Chief Executive Officer of Customs v Pham

[2006] NSWSC 285

CITATION:	Chief Executive Officer of Customs v Pham [2006] NSWSC 285
HEARING DATE(S):	20 February 2006
JURISDICTION:	Civil
JUDGMENT OF:	McClellan CJatCL
EX TEMPORE JUDGMENT DATE:	02/20/2006
DECISION:	1. Defendants' motion dismissed; 2. Defendants to pay the plaintiff's costs.
CATCHWORDS:	CUSTOMS ACT - motion for permanent stay of proceedings - evasion of customs duty - alleged involvement in cigarette importation - tape of conversations made during customs officials' execution of search warrant - whether denied opportunity of tendering evidence consistent with innocence - whether abuse of process sufficient to result in unfair trial
LEGISLATION CITED:	Customs Act 1901
CASES CITED:	Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2004) 216 CLR 161 Commonwealth Service Delivery Agency v Bourke (1999) 75 SASR 299 Duncan & Anor v Crews & Ors (2001) 161 FLR 250 Holmden v Bitar (1987) 75 ALR 522 Jago v District Court (NSW) (1989) 168 CLR 23 R v Lord and Fraser [1983] Crim LR 191 R v Ulman-Naruniec (2003) A Crim R 531
PARTIES:	Chief Executive Officer of Customs (Pltf) Vinh Phat Pham (Def)
FILE NUMBER(S):	SC 20979/01
COUNSEL:	R Bromwich (Pltf) M Robinson/R Nair (Def)
SOLICITORS:	Australian Government Solicitor (Pltf) Burn & Swift (Def)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

McCLELLAN CJ at CL

MONDAY 20 FEBRUARY 2006

20979/01 CHIEF EXECUTIVE OFFICER OF CUSTOMS v PHAM & ORS

JUDGMENT

1 HIS HONOUR: The defendants in these proceedings bring a notice of motion seeking the following order:

“The proceedings be permanently stayed by reason that its continuance would result in injustice and therefore amount to an abuse of process by reason of the loss or destruction of important evidence by the plaintiff, namely audiotape recordings of the search warrant action by the plaintiff at 43 Clapham Road, Regents Park, New South Wales and 31 Kessel Avenue, Homebush, New South Wales.”

2 The primary proceedings are brought under ss 233(1)(a), 234(1)(a) and 234(1)(d)(i) of the Customs Act 1901. They concern allegations that the defendants were involved in the smuggling of a significant quantity of cigarettes on which they evaded Customs duty. It is also alleged that they made false statements in not declaring the cigarettes to the relevant authorities. The penalties available are wholly pecuniary.

3 The applicants deny the allegations but have not filed any evidence in the substantive proceedings.

4 The allegation made is that two shipping containers were imported into Australia purportedly containing gyprock but in fact containing significant quantities of cigarettes. There is no issue between the parties that the smuggling of cigarettes and evasion of duty has taken place. The relevant containers were intercepted by the authorities and a substantial quantity of cigarettes found within them. Much of that quantity of cigarettes was removed from the container and replaced with empty cartons before it was delivered to the point at which the defendants were to take possession of it.

5 The plaintiff’s case is framed on averments in the statement of claim: see s 255 of the Customs Act 1901, some facts contained in an agreed statement of facts which is dated 12 August 2004 and the evidence contained in affidavits by a number of witnesses.

6 This is not the first interlocutory motion which the defendants have brought in the proceedings. As I understand it, an earlier motion sought to raise the question of the standard of proof applicable in proceedings of this nature. That issue caused the proceedings to be stayed until the matter was resolved by the High Court in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Limited (2004) 216 CLR 161. That decision formally established that the obligation falls upon the plaintiff to prove the case beyond reasonable doubt.

7 Another issue not presently relevant has also been pursued as an interlocutory issue but a special leave application to the High Court failed in relation to it.

8 The issue in the present motion arises from the fact that when one of the containers was delivered to the defendants’ warehouse at Clapham Road, having previously been intercepted by the authorities, arrangements were made to videotape activity and also make an audio recording of the activity which occurred when a search warrant was executed. The process undertaken by the authorities was, I understand, to be in accordance with usual practice.

