Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Ors - [2006] QSC 4

SUPREME COURT OF QUEENSLAND

CITATION:

Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Others [2006] QSC 4

PARTIES:

THE CHIEF EXECUTIVE OFFICER OF CUSTOMS
(plaintiff)
v
LABRADOR LIQUOR WHOLESALE PTY LTD
ACN 050 406 221
(first defendant)
LAWRENCE ERIC WRIGHT
(second defendant)
JEFFREY ANDREW JOHN BRYCE
(third defendant)

FILE NO:

BS 904/1997

DIVISION:

Trial Division

PROCEEDING:

Civil Claim

COURT:

Supreme Court

DELIVERED ON:

6 February 2006

DELIVERED AT:

Brisbane

HEARING DATES:

16 - 18 May 2005; 20 May 2005; 23 - 27 May 2005; 30 May - 3 June 2005; 6 June 2005

JUDGE:

Fryberg J

ORDER:

Defendants convicted on all charges

CATCHWORDS:

TAXES AND DUTIES – Customs and excise – Penal provisions – Offences – Evasion of duty – Making false or misleading statements – Moving or interfering with goods – Aiders and abbettors – Procedure in customs prosecutions – Averments by prosecutor – “information, complaint, declaration or claim” – Statement of claim

COUNSEL:

R W Gotterson QC and F W Redmond for the plaintiff
P E Hack SC and J M Jones for the defendants

SOLICITORS:

Australian Government Solicitor for the plaintiff
Forde Lawyers for the defendants

FRYBERG J: The first defendant ("Labrador") was at all material times a company of which the second and third defendants (Messrs Wright and Bryce) were the only directors and employees. As such they had control over Labrador's business affairs and operations. Labrador operated a bond store (more strictly, a “licensed warehouse” under the Customs Act 1901) at Delta Street, Geebung. Its licence entitled it to store alcohol and cigarettes without paying customs and excise duty otherwise payable on them. It was also entitled to import bulk spirits and bottle them under its own brand without paying duty. It used its store to carry on business as a liquor wholesaler. All work was done by Messrs Wright and Bryce, with occasional help from friends or relations.

During the 1990s Labrador traded domestically, and in 1995 and 1996 (at least) it also exported goods. The plaintiff alleges that (expressing it broadly) on eight separate occasions Labrador evaded customs or excise duty on goods delivered into home consumption by falsely pretending they were being exported. He also alleges that on each occasion Labrador knowingly or recklessly made a statement to an officer that was false or misleading in a material particular; and moved, altered or interfered with goods which were subject to the control of customs. Evading duty, making such a statement and dealing with such goods were offences under the relevant Acts.[1] Finally he alleges that Messrs Wright and Bryce are guilty as accessories for the same offences.[2] He seeks declarations that each of the defendants is liable to conviction for such offences; the conviction of the defendants accordingly; recovery of statutory penalties; and either a reparation order for the Commonwealth's loss or judgment for debt for the amount of the duty evaded.
[1]The Customs Act 1901 provided:
[2]The Customs Act 1901 provided:

The case has been conducted by all parties on the basis that goods dealt with domestically (“delivered into home consumption” in the jargon of the legislation) attracted duty under the Customs Tariff Act 1987 or the Excise Tariff Act 1921 as in force at the time, while goods exported attracted no duty. That makes it unnecessary to elaborate upon the statutory provisions leading to that result. In relation to the charge of evasion the plaintiff submitted that the following were the essential steps in the evasion on each of the eight occasions already referred to:

a. entering the goods for export from Australia;

b. acquitting the goods from bond;

c. not exporting the goods from Australia in accordance with the entry;

d. delivering the goods into home consumption without entering them for home consumption;

e. not paying customs duty or excise duty as the case may be.

Steps a, b and e were admitted by the defendants. The parties were also agreed as to the amount of duty evaded if it were true that the goods had indeed been delivered into home consumption.

The plaintiff led no direct evidence in relation to step d. Its averments that the step was taken in relation to each of the eight occasions were denied. The defendants did not challenge the averment that they did not enter the goods for home consumption, but sought to overcome the prima facie case raised by the averments[3] relating to step d by pleading and leading evidence that the goods were exported in accordance with the respective entries for export (step c). On this step the parties joined issue. The plaintiff pleaded and averred that the goods were not delivered for export. The defendants pleaded a positive case that they were exported. In the alternative they pleaded that if the goods were not exported, that occurred without their knowledge or consent.
[3]Customs Act 1901, s 255; Excise Act 1901, s 144.

The onus is on the plaintiff to prove beyond reasonable doubt[4] that the goods were not exported as the defendants allege. In theory the plaintiff could have relied upon the averments alone to satisfy that onus[5], but he did not do so. He mounted a substantial circumstantial case to demonstrate that the goods were not exported. The evidence of the defence witnesses, Mr Wright in particular, was directed toward showing that they were exported. If the plaintiff demonstrates that the goods were not exported, the only alternative conclusion open on the evidence and the averments will be that the goods were delivered into home consumption. There is no suggestion that any of them was entered for such consumption. It follows that if the plaintiff succeeds on each count in relation to step c, the fifteen counts of evasion will be proved against Labrador (a finding that the evasion was intentional would be inevitable). If he proves that Messrs Wright and Bryce were knowingly concerned in the evasion, the case against them on that charge also will succeed.
[4]Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161.
[5] Chief Executive Officer of Customs v El Hajje [2005] HCA 35 at para 40.

When Labrador dealt with alcohol and cigarettes from its warehouse, either by exporting them or by delivering them into home consumption, it was legally obliged to notify the Australian Customs Service (“Customs”). In the case of exports it did this by causing its customs broker, EDI Customs Brokers Pty Ltd (“EDI”), to enter information about the consignment into the Customs computer system called EXIT. That system allocated a unique identifying number, known as an export clearance number (“ECN”), to the transaction. Thereby Labrador satisfied its statutory obligation to enter such goods for export. If warehoused goods were to be delivered into home consumption, they were entered for home consumption by delivering an appropriate document to Customs who then issued an authority to deal with them. None of the goods the subject of the present charges was entered for home consumption, and no authority to deal with them in this way was issued.

The plaintiff's case, stating it broadly, accepted that on eight separate occasions Labrador placed goods in a container and exported it. The plaintiff alleged that on each occasion there were either fewer goods in the container than were listed in the entry for export or different goods from those so listed or both. The first seven occasions, referred to during the hearing as “Fiji 1” to “Fiji 7” for convenience, involved the export of a container to P A Lal Coachwork Ltd (“Coachwork”) in Fiji. The last, referred to as “Honiara 1”, involved the export of a container to QQQ Wholesale Ltd (“QQQ”) in Solomon Islands. The plaintiff's case, as it emerged from the evidence, was that on each occasion Mr Wright on behalf of Labrador created two invoices, one which truly set out the contents of the container and another which falsely stated them. He gave a copy of the false invoice to EDI which created an entry for export in accordance with it. He retained a copy of the false invoice and a matching packing list in Labrador's records and sent the true invoice to the consignee to enable it to take delivery of the goods which were in the container. He made entries in Labrador's stock registers reflecting the false invoices. The plaintiff sought to demonstrate the falsity of the invoices by proving that what actually arrived in the containers in Fiji and Solomon Islands were the goods listed in the true invoices. Because the containers had been sealed before leaving Labrador's premises, and arrived at their destination with seals intact, he submitted, their contents on arrival must have been the same as their contents when exported from Australia.

The defence case, again stating it broadly, centred on the evidence of Mr Wright. He denied creating two sets of invoices. He testified that the only invoices which he created were those in Labrador's records; those which were presented to Fiji and Solomon Islands Customs were not authentic. The typists who testified they had created those invoices on Mr Wright's instructions were mistaken. He had given samples of Labrador's letterhead to the respective consignees prior to each shipment, and these could have been used to forge the documents presented to overseas Customs. Fiji and Solomon Islands Customs officers either miscounted the contents of the arriving containers or failed to notice that their seals had been broken and contents removed prior to inspection. Their evidence was unreliable. When the containers left Labrador's premises they were packed in accordance with the invoices in its records. The defence accepted that if the case advanced against Labrador were proved that same evidence was capable of establishing the case against Mr Wright, but denied that it established the case against Mr Bryce.

It will be necessary in due course to refer in detail to the circumstances of each of the eight shipments. It is however convenient to begin by considering the various invoices purporting to relate to the shipments.

The invoices and packing lists

It was common ground that at and about the relevant times Labrador had two distinct letterheads. These were referred to by the parties as “new-style” and “old-style”. The former was printed in green ink and had Labrador's name in italic font. The latter was printed in blue ink and had Labrador's name in a roman font. Almost all of the invoices taken from Labrador's records, which Mr Wright testified were authentic, were printed on new-style letterhead. Those given to Fiji Customs and to QQQ were printed on old-style letterhead and, according to Mr Wright, were not authentic. Mr Wright was the person who, on behalf of Labrador, ought to have known. He did all of the office work, while Mr Bryce worked in the store. Mr Wright testified that in early 1995 Labrador had no typewriter or word processor in its warehouse. He had documents created by two outside typists, Mrs Wood and Mrs Lapré.

The direct evidence

Mrs Wood carried on a secretarial services business at Toowong, providing word-processing, photocopying, faxing and e-mail facilities for the public. She did work for Labrador almost from the time it commenced business. The procedure was that Mr Wright would drop off handwritten documents which she would type on her computer. She would print the documents on to Labrador letterhead paper, of which she was given a stock, both old-style and new-style. Mr Wright would return and collect the printed documents. Sometimes he would sign a document at her office and use her fax machine to fax it. She identified a considerable number of letters, invoices, pro forma invoices and statements of account which she thought she had typed. In particular she identified all of the invoices, pro forma invoices and packing lists relating to the eight consignments which were printed on new-style letterhead. On the other hand, with one exception she thought she had not typed any of the commercial invoices for the Fiji shipments which were on old-style letterhead.

The exception was the invoice in relation to the second Fiji shipment[6]. This she thought she had typed, although she conceded in cross-examination that since she had no records to say that she had typed it, it was possible that she had not done so. Each of the two copies of that invoice in evidence bears transmit terminal identity information - what is popularly called a fax header. Mr Heath, a handwriting expert, compared that with samples from Mrs Wood's facsimile machine. They were the same. He was able to identify the header as characteristic of a Toshiba machine, the type owned by Mrs Wood. Mrs Wood had customised the heading to omit the name and telephone number of her business, so that her customers’ faxes would not appear to have come from someone other than the customer. The business name and number were also omitted from the invoice. The header shows that the invoice was transmitted on 13 October 1995. Telephone records show that on that date a call was made from Mrs Wood’s office to Coachwork’s fax number. I am satisfied that the invoice was faxed from Mrs Wood's machine. These matters make it even more likely that she was the typist who created the invoice.
[6]Documents Fiji2.0001.003 and Fiji2.0001.004.

Mrs Lapré learned to type in Holland, but subsequently developed her own style. She and her husband conducted an office services business at Zillmere, near Labrador’s warehouse. They sold and repaired office equipment and offered a typing service. Typing was done on any handy electronic typewriter, not on a word processor. Mrs Lapré typed documents for Labrador during 1995 and the first half of 1996 from hand-written originals delivered to her by Mr Wright. She testified that she typed only on old-style letterhead and typed only invoices and packing lists and possibly some correspondence regarding a girl guides fund-raising project. She identified the old-style commercial invoices and packing lists for the consignments Fiji 1 and Fiji 3-7 as documents which she had typed.[7] She thought that she had not typed the old-style pro forma invoice in respect of the consignment Fiji 6 but agreed in cross-examination that she could have done so. She specifically remembered typing documents on behalf of Labrador involving the name “Frantelle”, which appears on the old-style commercial invoice for the consignment Fiji 1; that was how she became familiar with the name. She had recognised it unprompted when shown the relevant documents in October 2004.
[7]Although she was not sure about one invoice, Fiji4.0001.024, she considered that she had probably typed it.

