CEO of Customs v Pham

[2003] NSWSC 971

CITATION:	CEO OF CUSTOMS v. PHAM & ANOR [2003] NSWSC 971
HEARING DATE(S):	Tuesday 21 October 2003
JUDGMENT DATE:	21 October 2003
JURISDICTION:	Civil
JUDGMENT OF:	Greg James J at 1
DECISION:	Motion dismissed. I order the defendant to pay the plaintiff's costs of the motion. Stand over to the status conference list on 2 December 2003
CATCHWORDS:	Customs prosecution - proceeding to recover pecuniary penalties - offences against laws of the Commonwealth - whether should be commenced by indictment - whether trial by jury constitutionally necessary - whether jury trial should be ordered in discretion - application dismissed.
LEGISLATION CITED:	Customs Act 1901 (Cth) Judiciary Act 1903 (Cth) Supreme Court Act 1970 Courts Legislation Amendment (Civil Juries) Act 2001 Evidence Act 1995 Jury Act 1977
CASES CITED:	CEO of Customs v. Labrador Liquor Wholesale Pty. Limited [2003] HCA 49 The Queen v. Federal Court of Bankruptcy; ex parte Lowenstein (1938) 59 CLR 556 Kinswell (1985) 159 CLR 264 re Colina; ex parte Torney (1999) 200 CLR 386 Comptroller-General of Customs v. D'Aquino Brothers Pty. Limited (1996) 135 ALR 649 Evans v. Lynch [1984] 3 NSWLR 567
PARTIES :	CHIEF EXECUTIVE OFFICER OF CUSTOMS v. PHAM, Vinh Phat & ANOR
FILE NUMBER(S):	SC No. 20979 of 2001
COUNSEL:	Plaintiff: R. Bromwich Defendant: M. Robinson/R.Nair
SOLICITORS:	Plaintiff: Australian Government Solicitor Defendant: Burn & Swift

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

GREG JAMES, J.

TUESDAY 21 OCTOBER 2003

No. 20979 of 2001

CHIEF EXECUTIVE OFFICER OF CUSTOMS v. VINH PHAT PHAM & ANOR

JUDGMENT

1 HIS HONOUR: These proceedings have been commenced by statement of claim seeking penalties against the defendants for asserted breaches of provisions of the Customs Act 1901 (the Act) whereby the plaintiff claims the defendants are liable to conviction and serious punishment, in particular by way of the imposition of pecuniary penalties. Those penalties, I am informed, by reason of the application of certain provisions of Part XIV of the Act might total as high as $7 million.

2 When the proceedings were before me last year, an amended notice of motion was filed in Court dated 16 October and filed on 17 October 2002. On that occasion I was informed that it would be sought to remove the proceedings to the High Court for hearing as certain constitutional questions would be raised. The necessary notice had been given to the Attorneys-General of the States and the Territories by notices under s.78B of the Judiciary Act. The notice is to be found annexed to the affidavit of Ms. Dianne Burn sworn 17 October 2003. The High Court refused to remove the proceedings. They are being continued in this court. It has thus fallen to me to determine whether the orders sought in the motion should be granted.

3 The motion seeks that, by paragraph one, questions set out in it be decided separately before any trial in the proceedings. Paragraphs seven, eight and 10 of the motion are not pressed. Paragraph seven is not pressed in consequence of the decision of the High Court of Australia in favour of the proposition for which the defendants had there contended in CEO of Customs v. Labrador Liquor Wholesale Pty. Limited [2003] HCA 49.

4 The balance of the questions raise, in particular, the applicability to allegations of the kind made here of s.80 of the Constitution which provides that "the trial on indictment of offences against the laws of the Commonwealth shall be by jury". During the argument I raised with leading counsel for the defendants, the applicants on the motion, whether he wished to ague the first matter raised by the motion, that is, whether or not the statement of claim was an indictment, since it appeared to me that what he was concerned to argue was not that it was an indictment but that it was not an indictment and should have been and that in consequence of it being or of it needing to be an indictment there should be a jury to try it. I raised this since I had been favoured by counsel for the defendants and counsel for the plaintiff providing me with extensive written submissions for which I record my gratitude which submissions seemed to turn on whether or not the procedure contemplated by s.80 was necessary where allegations of this kind were made potentially leading to a judgment of conviction and punishment.

