that.  We have not given it to your Honours, but Wollaston Customs Law 1904 ‑ ‑ ‑

KIRBY J:   I think we looked at that in Labrador, did we not?

MR MAXWELL:   There is a discussion under the then section 255 at page 169:

It is a very necessary provision, inasmuch as in many instances whilst there could not be the slightest moral doubt that the offender was guilty, yet it would be next to impossible to actually prove it by direct evidence.  For example, a box of tea –

et cetera, and gives examples.  That was the view taken that this is about difficulties of proof in smuggling‑type cases, and let us say the defendant here had said, “Well look, I know that this was only cut for the purposes of transport, and it is my submission as the defendant that does not constitute manufacture, that is pre-manufacture.  It is just to transport it to the start of the manufacture process”.  Well, it may well be that Customs would not have been able to contest that.  They may not have had any direct evidence to lead about what had been done to the tobacco, but let me immediately make another point ‑ ‑ ‑

KIRBY J:   Then there is an issue for decision, but all that the Court of Appeal is suggesting is that, in order to avoid the impermissible pleading of a matter of law, you have to assert that it is cut, cured and otherwise presented in whatever is the factual circumstance that constitutes manufactured goods ‑ ‑ ‑

MR MAXWELL:   Indeed.

KIRBY J:    ‑ ‑ ‑ that you cannot just plead the statute.

MR MAXWELL:   That is plainly what the court is saying, and we rely on - going back to Justice Dixon, the use of the phrase “the elements of the offence”.  That is the phrase in his Honour’s dictum, and that is what, in his Honour’s view, an averment deals with.  Your Honour, in Neil Pearson & Co which we have at No 11 on the list, at page 460 in the Supreme Court of Criminal Appeal in New South Wales, said, and I think we have quoted this at the bottom of 460:

What is required, is that an averment alleges the facts necessary to establishing the offence and no more.

And up the page, your Honour set out the bit from the first judgment in Hush which we rely on:

“ . . . the facts and circumstances constituting the offence should be stated . . . But it is not right to set out the evidence –

The law has rather gone in the other direction, to caution against putting too much in the averment and to set out the factual elements of the offence and no more.  In our respectful submission, given that the authority under 144 is to aver any fact, then it would be permissible to aver more facts, but it is not impermissible to aver fewer, which is the Court of Appeal’s view.  It is impermissible to aver any fact which is properly characterised as evidence, but otherwise, provided it is a non‑evidentiary fact, you can aver it.  Our submission is that an averment which pleads the factual constituent elements of the offence in the language of the statute is a proper averment, and it responds to these exhortations from the Court about, “Don’t plead the evidence”.  As soon as one is getting into what actually happened to this particular tobacco at what time, that, in our respectful submission, has all the characteristics of the evidence by which you would prove that this particular tobacco had been manufactured.

I will conclude, if I may, by taking your Honours to Labrador (2003) 216 CLR 161, which is No 12 on our list. The part of the majority judgment is Justice Hayne’s, and the relevant section is at paragraph 140 and following, on page 207. As your Honours well recall, this was about the burden of proof, the standard of proof, but your Honour dealt, as part of testing the proposition about beyond reasonable doubt, with the averment provisions. Paragraph 140:

In Customs and Excise prosecutions the Customs bears the onus of proving the elements of its case.  It is, nonetheless, important to notice the way in which that proof may be effected.

Again, we say, precisely, proof of the elements of the case; manufacture is an element of this case.  Your Honour then sets out the prima facie evidence provision and then refers to the averment not being disqualified by virtue of there being other evidence, but that is to be considered on its merits, and we accept that.  Then, at the foot of the page, your Honour says this:

For present purposes, what is important is that although the averment provisions do not place upon the defendant the burden of disproving facts –

and the footnote is Hush in the Justice Dixon passage –

averments of the Customs will suffice to discharge its onus of proving those facts.  It will, in every case, be a matter for the judge to say, on the whole of the materials, whether the facts are established to the requisite degree of proof.  The judge may, but need not, treat what is properly averred as establishing that degree of proof.

