Chief Executive Officer of Customs BY Robert Harry Wales, His Duly Authorised Delegate v Corniche Motors Pty Ltd
[2002] WASC 21
CHIEF EXECUTIVE OFFICER OF CUSTOMS BY ROBERT HARRY WALES, HIS DULY AUTHORISED DELEGATE -v- CORNICHE MOTORS PTY LTD & ORS [2002] WASC 21
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 21 | |
| Case No: | CIV:1255/2001 | 7 FEBRUARY 2002 | |
| Coram: | MASTER SANDERSON | 14/02/02 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | CHIEF EXECUTIVE OFFICER OF CUSTOMS BY ROBERT HARRY WALES, HIS DULY AUTHORISED DELEGATE CORNICHE MOTORS PTY LTD JONVIE PTY LTD JEFFREY GORDON CARGER HARRY JONES |
Catchwords: | Practice and procedure Application to strike out parts of statement of claim Turns on own facts |
Legislation: | Customs Act 1901, s 234(1)(a), s 234(1)(d)(I), s 236 |
Case References: | Bridal Fashions Pty Ltd v Comptroller General of Customs (1997) 17 WAR 499 Brailsford v Tobie (1889) 10 ALT 194 Chief Executive Officer of Customs v Camile Trading & Ors [2001] NSWSC 1075 Chief Executive Officer of Customs v Coflexip Stena Offshore International SA & Ors [1999] WASC 242 Dillon v Chin (1988) 34 A Crim R 286 Given v Pryor (1979) 24 ALR 442 Kimberley Downs Pty Ltd v Western Australia (1986), unreported; SCt of WA; Library No 6414; 25 August 1986 Mallan v Lee (1949) 80 CLR 198 Natesan v The Queen (1996) 134 FLR 199 Rob Hodgson (Trading) Pty Ltd v Belvedere Motors (Hurstville) Pty Ltd [1971] 1 NSWLR 472 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
CORNICHE MOTORS PTY LTD
First Defendant
JONVIE PTY LTD
Second Defendant
JEFFREY GORDON CARGER
Third Defendant
HARRY JONES
Fourth Defendant
(Page 2)
Catchwords:
Practice and procedure - Application to strike out parts of statement of claim - Turns on own facts
Legislation:
Customs Act1901, s 234(1)(a), s 234(1)(d)(I), s 236
Result:
Application dismissed
Category: B
Representation:
Counsel:
Plaintiff : Mr A A Jenshel
First Defendant : Mr C E Chenu
Second Defendant : Mr C E Chenu
Third Defendant : Mr C E Chenu
Fourth Defendant : Mr C E Chenu
Solicitors:
Plaintiff : Australian Government Solicitor
First Defendant : Durack & Zilko
Second Defendant : Durack & Zilko
Third Defendant : Durack & Zilko
Fourth Defendant : Durack & Zilko
Case(s) referred to in judgment(s):
Bridal Fashions Pty Ltd v Comptroller General of Customs (1997) 17 WAR 499
(Page 3)
Case(s) also cited:
Brailsford v Tobie (1889) 10 ALT 194
Chief Executive Officer of Customs v Camile Trading & Ors [2001] NSWSC 1075
Chief Executive Officer of Customs v Coflexip Stena Offshore International SA & Ors [1999] WASC 242
Dillon v Chin (1988) 34 A Crim R 286
Given v Pryor (1979) 24 ALR 442
Kimberley Downs Pty Ltd v Western Australia (1986), unreported; SCt of WA; Library No 6414; 25 August 1986
Mallan v Lee (1949) 80 CLR 198
Natesan v The Queen (1996) 134 FLR 199
Rob Hodgson (Trading) Pty Ltd v Belvedere Motors (Hurstville) Pty Ltd [1971] 1 NSWLR 472
(Page 4)
1 MASTER SANDERSON: This is a pleading summons. By application to the case management registrar dated 23 November 2001, the defendants sought to strike out certain paragraphs of the plaintiff's statement of claim. Among the paragraphs of the statement of claim under challenge were pars 354 and 356. On 9 November 2001, the plaintiff filed a minute of proposed amendments to these two paragraphs. The amendments proposed by the plaintiff did not satisfy the defendants' objections. When the matter was heard, it was argued on the basis of the proposed amendments. Further, at the hearing of the application, the defendants sought leave to amend the application to include additional paragraphs of the statement of claim to which they took objection. Counsel for the plaintiff, who had prior notice the amendment would be sought, took no objection on the basis that the additional paragraphs the defendants sought to strike out would only be struck out consequent upon any successful application with respect to paragraphs mentioned in the application. The application was amended accordingly.