Neither Mrs Wood nor Mrs Lapré thought she had typed the commercial invoice and packing list for the Honiara shipment. However that fact does not necessarily weaken one's confidence in their evidence regarding the documents for the Fiji shipments. Labrador purchased its own computer from Mrs Lapré's firm in mid-1996. Mrs Lapré assumed that that was why it stopped using her services.

The evidence of the two typists, if it is accepted, shows that the old-style invoices and packing lists for all of the Fiji consignments were typed on the instructions of Mr Wright. Mr Wright flatly denied this. He claimed he did not know how the old-style invoices and packing lists were created, and asserted that he had nothing to do with them. Only the new-style invoices and packing lists were genuine. He also testified that Mrs Lapré would have typed not only invoices, packing lists and girl guides correspondence, but also price lists, fax headers and general correspondence. Somewhat inconsistently he said that the reason Mrs Lapré typed some things and Mrs Wood others was that Mrs Lapré's office was very close. “If it was something that was very urgent,” he said, “it was a lot more convenient and faster to go to Mrs Lapré than to drive to Mrs Wood in Toowong.”

Mr Hack SC for the defendants submitted that I should tread cautiously about accepting the evidence of a witness who claimed to remember typing the name “Frantelle” 10 years ago. He submitted that this evidence, as well as her evidence regarding recognition of her typing style, could well be “the result of the questions that were being asked of her”, rather than the result of true recognition. However there is simply no evidence to support such a theory. I reject it.

The opportunity for forgery – Fiji

To weaken the inference that the old-style invoices were typed by Mrs Wood and Mrs Lapré, the defence led evidence, and in the case of the Fiji shipments pleaded facts, designed to show that Coachwork and QQQ (the consignees in Fiji and Solomon Islands) were given copies of the old-style letterhead before their respective consignments were sent, thus giving them the opportunity to forge the old-style commercial invoices and packing lists. The principal officer of Coachwork was Mr Richard Lal. Mr Wright testified that in early 1995 Mr Lal was introduced to him at the Labrador warehouse as a potential purchaser by a mutual acquaintance. He showed Mr Lal around the premises and gave him price lists and another document. Asked if he gave anything else with the price lists, he replied:

“Yes. In order to create a good impression - we don't have the facilities of doing presentations, et cetera - I would take a letterhead and create a with compliments slip by tearing off a section and attaching it with a paper clip. It looked better, and I did that.
Now, you are aware that in this case, we have used the terminology "old-style letterhead" and "new-style letterhead". Was this old-style or new-style at that time?-- I would have made use of the old-style letterhead because it was a way of constructively using what had already been paid for. Instead of throwing them in the rubbish bin, we used them.”

I took that to imply that Labrador had not had with compliments slips printed. Labrador also had no typing or word-processing facilities at the warehouse at that time. I asked him about the making of the slip:
“How did you manufacture the with compliments slip?-- Take a letterhead, and a ruler and you decide how much of it you need, and make sure that it's a straight line, and then with a pair of scissors-----
No. I meant - sorry. Go on. Finish that?-- You just make sure that the line is straight and it looks like a compliments slip, your Honour.
But did you - I mean did you type on it or write on it or what?-- I don't recall, your Honour. It's - sometimes I would have - yes, I would have said "regards Lawrie", or "with compliments" or "kindly reply" or - I don't - I don't know.”

In cross-examination a somewhat different picture appeared. Mr Wright was asked about the new-style letterhead:

“And this was A4 and with compliments slips, I take it. Yes, you agree with that, don't you?-- I'm not sure if we had compliments slips printed at the same time.
All right, anything else?
HIS HONOUR: Did you eventually have with compliments slips printed?-- Might have had one or two batches of it, yes, but it's not standard stationery, your Honour.
MR GOTTERSON: All right. I'll ask you to have a look at this document. It's miscellaneous 1.0086. If you look at that and will you agree with me, having seen it, that it is new-style letterhead with compliments slips?-- Yes.
…
MR GOTTERSON: I suggest to you, Mr Wright, that you had the with compliments slip and your A4 printed by your printer engaged once you worked out the new letterhead?-- It would seem so, yes.
…
HIS HONOUR: When was that, please, Mr Wright?-- I don't recall, your Honour.
MR GOTTERSON: Well, could I suggest to you, Mr Wright, that you had your new-style letterhead as early as late 1994.

…
HIS HONOUR: Mr Gotterson wants you to comment on the suggestion that you had it by late 1994?-- I really can't recall, Mr Gotterson.
MR GOTTERSON: Very well. I'm going to ask you to look now, Mr Wright, at document - defendant's document 0001.216, and would you agree with me that it is new-style letterhead?-- Absolutely, yes.
It's a letter dated the 11th of November 1994, is it not?-- Correct.
…
So by November 1994 you obviously had your new-style letterhead?-- Yes.
And you had stationery printed in it?-- Yes.
And I suggest you had with compliments slips printed in it; didn't you?-- Most likely.
Why is it then that you didn't give Mr Richard Lal a copy of the new-style with compliments slip when he visited, as you said in your evidence, in early 1995?-- It's quite possible that, at the time of his visit, we didn't have any more stock of the new - new-style letterhead.
… I suggest you got your new-style letterhead in late 1994. Do you agree with that?-- Yes, it would seem so.
And are you suggesting that by early 1995 you'd run out of it?-- It's possible, Mr Gotterson.
Right. In any event, do you say you had run out of with compliments slips by then?-- That too is possible, yes.
You don't know?-- I don't know for sure. No.
Had you run out of new-style letterhead by then?-- It's possible.
You don't know?-- No.
If you had new-style letterhead, wouldn't you have given - even if you didn't have with compliments slips, given A4 with new-style letterhead on it to Mr Lal?-- In preference, if I had stock, of course, I would.
Yes. In fact you've described your old-style letterhead as boring, didn't you, in your evidence-in-chief?-- Yes.
You would, of course, give your new customer new-style letterhead?-- Yes.
So the best you can put it, though you got new stationery in late 1994, by early 1995 you might have run out of with compliments slips and A4?-- Correct.
…
Mr Wright, I suggest you didn't give Richard Lal any letterhead at all? You didn't give him any sheet of A4 or torn off sheet of A4 with letterhead on it at all.
That's the case, isn't it?-- I disagree with you, Mr Gotterson.
…
You say your preference or the course you took was to give him a torn off piece of old-style letterhead?-- Because if that's what I had available, that's what I would have done.
Not a way to impress a new customer, I suggest?-- Mr Gotterson, if you don't have stock, you do your best.”

He might equally have said, “If you don't have answers, you do your best.” Mr Wright's admission that if he had had stock his preference would have been to be use the new-style letterhead contradicted his evidence-in-chief that he selected old-style letterhead to avoid waste. That admission forced him to suggest that he might have run out of both new-style letterhead and new-style with compliments slips only a few months after having them printed. That seems unlikely, particularly as the slips were available in June 1995 when ex 46 was created. The cross-examination also dispelled the impression created by the evidence-in-chief that Labrador did not have with compliments slips printed.

Another problem with Mr Wright's evidence about giving letterhead to Mr Lal is that it was very much an afterthought. Pleadings in this case opened in 1997. In 1999 Mr Wright gave instructions to Labrador's solicitors in relation to the old-style commercial invoices relating to the Fiji shipments. A defence was subsequently delivered. In it the defendants admitted the existence of the old-style commercial invoices but denied their authenticity. They also denied that they were prepared with their authority or knowledge. They pleaded that they:

“(c)say that a date well prior to 5 May 1995 the first defendant ordered copies of stationery bearing its letterhead to a servant or agent or associate of the P A Lal Group of Companies one Ram Singh;
(d)the stationery was sent to Ram Singh in order for him to have letters written in Chinese so that the said Ram Singh could assist the first defendant in canvassing for business in China;
(e)P A Lal Coachwork is one of the companies in the P A Lal Group of Companies;
(f)the invoice was prepared by the said Ram Singh or at his direction and falsely;
(g)deny that any such order was placed with the first defendant.”

On the morning of the first day of the trial, leave was sought to amend the defence by deleting paragraphs (c), (d) and (f) and in lieu inserting paragraphs pleading the version given by Mr Wright in his evidence-in-chief.

Not surprisingly, Mr Wright was cross-examined about this. He said at first that he did not think he would have given his solicitor, Mr Forde, instructions that stationery had been sent to Ram Singh and that he had not in fact sent any. Later he admitted he had given such instructions but claimed that when he did so, he was confused. If that was the truth, he was very confused: I infer from the evidence of Mr Sharma (unchallenged on this point) and the context of the various references to Ram Singh that no such person existed.[8] Mr Forde was not called to give evidence, although he had earlier done so on the voire dire (when legal professional privilege had been waived) and was opened as a witness on the trial. Mr Wright admitted that it was possible that he had not given Mr Forde instructions about the with compliments slip until 29 March 2005, and that his first recollection of the with compliments slip had not arisen until he and his lawyers were preparing for trial a month or so before the trial started.[9]
[8]Paragraph [76].
[9]16 May 2005.

The opportunity for forgery - Solomon Islands

Whatever the position regarding the with compliments slip, it could not explain a false commercial invoice in respect of the Honiara shipment. The defendants did not plead anything by way of explanation for that invoice, but Mr Wright raised an explanation in his evidence-in-chief. He said that the defendants were introduced to Mr Michael Quan, a director of QQQ. At first he could not recall ever having spoken to Mr Quan personally. He was then shown what purported to be a letter on new-style letterhead to Mr Quan dated 3 May 1996 and signed by him. The letter referred to a telephone conversation on that date. It informed Mr Quan that Labrador would have no objection to QQQ re-exporting product to the Republic of China and recommended that QQQ establish a regular supply of stock to China “prior to entering into an agreement of exclusive distribution/export rights to China”. Mr Wright said that he had not recalled the letter but in the light of it he must have spoken to Mr Quan. Asked to give the effect of the telephone conversation, he responded, “I recalled the whole issue of exclusive sales to China would go through his business, yes.”

Mr Wright was then shown another document, dated 7 May 1996[10], and was asked what that document was. He replied, “It's a document sent to Mr Quan whereby we gave or - yes, we gave QQQ Wholesale the exclusive distribution for Regency Scotch Whisky for the Solomon Islands and also for the Republic of China, but for a limited period of six months for China.” Asked to recall the circumstances surrounding the handwritten note at the foot of the letter he said, “Mr Quan needed to do a translation of this sole and exclusive distributor agreement for his contacts, his people in China. I have no knowledge of Chinese and he said he would do it. He would do the translation, so, yes.” He added, “I provided him with letterheads to do it and apologised because I didn't have any new ones in stock at the time.” The following exchange then took place:
[10]Document HON1.0001.004. Click on the link to view it:

“HIS HONOUR: Why would he need letterhead?-- My understanding, your Honour, was that he was doing a translation and wanted to look like the original, possibly because he was attaching a certified copy of the English version.
What right did he have to use your letterhead? You only made him a distributor?-- I understood that he needed to prove to his people in China that he had that right to do that, to sell on an exclusive basis.
Then couldn't he have got a letter from you like this one? Wouldn't that be proof?-- That wasn't how he put it to me.
I just don't understand why he would have any need for letterhead. What did he say to you?-- Your Honour, I guess we got terribly excited because anyone that could get us a - get our products into the Chinese market, that was a ginormous jump forward.
…
What did Mr Quan say to you as the reason why he needed letterhead?-- To do a translation into Mandarin-----
Of what?-- Of this letter to prove that he had the sole and exclusive distributorship for China for Regency Scotch Whisky.
So the translation had to be on letterhead?-- That's what he explained to me, yes.
But you wouldn't be signing it?-- No.”