And then your Honour concluded at the end of 144 that the averment provisions did not suggest that the answer to the standard of proof question should be any different.

In this case the averment of the fact of manufacture meant that there was prima facie evidence of that fact before the court.  There was no evidence to the contrary, and on the accepted view of prima facie evidence as presumptive evidence, as Cross characterises it, that means that it becomes conclusive evidence.  As Justice Dixon said and this Court said in Labrador, it means that the prosecutor’s onus is discharged.  Our learned friends in their submission say the court could not have been satisfied beyond reasonable doubt.  In our respectful submission, the court could perfectly properly have been so satisfied given the matters averred.  For completeness we draw attention to what Justice Byrne at trial said about his state of satisfaction.  If your Honours would go to appeal book 15, paragraph 9, second line at the end:

The evidence shows without any doubt and, a fortiori, on the balance of probabilities, that, when intercepted, the cut tobacco as manufactured goods was in the possession, custody or control of the defendant.

In relation to the sentence, might I simply give your Honours a short reference to the provisions.

GUMMOW J:   What do we do about them?

MR MAXWELL:   I am not quite sure, your Honour.  I ‑ ‑ ‑

GUMMOW J:   There is no ground of appeal about it.

MR MAXWELL:   No, there is not.  But what was important - we make clear immediately ‑ ‑ ‑

GUMMOW J:   There was no cross-appeal, was there?

MR MAXWELL:   There was no cross-appeal, exactly so.  The point is well taken.

KIRBY J:   If an application were made now to cross-appeal, you would not oppose it?

MR MAXWELL:   We would not.

KIRBY J:   And you agree that the sentence has to be correct?

MR MAXWELL:   Indeed we do.  So it is a manifest injustice, the ‑ ‑ ‑

GUMMOW J:   What does 10 penalty points mean?

MR MAXWELL:   It is 100 penalty points, as I understand it and they are $110 each, so the maximum is $11,000, whereas, as your Honours may or may not have noted, the minimum under section 129(a), which was wrongly applied ‑ ‑ ‑

McHUGH J:   It was 331,000, was it not?

MR MAXWELL:   Yes, the minimum was twice the amount of the duty that would have been payable, so that came to the 331,000, but the Act had been amended.  The order was made July 2002.  The Act had been amended September 2000, so a long time before, and the maximum penalty by virtue of the Crimes Act section 4F(2) was the 100 penalty units.

GUMMOW J:   But that was the maximum.

MR MAXWELL:   That was the maximum.  How do your Honours decide what it should be?

GUMMOW J:   Well, exactly.

MR MAXWELL:   Indeed.  We discussed that ourselves this morning and we are in your Honours’ hands in that regard.  You have not obviously conducted the trial, you have not dealt with the matter, you are dealing with a question of law.  At all events that is the position.  There is a maximum and no minimum and it may be that if your Honours allow the cross-appeal, you restore the conviction and you send it back to the trial judge for resentencing in accordance with law.

KIRBY J:   Otherwise, unless the record is amended, you are asking us, in effect, to hold that the Court of Appeal ought to have dismissed the appeal but that on what we have now been told would be to restore an unlawful penalty.

MR MAXWELL:   That is so.

KIRBY J:   So that we have to, if we do uphold the appeal, find some way to avoid that because that would be an injustice.

MR MAXWELL:   Indeed.  We make that submission, that there is no doubt that justice requires that that occur.  Those are the submissions for the appellant, if the Court pleases.

McHUGH J:   Yes, Mr Baker.

MR BAKER:   I make formal application for leave for the respondent to cross-appeal in respect to this ‑ ‑ ‑

McHUGH J:   We need a document and it will have to be - first of all, you need an application for special leave to appeal and you will have to annexe your cross-appeal to that.

KIRBY J:   But perhaps if you have a word with Mr Maxwell you can get a document into appropriate form and send that into us after this matter stands reserved within a short time.

MR BAKER:   As your Honour pleases, thank you.  I will do that.

GUMMOW J:   But what order will you be seeking?  There was no appeal in the Court of Appeal against this.