9 One of the Customs officers was carrying a tape recorder and a record was made of the conversations which occurred at the premises involving both defendants and other persons who were present. A record of the events is contained in the affidavit of David Gordon Rooney which has been read on this motion. He deposes that on 2 February 2001, which is the relevant date, he was delegated the role of note-taker during a Customs Act search warrant action at the premises at 43 Clapham Road. In that role he was required to record all conversations which took place. On the following day Mr Rooney says that he listened to the tapes at his desk and made a transcript of the conversations which he heard. He annexes to his affidavit what he says is a true copy of the transcript which he made on that date.

10 A perusal of the transcript indicates that although it excludes direct quotes which I infer are his transcription of what he heard on the tape, he has added in significant other details. Those details relate to the movement of persons at various times and also includes a comment on a number of occasions where an indication is given of persons conversing in a foreign language or the interpretation of English into Chinese so that the defendants could understand what was being said. There are forty-one occasions on the transcript where it would appear that there is such an occurrence.

11 I should have indicated that the defendants are both Vietnamese Chinese and speak a dialect of Chinese commonly used in Vietnam.

12 Mr Rooney, I infer, was not fluent in Chinese and, accordingly, insofar as the tape recording recorded conversation between the defendants and others in their native tongue, he was not able to transcribe it. The problem arises in this case because following the transcription by Mr Rooney, the original tapes have been lost and it may be assumed cannot now be retrieved.

13 In these circumstances the defendants submit that for two reasons the trial would be unfair if it was allowed to proceed. It is firstly submitted that by reason of the destruction of the tapes they have lost the opportunity to tender in evidence material which would be consistent with their innocence. The submission was framed that they would be denied the opportunity of advancing to the court an alternative hypothesis consistent with their innocence. It is submitted that that hypothesis is founded in the denials which they allegedly made of involvement in the enterprise when the search warrant was being executed.

14 It is further submitted that by reason of the destruction of the relevant material they will be denied the opportunity of tendering evidence of statements which they made at the relevant time consistent with their innocence. It is submitted that the evidence that may have been available on the tape would have demonstrated that their statement of mind at the relevant time would not implicate them in the alleged offence.

15 It is further submitted by the defendants by reason of the fact that the whole of the original tape was not transcribed, and part of it has now been lost, the plaintiff should not have the benefit of any of the tape at the proposed trial.

16 On this motion the defendant's son, Jason Pham has given evidence by affidavit. He was present at the warehouse on 2 February 2001 to assist his father to unload a container of what he says to be gyprock. He says that on previous days his father had asked him to arrange for friends to unload a container of gyprock to be delivered to the warehouse. He was asked to make sure they were big blokes as the contents would be heavy. Mr Pham arranged for some friends to assist.

17 When he arrived at 9am on 2 February he says the container was already at the warehouse. He says that his father operated the forklift and he, Mr Pham, and his friends got into the container and started unloading the gyprock. He said that he unloaded the container for two hours and heard a lot of shouting and somebody saying: “Stop everything.” That person he knows now to be Colin Bullock, from the Australian Customs Service.

18 Shortly after Mr Bullock gave Mr Pham's father a document which was the relevant search warrant. Mr Pham said he looked at the document briefly but did not read all of it. He then conversed with his family in the Toshu language. Although he does not remember the precise words he said, the following conversation took place: "Father: 'What is happening?' I said: 'They have a warrant to search the warehouse. It seems they are looking for cigarettes.' Father: 'We have no cigarettes here. Why are they looking for cigarettes?'"

19 Mr Pham said he tried to explain to his father what the warrant was: "It is a document that allows them to come on the premises and search for cigarettes. I think the best thing is to let them come in and take up their search."

20 He says that his father and himself walked away and had a further conversation in Toshu. Apparently a police officer said: "Don't speak Chinese to each other. If you want to talk, speak English." It is not clear by what authority the officer gave that command. I understand in any event it was not obeyed.

