Chief Executive Officer of Customs v Derbas

[2002] NSWCCA 132

CITATION:	CHIEF EXECUTIVE OFFICER OF CUSTOMS v DERBAS [2002] NSWCCA 132
FILE NUMBER(S):	CCA 60828/01
HEARING DATE(S):	9 April 2002
JUDGMENT DATE:	11 April 2002
PARTIES :	CHIEF EXECUTIVE OFFICER OF CUSTOMS v Zakaria DERBAS
JUDGMENT OF:	Mason P; Dowd J; Smart AJ

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	01/12/0687
LOWER COURT JUDICIAL OFFICER :	Chief Judge Blanch

COUNSEL :	Appellant: S F Vorreiter (Customs) Respondent: G Thomas
SOLICITORS:	Appellant: Australian Government Solicitor
CATCHWORDS:	Appeal by case stated - excise prosecution - Excise Amendment (Compliance Improvement) Act 2000, item 62 - inconsistent with Crimes Act (Cth), s4F(1). ND
DECISION:	Stated case - pars 28 and 29.

CCA 60828/01

MASON P
DOWD J
SMART AJ

Thursday 11 April 2002

CHIEF EXECUTIVE OFFICER OF CUSTOMS v Zakaria DERBAS

Judgment

1 THE COURT: On 4 July 2001 an excise prosecution was commenced against the respondent by Information and Summons in the Local Court, Downing Centre.

2 Three offences were charged under the Excise Act 1901 (Cth) (the Act) and they arose out of events occurring on 8 August 2000. The respondent was charged with:

(a) being in possession of excisable goods, namely cut tobacco leaf, contrary to s117;

(b) engaging in the manufacture of excisable goods, contrary to s35; and

(c) moving excisable goods subject to the control of Customs, contrary to s61.

3 The prosecution of each offence is an excise prosecution by virtue of s133.

4 The respondent pleaded guilty to each offence on 14 August 2001 before Magistrate Garbett. He was convicted and the following penalites and costs were imposed:

(a) on the s117 offence – a fine of $20,000, court costs of $58 and professional costs of $200;

(b) on the s61 offence – a fine of $4,000 and court costs of $58;

(c) on the s35 offence – a fine of $500 and court costs of $58.

5 The respondent appealed to the District Court against the severity of the penalty. The only issue of continuing relevance was the applicability to the s117 conviction of an amendment to s134(4) of the Act effected on the commencement on 7 September 2000 by the Excise Amendment (Compliance Improvement) Act 2000 (the Amendment Act).

6 As at 8 August 2000, the date of the alleged offences, the Act relevantly provided:

117. (1) 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, and no person other than a manufacturer, producer, or dealer shall except by authority keep or store any proclaimed material.
(2) A person who contravenes subsection (1) is guilty of an offence punishable upon conviction as provided by section 129.
129. Where an offence is punishable as provided by this sub-section, the penalty applicable to the offence is:
(a) where the Court can determine the amount of the duty that would have been payable on the goods to which the offence relates if those goods had been entered for home consumption on:
(i) where the date on which the offence was committed is known to the Court – that date; or
(ii) where that date is not known to the Court – the date on which the prosecution for the offence was instituted;
a fine not exceeding 5 times the amount of that duty and not less than 2 times that amount; or
(b) where the Court cannot determine the amount of that duty, a fine not exceeding $50,000.
134. (1) Excise prosecutions may be instituted by the CEO in the name of the office of the CEO by action, information or other appropriate proceeding:
(a) in the Supreme Court of a State;
…
(d) in a County Court or District Court of a State;
…
(f) in a court of summary jurisdiction of a State, of the Australian Capital Territory or of the Northern Territory.
(2) Where an Excise prosecution for a pecuniary penalty that, but for this section, would exceed $20,000 is instituted in a Court referred to in paragraph (1)(d) or (e), the amount of that penalty that exceeds $20,000 shall be taken to have been abandoned.
(4) Where an Excise prosecution for a pecuniary penalty that, but for this subsection, would exceed $5,000 is instituted in a Court referred to in paragraph (1)(f), the amount of that penalty that exceeds $5,000 shall be taken to have been abandoned.

7 Item 61 of Schedule 1 of the Amendment Act amended s134(4) by omitting “$5,000” (wherever occurring) and substituting “$20,000”. This amendment took effect on 7 September 2000, the day on which the Amendment Act received Royal Assent. (Section 117 was also repealed and replaced, and s129 was repealed entirely by the Amendment Act, but no one suggests that these amendments touch the instant case.)

8 The question whether the amendment to s134(4) touched the instant prosecutions was debated before Magistrate Sweeney on 31 July 2001. She held that the new regime applied and, when Magistrate Garbett came to sentence the respondent on 14 August 2001 he followed and applied such ruling.

9 In the District Court Blanch CJ held that the amendment to s134(4) did not apply to offences committed before the amendment came into effect. Accordingly, on 19 September 2001 he made the following orders:

(a) on the s117 offence – penalty of $20,000 quashed and a penalty of $5,000 substituted, costs confirmed;

(b) on the ss35 and 61 offences – penalties and costs confirmed.

10 The matter came before this Court pursuant to s5B of the Criminal Appeal Act 1912 on a case stated by His Honour Chief Judge Blanch. The Case Stated raises the following questions of law for determination:

3.(a) Did I err in law in holding that the amendment to section 134(4) of the Act introduced by items 61 of the Excise Amendment (Compliance Improvement) Act 2000 (which had the effect of increasing from $5,000 to $20,000 the amount above which a penalty in relation to an Excise Prosecution instituted in the Local Court of NSW is taken to be abandoned) did not apply in circumstances where the relevant offence was committed prior to the commencement of the said amendment?