MR BAKER:   No, your Honour.

McHUGH J:   You see, if we send it back to the Court of Appeal, there is nothing they could do about it because they have no appeal by you in front of them.  It may be that you could seek leave to appeal out of time, but there has already been an appeal.  There may be interesting questions involved there, although if we set aside their order ‑ ‑ ‑

MR BAKER:   Perhaps after I have made my submissions I would ask time to stand down and perhaps have a word with my learned friend as to the best procedure here.

McHUGH J:   Yes.

MR BAKER:   Thank you, your Honour.  If the Court pleases, in regard to the appellant’s reliance on the averments before the trial judge, what was said by counsel on behalf of the appellant then was: 

Your Honour those were the oral witnesses that the plaintiff wishes to call, the only other evidence relied upon is that I formally rely upon the averments as pleaded in the statement of claim to the extent permitted, save any averment which purports to aver intention.

HIS HONOUR:   Very well, that is your case.

That was the only reference to the averments, save what is stated in paragraph 20 of the averments that the appellant relies on in paragraph 20 of the amended statement of claim that:

To the extent permitted by law the Plaintiff avers the matters set out in paragraphs 2 to 8, inclusive, paragraphs 11 and 12 and paragraphs 14 to 19, inclusive.

Nothing was said by the appellant either at trial or in its averments in regard to section 144. The trial judge ‑ ‑ ‑

KIRBY J:   But what does that matter?  It is part of the law of the land.  It is enacted by Parliament.  If it is a valid law, what does it matter that nothing was said about it?

MR BAKER: But the trial judge, your Honour, did not rely on section 144 and did not refer to the averments in giving judgment ‑ ‑ ‑

KIRBY J:   What does that matter?  If it is part of the law of the Commonwealth, it must be obeyed by every court in this land, and if it permits this form of averment, then that is it.

MR BAKER:   Yes, but, your Honour, this appeal to the Court of Appeal turned on two questions.  One was a question of whether there was a denial of justice…..

(Audio dropout from 11.21.27 to 11.21.58)

KIRBY J:   …..or not often, but we see it from time to time, that important points are overlooked, and if they are points of fact, that creates a big problem.  But if it is a point of law, it can usually be accommodated because everyone is deemed to know the law, and if the Federal Parliament has validly enacted the provision for averments in the form that it has, then the fact that it was not noticed by trial counsel or the trial judge does not seem to me to matter a jot.  Once you have got it before a court of law, they have to apply the law.

MR BAKER:   Yes, but my argument, your Honour, is that the trial judge did not deal with this.  The Court of Appeal did, and it was for the Court of Appeal to determine whether the evidence, both the oral evidence and what was put as evidence before the court by way of averments, was sufficient to establish the guilt.  They did that exercise and they were not satisfied.  There has been no point taken by the appellant that there was anything amiss in the weighing up of the evidence.  What is alleged is that the Court of Appeal should have found ‑ ‑ ‑

at a certain rate -

as specified in Item 6 B of the Schedule to the Excise Tariff Act 1921.

So the excisability was unambiguously alleged invoking provisions which would apply to tobacco.  It is as simple as that and, assuming my learned friend to be right, the averment of the fact of manufacture survives and the excisability is, as in any case where you need to satisfy a provision, satisfied by pleading the facts and then referring to the provision which makes them taxable or assessable or whatever it might be.

McHUGH J:   Well, now, your capacity to simply delete the word “excisable” may depend upon the meaning of section 144(2)(b). When it says:

the matter averred is a mixed question of law and fact but in that case the averment shall be prima facie evidence of the fact only –

does it cover a paragraph like 4, where there is both fact and law all mixed up, or is it really directed to a compound conception such as trespass or maybe income or some ‑ ‑ ‑

MR MAXWELL:   Yes, your Honour.

McHUGH J:   What do you say?

MR MAXWELL:   The former, with respect.

McHUGH J:   The former. 

MR MAXWELL:   Yes.  We say that ‑ ‑ ‑

GUMMOW J:   Any authority on that?

MR MAXWELL:   Not that I am aware of.