2 This action is what is sometimes known as a Customs Act prosecution. Such actions are somewhat unusual not least because the plaintiff brings a civil proceeding seeking an order that a financial penalty be imposed upon the defendants for breaches of the Customs Act 1901. The nature of such actions was considered by the Full Court in Bridal Fashions Pty Ltd v Comptroller General of Customs (1997) 17 WAR 499. As Customs Act prosecutions are civil proceedings, the rules of pleading apply in broad terms as they would to any other action. However, given the provisions of the Customs Act, and in particular the provision that averments contained in the statement of claim are prima facie evidence of the facts alleged, some modification of general principles applicable to strike-out applications is required. Bridal Fashions itself provides a striking example of such a situation.
3 As is often the case in actions of this sort, the statement of claim is long and reasonably complex. It runs to 361 paragraphs and 99 pages. For the purpose of this application, it is not necessary to go into detail as to the facts of the case. The action can be summarised by saying that it is alleged in the statement of claim the third defendant is a director of the first defendant and the fourth defendant is a director of both the first and second defendants. It is alleged that in 1997 the defendants arranged for the purchase of a number of luxury motor vehicles in Hong Kong. It is alleged that on importing these vehicles into Australia, the value of the vehicles was understated on the customs declaration which accompanied the importation. Of course, the first and second defendants, as corporations, could only act through their directors, officers and agents.
(Page 5)
- Insofar as it is alleged that any breaches of the Customs Act were committed by the first and second defendants, the claim seeks to attach accessorial liability to the third and fourth defendants. It is with respect to this accessorial liability that the defendants say the difficulties with the statement of claim arise.
4 The defendants attack pars 352(a), (b) and (c) of the statement of claim. This paragraph appears under the subheading "Section 236 Liability of the Fourth Defendant". Section 236 of the Customs Act is in the following terms:
"For the purposes of a Customsprosecution (within the meaning of section 244), whoever aids abets counsels or procures or by act or omission is in any way directly or indirectly concerned in the commission of any offence against this Act shall be deemed to have committed such offence and shall be punishable accordingly."
5 Thus it is that par 352 deals with the accessorial liability of the fourth defendant. The paragraph itself reads, relevantly, as follows:
"In respect of the second and fourth statements, the Fourth Defendant at all material times:
(a) contributed equally with the Third Defendant to the true invoice price of the second and fourth vehicles;
(b) contributed equally with the Third Defendant to the other costs associated with the purchase and importation of the vehicles by the Third Defendant;
(c) was the partner of the Third Defendant in relation to the purchase and importation of the vehicles;
Particulars
- (i) The Plaintiff repeats sub paragraphs (a) and (b).
(ii) The Third and Fourth Defendants shared equally in the proceeds from the sale of the vehicles."
(Page 6)
- "20. On or about 26 August 1997 the Third Defendant purchased a 1981 Rolls Royce Spirit in Hong Kong ("the second vehicle") for HK $120,000.
