Challenge Plastics P/L v The Collector of Customs for the State of Victoria

[1994] FCA 286

JUDGMENT No. ..Z&k:.,! 3

CUSTOMS - Customs Warrants under s .214 (3) of Customs Act 1901

(Cth) - "books or documents relating to the goods" - onus of

proof - whether single relevant entry in a book renders whole

book seizable.

WORDS AND PHRASES - "Books and documents"

Customs Act 1901 Cth s.214 (1)(3)

Administrative Decisions (Judicial Review) Act 1977 (Cth)

S.5(1) (d) (h)

Judiciary Act 1904 (Cth) s.399

Comptroller General of Customs v Kawasaki Motors Pty Ltd

(1991) 32 FCR 219

F Hoffman-La Roche & CO AG v Secretary of State for Trade and

Industry [l9751 AC 295

R v Secretary of State for the Home Department, ex parte

Khawaja [l9841 AC 74

HEQISTRV

Challenae Plastics Ptv Ltd v The Collector of Customs for the
State of Victoria

(No. 227 of 1992)

Judge :	Heerey J
Date:	2 May 1994

Place: Melbourne

PRINCIPAL

IN THE FEDERAL COURT OF AUSTR?%LIA	)
1
VICTORIA DISTRICT REGISTRY	) No. 227 of 1992
)
GENERAL DIVISION	)
B E T W E E N :

CHALLENGE PLASTICS PTY LTD

Applicant

- and -

THE COLLECTOR OF CUSTOMS

FOR THE STATE OF VICTORIA

Respondent

m:	Heerey J
DATE :	2 May 1994

m: Melbourne

MINUTE OF ORDERS

The Court Orders that:

1.    The following documents seized by the Respondent pursuant to the Customs Warrant dated 25 June 1992 ("the Warrant") be declared to be properly seized under the Warrant and released into the possession of the Respondent for perusal and copying and retention by the Respondent as necessary:

1.1 Bill of lading dated 13 December, 1989 and Invoice

dated 7 December, being part of Document No.
A568423,

1.2 Document A568085, 1.3 Document A071424, 1.4 Document A568075, 1.5 Document A568440, 1.6 Document A071435. All other documents seized pursuant to the Warrant and

now in the possession of the solicitors for the Respondent and subject to the order of this Court made 8 June 1993 and any copies of such documents be delivered to the solicitors for the Applicant forthwith.

3.    There be no order as to costs in relation to the Notice of Motion dated 22 December 1993 filed by the Respondent herein.

1. The Application dated 29 June 1993 be otherwise dismissed with no order as to costs in relation to costs incurred after the 28 May 1993.

2. There be liberty to apply granted to each party.

NOTE :  Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )

1

VICTORIA DISTRICT REGISTRY	1	No. 227 of 1992
)
S;ENERAI. DIVISION	1
B E T W E E N :

CHALLENGE PLASTICS PTY LTD

Applicant

- and -

THE COLLECTOR OF CUSTOMS

FOR THE STATE OF VICTORIA

Respondent

JUDGE:	Heerey J
m:	2 May 1994
a:	Melbourne

EX TEMPORE REASONS FOR JUDGW3NT

On 28 May 1993 I gave a ruling as to the ambit of s.214(3) of the Customs Act 1901 (Cth) (the Act) in relatlon to a warrant issued by the respondent. That decision is now reported (1993) 42 FCR 397, 115 ALR 149. After a series of directions hearings and negotiations, the parties are still not able to agree as to the application of s.214(3) to a sign~ficant

number of documents, even though agreement has been reached as
to others.

On 8 June 1993 I gave various directions which included arrangements for the translation of some of the documents which were not In the English language and also directions requiring the respondent to give notice of the reasons why he contended that the documents, or any parts of them, were within the terms of the warrant and thus could be retained by him. The applicant was directed to file and serve notice of its contentions in opposition.