McHUGH J:   I mean, ordinarily, when one talks about a point being a mixed question of fact and law, one is dealing with the compound conception section ‑ ‑ ‑

MR MAXWELL:   In our respectful submission, what would tend against that construction is the near impossibility of doing what (2)(b) says in respect of a compound notion, like trespasser.

McHUGH J:   Yes.

MR MAXWELL:   How would you do the (2)(b) task, one would ask?

GUMMOW J:   Well, it is governed by the phrase “the matter averred”, I suppose.

McHUGH J:   Yes. 

MR MAXWELL:   Exactly, with respect.  We say that (2)(b) appears to be a severance provision, saying, “Well, if it can survive, then to the extent it can survive, it does survive”, so the statute says.  And here, the excision of the word “excisable” leaves an intelligible statement of fact that the goods were manufactured or partly manufactured.

In our respectful submission, that is the conclusion the Court should prefer.  I think there are only two other short matters ‑ ‑ ‑

GUMMOW J:   There are the questions Justice Hayne raised about – two questions.

MR MAXWELL:   In relation to – the question is about how it is to be dealt with in relation to sentence?

GUMMOW J:   That is one question.

MR MAXWELL:   We certainly do not oppose the course proposed.  Indeed, we respectfully support ‑ ‑ ‑

KIRBY J:   You do not object to the grant of special leave and the remittal of that matter to the Court of Appeal?

MR MAXWELL:   No, we did not understand it to have been put in those terms, your Honour ‑ ‑ ‑

KIRBY J:   We have to get our record in place so that it can be remitted to the Court of Appeal. 

MR MAXWELL:   Your Honours have ample power to deal with the matter having allowed the appeal ex hypothesi, and the course Justice Hayne was suggesting is the one that we would support, that is to say that the matter goes back for the Court of Appeal to deal in its appellate jurisdiction with an appeal point not hitherto raised by the defendant, the raising of which we will not oppose, and that will then be dealt with by the Court of Appeal as it would have been had it been raised in the notice of appeal the first time.

KIRBY J:   Just a footnote to that:  does the Court of Appeal have jurisdiction and power nunc pro tunc, as it were, to enlarge the ambit of its own appeal beyond that which was originally brought to it?  This matter was considered in Postiglione, I think, and in some other cases, as to whether once they have discharged their function, perhaps their function is re‑enlivened by our remitting it to them to deal with it ‑ ‑ ‑

GUMMOW J:   We have set aside their order ‑ ‑ ‑

MR MAXWELL:   You have set aside their order ‑ ‑ ‑

McHUGH J:   We have set aside their order so there is no order then ‑ ‑ ‑

MR MAXWELL:   Indeed.

HAYNE J:   And there is an undetermined appeal and the appeal can be enlarged if the Court of Appeal grants leave.

MR MAXWELL:   Precisely.  In our respectful submission, that ‑ ‑ ‑

McHUGH J:   Let it be assumed you lose this appeal.  What is the situation then?  Do we have jurisdiction in that situation to grant special leave to appeal on a ground not taken in the Court of Appeal, not the subject of the notice, this being a civil action, and not having been litigated before the trial judge.

MR MAXWELL:   The difficulty with that is that we are really the only party that can appeal from the Court of Appeal because they won and they have no sentence at all so that, with respect, the concept of special leave to appeal from the Court of Appeal’s decision would not work for the defendant, there is nothing to appeal against.

McHUGH J:   In the Uren Cases the Privy Council granted leave to appeal even though the orders were favourable to them, but they wanted to raise an argument about a point that was involved.

MR MAXWELL:   Your Honours know from what I said at the opening that my client accepts that this is a very important issue of justice to what we say is a rightly convicted defendant.

GUMMOW J:   But if you lose the appeal, the other side is happy.

MR MAXWELL:   Precisely.

GUMMOW J:   Because the record of the Court of Appeal will remain ‑ ‑ ‑

McHUGH J:   There is no penalty. 

GUMMOW J:   They walk away.

MR MAXWELL:   Remains and the conviction has been set aside.  Sorry, I should have thought of that. 