5 Leading counsel for the defendants accepted during the argument that the statement of claim purported to be a statement of claim, did not meet the requirements for a common Law bill of indictment, did not comply with s.69 of the Judiciary Act 1903 (Cth), and did not otherwise appear to accord with whatever essential features might distinguish an indictment from other written accusations of offences for breaches of the law utilised to bring persons before a court for the purpose of the determination of those offences and possible punishment.

6 It was accepted that the essence of the defendant's contention is that they were entitled to the benefit of a trial by jury constitutionally in the context of the allegations made against them in the originating process.

7 In those circumstances, I invited counsel to move there and then to have the statement of claim struck out on the basis that that procedure would enable resolution of the issue of whether the proceedings against them should have been on indictment hence necessitating under s.80 a trial by jury.

8 Counsel for the plaintiff was content to eschew formality and to meet that application being made there and then without further documentation that the statement of claim should be struck out on the basis that it was required by the Constitution to be an indictment and that in consequence the proceedings should be tried by jury in accordance with s.80.

9 The plaintiff has accepted that such an application provides an appropriate vehicle to examine the questions the defendants seek to have raised and which underlay certain of the questions raised in the notice of motion.

10 Further to those questions, however, there are also questions which would involve the consideration of whether the proceedings, even if properly commenced by statement of claim, should be tried by jury and by a jury of 12. That is sufficient, I think, at this point to describe the nature of the application that is before me.

11 I shall turn then to considering the basis for the defendants' submission that the statement of claim should be struck out, and in that regard to the questions otherwise raised in the amended notice of motion, before turning to consider, if necessary, whether the defendants might have the benefit, if that is how it should be described, of a jury trial under the provisions of the Supreme Court Act 1970 or for any other reason other than by reason of the application of s.80 of the Constitution.

12 The argument is that the statement of claim is incompetent. The argument initially turns upon the recognition, particularly by the High Court recently in Labrador Liquor (supra) that the acts constituting breaches of the various sections of the Customs Act referred to in the statement of claim constitute offences against the laws of the Commonwealth. So much might be accepted. It is further submitted in accordance with the views of the minority in The Queen v. Federal Court of Bankruptcy; ex parte Lowenstein (1938) 59 CLR 556 at 582-583 per Dixon and Evatt, JJ. and Deane, J. in Kingswell v. The Queen (1985) 159 CLR 264 at 298-322, that in the case of such offences if serious it should not be open to the legislature to avoid the application of s.80 by the prescription of some other mode of trial other than on indictment. Yet it must be recognised that the views to which I have referred expressed in Lowenstein (supra) were the views of a minority as remains the view of Justice Deane in Kingswell (supra).

13 I am bound by the views of the majority, expressing as they do, the way in which historically s.80 has been considered, that is to say, that only if there is an indictment must there be a trial by jury. If there is not, as necessary, an indictment prescribed for such a trial, then there need not be a trial by jury. These views historically were advanced before the enactment by the Imperial Legislature of the Constitution in the Constitution Debates even by those who later became the Justices of the High Court concerned to interpret the provision.

14 In this case, reliance is placed on s.247 of the Customs Act 1901 (Cth), which is contained in Part XIV of that Act. That Part provides for the recovery of pecuniary penalties. It is to be found following the penal provisions of the Act contained in Part XIII.

15 Section 245 provides for institution of the proceedings for the recovery of pecuniary penalties "by action information or other appropriate proceeding":-

“(a) In the Supreme Court of a State;
...
(2) Where a Customs prosecution for a pecuniary penalty that, but for this section, would exceed $40,000 is instituted in a court referred to in paragraph (1)(d) or (3), the amount of that penalty that exceeds $40,000 shall be taken to have been abandoned.
…”

16 Section 247 provides as follows:-

“Every Customs prosecution in a court referred to in subsection 245(1) may be commenced prosecuted and proceeded with in accordance with any rules of practice (if any) established by the court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the court in civil cases or in accordance with the directions of the court or a judge.”

17 Sections 245 and 247 plainly contemplate the procedure that has been adopted in this matter not a criminal trial on indictment. There is nothing on a close analysis of what is said in the judgments in Labrador Liquor (supra) nor except elsewhere perhaps in one passage the judgment of Kirby, J. as appears in re Colina; ex parte Torney (1999) 200 CLR 386, to raise any question as to either the constitutionality or the applicability of those provisions. Before me, however, it is contended that they are inconsistent with the constitutional provision and to that extent are invalid.