In cross-examination Mr Wright was unable to remember the name of the printer who printed further stocks of new-style letterhead. He said that he would not necessarily have had the letterhead reprinted by the same printer who originally printed it. He had not looked for the invoice. No invoice was produced. Labrador would not necessarily have had an invoice because he might have bartered South African wine for the print work. He was not concerned about getting a tax deduction for the expense.

Michael Quan died in 2003. His brother and co-director of QQQ, Lawrence Quan, was called as a witness. He deposed that neither the letter dated 3 May 1996 nor the document dated 7 May 1996 was among the business records of QQQ.

The opportunities for forgery - conclusion

I have come to the conclusion that Mr Wright's evidence about giving the handmade with compliments slip to Mr Lal and about sending the document dated 7 May 1996 to QQQ was not the truth. As to the former I take into account Mr Wright's initial attempt to imply that Labrador did not have with compliments slips; his changed explanation in cross-examination for why he used old-style letterhead; and the sheer unlikelihood that, if he had temporarily run out of with compliments slips, he would bother to tear the bottom from a page of old-style letterhead to try to imitate one. I also take into account the long delay which occurred before he told anyone of this incident and the inconsistency between it and the explanation which he first advanced to his solicitors. As to the latter I am satisfied that the document dated 7 May 1996 was created by Mr Wright for the purposes of the litigation. No copy existed in the records of QQQ despite Mr Wright's evidence that he both faxed a copy and mailed the original. The supposed distributorship agreement referred to in the document makes no commercial sense; nor is there any apparent reason why QQQ’s customers would wish to know of it, in Chinese or in English. Mr Wright's inability to produce invoices for the reprinting of the new-style stationery reinforces my conclusion that he had not exhausted his supply on 7 May 1996; this explanation for the absence of an invoice is a most unlikely one. If the letter dated 3 May is genuine (and I need not reach a conclusion on that point) the arrangement described four days later seems inconsistent with what is proposed in the letter. More importantly, new-style letterhead must have been available on 3 May. It was also available on 8 May, as it was used for the commercial invoice bearing that date which Mr Wright swore was genuine. I am satisfied it was also available on 7 May had it been needed.

Neither Mr Lal nor Mr Quan was provided with old-style letterhead. Mr Wright's evidence in that regard does not weaken the evidence of Mrs Wood or Mrs Lapré. It does weaken the defendants’ case.

Conclusions regarding invoices and packing lists

I found Mrs Wood and Mrs Lapré convincing witnesses. Each recognised the documents typed in her own style and was able to give reasons for that recognition. Neither was dogmatic. Mrs Lapré was quite definite on some occasions, but appropriately cautious on others. Her memory of typing “Frantelle” is significant. The possibility that someone (and it would have to have been someone in Fiji associated with Coachwork) managed consistently and deliberately to fabricate old-style letterhead complete with printing flaws[11] and imitate Mrs Lapré's style on six sets of documents and both Mrs Wood's style and her fax header on one set is remote; the possibility that such imitation occurred by coincidence is fanciful. The suggested motive, that it was done to defraud Fijian Customs, is unsupported by evidence.[12] It is true that typing styles are not like fingerprints; they do not uniquely identify a document. However even bearing this in mind, I can perceive no rational explanation for the creation of the old-style invoices and packing lists other than that they were typed by the two witnesses. That being so, they must have been typed and sent to the consignees on Mr Wright's instructions.
[11]See the evidence of Mr Heath.
[12]In this context I have taken into account the evidence discussed below about the Fiji deliveries.

That is not all that is improbable about the version propounded on behalf of the defendants. According to that version Labrador was the innocent exporter on whose letterhead commercial invoices were forged not only by its Fijian customer, but also by its Solomon Islands customer. There is no suggestion that the customers were in any way connected. It strains credulity to suggest that two unconnected customers in two different places should seize upon a similar fraud by chance. Moreover there was no reason why QQQ needed to forge the old-style commercial invoice if it were intent upon defrauding Solomon Islands Customs. It could and did obtain clearance and delivery of its goods by presenting a form which was a Combined Invoice and Certificate of Value and Origin.[13] It would have had no need for an old-style commercial invoice.
[13]See para [207].

Mr Hack submitted that even if I were satisfied that Mr Wright’s denial of having given the instructions to type the documents was not correct, I should not conclude that he had lied in his evidence. He submitted that with the passage of time Mr Wright may well have persuaded himself that what he said in his evidence was true. Testifying on the basis of a mistaken belief was not to be equated with telling a lie. With great respect I cannot accept that there is any scope for Mr Wright’s denial to have been innocent. To my mind it is most improbable that he could have forgotten giving the instructions for such documents, notwithstanding the lapse of time. It must be remembered that he became aware of the investigation relatively soon after the events took place. That conclusion is reinforced by his attempts to fabricate evidence to support an hypothesis that old-style letterhead sent to Mr Lal and Mr Quan could have been used to forge the old-style commercial invoices and packing lists. I reject the submission. I am satisfied that Mr Wright’s denial was a deliberate lie.

The findings that the documents were typed on Mr Wright's instructions and that he fabricated evidence are important circumstances to be taken into account in weighing the evidence in a circumstantial case. Mr Wright’s deliberate lies seriously detract from his credibility.

Mr Hack also submitted that even if the typists’ evidence were correct, it was “not a particularly compelling circumstance, in this case, because of the paucity of evidence, the quality of the evidence, in Fiji.” Even if the documents were created by Labrador, he submitted, they may have been created in an attempt to delude Fiji Customs about the import of goods rather than to delude Australian Customs about their export. On this hypothesis the defendant exported goods in accordance with the new-style invoices and created the old-style invoices to assist Coachwork to persuade Fiji Customs that it was importing less than it actually received. The hypothesis requires the possibility of the additional or different goods arriving in Fiji either without the knowledge of Fiji Customs or with the connivance of a number of customs officers.

In the support of the former possibility, Mr Hack referred to a number of weaknesses in the evidence relating to what was in the containers when they arrived at their destinations. I shall refer to that evidence in detail shortly, in the context of particular shipments. For the present it is sufficient to say that in my judgment that possibility simply is not raised on the evidence; any weaknesses in the prosecution evidence are not enough. Moreover it is improbable that Mr Wright could have hoped to repeatedly avoid scrutiny of the contents of containers imported into Fiji; and no explanation has been offered for why he should hazard his company and perjure himself to protect Coachwork and Mr Lal.

The evidence in support of the connivance hypothesis centres on a letter dated 26 August 1997 sent to Labrador by a Mr V Raikuna, an officer of Fiji Customs. At that time Mr Raikuna was Acting Director (Commercial) for Fiji Customs and was responsible for revenue collection. In summary the letter stated that continuing investigations by customs of the seven Labrador shipments to Fiji indicated that some fraudulent entries had been made in Fiji for goods received; that the exact details were difficult to ascertain because documentation was misplaced; that collusion of officers seemed apparent; and that “we” were of the opinion that the vast majority of product in Labrador's pro forma invoices entered Fiji.[14]
[14]Exhibit 30. Click on the link to see it:

Those are startling allegations. One would have expected that, if there were any substance in them, Mr Raikuna would have been called to give evidence. He was not called. The plaintiff did not call him because on his case, the statements in the letter were without substance. Mr Dean, currently the Director, Enforcement for Fiji Customs, said so in his evidence. At the relevant time Mr Dean was the Principal Collector, Enforcement Audit and Compliance. His duties included the detection and investigation of offences against the customs laws of Fiji. He had been investigating the shipments for some 18 months when Mr Raikuna wrote the letter. He testified that Mr Raikuna was not involved in the investigation and that investigations were not part of his responsibilities. Mr Dean found out about the letter within a fortnight of its being sent. He spoke to Mr Raikuna and concluded that the letter was based on assumption only. He wrote at the time:

“Mr Raikuna was not able to access to any of the Fiji Customs import entries relating to shipments as given in his letter. He assumed that there was fraud in order to avoid duties and taxes. Mr Raikuna is responsible for matters on tariffs and trade and not investigations.”[15]

That evidence is unchallenged. It explains why the defence did not call Mr Raikuna.

[15]Exhibit 31 (emphasis in the original).

A considerable number of Fiji Customs officers gave evidence. They included officers with direct responsibility for counting and checking imported cargo. To none was it suggested that he or she had connived at fraud on the Fijian Customs. There is in my judgment no basis for such a finding.

I reject the submission that the old-style commercial invoices and packing lists were created to defraud Fiji Customs and the submission regarding the weight of the typists’ evidence.[16]
[16]Para [31].

Fiji shipment one
The documents

On the defence case, Labrador made a contract with Coachwork for the sale of considerably more product than appeared in the old-style invoice presented to Fiji Customs. The contract was propounded as an ordinary commercial dealing, but it displayed some unusual features. Mr Wright gave evidence that the transaction was initiated by an order, numbered 2624, received from Coachwork by facsimile on 19 April 1995. He could not remember speaking to anyone from Coachwork prior to receiving the order. The order was for 1,180 cases of eight different spirits. It was unpriced. The facsimile was seized in a raid by Customs officers 17 months later, by which time an attempt had been made to conceal the signature by the use of whiteout. Mr Wright had no explanation for why that was done. However he testified that following its receipt he checked Labrador's stock, costed the order and had Mrs Wood type a pro forma invoice on new-style letterhead. That invoice was faxed to Coachwork. There it was signed by way of confirmation and re-faxed to Labrador the same day. A photocopy of the re-faxed document was seized in the same raid. On it also the signature on behalf of Coachwork has been substantially obliterated.

Mr Wright further testified that when the container was packed, he prepared a commercial invoice and a packing list for the order. It was dated 4 May. For some unexplained reason a further eight cartons of Regency Scotch whisky were included in the consignment at the time of packing. That is an odd thing to do without consulting the consignee. The additional whisky increased the total invoiced value by $260.00 to $70,358.00. As with all shipments, packing of the container took place at Labrador's warehouse and the container was sealed before removal for loading. On 9 May a container said to contain “spirituous liquor beverages” was received for carriage to Suva on the vessel Capitaine Kermadec at Brisbane. Its number was CRXU 294 7650 and it bore three numbered seals.

The new-style commercial invoice advised Coachwork of Labrador's bank details and set out terms of payment. The latter were, “Payment on presentation of bills of lading A$20,000 (per telegraphic transfer as discussed) and the balance, 30 days from the date of bills of lading.” Mr Wright said that he intended “presentation” to refer to receipt by Coachwork of the bill of lading, which he had couriered by air to that company on 10 May, the day it was issued. Those terms have an unrealistic air. This was the first dealing between these two companies. (Mr Wright claimed in his evidence-in-chief that there had been previous dealings, but that claim was demolished during cross-examination.) Mr Wright had met Mr Lal once, earlier that year. There is no evidence that he made any checks as to the financial soundness of Coachwork. Labrador held no security from Coachwork. It had its own cash flow problems and had three times been refused an overdraft facility by its bank. Mr Wright was experienced at his business. Yet if this invoice is genuine, Labrador had sent the documents of title to Coachwork in Fiji before it received a cent and on the latter's bare promise to pay. It seems a most uncommercial arrangement. The most Mr Wright could offer by way of explanation was, “I believed this was good business. It was opening an export market for us.”