21. On 20 September 1997 the Third Defendant imported the second vehicle into Australia through the Port of Fremantle."
7 The defendants say that these two pleas are an allegation made directly against the third defendant. There is no mention in these paragraphs of the fourth defendant. They say that to then attempt to tie in the fourth defendant as an accessary in the way it is pleaded in par 352 is inconsistent and embarrassing. Counsel for the defendants submitted that if par 352 is to stand, then pars 20 and 21 would have to refer to a part of the cost being of the purchase of the second vehicle and its importation into Australia being paid by the fourth defendant. As the pleas stand at the moment, they are inconsistent. While there is always the possibility of alternative pleas, that is not the way the statement of claim is presently constructed.
8 On behalf of the plaintiff it is said that no allegation of principal liability is made against the fourth defendant in par 352. It is said that the structure of the pleading shows that it is alleged the third defendant was the prime mover in the importation of the vehicles and the fourth defendant was only an accessary. Further, it is said that the true nature of the allegations made against the fourth defendant is apparent from a full reading of par 352 taken together with par 353.
9 I would accept, on the face of it, that there is an inconsistency between pars 21 and 22, 49 and 50 and par 352(a), (b) and (c). However, I am not satisfied that the inconsistency is embarrassing to the point where par 352 ought be struck out. It is clear to the fourth defendant what is being alleged against him. It is open to him to admit the plea or deny it offering his version of events. (It is not open to him to make a simple denial – see Bridal Fashions (supra)). He should have no difficulty meeting the plea against him and no difficulty understanding how it is said accessorial liability attaches to him. I would not strike out par 352.
10 Objection is taken to the use of the words "or ought to have known" in subparagraphs 352(g) and 355(f). To illustrate the point, par 352(g) reads as follows: "(The fourth defendant) knew or ought to have known that the amounts mentioned in subparagraph (e) were not the full amount of the customs duty payable."
(Page 7)
11 On behalf of the fourth defendant, it was submitted that the assertion that the fourth defendant "ought to have known" that the customs duty paid was less than the amount payable is not a matter capable of giving rise to liability as an aider or abettor or otherwise by virtue of s 236 of the Customs Act. Furthermore, it is said that the principal offences which the fourth defendant is said to have aided or abetted were, firstly, evading payment of duty (s 234(1)(a)) and knowingly or recklessly making a statement to an officer that was false or misleading in a material particular (s 234(1)(d)(I)). That being the case, any allegation that the fourth defendant "ought to have known" is irrelevant.
12 It may well be that the use of the phrase "ought to have known" would have been better avoided. After all, the mere averment that the fourth defendant had knowledge of these matters is, as I have said above, prima facie evidence of that fact. Having said that, the use of the phrase is not, in my view, so embarrassing as to cause the fourth defendant any real concern. In my view, no purpose would be served in striking out these words and I would decline to do so.
13 Complaint is then made about par 354. In its amended form, the paragraph reads as follows (omitting the marking up):
"In respect of the fifth to twenty-second statements inclusive, the Fourth Defendant was engaged in the making of the fifth to twenty-second statements inclusive.
Particulars
i. The Plaintiff repeats paragraph 4 and 5(a).
ii. The Plaintiff repeats paragraph 345 in so far as it relates to the First and Fourth Defendants.
iii. The Third Defendant was at all material times the agent of the Fourth Defendant and acted within the scope of his actual or apparent authority.
iv. The Fourth Defendant is deemed to have been so engaged by section 257(4) of the Act."
14 The first complaint made by the defendants is that matters pleaded in the particulars should properly be pleaded as material facts. Paragraph 354(iii) is perhaps the best illustration of the point made by the fourth defendant. It was submitted that the allegation that the fourth defendant
(Page 8)
- was the agent of the third defendant and acted within the scope of his actual or apparent authority were both facts which were material to the plea in par 354.