18 Really the argument boils down to the proposition that since an authorised officer of the Commonwealth asserts the commission of offences against the laws of the Commonwealth which offences might (in some cases see Comptroller-General of Customs v. D'Aquino Brothers Pty. Limited (1996) 135 ALR 649 at 656) sometimes be criminal, then it is necessary for the proceedings to be treated as proceedings of a criminal nature for indictable offences, particularly in consequence that the result, if successful, of such proceedings is the conviction and punishment of the defendants.

19 The argument does not discriminate between offences prosecuted on information and offences prosecuted on indictment. It may, for the purposes of the argument be accepted that in Australia following the abolition of the grand jury system that the document which commences the prosecution of serious offences in the higher courts is of the species indictment even though in truth and law rather akin to an information than to a true bill found by a grand jury but informations are available to commence various kinds of proceedings that are not criminal.

20 A number of cases have discussed the history in Australia of the originating process in criminal proceedings but that is not to the point here. The point sought to be made is if the offences asserted against the laws of the Commonwealth are to be the subject of proceedings resulting in convictions and the imposition of penalties, they must be, notwithstanding the expressed provisions of the Customs Act 1901 (Cth), prosecuted by a means which falls within what the Constitution regards as an indictment.

21 I am informed that there is no authority binding me to so conclude. It is accepted that there has been a wealth of history and practice to the contrary.

22 It is asserted that the point was not raised in Labrador (supra), and on a reading of the judgments it is clear that there is no express statement contained in that case by any of the justices directly on point. It is submitted that I should conclude for very much the reasons that were advanced by Justice Deane and as are said to be referred to by Kirby, J. in Colina (supra) that the prosecution in these proceedings on a statement of claim is an attempt to "mock" the Constitution.

23 Both in oral argument and in written submissions it was sought to distinguish the judgments in Colina (supra) of all but Kirby, J. I do not agree that they can so relevantly be distinguished. True it is that that case applied to a prosecution for contempt in a Federal Court, that is the Family Court. True it is that the High Court concluded that such a prosecution was not a prosecution for an offence against the laws of the Commonwealth but sufficiently it also appears in the judgments of the majority that they concluded that independently of the other ground, s.80 did not apply because there was no indictment and all case law over the years, even if decided by a majority, accords with that view. It is binding on me. There is no warrant in the case law, in my view, to consider that there has been left to me, sitting as a single judge, an opportunity consistent with the law as it has been understood and the history of customs prosecutions to conclude that they must be brought by indictment so that s.80 might apply.

24 The nature of the proceedings must make it necessary that they be properly commenced by indictment, ie., they need at least to be truly criminal not merely needing to be commenced by a document containing an assertion of the commission by the defendant even of conduct amounting to criminal offences by an authorised officer and potentially capable of leading to the conviction and punishment, close though that may be to being criminal process. That process is described in Labrador Liquor (supra) as “hybrid”. Whatever it is, it is not truly criminal.

25 This statement of claim is not an indictment nor, in my opinion, having regard to the purpose for which it is brought, which is for the purpose of seeking pecuniary penalties rather than to initiate a criminal trial, is it required to be an indictment. I accept that the criminal standard applies. I accept, as the High Court pointed out in Labrador (supra) and as has been pointed out in other cases, that many of the incidents of criminal prosecutions attach to Customs prosecutions seeking pecuniary penalties. But such prosecutions are different in nature to criminal proceedings in many respects. They are not the appropriate vehicle to be launched by an indictment.

26 I therefore conclude that the constitutional objection it was sought to make cannot be sustained and that the statement of claim should not on that ground be struck out.

27 To found an alternative basis for ordering a jury, I was taken to s.85 of the Supreme Court Act as it stood in force before its amendment by the Courts Legislation Amendment (Civil Juries) Act 2001, since clause 19 of the fourth schedule to the Supreme Court Act preserved the continued application of ss.85, 86, 87 and 89 of that Act, as they then stood to these proceedings. Section 85 provided that, subject to ss.86, 87 and 88, proceedings in any division, and I interpolate these are proceedings in the Common Law Division, shall be tried without a jury unless the court otherwise orders.

28 Sections 86, 87 and 88 related to proceedings on a common law claim.

29 Evans v. Lynch [1984] 3 NSWLR 567 is plainly binding upon me in its conclusion that these are not proceedings on a common law claim.

30 Section 87 related to running down claims. Section 88 to matters involving fraud, or defamation and certain other claims in tort.

31 It is conceded, again I interpolate, that these proceedings do not otherwise raise any application of those sections particularly since the plaintiff concedes there is no question of fraud.