There seems no doubt that Labrador couriered some documents to Coachwork on 10 May 1995. What those documents were is in dispute. There is also no doubt that on 12 May 1995 Coachwork's customs agent presented an old-style commercial invoice and an old-style packing list to Fiji Customs in respect of the container CRXU 294 7650. The invoice referenced order 2624 and was for 1,199 cases of Frantelle natural spring water and 58 cases of Regency Scotch whisky. The total amount claimed was $9,079. I have already found that it was typed by Mrs Lapré on Mr Wright's instructions. I infer that he sent it to Coachwork in the package couriered on 10 May.

Delivery in Fiji

Sometime prior to 22 May the container was unloaded onto the wharf at Suva. There it was examined by Mr V Narayan, a Fijian Customs officer. At the time he was a newly appointed officer who “was taking care to make sure that I did the job properly.” His practice was to check the seal (or seals) on containers. In his 10 years in the service he has never encountered a broken seal. He opened the container, the contents were unloaded and he counted them. The contents were in accordance with the old-style invoice. In cross-examination Mr Narayan firmed up his evidence by asserting that he could actually recall checking the seal, and that there was only one seal on the container. Mr Hack submitted that his evidence of actual recall could not be regarded as reliable, and that the better view is that his evidence was based upon a combination of reconstruction and a recollection of standard practice. In relation to the seal I am inclined to think this submission is correct. Mr Narayan had the packing list, which listed three seals, during his check. He told Mr Hack that if on an examination he had checked against a document that had three seal numbers and there had been only one seal on the container, he would have reported the matter to his supervisor. He made no such report. I am satisfied that no seals were missing and that Mr Narayan checked them.

The purpose of this cross-examination was to support the hypothesis that someone might have tampered with the container before Mr Narayan inspected it. On this hypothesis the tampering must have involved the removal of 1,130 cartons of spirits and the substitution of 1,199 cartons of spring water from Queensland. The hypothesis seems fanciful. There is simply no evidence that it happened, nor even of how it could have happened. On the other hand there is evidence that at the relevant time Labrador had purchased sufficient spring water to constitute the consignment.

Frantelle spring water

In 1995 Frantelle spring water was manufactured in Queensland by Bev-Pak Australia Pty Ltd. It was distributed by an associated company, Pure & Natural Juices Pty Ltd. Mr Kevin Holland was a director of both companies and worked as the warehouse manager for Pure & Natural Pty Ltd. Ms Judith Haslem was an invoicing clerk for Pure and Natural Pty Ltd.

In the same year Taira (T & T) Pty Ltd operated a chain of supermarkets called Cannon's Food Barns and a warehouse division called Australian Independent Wholesalers (“AIW”). Mr Michael Sirr was the general manager of AIW. Ms Bambi Sweeting (née Gageldonk) was employed by Taira as an accounts clerk.

These witnesses gave evidence on the basis of their employers’ records. The evidence of Ms Haslem and Mr Holland established that on 2 May 1995, 1,500 cartons of Frantelle spring water were dispatched from Bev-Pak’s Redbank premises consigned to Labrador at Geebung. Delivery was scheduled for 10.00 am. These facts appear from a Bev-Pak form called a Goods Delivery Docket (“GDD”) which Mr Holland filled out a couple of days before the consignment was dispatched. These dockets were on Bev-Pak stationery, which provided for multiple, differently coloured copies of each docket. The goods were packed on 22 CHEP pallets, that is pallets on hire from Brambles Ltd pallet division, called CHEP, which on 4 May were loaded onto a truck operated by Rowley Sullivan Transport. Mr Holland wrote out another delivery docket in a carbon book of dockets kept by or for the truck driver, and for his benefit. The docket which he wrote also provided for delivery to Labrador. The system required to the driver to obtain a signature for the delivery on the pink copy of the GDD and also on the delivery docket in the carbon book, and return the GDD and a copy of the carbon book docket to Bev-Pak. Signed copies of both dockets were returned in due course. Each has a signature, but the signatures are different. Neither signature has been identified in the evidence. That on the GDD suggests that it was signed at 4.45 am on 4 May. The system also required the driver to obtain 22 CHEP pallets to return to Bev-Pak in exchange for those on which the water was packed. Twenty-two pallets were duly returned.

Spring water included in that consignment had been ordered by Mr Sirr on behalf of Australian Independent Wholesalers. He was the person who instructed Bev-Pak to deliver it to Labrador. He gave that instruction because that was the requirement of the order which AIW had received. Taira paid Pure & Natural $12,405.33[17] for the consignment and was itself paid. Taira’s business records for the relevant period had been destroyed and it was not possible by the time of the trial to use them to identify who ordered the consignment and who paid for it. However in 1998, before their destruction, Ms Sweeting had extracted copies of some of the documents relating to the transaction with Pure & Natural and had sent them to the solicitors for Labrador. These matters are established by the evidence of Mr Sirr and Ms Sweeting.
[17]Pure & Natural’s invoice 23721 ($13,050) less “cruise allowance” and “settlement discount” of $391.50 and $253.17 respectively.

In the course of cross-examination of Mr Sirr, the following exchange took place:

“Do you recall an occasion in 1998 speaking to a solicitor, Mr Michael Forde?[18]-- No.
[18]The solicitor for the defendants.
In 1998 was your mobile number then 0418-651-621?-- That sounds familiar.
Can I suggest that on the 5th of March 1998 Mr Forde spoke to you on the telephone. He introduced himself as a solicitor acting for Labrador Liquor. Does that remind you at all?-- No, I have no recollection of that.
Do you recall telling Mr Forde that the water had been ordered by a Mr Harvey Treetle or Mr Harvey Cheetle?-- I know of that name. I do not have a recollection of that discussion.
Was it the case that the water had been ordered by a Mr Harvey Feetle or Cheetle?-- Can you repeat the question, please.
Was it the case that the water had been ordered by a Mr Harvey Feetle or a Mr Harvey Cheetle?-- I can confirm that the order was placed to me by a member of our staff. I can also confirm that I facilitated the payment of the order with Pure & Natural to the address on the document. I had no discussion with Harvey Cheetle, had no dealings with him and I do know of the name, but I do know in respect of certain liquor transactions our company had had dealings with Harvey Cheetle but I had no discussions with Harvey Cheetle.
HIS HONOUR: Who was he, please, Mr Sirr?-- He was a liquor trader. As far as I can recall, he was based in South Australia. He was involved in the importing of - parallel importing of certain spirit products. He also sold wine. I have never met the man.
Had your company had previous dealings with him?-- We had.
MR HACK: Do you recall or do you not recall telling Mr Forde that it was Mr Harvey Cheetle who had ordered this water?-- I have no recollection of a discussion with the gentleman you refer to.
And you don't recall telling him that it had been ordered by a company in South Australia?-- I don't recall having a discussion with that gentleman.
HIS HONOUR: Supposing that you had had a discussion and supposing that you did say those things back in 1998, presumably, that would've been the position as you then recollected it; is that correct?-- Your Honour, I don't recall having a discussion with the lawyer that you are referring to. If your question is such that-----
But if you did have that discussion would you have said the position as you then knew it?-- If I had had that discussion, and being eight years ago, I may have said words to that effect that Mr Cheetle may have facilitated that transaction. He may have made a call to our office. He was known to the company at that time on an ad hoc basis. If I had had that discussion, I might have said words like that.
You had no reason not to tell anyone who you spoke to, such as Mr Forde, if you spoke to him, you had no reason-----?-- Yes.
-----not to tell him the true position?-- Certainly not.
MR HACK: Thank you. I have nothing further.
MR REDMOND: No re-examination.
HIS HONOUR: One question I had, Mr Sirr, if this was a telephone order?-- Yes.
It was a rather large one, some $12,000, I think, or so. Would your company normally accept such a large order and have the goods delivered without some level of confidence as to the probability of payment?-- Definitely.
What-----?-- Definitely. I would not have allowed an order to be delivered unless I had absolute confidence that the order was going to be paid for and the way in which I would've had absolute confidence was either dealing with someone like Harvey Cheetle, with whom we had had prior dealings, or a payment by the company in advance of the shipment being effected.
It appears from your paper work that there was no payment in advance?-- The paper work I have doesn't show a deposit or a payment. All I have here, your Honour, is a remittance to the supplier of the product. I haven't been furnished with any other records.
I see. I see what you mean. It's possible that you were paid in advance for this?-- That's correct. I certainly - I can be 100 percent certain I would not have allowed that delivery to go through unless I was absolutely satisfied that we were going to get paid.”

The clear inference from that evidence is that on Mr Hack’s instructions, Mr Sirr told Mr Forde that the order had been placed by Mr Cheetle. Mr Wright has known Mr Cheetle since at least 1995. At least two of the latter's companies have had dealings with Labrador, although only rarely during the past 12 months. Mr Cheetle conferred with Mr Wright and Mr Forde in (on Mr Wright's estimate) 2003. Mr Cheetle lives in Adelaide and has retired. He would know whether he placed the order. He was not called as a witness and no explanation for failing to call him has been advanced. In these circumstances I have no hesitation in finding that it was Mr Cheetle who placed the order for the spring water with AIW.

Mr Wright could not think of any reason why Mr Cheetle would have ordered a quantity of spring water to be delivered to Labrador. He denied speaking to Mr Cheetle about the delivery before or during May 1995. He denied that Labrador had ordered or received the consignment and he denied asking Mr Cheetle to order it for Labrador. He testified that Labrador did not have CHEP pallets to exchange at the time of the consignment (he said it had no account with the owner of the pallets) and that it was not Labrador's practice to open at 4.45 am. He denied that Labrador had placed 1,199 cartons of spring water in the container for the first Fiji shipment.

Mr Bryce (who was responsible for loading and unloading goods) accepted that that in 1995-6 goods were delivered to Labrador on CHEP pallets. He added, unresponsively, “I believe that we didn't have CHEP pallets [to exchange] at that time.” A little later in his evidence he said he believed that during those years Labrador never had CHEP pallets because it had no account with the pallet owner. He explained that when goods arrived on pallets, it was not the practice to provide the transport company with exchange pallets; rather, the transport company would come back later to collect the pallets which it had brought. Finally, he testified that Labrador had never purchased water nor had it at its premises.

No one advanced any rational explanation, let alone evidence, of what happened to the spring water if it was not delivered to Labrador. It is difficult to imagine an explanation without drifting into fancy.

Mr Hack submitted that the plaintiff had failed to prove delivery of Frantelle spring water to Labrador. He pointed to the absence of evidence that any of the defendants had ordered or paid for the water. It is unfortunate that Taira’s records were destroyed before Customs enquired for them; though I note that they were still in existence when the solicitors for the defendants made their inquiry. It is true that there is no record of any payment in Labrador's books; but one would hardly expect to find such a record whatever the true position. It is unnecessary for present purposes to determine precisely how the order was placed and paid for. What matters is whether the 1,500 cartons of spring water were delivered to Labrador. Mr Hack submitted that delivery at 4.45 am was inconsistent with the manner in which Labrador conducted its business. That submission reflected Mr Wright's evidence, but it is noteworthy that Mr Wright was not asked whether he (or anyone else to his knowledge) had ever been at the premises at that time, or more particularly, whether he was at the premises at that time on 4 May 1995. Mr Hack also submitted that there was no evidence that Labrador had access to 22 CHEP pallets and that the exchange of such pallets was inconsistent with the manner in which Labrador conducted its business. That may well be so. However there is no inconsistency between Mr Bryce's description of how pallets were handled by Labrador and the evidence of Ms Haslem and Mr Holland. They assumed an exchange of pallets because 22 pallets were returned. They could not have known whether the driver actually received exchange pallets or went back and collected the ones on which the goods delivered had been transported.