GUMMOW J:   The other question Justice Hayne was raising with you was what seems to be a ground undecided by the Court of Appeal, it does seem to be within the grounds of appeal, as to whether or not the primary judge, having looked at the averment, went on to weigh it against the other material that was before him.

MR MAXWELL:   Your Honours, I was going to come to that because, as the learned presiding judge was ‑ ‑ ‑

GUMMOW J:   If that is right, that would be an unresolved question in the Court of Appeal ‑ ‑ ‑

MR MAXWELL:   It would.

GUMMOW J:    ‑ ‑ ‑ that would be reinstated, as it were.

MR MAXWELL:   In our respectful submission, this is a case where examination of the trial judge’s reasons should lead this Court to be satisfied that the trial judge had given adequate consideration to the evidence ‑ ‑ ‑

McHUGH J:   Well, that may be the result, but if you are right on your submissions to this Court, the true situation is that the Court of Appeal has not properly discharged its functions ‑ ‑ ‑

MR MAXWELL:   With respect, that is so.

McHUGH J:   It has not considered your reliance of the averments, as opposed to the defendant’s.

MR MAXWELL: That is right, and has not considered what one would immediately concede what the subsection says, section 144(3), which is the point your Honours are making, the need to consider “on its merits” any evidence given by witnesses in support or rebuttal of the matter. The fact is that we did lead some evidence in support of the averment, and there is no adverting by the Court of Appeal, or, we would readily concede, by the trial judge, to that exercise, though we would have said in respect of the trial judge that his Honour should be taken to have done that, having reached such an emphatic conclusion about it is clear beyond all doubt, or any doubt, that the evidence shows what it showed.

KIRBY J:   Yes, but just let me understand it.  Do you contest that it would be open if the matter were remitted to the Court of Appeal, as it may have to be for the sentence matter, that the Court of Appeal could consider the question of whether the trial judge has addressed his attention sufficiently to the issue of whether, on all of the facts, taking into account but not regarding as conclusive the averment, the conclusion that he reached that the respondent was properly convicted is one that should be sustained?  I would want to make sure that with the enlightenment of Labrador the mind was specifically addressed to that question and it does not, at least arguably, appear to have been addressed.

MR MAXWELL:   No, indeed, in neither court explicitly.  I can only repeat what I said a moment ago.  Our submission is that the trial judge should be taken to have considered everything on its merits ‑ ‑ ‑

KIRBY J:   I realise you say that but he did not use the formulae that with the enlightenment of Labrador he might have used and, therefore, the question is whether the Court of Appeal can do that or whether it should be done by the trial judge.

MR MAXWELL:   Even if we were right about the trial judge, the Court of Appeal could clearly do it ‑ ‑ ‑

McHUGH J:   The Court of Appeal is bound to do it.  It is a rehearing and it is bound to consider all the evidence and, if I read subsection (3) correctly and my recollection of the case law, it would open to the Court of Appeal to say, “Despite the averments and despite the fact that they are prima facie evidence, nevertheless, we are still not satisfied to the appropriate standard beyond reasonable doubt”.

MR MAXWELL:   Your Honour is entirely correct. 

KIRBY J:   Was there oral evidence given before the primary judge?

MR MAXWELL:   Yes.

KIRBY J:   Well, that may be a matter where the Court of Appeal, especially in a matter of this kind, might defer to saying, well, this has to go back to be considered by a judge who sees witnesses.

MR MAXWELL:   In any event, we accept that it is not only open to the Court of Appeal but it is the Court of Appeal’s duty to address the subsection (3) question.  We have put our notice of appeal at the highest, which is to say ‑ ‑ ‑

McHUGH J:   In grounds 1 and 2 you say there was sufficient evidence. 