The parties made the submissions contemplated, the respondent's submission being filed and served on 27 August 1993 and the applicant's submissions in reply on 13 September 1993. On 22 December 1993 the respondent filed a notice of motion seeking orders that the documents referred to in his submission be declared by the Court as property seized under the warrant and be released to him for perusal and copying and/or attention as necessary. The matter has come on for hearing this morning. An initial question arises as to the onus of proof

In my opinion where there was a dispute over the applicability of s.214(3) to a particular book or document, the onus of proof is on the respondent.

Section 214 relevantly provides:

on oath to the Collector that goods have been	"(1) Whenever information in writing has been given
unlawfully imported exported undervalued or entered or illegally dealt with, or that it is intended to unlawfully import export undervalue enter or illegally deal with any goods, or whenever any goods have been seized or detained, the owner shall immediately upon being required so to do by the Collector produce and hand over to him all books and documents relating to the goods so imported exported entered seized or detained undervalued or illegally dealt with, or lntended to be unlawfully imported exported undervalued entered or illegally dealt with, and of all other goods imported or exported by him at any time within the period of 5 years also produce for the inspection of the Collector or such other officer as he may authorize for that purpose and allow such Collector or officer to make copies of or extracts from all books or documents of any kind whatsoever wherein any entry or memorandum appears in any way relating to any such goods.
Penalty: $1,000.
(3) If any person fails to comply with a requirement by the Collector under this section, an officer of Customs or officer of police, having with him a Customs Warrant in the form of Schedule V hereto may, at any time of the day or night, break open and enter into any house, premises or place in which any books or documents relating to the goods are or are supposed to be, and search:

(a) the house, premises or place;

(b) any person therein or thereon; and

(c) any chests, trunks or packages therein or thereon;

and take possession of, remove and impound any of

those books and documeilts which are found."