Mr Hack criticised the failure of the plaintiff to call the driver of the delivery vehicle. Mr Holland was uncertain whether the driver was Rowley Sullivan himself or his son-in-law. Both sides interviewed Mr Sullivan and either could have called him. Mr Hack foreshadowed in his opening statement that he was going to call Mr Sullivan and that Mr Sullivan would say, “I didn't deliver it. My drivers didn't deliver it.” In the event neither side called him or his driver. I gain no assistance from their omission.

I have come to the conclusion that the matters the subject of these submissions by Mr Hack are insufficient to rebut the inference that the Frantelle spring water consigned by Mr Holland was delivered to Labrador. I have no confidence in the reliability of Mr Wright's evidence and to the extent that it is inconsistent with that inference, I reject it. I also reject the evidence of Mr Bryce that Labrador never had water at its premises. I am satisfied that the consignment of 1,500 cartons of Frantelle spring water was delivered to Labrador. Labrador had that consignment on hand when the container for the first Fiji shipment was packed.

Payment

The amount payable for the shipment in accordance with the old-style invoice was $9,079.00. The amount payable in accordance with the new-style invoice was $70,358.00. The defendant's case is that Coachwork paid that latter amount. It is common ground that on 11 May 1995 Coachwork requested Westpac bank in Suva to send $20,000.00 to Labrador's account with ANZ bank at Geebung, and that this amount (less $10.00 handling fee) appears on Labrador's bank statement on 15 May. On the defence case that is consistent with Coachwork's obligation under the new-style invoice. The defence further contends that the balance of the amount in that invoice, $50,358.00, was included in a deposit of $51,692.00 made into Labrador's account on 25 May 1995. The plaintiff, on the other hand, has been unable to identify any payment which can be directly linked to the old-style invoice.

On their face the deposits into Labrador's bank account appear consistent with the new-style invoice. There are, however, some unusual features about the deposit of 25 May. The deposit was wholly in cash and was made up in the following denominations:

$100 notes                $11,100.00
   $50 notes                $40,300.00
   $20 notes                $     260.00
   $10 notes                $      20.00
     $2 coins                $      10.00
     $1 coins                $         2.00
  $ 51,692.00

The deposit was made at 10.01 am at a branch of the ANZ bank in Parramatta Road, Annandale, New South Wales. The identity of the person who made the deposit is unknown and the signature on the deposit slip is indecipherable. It is plainly not that of Mr Richard Lal, nor was Mr Lal in Sydney at the time. Austrac, the Commonwealth agency responsible for administering the Financial Transactions Reports Act 1988, has no record of the transaction, as it would do had the money being brought into Australia legally. The deposit slip used was a generic slip, not one preprinted for Labrador; but according to Mr Wright, most of Labrador's customers, including it seems Coachwork, had been given preprinted slips to use.

These features make it quite unlikely that the payment was made by Coachwork. The defendants advanced no alternative explanation for it. On any view it is a highly suspicious transaction. It does not in my judgment support the defence case. If anything it casts suspicion upon that case.

Mr Hack submitted that there were a number of inconsistent features about the plaintiff’s contentions regarding payment. Not only was the plaintiff unable to identify any payment directly related to the old-style invoice amount of $9,079.00, but it had also not explained why Coachwork would have paid $20,000.00 in respect of that invoice. Moreover on the plaintiff's case, Labrador paid at least $8.70 per carton for the Frantelle water, yet in the old-style invoice it charged Coachwork only $6.00 per carton. Additionally, Mr Hack submitted, it may be wondered where the remainder of the spring water had gone. As to the last point, it is true that there is no evidence to show what happened to the 301 cartons which Labrador received but did not send to Coachwork, but that hardly weakens the plaintiff's case. One would not think it too difficult for Labrador to have disposed of them, not necessarily for money. The other inconsistencies are not so easily explained. I can see no explanation for them in the evidence. They are circumstances favouring the defence.

Conclusions regarding Fiji shipment one

Having regard to all of the circumstances discussed above, I have reached the conclusion that the plaintiff has proved his case. The circumstances supporting that case overwhelm those favouring the defence. I can conceive of no rational hypothesis consistent with innocence. The old-style invoice for the first Fiji shipment was typed by Mrs Lapré on the instructions of Mr Wright. The goods listed in that invoice were in the container when Mr Narayan inspected it on or immediately before 22 May 1995. They were placed in the container at Labrador's premises before the container was exported. Mr Bryce was the person who packed all containers at those premises. Except for the 58 cases of Regency Scotch whisky common to both invoices, the goods listed in the new-style invoice for the shipment were not exported and the export clearance submitted by Labrador to Customs in accordance with that invoice was false and misleading. As Labrador's stock book shows, they ceased to be part of the stock held under bond. I infer they were delivered for home consumption. The plaintiff’s averment to that effect is correct. That process must have involved moving them while they were subject to Customs control. I am satisfied of these conclusions beyond reasonable doubt, and on the evidence can find no rational hypothesis consistent with innocence. The circumstances in favour of this conclusion overwhelm all others. In respect of the first shipment the six charges alleged by the plaintiff against Labrador are proved.

Fiji shipment two
The old-style commercial invoice and packing list

The second Fiji shipment involved container number ITLU 821518-1, shipped by Labrador on the vessel Barbican Star on 4 October 1995, when the bill of lading issued. The original old-style commercial invoice and packing list for this consignment were, as I have already found, typed and sent by facsimile by Mrs Wood on Mr Wright's instructions. According to those documents the consignment comprised 57 cases of Black Imperial Scotch Whisky, 34 cases of Red Imperial Scotch Whisky and 1,138 cases of beer. Mr Wright denied that this invoice was prepared at his direction, but I have rejected that denial. On 13 October he sent some documents by air to Coachwork. I infer that if the old-style invoice and packing list and the bill of lading had not already been sent to Coachwork, they were included in that package.

The new-style invoices

In evidence-in-chief, Mr Wright was shown what purported to be a pro forma invoice dated 22 September 1995. That document, which was seized by Customs Officers from Labrador in September 1996, was also typed by Mrs Wood on Mr Wright's instructions. It was addressed to “Mr B. Ram, purchasing officer” at Coachwork. It referenced “Our Telephone Discussion of Today”. It purported to be for a consignment of 1,198 cases of 14 different lines of spirits at a total price of $67,475.00, to be shipped on the Barbican Star (voyage 99), ETD Brisbane 2 October 1995. The terms of payment were, “deposit of $20,000 (per telegraphic transfer) or [sic] presentation of bills of lading and the balance 30 days from the date of bills of lading.” It concluded, “Kindly acknowledge acceptance and confirmation of this our pro forma.” He testified that he recognised the document:

“And what events led up to that document?-- It's a pro forma based on a verbal order given, I assume, to me by the telephone from Fiji.
Now, it makes reference to a Mr B Ram?-- Yes.
Described as purchasing officer?-- Yes.
Can you recall that conversation?-- No.
The document of the 22nd of the September, do you infer from that you had a conversation?-- I say so in my letter, so I must - I must assume so. Yes.
What did you do with the document that was FIJ1? Was it the - sorry - FIJ2.001 that we are looking at, did you adopt the same process that you have spoken about earlier?-- Yes.
And did you receive that back with a confirmation? That's - I think there is not a confirmation in this one?-- It would seem not. There isn't one here.”

Mr Wright's reluctance to vouch positively for the document is understandable. There are a number of indications which suggest it does not reflect any genuine transaction. First there is no evidence that it was ever sent to Coachwork. Given the reference to urgent confirmation, one would have expected Mr Wright to have asked Mrs Wood to fax it to Coachwork as soon as it was typed. Second, there was no evidence in Labrador's files and no documentary evidence has been led by which the order was accepted or varied. Third, Mr Balwant Ram, to whom the letter was addressed, knew nothing about the purchase of alcohol. He was a delivery driver who worked in the coachwork side of the business and the most he ever ordered for the company were things like nuts and bolts. He could not have had the conversation referred to in the pro forma invoice and in cross-examination of him counsel for the defendants did not suggest otherwise. I am satisfied that the document is bogus and that it was created to give a spurious air of verisimilitude to the transaction.

The evidence-in-chief set out above continued:

“Can I take you to FIJ2.001.005?-- Yes.
That's described as a commercial invoice?-- Correct.
And it speaks of your confirmed order 23/9/95?-- Yes.
What would lead you to put or to describe it in that way?-- I must assume, Mr Hack, that I received a call after they had my pro forma and they had accepted it.
Now, did Labrador send to Fiji the goods that are set out in that commercial invoice, FIJ2.0001.005 and 6?-- Yes.”

Mr Wright did not testify explicitly that this was a genuine commercial invoice in respect of the second Fiji shipment, but that was the clear thrust of his evidence. The document which he was shown listed the goods which Labrador caused to be included in the entry for export lodged on its behalf with Customs in respect of the shipment. It was a new-style commercial invoice dated 29 September, for the same voyage as the pro forma invoice, but with a number of alterations of what was in that document. The number of cases of spirits was now 1,229. The total price of the goods was $68,575.50. However the invoice receipted payment of $20,000.00 by TT on that day, so it was for an amount of $48,575.50. Payment terms also changed: Payment was now due “On presentation of bills of lading (per telegraphic transfer as discussed) or within 30 days from date of bills of lading.” There is no evidence to indicate how these changes came about, nor why the much harsher terms of payment were required of a customer which, according to Mr Wright, was trusted.
Payment

At about 3.00 pm on Friday 6 October 1995, a man walked into the Annandale branch of the ANZ bank and consulted Ms Lena Arabi, a full-time service adviser. He was a stranger to her and, I infer, to other bank staff. Whether he was the same man as made the deposit on 25 May is unknown. Ms Arabi described him as a white male, definitely not Fijian or Indian in appearance. He said he wished to make two telegraphic transfers for approximately $100,000.00 cash to Labrador's account. Under the bank's procedure the money was required to be deposited into an account of the bank called the direct remittances account. Ms Arabi interviewed the man, obtained the necessary details, filled in two deposit slips in accordance with those instructions for $48,605.50 and $58,018.50 respectively[19] and began filling in the form necessary to generate the telegraphic transfers. On that form she wrote the name of Coachwork as the applicant. The man signed the deposit slips. The signature is indecipherable, but it is not that of Mr Richard Lal. Ms Arabi then gave the man a Significant Cash Transaction Report to fill in and directed him to a teller. She then continued with her work.
[19]Each of those amounts included $30 bank commission.

A Significant Cash Transaction Report is a form which a person undertaking a cash transaction in excess of $10,000.00 is required to complete under the Financial Transactions Reports Act 1988. The form which Ms Arabi handed the man required not only disclosure of the name of the person conducting the transaction but also the verification of that person's identity and the recording of such information as a driver's license number, bank account number, passport number or credit card number. The man took the form, went to the teller, deposited the cash into the direct remittances account and left the bank without completing the report. That threw Ms Arabi into a state of “panic”. Nevertheless the transfers were effected and were credited to Labrador's account on that day. Mr Wright subsequently brought them to account as payment for the second and third Fiji shipments. The source of the funds is unknown but they were not lawfully transferred into Australia by Coachwork or anyone associated with it.