MR MAXWELL:   There was.  Essentially, relying on the kind of sentiment expressed by Justice Callinan at special leave – which, of course, is just in argument – the notion that nobody, in particular, not the defendant, suggested that there had been – well, he did not know – any cutting to put it into bags, so Justice Buchanan’s speculation about that perhaps being an explanation for the cutting was purely that, speculation.  We would contend, for the sorts of reasons that your Honour Justice Kirby was saying a moment ago, that, to use Justice Callinan’s words, it is “inevitable” that it is a step in the manufacture of tobacco that you cut it, and unless you had some clear evidence to show cutting for some non‑manufacture reason, which there was not, then you would inevitably conclude. 

In other words, there is really no room for doubt, and we invite the Court, and still make this submission, that your Honours would look at the evidence which was before the Court of Appeal, if you allow our appeal, including that which is averred, and be satisfied that the conviction should be restored, because there is no utility in sending back to the Court of Appeal the task of once again looking at the averments and the evidence.

KIRBY J:   But we do not have transcripts of evidence.

MR MAXWELL:   We do not have the evidence, and we have not sought to put this appeal on the alternative basis that the evidence absent the averments was sufficient.  I should draw it to your Honours attention because it explains why evidence is led as well as an averment.  It is not because you have a fallback position.  It is because, as the Australian Customs Service told the Parliamentary Committee, it is the policy of the Customs Service to lead evidence to show that there is an evidentiary basis for that which is averred.

KIRBY J:   Yes, but also since Labrador, you have the statement of the Court that the judge may act on the averment, but is not obliged to.

MR MAXWELL:   Indeed, and I accept that, and also you have subsection 3.

McHUGH J:   You do not have to worry about what this Court said, you obey the statute.  It says it in plain terms.

MR MAXWELL:   Precisely, and so the policy, which is designed to, as I understand what the Parliamentary Committee was told - I will give your Honours the reference only - the policy is designed to say we do not just use averments where we have no possibility of showing it otherwise.  This is to show, if you like, good faith that there is some evidence underlying the matters averred, not as I say, to deal with them in the alternative, but in order to show that.  That explains why it was there, but it does attract subsection 3.  To repeat, it is our submission that your Honours could be satisfied on this appeal if you are seized of the matter, true on a ground of appeal we have raised, that your Honours as an appellate Court, are in as good a position as the Court of Appeal, we say, to deal with the question of whether there was evidence to satisfy beyond reasonable doubt ‑ ‑ ‑

KIRBY J:   Except that they had the transcripts and the evidence.  We do not have that.

MR MAXWELL:   That is so.  You do not have that evidence.  I accept that.

KIRBY J:   So we are not in as good a position.

MR MAXWELL:   I accept that.

KIRBY J:   Anyway, we are a court of error.  We are not a trial court or an intermediate court.

MR MAXWELL:   At all events, I immediately accept that to assert that it is inevitable that cutting is part of the process of manufacture is to give evidence from the Bar table, and there was nothing before any of the courts about what part cutting played in manufacture.  It was thought to be sufficient to aver that the goods were manufactured.  If the Court pleases, those ‑ ‑ ‑

KIRBY J:   I thought you were going to say that you would never give evidence from the Bar table.

MR MAXWELL:   May it please the Court.

McHUGH J:   Mr Maxwell, can we have those legislative enactments in a suitable compilation within seven days delivered to the Court?

MR MAXWELL:   If your Honour please.  We will endeavour to do it sooner than that.

McHUGH J:   Yes, thank you. The Court will now adjourn to 9.30 am ‑ ‑ ‑

MR BAKER:   Your Honour, I am loath to intervene, but would your Honour hear me on one aspect, and that is my – I would not like your Honours to go away with some misapprehension following from what my learned friend said, and that was in regard to the fact that my learned friend said that the Appeal Court did not deal with the oral evidence.  It in fact did, and that was at paragraph 15 of the reasons for judgment.

McHUGH J:   Yes, it is in there.

MR BAKER:   The other is that I would submit that in addition to the question of sentence, that if the appeal is successful the question of the failure of the trial judge to consider the averments should be referred back to the Court of Appeal.

McHUGH J:   Yes, Mr Baker.  The Court will now adjourn to 9.30 am tomorrow in Sydney and 9.30 am tomorrow in Melbourne.

AT 12.47 PM THE MATTER WAS ADJOURNED