15 The answer to this complaint, I think, is twofold. First, there is the particular nature of the Customs Act prosecution and the fact that the averment in par 354 is prima facie evidence of the fact. That must necessarily limit the role particulars play in any pleading. Assuming that the defendants are entitled to particulars of par 354, that is what has been provided. Properly considered, the plea that the third defendant was at all material times the agent of the fourth defendant is not in and of itself a fact material to the allegation that the fourth defendant was engaged in making the statements. Properly viewed, it is a particular given in the context of the statement of material fact which in turn relates to the particular offence alleged against the fourth defendant. Viewed in that way, the matters raised in the particulars are properly described as particulars.
16 The defendants' further complaint as to par 354 can be summarised in this way. It is that there is no explanation as to what the nature of the scope of the authority could have been. The relevant vehicles were, based upon the statement of claim, imported by the first defendant and not by the third defendant. The fifth to twenty-second statements were made by the third defendant as agent for the first defendant: see par 345 of the statement of claim. It is said that the statements made to the customs officers were made by the third defendant on behalf of the first and second defendants. It cannot then be the case that these statements were also made on behalf of the fourth defendant.
17 The answer to this complaint is twofold. First, such a point should not be raised on a pleading summons. If there is a fundamental defect in the plaintiff's case, then this can be dealt with at trial. Leaving that broad point to one side, it may be that in the circumstances of this case, it can be said that the third defendant was the agent of the fourth defendant when the statements were made. The relationship may arise by virtue of the fact that both the third and fourth defendants were directors of the first defendant. In my view, the position is at least arguable. I would not strike out par 354.
18 Objection is taken to pars 355(a) and (b), 356 and 357. These objections stand or fall with earlier objections taken to various paragraphs. Having dismissed those objections, I also would dismiss the objection to these paragraphs.
(Page 9)
19 Finally, objection is taken to pars 348 and 351 and 358 through to 361. The objection taken can be illustrated by reference to pars 358 and 359. These paragraphs (shorn of particulars) read as follows:
"358. At all material times the Fourth Defendant intended that the payment of some of the duty which was payable in respect of each of the second and fourth to twenty-second shipments particularised herein would be evaded.
359. In the premises the Fourth Defendant aided, abetted or procured or by act or omission was directly or indirectly concerned in the commission of the offences pleaded in paragraphs 76, 90, 104, 118, 132, 146, 160, 174, 189, 203, 217, 231, 245, 259, 273, 287, 301 and 315 and is thus deemed, pursuant to section 236 of the Act, to have also committed them."
20 It was submitted on behalf of the fourth defendant that the mere forming of an intent cannot in and of itself amount to the commission of an offence. That being the case, accessorial liability cannot arise consequent merely upon the forming of that intent. The answer to this complaint lies in the structure of the pleading as a whole. It is alleged that the fourth defendant was involved in a number of schemes designed to avoid payment of duty. What is alleged in par 358 was that this was deliberately done – that is, with the full knowledge of the fourth defendant. The act may then have been carried out by one of the other defendants but, nonetheless, the duty was avoided. It is then said, by par 359, that accessorial liability attaches to the fourth defendant. The plea sets up the necessary knowledge on the part of the fourth defendant to establish liability. In my view, none of these paragraphs ought be struck out.
21 I could not leave this application without making some general comments about a strike-out application of this nature in an action of this sort. Any fair reading of this statement of claim discloses with the clarity of crystal the nature of the case being made against each of the defendants. It is a complicated claim and the pleading has clearly been drawn with great care and precision. The statement of claim and the pleading is self-evidently not embarrassing. Furthermore, the defendants must confront the reality that averments made in the statement of claim are prima facie evidence of the pleaded facts. Given these circumstances, this application should never have been brought. It was doomed to failure. It was initiated on 23 November and was heard on 7 February.
(Page 10)
- That is a period of some eleven weeks which has been entirely wasted. (The programming orders were such that the parties were not ready to have the matter heard before 17 January 2002. They were then offered a hearing on 24 January 2002. Due to unavailability of counsel, the matter could not be heard until 7 February 2002.)
22 The costs order in this matter should reflect these comments.
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