Ms Arabi's first step to rectify the situation was to contact Coachwork. She could not remember whether she did so that afternoon or the following Monday, but having regard to time zone differences it was probably the latter. Whomever she spoke to gave her the Brisbane telephone number of Mr Richard Lal (Mr Lal had his own premises in Brisbane). She rang him and explained the need for the form to be filled in. She arranged to fax him a copy of the first page of the form. He told her that he was going to have a meeting with Labrador and he would get them[20] to fill out the form and send it back to her. She faxed him accordingly on 10 October. Two days later she received a facsimile of the first page, sent by Labrador. Near the top of the form someone (Mr Wright admitted in evidence that it was he) had written her first name and telephone number. The form had been partly completed and showed the identity of the person who conducted the transaction as “Balwant Ram”. It purported to have been signed by Mr Ram. No verification of identity was given. The signature was a forgery.[21]
[20]My emphasis.
[21]Document FIJ2.0001.064. Ms Arabi completed the second page of the form.
Click on the link to see it:

Not surprisingly, Mr Wright was asked about the document:

“Now, what can you recall about this document? Where did it come from? What was said to you about it?-- Mr Hack, I recall very little. I really do.
Well, do you - did you at the time recognise it as being a document which involved the deposit of more than $10,000.00 in cash into your account?-- Yes, I know what it is, yes.
And did that surprise you?-- No.
Why not?-- I've never really queried how I get paid, as long as the company has paid for the goods, and if Mr Balwant Ram wished to deposit funds, that was - that's what he was doing for on behalf of PA Lal, so be it.
Can I-----
HIS HONOUR: Didn't strike you as odd that there would be money being deposited in Sydney?-- I'm sure I would have thought that at the time.”

Later he said that Mr Lal had either brought the document to him or faxed it to him. He was sure he would have discussed it with Mr Lal; it seemed strange that Mr Lal was asking him to fax one of his documents. He was sure he asked Mr Lal the reason for the request, but he could not remember the answer. He could not explain why Mr Lal did not simply fax the document to the bank himself. He knew the document related to money being paid to Labrador, but could not recall if he asked Mr Lal why it was being paid into a branch at Sydney rather than in Brisbane.

I do not believe Mr Wright's evidence. I am satisfied that he was at least a party to the creation of the forged form, probably in collusion with Mr Lal. It is not possible to determine who made the deposits in Sydney, but it was not Coachwork or Mr Lal.

It was the defendants’ case that the deposit of $48,605.50 represented payment of the balance due under the new-style commercial invoice. It will be recalled that the invoice provided for the balance to be paid “on presentation of bills of lading (per telegraphic transfer as discussed) or within 30 days from date of bills of lading.” Obviously those words provide for two different and inconsistent dates for payment. Mr Wright testified that he expected payment on the earlier of the two dates but it is more likely that the failure to omit the words “on presentation of bills of lading (per telegraphic transfer as discussed) or” was a mistake, brought about by inattention to the logical consequences of the alleged deposit having been paid before the date of the document. However even on Mr Wright's view, payment of the balance was not due before Coachwork received the bill of lading. It seems unlikely that this occurred by 6 October, the date of the deposit at Annandale. There is no evidence of any consignment of documents by Labrador until 13 October. That is also the date when Coachwork's customs agent, Cargo Brokers International (Fiji) Ltd (“CBI”), began work on the import entry for both this shipment and for the third shipment (which was made on the same vessel). If the defendants’ case is to be accepted, Coachwork not only made no protest when Labrador unilaterally changed the agreed terms of payment, it also probably paid the balance before it was due. That seems unlikely.

Entry of goods to Fiji

The old-style commercial invoice and packing list and the bill of lading reached Coachwork by 13 October.[22] Its accountant, Mihendra, gave them to CBI and instructed it to prepare the documentation necessary to have the cargo released by customs and transferred to a bond store called Suncourt Bond.[23] CBI prepared the necessary entry based on the information in the old-style commercial invoice and the packing list. Mr Sharma, its managing director, signed the entry that day and by the following Monday it and the other documents were lodged with Fiji Customs. It was checked by an officer quaintly known as the comparing officer, who, on Tuesday 17 October, endorsed the instruction, “Examine to verify quantity and description.” That instruction defined the scope of the examination required. The entry was then passed to another officer, Mr Lewatoro, to carry out the examination. Mr Lewatoro was in fact a warehouse officer, but no one else was available at the time. He was an experienced examination officer, having previously served in that section.
[22]Paragraph [59].
[23]For a more detailed description of that store, see para [119].

The examination took place the same day. Still under customs control, the container was brought to the Suncourt Bond warehouse. Mr Lewatoro testified that he checked that the container number and seal number matched the documentation and that the seal was intact. He then removed the seal and the container was unloaded in his presence by Suncourt workmen. He checked the contents as they did so and counted the number of cartons for each line of the entry. The contents were placed onto pallets and taken into the store. A representative of CBI named Pramesh was present during the examination.

Mr Lewatoro testified that he wrote the result of his examination on the back of the entry. He noted that he found surplus cargo consisting of three cases of Black Imperial Whisky, 220 cases of canned beer and 237 cases of beer with twist tops; and a short shipment of three cases of Red Imperial Whisky. He issued a detention notice in respect of the surplus and on 19 October wrote a report of his findings for the Collector. He then re-examined the three surplus cartons of whisky. They were unmarked. Upon opening them he found that they contained Red Imperial Whisky. They were therefore not surplus to the entry, so he amended his report and the detention notice accordingly. It was recommended that the question of the surplus beer be referred back to CBI. By then, however, CBI must already have been aware of the problem. On 18 October Mr Sharma signed a new entry which included the surplus beer.

On the same day three documents were sent by facsimile from Labrador to Coachwork. They were an old-style commercial invoice for 220 cases of canned beer and 237 cases of beer with twist tops, an old-style packing list for the same cargo and a letter. The packing list specified the container and seal numbers used for the shipment. The invoice and packing list had been typed by Mrs Lapré. The letter referred to the container by number and explained that there had been an error resulting in two orders being combined and dispatched in the one container. Who typed it is unknown. It is signed “D Nara”. Nobody of that name worked at Labrador. It could not have been sent from Labrador without the involvement of either Mr Wright or Mr Bryce. There is no reason to think that Mr Bryce was directly involved. The selection of an Indian-sounding name for the signatory and a certain clumsiness in the style suggests an attempt to make it seem as though the letter was written by a Fijian Indian, but Mr Lal was not in Australia at the time. Mr Wright denied that any of the three documents was typed on his instructions; indeed, he claimed to be unable to remember the incident of the over-shipment:

“And I will suggest to you that it was the fact that you were told in about October - in October 1995 that Fiji customs was claiming that there was an over-shipment of beer in what we have called the FIJ2 shipment. That happened, didn't it?-- I don't recall that, Mr Gotterson.
I'm suggesting to you that at that point you didn't protest and say there must be a mistake because the shipment didn't contain any beer at all?-- I don't remember the instance, Mr Gotterson.”

I have already found in relation to the commercial invoice and packing list that his denial was a lie. So was his profession of ignorance regarding the over-shipment. I infer that CBI informed Coachwork of the over-shipment on 17 October and that Mr Lal immediately told Mr Wright about it. I am satisfied that Mr Wright was responsible for the letter of 18 October.

Coachwork faxed the commercial invoice and the packing list to either CBI or Fiji Customs at 4.34 pm local time. It also faxed the letter, apparently about an hour and a half later. CBI acted less swiftly. On 20 October it lodged the new entry, a fresh copy of the original commercial invoice and (if they had not been sent direct to Fiji Customs by Coachwork) the three facsimile documents sent by Labrador. This time the comparing officer endorsed the entry, “Examine to verify quantity and T/C [tariff classification].” Before that could be done, however, Coachwork discovered that there had been a further error in the Labrador documentation. The original commercial invoice had included 200 cases of Fosters beer with twist tops and the supplementary commercial invoice included 237 cases of Fosters beer with twist tops. In both cases the invoice specified the contents of the cases to be 375ml containers. In fact they were 250ml containers. CBI was informed and immediately wrote to Fiji Customs requesting approval to examine the contents to verify this information. Presumably that happened. On 24 October Mr Sharma signed and lodged a third entry. In this entry all of the cartons of twist top containers (both Fosters and Victoria Beer) were specified to contain “6L/carton”, which implied that the beer was in 250ml containers. This time the comparing officer instructed an examination of contents per carton and quantity. Mr Lewatoro carried out a further examination the same day. He found that the actual content of the twist top cartons was in accordance with the entry, not the invoices. Thereafter the goods were released into bond.

The versions of Mr Sharma and Mr Lewatoro described above were not the only versions which those witnesses had given of these events. Each had made a one-page affidavit in mid-2001. The formats of the affidavits are similar and I infer they were prepared by the same person. Mr Sharma’s affidavit contained a number of statements inconsistent with his evidence and with the agreed facts. They were:
“3.THAT I also recall dealing with Mr Ram Singh who operated a section of the business also called International Liquor Traders that imported several containers of liquor from Australia.
4.THAT I have checked records and can state that the following containers were attended to by me on behalf of my clients. [There followed a list of the containers used for the seven Fiji shipments by Labrador].
7.THAT the above-mentioned containers, after the fulfilment of the legal requirements were delivered to Ram Singh for collection/pick-up.”
The affidavit made no mention of Coachwork or of Mr Lal.

Delivery in Honiara

On 14 May 1996 Mr K J Logan, an officer of Customs, wrote to the Acting Comptroller-General of Customs for Solomon Islands regarding the shipment. He nominated the container number and seal number 005996 and requested that officers from Solomon Islands Customs examine the container and forward details of the container number, seal number, whether the seal was intact and an itemised list of the contents of the container including brands and quantities. Copies of documents and other information were also sought.

There is no evidence to establish the date upon which the container was unloaded. After it was unloaded it remained in a secure area of the port of Honiara controlled by Solomon Islands Customs. It was examined by a team of four officers led by Mr Waihere on 11 June. Mr Limnanigau was also present on behalf of QQQ. There was only one seal on the container (005996) and it was intact.[81] Mr Waihere described the examination process in his affidavit:

“46.I recall that my officers and I unpacked the whole container. The cigarettes were packed at the front of the container. Then there were the cartons of whisky with the cartons of beer at the back.
47.I counted the number of cartons of cigarettes, whisky and beer. I specifically recall that there were two cartons of whisky shortshipped. The number declared was 360, but there were only 358 in the container.
48.There was only one type of cigarettes in the container. The cartons of cigarettes were all Rothmans brand. There were 136.5 sleeves of cigarettes.
49.The examination took one (1) day. Following the examination, we (i.e. the other customs officers and I) repacked the container and locked it. Two locks were applied; one from QQQ Wholesale Pty Ltd and the other was a Crown Lock from Solomon Islands Customs. The key for the Crown lock was then given to the Senior Collector in charge of the Private Warehouse section.”

[81]In his 23 years as the Customs Officer, Mr Waihere had not come across a broken or missing seal or one that had been tampered with.

The evidence of Mr Limnanigau was to somewhat different effect. His affidavit referred simply to cartons, without identifying whether he was referring to gross cartons (sleeves) or shipping cartons (shipping cases). In cross-examination he maintained that the cartons which he saw were shipping cartons. Obviously both he and Mr Waihere cannot be correct.

I unhesitatingly prefer the evidence of Mr Waihere as to what was in the container at the time of the inspection. There was no suggestion that this witness was anything but honest in his answers. He knew that the examination was special because of the request from Australia. He personally did the counting. He wrote the results of his examination in a contemporaneous report. His evidence on the results of his count was unchallenged in cross-examination and there was no application for him to be recalled for further cross-examination after Mr Limnanigau gave his evidence. Mr Limnanigau gave his evidence by video link and there were from time to time the difficulties caused by this method of examination. His grasp of English was inferior to that of Mr Waihere. The only reference to cigarettes in the entry for warehousing, which he had personally filled out, was to “Rothmans KSF”, the weight of which was stated to be 20.4 kg. That was what two or three shipping cases full of cigarettes would have weighed; 136 shipping cases would have weighed far more. Surely Mr Limnanigau would have been astonished to have seen so many when the container was opened, yet he said nothing.[82] On this point I do not accept his evidence.
[82]In saying this I do not overlook the fact that Mr Vosa seems to have made such an error in respect of the cigarettes in the seventh Fiji shipment.