Thus the power to enter and seize and remove is dependent upon the Collector requiring the production and handing over of books and documents relating to the goods in question.	Counsel for the respondent argued that since the applicant has	brought this proceeding under the Administrative Decisions
(Judicial Review) Act 1977, presumably s .5 ( l) (d) and perhaps s.5(l)(h), and s.39B of the Judiciary Act 1904, the onus is on the applicant to make out its challenge to the decision of the respondent to seize the goods.
Generally speaking, administrative acts are presumed to be valid and the onus is on the party challenqing them: see F Ifoffman-La Roche & CO AG v Secretary of State for Trade and Industry [l9751 AC 295, Comptroller General of Customs v Kawasaki Motors Pty Ltd (1991) 32 FCR 219 at 228-229. However, here we have a rather special situation of an entry on premises and removal of documents without the consent of the owner of the premises and documents. Without lawful justification, such conduct would constitute a trespass. In substance, this proceeding has been concerned with the legal justification advanced by the respondent for that action. Where the exercise of executive discretion interferes with liberty or property rights, once the person affected has shown a prima facie case the burden of justifying the legality of the decision is on the executive: R v Secretary of State for the Home Department, ex parte Khawaja [l9841 AC 74 at 112 per Lord Scarman. Thus in my opinion the onus is on the respondent to show that, in respect of the documents still in dispute, they relate to "the goods" within the meaning of that expression as I have construed it.
There was some other debate about the term "books and documents" and whether, if there was a page in a book that was
relevant, the whole book became seizable, and similarly whether, when a plece of paper was bundled or in other ways attached to other documents, the whole bundle became seizable.
I think the respondent's contention is correct in this regard. Looking at the clear words of the statute, the term "book" must include pieces of paper physically bound together in book
form. The book in question certainly relates to "the goods so imported etc" in that there is an entry under the relevant date relating to those goods. I do not think one can read the statute as though it said "all books relating to the goods so imported etc" or "all books and documents relating mainly to the goods so imported".
It is in the nature of books of account that a book may record very many transactions, only a few of which are connected with goods the subject of an information in writing about unlawful importation etc. This construction is further supported by the latter part of sub-section (1) which deals with goods imported or exported at any time within the period of five years. As I said in my judgment in the earlier hearing, it would be an extremely onerous construction to hold that the Collector was entitled to take away from the premises all books and documents relating to such goods. Hence one could understand that in relation to those goods there is specific provision for the making of copies or the taking of extracts
actually the subject of information on oath about unlawful from books or documents. But when we are concerned with goods
importation etc, no such qualification appears. I think the statute entitles the seizure of the whole of the book or document, provided it contains some information about those goods.
The next item is a contract dated 3 January 1990 between the applicant and its supplier. I think that the contract on its
face relates to goods produced in 1990. It seems to be setting up a regime for 1990, concerning such matters as production of goods, the prices, and delivery FOB Shanghai, payment against shipping documents. Bearing in mind that the goods in question physically arrived in Australia on 3 January 1990, I am not persuaded that this document relates to those goods which obviously must have been produced in the previous
year. I rule that it not be retained by the respondent.
The next item is a bundle of pages from the applicant's supplier showing the quantities and prices of goods ordered during February to November 1989. I rule in favour of the respondent on this issue. I think on the balance of probabilities it is likely that, particularly having regard to the dates and the correspondence of the quantities referred to in this document with the quantities in the actual shipment, that this document includes order details of the goods that were shipped. For the reasons that I gave in relation to the earlier item, the whole document can be retained by the respondent (I use the word "retained" throughout in a sense of kept and now open to inspection by the respondent).
The next item is a list of payments to the supplier for 1990. I am not satisfied as to that. I think the much more likely construction is that it is the date of payment. I now know from the details of the contract that was produced earlier that payment was against shipping documents. So in respect of goods which arrived in Australia on 3 January, it makes it unlikely that this entry relates to those goods. So those will not be retained by the respondent.
The next item is a bound lecture pad. There is no argument that it contains a lot of material that has got nothing to do, on the face of it, with the imported goods of 3 January 1990, but consistent with my earlier ruling, once it is a "book" I think it can be retained.
The next item is a letter dated 30 October 1989 from the manager of the supplier to a director of the applicant. I think the document deals with one aspect of the pricing of goods which I think on the balance of probabilities include the goods that were shipped to arrive in Australia early in January 1990. The document czn be retained by the respondent.
The next item is the supplier's price list for a variety of items. I think that all this document does is identify prices for goods of the kind that constituted the shipment in January
those goods and thus is not to be retained by the respondent. 1990. I do not think it has that necessary relation with
The next item consists of bank statements of the Chinese supplier for the months of February to October 1989 and January, February, March and May 1990. In the absence of some specific entry in the bank accounts which might be seen to correspond with the amounts paid for the shipment of 3 January 1990 these documents would not relate to the goods. Having regard to the circmstances of the bill of lading being dated 13 December 1989 and the goods arriving in Australia on
3 January 1990, the probabilities are that payment was made
against shipping documents and was made in December. Therefore these statements would not contain the payments.
The next item consists of undifferentiated price lists. They do not bear sufficient connection with the goods in question. They are not to be retained by the respondent.
The next item is the applicant's cash payments journal for July 1988 to August 1990. I think on the balance of probabilities this document does relate to the goods. It is on its face a continuous record of cash payments of the company's business. There are the entries of payment very close to the time of the actual importation to the Customs Department, which I think is enough to indicate that it is more likely than not that that entry relates to payments of
that it be retained by the respondent. customs duty in relation to the goods in question. I rule I propose to make no order as to costs on the notice of
motion. It is true that the respondent has had some success. I am not sure whether one values that by the proportion of items in respect of which he succeeded, but this proceeding really had its genesis in an attempt by the respondent to obtain access to many documents to which I had held he was not entitled. Once that basic unlawfulness was establ~shed it became inevitable that there would be disputation as to the particular documents which should or should not be released to the respondent. In the light of those rather unusual circumstances I will not make any order as to costs of the notice of motion.

I certify that this and the

preceding eight (8) pages are a true copy of the reasons for judgment of his Honour Mr Justice Heerey.

Dated: 2 Mav 1994

Assoclate

ADDearances

Counsel for the applicant:	A K Panna
Solicitor for the applicant:	Jessop & Komersaroff
Counsel for the respondent:	R Berglund
Solicitor for the respondent:	Australian  Government
Solicitor
Date of hearing:	2 May 1994