(b) Is the amendment to section 134(4) of the Act referred to in paragraph 3(a) above a provision of a law of the Commonwealth which increases the penalty for the purposes of section 4F of the Crimes Act (Cth) and, if the answer is yes, does item 62 of the Excise Amendment (Compliance Improvement) Act prevail over the general effect of section 4F in circumstances of this case?

11 Chief Judge Blanch’s reasons are not annexed to the Case Stated, but they have been placed before us.

12 Those reasons explain the mathematics of the penalty in relation to the s117 offence as well as the basis for the learned Chief Judge’s conclusions.

13 The amount of duty specified in the summons pertaining to the s117 charge was $14,732.35.

14 Magistrate Sweeney had taken the view that s129 related to penalty and that s134(4) was merely a procedural section. For this reason, apparently, she saw no difficulty in applying the amended s134(4).

15 Applying the amended s134(4) to the original s129(a), the penalty applicable to the s117 offence was a fine not exceeding 5 times the amount of the duty and not less than 2 times that amount. The minimum penalty was thus $29,467.70, but the application of the amended form of s134(4) required the abandonment of the amount exceeding $20,000.

16 Chief Judge Blanch held that the old s134(4) continued to apply to the instant prosecution, with the result that an amount above which the penalty was taken to be abandoned remained at $5,000. This became the substituted penalty on the s117 charge that Blanch CJ imposed.

17 The learned Chief Judge referred to s4F(1) of the Crimes Act 1914 (Cth) which provides:

4F Effect of alterations in penalties
(1) Where a provision of a law of the Commonwealth increases the penalty or maximum penalty for an offence, the penalty or maximum penalty as increased applies only to offences committed after the commencement of that provision.

18 He rejected the Crown’s submission that s134(4) was merely procedural because the primary penalty provision is to be found in s129. He said:

True it is that section 134 only comes into effect after the prosecution has elected where the offence is to be prosecuted, but the very wording of section 134(4) is that “… the amount of that penalty …” and clearly the sub-section itself speaks of a penalty and it is the penalty that has been increased from $5,000 to $20,000 and when the very word itself is used in the sub-section I cannot myself see that there is any basis upon which section 134(4) can be interpreted otherwise than as being a provision relating to the penalty.

19 It seems to us that this was entirely correct on the basis of the legislative materials placed before his Honour. Unfortunately, a key transitional provision was not drawn to his attention. It was probably overlooked because it is not to be found in Schedule 2 to the Amendment Act, which purports to contain the “Transitional provisions”.

20 Section 134(4) was amended by item 61 of Schedule 1 to the Amendment Act. Item 62 thereof also provided:

62 Application of items 60 and 61
The amendments made by items 60 and 61 apply to Excise prosecutions instituted on or after the day on which this item commences, whether or not the prosecutions are in relation to penalties incurred, or goods seized, before, on or after that day.

21 Counsel for the respondent submitted that item 62 did not apply to the instant prosecution because:

(a) the words “before, on or after that day” only applied to the words “goods seized” ;

(b) (alternatively) “penalties incurred” refer to the imposition of penalties by the court as distinct from the commission of an offence giving rise to a liability to a penalty;

(c) (alternatively) there was no express modification of s4F(1) of the Crimes Act ;

(d) (alternatively) there was no reason why Parliament should have amended s134(4) with retrospective effect in relation to past offences, in circumstances where the prosecution retained a discretion as to when to lay a charge.

None of these submissions can be accepted.

22 The language of item 62 is too clear.

23 The concluding words “before, on or after that day” qualify all of the words after “whether”; and the word “before” ensures that prosecutions for penalties incurred before the date of Royal Assent may attract item 62 so long as those prosecutions were instituted on or after that date (and within the five year limitation period stipulated by s138 of the Act). A penalty is incurred when the offence attracting liability to the penalty is committed.

24 The instant excise prosecutions were commenced on 4 July 2001, ie after the commencement of item 62 on 7 September 2000. Accordingly, the clear wording of item 62 requires the application of the amended s134(4).

25 The specifically applicable terms of item 62 prevail over the general terms of s4F(1) of the Crimes Act, which the respondent accepts is inconsistent with it. This is a plain example of the generalia specialibus maxim. Furthermore, the Amendment Act is the later provision.

26 The respondent submits that the Crown is bound by its discretionary election to prosecute in the Local Court. That is no answer, because it is Parliament and not the Crown that determines the penalty regime and Parliament has spoken with words of unmistakable clarity.

27 This is not a case where the respondent acquired some vested right to a maximum penalty when he committed the offences. He was always at risk of an excise prosecution being brought in the Supreme Court, in which event he would have been exposed to the full penalty, or in the District Court, in which event he would have been exposed to a penalty not exceeding $20,000 in accordance with s134(2) (as it stood before “$40,000” was substituted for “$20,000” by the Amendment Act). The prosecution elected to proceed in the Local Court, but at a time when Parliament had relevantly amended s134.

28 We therefore answer the questions in the case stated:

1. Yes.

2. Yes, but item 62 of the Excise Amendment (Compliance Improvement) Act 2000 prevails.

29 Costs may be awarded in matters of this nature (Clyne v Wrigley [1980] 1 NSWLR 599). We would decline to make any order. Both sides share responsibility for having failed to draw item 62 to the attention of the Chief Judge; the appellant has succeeded; and the respondent might have chosen to adopt a submitting stance.

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