On behalf of the defendants, Mr Hack submitted that I could not be confident that the container had not been interfered with prior to its inspection by Mr Waihere. (I take it that by “interfered with” the submission refers to the removal of about 133 shipping cartons of cigarettes.) He submitted that on the evidence of Mr Stonehouse, procedures on the wharf at Honiara were “fairly lax”. I take that to refer to evidence by Mr Stonehouse that he was able when in Honiara to accompany a QQQ vehicle onto the wharf when goods were unloaded from a container on to the vehicle. It was however an unsealed container with only one padlock, to which the QQQ employees had the key. It must therefore have already been cleared by Customs, so no impropriety is demonstrated. Mr Stonehouse said that the vehicle was not stopped on its departure, which does demonstrate some laxity. On another occasion, he said, he went for a stroll through the port facility and was not stopped, but he was vague about precisely where he went and did not suggest that he could have removed goods from a sealed container under Customs control.

In addition to evidence of the possibility that the cigarettes were removed from the container before its inspection, there was evidence relating directly to the packing of the container to support the contention that what was exported was indeed 136.5 shipping cartons of cigarettes. I turn to that evidence.

The packing of the container

Both Mr Wright and Mr Bryce swore that the container was packed with the goods set out in the new-style invoice and packing list. The defendants sought to support their testimony by evidence from Mr Stonehouse who was alleged to have been present at the time of packing. They also gave evidence of the presence of Customs officers at Labrador's premises at the time of the packing.

During May 1996 two Customs officers, Mr Holiday and Mr King, were carrying out routine auditing activities at Labrador's premises. These activities had nothing to do with the events the subject of the prosecution and the officers were not initially opened as witnesses in the plaintiff's case. In the course of cross-examining another Customs officer, Mr Hack asked if he was in a position to comment on the proposition that the two auditors were present at Labrador's premises at the time when the Honiara shipment was being packed and the container sealed. He could not; but the plaintiff promptly made arrangements for the two officers to be called, in effect for cross-examination. In relation to an occasion at Labrador's premises on 7, 13 or 17 May 1996, the following propositions were, expressly or by implication, put to one or other, or both, of them:

·the witness might have been in a position to have seen a number of cartons of Regency Scotch Whisky in a container
·the witness might have been in a position to notice cigarette cartons on top of the whisky
·Mr Bryce said he was packing a container to go to Honiara
·Mr Bryce showed the witness a chalk mark on the floor of the container, marking where beer was to go
·there was some discussion about whether all of the goods would fit in the container
·Mr Bryce came into the office while both witnesses were there “a bit cocky about having got a lot of goods into a container”
·Mr Bryce asked Mr Holiday to go and have a look at the container
·Mr Holiday said that he was doing an audit and he wasn't interested
·Mr Bryce said to Mr King, “Why don't you come and look at it”
·Mr Holiday said to Mr King words to the effect, “Go and have a look”
·Mr King went and had a look at the stuffed container.

Neither witness had any recollection of such of those events as were put to him. That is not surprising. Neither is presently employed by Customs and neither had any direct involvement in the case. However the solicitors for the defendants raised an allegation that one or other of them inspected the content of the container on either 7 or 13 May with the solicitor for the plaintiff by correspondence in September 1996.[83] The latter spoke to the officers about the allegation. At that time the matter would have been reasonably fresh in their minds. The Australian Government Solicitor responded by letter dated 23 September 1996:
“… neither officer was engaged in any inspection of a container being loaded for export. My instructions are that such an activity was not in their audit program for the days in question notwithstanding their presence at the warehouse.”

[83]Exhibit 9.

The three dates to which Mr Hack directed the witnesses’ attention were selected because they were the only dates on which Mr King and Mr Holiday were at Labrador's premises in mid-May 1996. However it is impossible for the packing to have taken place on 7 May because the order was not placed by QQQ until 8 May. I have already found that it did not take place on 17 May.[84] If these things happened, they could only have happened on 13 May. If the parties’ agreement that the container was packed on or about 10 May is understood to refer that to that precise date, these events could not have happened. The documentary evidence supports the view that packing occurred on 10 May: that is the precise date specified as the date of packing in the Export Receival Advice. On the other hand, I have already found that the container was transported from Labrador's premises on 13 May and that the second seal was delivered to Labrador on that day. I have no reason to doubt the evidence of Mr Stonehouse. Consequently I think that despite the terms of the parties’ agreement it is possible that the events described by Mr Stonehouse occurred on 13 May. That is why I stated above that my findings regarding the date when Mr Wright gave instructions to EDI and the date of lodgement of the export clearance were made more readily because they favoured the defendants.[85]
[84]Paragraph [195].
[85]Paragraph [198].

Mr Hack opened the defence case on these matters in much less detail, but with no apparent inconsistency:

“At the time that the container was being packed for Honiara, Mr Holiday and Mr King were there present doing their regular tasks and I don't for a moment suggest that one of their tasks was to check this, but it was a very large shipment and it was a matter of some pride to Mr Bryce that he could actually get that into the container and his evidence will be, as to that event, that during the course of packing he had conversations with Mr King and Mr Holiday about that he'd get it in and so on, and that when he finally got the last shipper of carton of cigarettes into the container he wanted to show them that he'd actually achieved what he had set out to do. Mr Stonehouse was - happened to be there that day and will give similar evidence to the effect that he saw, as it were, the last carton go in. Sorry. I'll just check that. I said the last carton to go in. Yes.”

Mr Wright gave a limited amount of evidence on the topic:

“Do you recall the circumstances involving the packing of that container?-- I remember there was a lot of controversy as to whether all the goods would fit. I remember at the time we had a Customs audit. I think some teasing, joking, was going on, including even Mr King from Customs. Mr Stonehouse had a bet with Mr Bryce that he wouldn't get it all in, but he did. Yeah, I - that's what I remember about packing that - well, that container being packed.”

Mr Bryce's evidence was more important. He testified that at the time he was packing the Honiara shipment (it was the only one he had ever packed for Honiara), two Customs officers were carrying out an audit. He thought the date was 17 May 1996.[86] He said that he had Mr Stonehouse “basically there helping me”. He said the container was packed all in the course of one day. He said that he put the Scotch at the back of the container, put some cigarettes (sleeves or gross cartons) on top of it, then packed shippers (shipping cartons) of cigarettes. He said that he had drawn a line on the floor of the container to mark where the beer had to start. He said that Mr Stonehouse had said that he wouldn't get it all in and they had a wager on it,
[86]Paragraph [195].

“… and I recall the last box of beer went in the top right-hand corner of the container and it was just absolutely no room for a box of matches to go in there after it, and I recall going into Paul Holiday particularly, one of the Customs officers there, and saying, "Paul, do you want to come and have a look at this container now it's packed?", because I think he was a bit skeptical and I believe his comment was, "I'm here to do an audit. I'm not really interested, but my colleague might like to go and have a look", and he did.
When you say he was a bit skeptical, had Mr Holiday been involved in this earlier?-- Oh, I don't remember. He saw the stock that was to go in the container.
Why did you go in to see him?-- Oh, gloating, I guess.
Right. What happened? Did the other Customs person come out?-- Yes.
And what happened then?-- I think he either put the seal on it himself or watched me put the seal on it and that was the end of that container.”

I do not believe the last answer. Mr Bryce did not identify which seal he was referring to. Indeed he made no mention of the fact that two seals were used. There was no suggestion in cross-examination that Mr Holiday had applied a seal himself or had seen a seal applied. Moreover Mr Bryce's evidence “I recall going into Paul Holiday particularly, one of the Customs officers there, and saying, ‘Paul, do you want to come and have a look at this container now it's packed?’” is inconsistent with the cross examination of Mr King and Mr Holiday, where it was suggested that the invitation was directed to Mr King who in turn spoke to Mr Holiday. I am not prepared to accept Mr Bryce's evidence in relation to this incident except where it was corroborated by Mr Stonehouse.

To some extent, Mr Bryce's evidence was corroborated by Mr Stonehouse. The latter testified that at an unspecified time on an unspecified date in May 1996 he went to Labrador's premises to see Mr Wright. He found Mr Wright engaged in an audit with two Customs officers. Mr Wright said that he was busy and suggested that Mr Stonehouse talk to Mr Bryce “and he would see me not long after”. He went through to the warehouse and found Mr Bryce engaged in packing a container. Mr Bryce told him the container was going to Honiara and that he was only halfway through loading it. He said the truck was due to arrive at any moment. At that stage the third of the container furthest from the doors[87] contained “quite a few” cases of cigarettes and appeared to contain spirits behind them (although it was difficult to see beyond the first row). Mr Bryce was packing cigarettes by taking sleeves out of the cases and packing them on top of the spirits. There were a few cases on a pallet inside the container and another 32 awaiting packing on a pallet outside. After the former pallet had been emptied and removed, Mr Stonehouse threw the remaining 32 into the container for Mr Bryce to pack. This Mr Bryce did, packing them along one side of the container, not in full rows. They did not reach the doors of the container. There was some discussion as to whether the “balance of the beer” would fit in the remaining space. Mr Stonehouse did not think it would, and had a bet with Mr Bryce to support his opinion. In the event it fitted in, very neatly filling the last hole. Mr Bryce showed Mr Stonehouse a seal when he was about to close the container. They then walked into the office, Mr Bryce saying that he was going to get one of the Customs officers to seal the container with him. He spoke to the Customs officers and one of them went with him out to the warehouse. Mr Stonehouse continued to the inner office to speak to Mr Wright.
[87]In Mr Stonehouse's terminology, the front of the container referred to the end furthest from the doors and the back to the end near the doors.

The evidence of both Mr Bryce and Mr Stonehouse differed from what was put in cross-examination and opened in two significant respects. First, Mr Bryce did not suggest in his evidence that either officer was involved during the packing of the container or even saw it before packing was complete, although he did claim that Mr Holiday had seen the stock that was to go into the container. In particular he did not allege that he showed either officer a chalk mark on the floor of the container, nor did he allege that either was involved in a conversation about whether all of the goods would fit in the container. Second, the goods packed closest to the entrance of the container were, on his evidence and that of Mr Stonehouse, cartons of beer, not cartons of cigarettes as was opened. Given the tightness of the alleged pack, no cigarettes could have been visible to Mr King, even if he went with Mr Bryce as alleged.

The defendants submitted that it would suggest a particular bravado for Labrador to be attempting to evade duty on $92,820.00 worth of cigarettes in the presence of Customs officers undertaking an audit; particularly to have involved Mr King and Mr Holiday in some banter with Mr Bryce about fitting the goods into the container. The difficulty with that submission is that it is impossible to determine with any precision what happened at Labrador's premises on 13 May (assuming that was the day the container was packed) and the sequence in which it happened. Why a second seal was needed was not explained. The time of Mr Stonehouse’s visit is unknown. Important elements of Mr Bryce's evidence are uncorroborated and that evidence itself is unreliable.

Whatever the level of bravado displayed by Mr Bryce, the more important question is whether the evidence just discussed, considered with all of the other evidence relevant to the point, opens up a reasonable hypothesis consistent with innocence. When I consider that evidence and the evidence relating to the opportunity for the container to be tampered with, and balance it against the evidence of Mr Waihere relating to the seal, the documentary evidence of the contents of the container, the evidence regarding the nature of QQQ's business and the evidence regarding payments to Labrador, I have no doubt that when the container left Labrador's premises its contents were as set out in the Honiara version of the Combined Certificate of Value and Origin. Those were the goods which Labrador exported.