32 Section 89 provided that for proceedings on a Common law claim despite ss.85, 86 and 87, the court might order that all or any issues of fact be tried without a jury but I reiterate, this is not common law claim.

33 It remains then to consider whether I am persuaded under s.85 this is an appropriate case in which to order that the proceedings be tried with a jury.

34 In this regard, it was submitted that was the appropriate course to take because of the seriousness of the allegations, the analogy, which it was submitted was a very close one, to criminal proceedings and the respect traditionally given to the role of a jury in deciding matters which might affect the status of defendants who, in this case as in criminal cases, would be subject to a conviction if the proceedings were successful.

35 It was asserted that all of those matters, including reference to such proceedings being quasi criminal or hybrid between criminal and civil mitigated in favour of the order there be a jury, notwithstanding that as far as one could ascertain, at least in modern times, no jury had every been ordered to try what could often be quite complex scientific or factual questions on which might turn the application of regulations under the Customs Act or matters involving International trade practice.

36 Notwithstanding these matters, I remain unpersuaded that this is an appropriate matter to put before a jury.

37 I remain so unpersuaded particularly because s.85 casts upon the party moving to have a jury, a strong positive duty to persuade the court of that and particularly so in such a case as this where such matters have not historically been regarded as appropriate for a jury and because there seems no reason to distinguish this matter from any of the other customs prosecutions that the court has entertained over the years.

38 I would conclude therefore that it is not appropriate in discretion to order a jury. I need not deal, in these circumstances with the claim that there should be a special jury of 12, although I remark that there is much to be said of the plaintiff's submissions that such a jury is not to be provided except in the case of a matter of general public importance extending beyond the interests of the individual parties.

39 It was raised during the argument, in connection with the submission that there should be ordered a jury of 12, that certain material either itself of primary evidentiary significance or alternatively corroborative of oral evidence that might be given has been lost by the plaintiff, these being audio tapes of significant conversations. I am unable to relate that matter to the submission there should be a jury of 12.

40 However, I should not be taken by what I have said to be excluding the possibility that an application might be brought, whether the proceedings are regarded as civil or criminal, for appropriate relief, if necessary by way of stay in consequence of some such matter as that.

41 I would not have thought that if that were as far as the defect went, the nature of the proceedings would make any difference or that the entitlement to relief of the kind I have referred to might have been made out, but that is a matter upon which I do not now express any definite view since the only circumstances being referred to me are those that might operate in favour of the provision of a jury of 12.

42 I therefore consider the motion should not succeed on any of the claims that have been pressed. Only one of the claims originally asserted has been successful and that in consequence of the decision in Labrador Liquor (supra).

43 I have heard the parties on the issue of costs. Neither drew my attention to s.263 of the Customs Act. That section provides that in a customs prosecution, a court may award costs against a party and makes provision as to how those costs might be recovered in the circumstances to which the section speaks.

44 Thus the old rule that the Crown neither seeks nor recovers costs, particularly in criminal proceedings, is abrogated insofar as these proceedings are concerned. The section is no doubt inserted for more abundant caution lest s.247 which provides for the proceedings to be conducted in accordance with the usual practice and procedure of the court in civil cases, should not be wide enough to include an entitlement to make an order for costs. I apprehend the usual discretion provided for by the Supreme Court Act and Rules relating to proceedings generally applies.

45 In summary, the questions that I have determined, except for those that are not pressed, were before me when the matter came forward in 2002 prior to the application for removal. That application having been refused, before me those matters that I have dealt with and in particular the submission that these were or should be criminal proceedings required to be commenced by indictment, that s.245 and s.247 of the Customs Act were invalid as inconsistent with the present s.80 in the Commonwealth Constitution, were agitated.

46 What was not pressed was that the standard of proof is that applicable for criminal proceedings and the definition argument based upon the provisions of the Evidence Act 1995, the NSW Supreme Court Act 1970 and Jury Act 1977 and New South Wales Barristers Rules relating to criminal proceedings as there defined. The first was not pressed understandably, due to the decision of the Full Court of the High Court of Australia in Labrador Liquor (supra).

47 That being said, it appears to me that the plaintiff has enjoyed a complete success on all matters that were today in issue and that in substance all matters that were in issue today were in issue when the motion was launched. Despite the submission that costs should be costs in the cause or that there should be no order as to costs I am of the view that the defendants should pay the plaintiff's costs on the motion.

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Last Modified: 10/30/2003