Conclusions regarding Honiara shipment

My conclusions regarding this shipment are similar to those reached in respect of the Fiji shipments. The Honiara version of the Invoice and Combined Certificate of Value and Origin sets out the contents of the container TPHU 824197-2 sent by Labrador from Brisbane to Honiara. The container was packed by Mr Bryce at Labrador's premises before it was exported. The cigarettes listed in the new-style invoice were not exported. For that reason the entry for export submitted by Labrador to Customs in accordance with a handwritten facsimile document sent by Mr Wright to EDI (which set out the same goods as were in that invoice) was false and misleading. In Labrador's records the missing cigarettes were taken out of stock held under bond and the only available inference is that they were delivered for home consumption. That inference accords with the plaintiff's averment to that effect. That process must have involved moving them while they were subject to Customs control. I am satisfied of those conclusions beyond reasonable doubt and on the evidence can find no rational hypothesis consistent with innocence. The circumstances in favour of this conclusion overwhelm all others. The plaintiff has proved the three charges which he alleges in respect of the Honiara shipment.

Accessories

Liability as an accessory may arise pursuant to s 236 of the Customs Act 1901 in respect of an offence under that Act and pursuant to s 5 of the Crimes Act 1914 in respect of an offence under the Excise Act 1901.[88] Although the word “knowingly” did not appear in the former provision, it is common ground that this difference between the sections is of little or no consequence. The plaintiff alleged that Mr Wright and Mr Bryce were liable under these provisions but did not particularise under which part of the provisions they were liable.
[88]See note 2 above.

Mr Wright

The defence accepted that if I found the case against Labrador proved to the necessary standard, it followed “as night follows day” that a similar finding must be made against Mr Wright. I have made such findings against Labrador on every charge and I have no hesitation in finding that on each charge Mr Wright is guilty as an accessory.

Mr Bryce

On behalf of Mr Bryce, Mr Hack submitted:

“There is simply no evidence that Mr. Bryce was in any way concerned in the matters alleged by the Plaintiff; being a director and having operational control with another does not satisfy that requirement, a fortiori beyond reasonable doubt. It does not amount to evidence for the Plaintiff to assert that Mr. Bryce “must have known”. If there is no evidence, assertion of what “must” have been known cannot overcome that void.”

That rather overstates the position in several respects.

First, Mr Bryce packed all of the containers used for the disputed transactions. As Mr Bryce's evidence regarding the Honiara shipment showed, the process of packing culminated with the application of a seal to the container. Second, in each case he knew that details were provided to Customs for export clearance for the goods listed in the relevant export entry.[89] Third, Mr Bryce swore that the container for the Honiara shipment would definitely have contained more than one row of shipping cartons of cigarettes. Whatever went on at Labrador's premises in relation to the shipment, that was not the position at the time the container left Labrador's premises. I reject that evidence. I can think of no reasonable hypothesis by which the container could have left Labrador's premises loaded as it was without Mr Bryce's knowledge. Fourth, there was evidence from Mr Bryce about the packing and contents of the Fiji shipments, not in his evidence in chief but in cross-examination: Mr Bryce insisted that the Fiji containers held “international brand spirits” and denied that he packed any of them with the goods listed in the relevant old-style commercial invoice. I reject those denials. I have already found that when those containers left Labrador's premises they held such goods. I can conceive of no rational means by which that state of affairs could have come about without the involvement of Mr Bryce. He must have known the true contents of the containers. Fifth, given that knowledge, his persistent denials that the containers held the goods listed in the old-style commercial invoices could not have arisen from forgetfulness, confusion or inadvertence. If he could not remember what was in the containers, Mr Bryce could have said so. Sometimes he almost seemed to say this, but invariably he returned to his theme that the containers did not hold those goods. I can see no rational explanation for these denials; I think they demonstrate a consciousness of his own and Labrador's guilt.[90] Finally there is Mr Bryce's evidence that Labrador never purchased spring water, nor had it at its premises. I have already rejected that evidence.[91] Mr Bryce must have known about the water and must have packed it into the container for the first Fiji shipment. In short, there is some evidence that Mr Bryce was concerned in the matters alleged by the plaintiff against Labrador.
[89]Admitted on the pleadings.
[90]R v Edwards (1993) 178 CLR 193.
[91]Paragraph [53].

On the other hand, accepting that the charges against Labrador are proved, there is no evidence tending to exclude Mr Bryce's involvement. Although it was pleaded on his behalf that, if each container held the goods set out in the old-style commercial invoice, that occurred without his knowledge or consent, Mr Bryce did not suggest any hypothesis upon which he might not have been knowingly concerned in Labrador's conduct. That poses a difficulty for his case. The plaintiff pleaded in relation to each shipment that Mr Bryce knew at all material times that the container in question held only the goods listed in the relevant old-style commercial invoice. He also pleaded in relation to each shipment that Mr Bryce aided and abetted, counselled or procured or by way of act or omission was directly or indirectly concerned in moving altering or interfering with the relevant goods otherwise than in accordance with an appropriate authority and the making of the relevant false statements to Customs. The plaintiff submitted that these allegations constituted averments for the purposes of s 255 of the Customs Act 1901 and s 144 of the Excise Act 1901. If that is correct they provide prima facie evidence of the matters averred.

I see no difficulty in characterising the plaintiff's allegations in the statement of claim as averments.[92] Indeed, the opening words of the statement of claim were, “Pursuant to the provisions of section 255 of the Customs Act 1901 and section 144 of the Excise Act 1901, the plaintiff says and avers …”.[93] It is true that to some extent they may be regarded as averring a mixed question of law and fact; but the only consequence of that is that they are to be regarded as prima facie evidence of the fact only.[94] It is probably also true that as against Mr Bryce, some of them are averments of the ultimate issue; but that is of no consequence.[95] The only unresolved question is whether they are averments for the purposes of the averment provisions. To be so they must under the sections have been contained in the information, complaint, declaration or claim. In the present case they were contained in the statement of claim. Under the Uniform Civil Procedure Rules, that is a different document from the claim.[96] Although Mr Hack made no submissions on this point, he expressly did not concede it.
[92]An averment is an allegation: Brady v Thornton (1947) 75 CLR 140.
[93]It was not suggested that this form of pleading caused any embarrassment to the defendants or that it was not open to the plaintiff to rely on the averment provisions in this way: compare R v Hush; ex parte Devanny (1932) 48 CLR 487 at pp 500-501 (per Gavan Duffy CJ and Starke J), 513-515 (per Evatt J).
[94]Customs Act 1901, s 255(2)(b); Excise Act 1901, s 144(2)(b).
[95]Chief Executive Officer of Customs v El Hajje [2005] HCA 35.
[96]Rule 22.

The phrase “information, complaint, declaration or claim” embodies a mixed list of court forms. It reflects the variety of courts, superior and inferior and including courts of summary jurisdiction, in which customs prosecutions may be instituted.[97] When originally enacted[98] the phrase did not include “complaint”; that word was added in 1923.[99] Informations and complaints were (and are) initiating processes in courts of summary jurisdiction.[100] A declaration was not an initiating process, but was the first pleading in a pre-judicature common law action in a superior court. “Claim”, on my limited research, does not seem to have had any particular technical meaning. I see no reason why it should be construed in the narrow sense in which it is used in the Uniform Civil Procedure Rules; and I note that this case was commenced by writ before those rules came into operation. The averment provisions were drafted long before those rules and have application throughout Australia. They display an intention to include a pleading (or at least the first pleading) among the documents which may contain an averment. When the High Court decided the separate questions earlier determined in this case, the applicability of the provisions to the statement of claim was assumed.[101] The same assumption was made in Chief Executive Officer of Customs v El Hajje.[102] In my judgment averments in the statement of claim are averments for the purposes of the averment provisions.
[97]Customs Act 1901, s 245; Excise Act 1901, s 134.
[98]Act No 6 of 1901.
[99]Act No 12 of 1923, s 35.
[100]As to informations see Fraser v The Queen (No 2) (1985) 1 NSWLR 680 at pp 689-690; as to complaints see Justices Act 1886, s 42. In England an information was also the initiating process for proceedings commenced in the Court of Exchequer for recovery of amounts owed to the Crown for customs duty or as a penalty for not paying customs duty when due: Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 per Hayne JA at p 193. No such jurisdiction ever existed in Australia.
[101]Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR at p 207.
[102][2005] HCA 35 at paras 29 and 34.

It remains to determine Mr Bryce's guilt or innocence. That must be decided on the basis of all of the evidence,[103] taking the averment provisions into account.[104] On that basis I am satisfied of his guilt on all charges beyond reasonable doubt.
[103]The existence of evidence tending toward the guilt relieves me of the “difficult and perhaps .. baffling task to discover appropriate criteria by which to judge whether [a] prima facie case has been converted into satisfaction beyond reasonable doubt”: Simmons v Venning (1969) 1 SASR 403 at p 406.
[104]Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR at p 208.

Conclusion

Each of the defendants is convicted on all 45 charges. I shall hear the parties on the question of penalties and other consequential orders.

“234 Customs offences
(1)A person shall not:
(a)evade payment of any duty which is payable;
…
(d)knowingly or recklessly:
(i)make a statement to an officer that is false or misleading in a material particular;
…
(2)A person who contravenes subsection (1) is guilty of an offence punishable upon conviction …
33Persons not to move goods subject to the control of the Customs
(1)Except as authorised by this Act, a person shall not move, alter or interfere with goods that are subject to the control of the Customs.
Penalty:$50,000.”
Section 120 of the Excise Act 1901 was in terms materially identical to s 234. Section 61 of the Excise Act 1901 provided:
“ 61All excisable goods are, until delivered for home consumption or for exportation to a place outside Australia, whichever first occurs, subject to the control of Customs and must not be moved, altered or interfered with except as authorised by this Act.
Penalty:$20,000.”

“236 Aiders and abettors

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.”

Section 5 of the Crimes Act 1914, which applied to prosecutions under the Excise Act 1901, was in materially the same terms, except that “knowingly” modified “concerned in”.

CITATION:	Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd & Others [2006] QSC 4
PARTIES:	THE CHIEF EXECUTIVE OFFICER OF CUSTOMS (plaintiff) v LABRADOR LIQUOR WHOLESALE PTY LTD ACN 050 406 221 (first defendant) LAWRENCE ERIC WRIGHT (second defendant) JEFFREY ANDREW JOHN BRYCE (third defendant)
FILE NO:	BS 904/1997
DIVISION:	Trial Division
PROCEEDING:	Civil Claim
COURT:	Supreme Court
DELIVERED ON:	6 February 2006
DELIVERED AT:	Brisbane
HEARING DATES:	16 - 18 May 2005; 20 May 2005; 23 - 27 May 2005; 30 May - 3 June 2005; 6 June 2005
JUDGE:	Fryberg J
ORDER:	Defendants convicted on all charges
CATCHWORDS:	TAXES AND DUTIES – Customs and excise – Penal provisions – Offences – Evasion of duty – Making false or misleading statements – Moving or interfering with goods – Aiders and abbettors – Procedure in customs prosecutions – Averments by prosecutor – “information, complaint, declaration or claim” – Statement of claim
COUNSEL:	R W Gotterson QC and F W Redmond for the plaintiff P E Hack SC and J M Jones for the defendants
SOLICITORS:	Australian Government Solicitor for the plaintiff Forde Lawyers for the defendants