21 Mr Pham says for most of the day he was with his father assisting him with interpreting questions from the Customs officers and answering some of their questions in English. He says that he never interpreted a caution from Colin Bullock to his father. Mr Pham says his mother arrived at the warehouse and his parents had a conversation in Toshu and he had a number of conversations assisting his mother to communicate with the officers from Customs. When he first explained to his mother what was happening she said: "I am very surprised. Why are they doing this?"

22 Mr Pham's comments on a number of the passages in the transcript are prepared by Mr Rooney. It is unnecessary for me to relate all of his comments. However, he does relate that in response to questions from the Customs officers he said to his father: "Dad, they now want to know when the gyprock arrived?" Father: "Why do they want to know this? There are no cigarettes. What do they want?" I said: "I don't know what they want. Let them do their search so they can leave. Can you remember when the gyprock arrived at the warehouse?" Father: "I am not sure."

23 Later he said to Mr Pham: "(Swear words) What cigarettes are they looking for? Tell them to piss off. They are wasting taxpayers' money and my time, making a mess of the place."

24 From this affidavit it is apparent that Mr Pham does have a significant recollection of various of the conversations which he says occurred but which were not transcribed by Mr Rooney. Although it may be the case that he does not remember each of the conversations on the 41 occasions where Mr Rooney makes a note that there was some private discussion, it is nevertheless plain that Mr Pham remembers with clarity his father indicating that as far as he was concerned there were no cigarettes in the container and that the Customs officers were wasting everyone's time.

25 I understand that it is evidence of that nature which the defendants say they cannot benefit from because of the destruction of the primary tape or loss of the primary tape before it was transcribed.

26 The principles which I should apply in the resolution of this application are now well understood. They have been usefully summarised by Sulan J in R v Ulman-Naruniec (2003) A Crim R 531 at 570-575 sitting as a member of the Court of Criminal Appeal in the Supreme Court of South Australia. It is unnecessary for me to repeat all of his Honour's useful discussion which concludes with consideration of the High Court's decision in Jago v District Court (NSW) (1989) 168 CLR 23. The fundamental principle is the court will intervene to stay prosecution proceedings where there may be an abuse of process which carries the consequence that the proposed trial may not be fair. If such an abuse exists, and cannot be cured, the court will intervene.

27 There are in the authorities some obvious examples of when the court should intervene in relation to matters which bear some similarity to the present facts. In Holmden v Bitar (1987) 75 ALR 522 the defendant was accused of bringing five tins of meat pate into Australia without making the relevant declarations. Once discovered the quarantine officer assessed the tins and, although the labels were retained, the tins and their contents were later incinerated. As a consequence of the destruction of the tins the defendant was unable to examine the contents to determine whether or not they may have contained pate derived not from animals but from fish. If the pate had been derived from fish, the relevant offence would not have been committed. Cox J held that in those circumstances the destruction of the primary evidence by the prosecution had denied the defendant an opportunity to defend herself at the trial. Accordingly an abuse of process had taken place which was not capable of being cured.

28 In Duncan & Anor v Crews & Ors (2001) 161 FLR 250 Greg James J was concerned with two matters heard by different magistrates involving similar factual backgrounds. They related to allegations that the defendants had failed to declare or had understated income. However, the primary documentation where the false declaration or statement was allegedly made had been destroyed leaving the prosecution to rely on a computer-generated record of the amount of income notified to Centrelink on forms lodged by the defendants. Both were claiming Centrelink benefits for which the entitlement was dependent upon their income levels.

29 His Honour held that in those circumstances the Supreme Court should not intervene to stay the proceedings. Although his Honour recognised when the matters came to trial the fact that the primary documentation was not available may lead to an acquittal, this was a matter to be determined by the trial judge having regard to the evidence which was ultimately tendered at the hearing.

30 In R v Lord and Fraser [1983] Crim LR 191 the prosecution brought a case which alleged a conspiracy in relation to the false inflation of a price of a number of compressors which were said to be in poor mechanical condition. Apparently the relevant equipment was sent to an independent consulting engineer to examine and report but was thereafter effectively destroyed. In these circumstances the court found that the Crown had been negligent in their handling and treating of the exhibits both by reason of the loss of compressors and what was found by the court to be excessive delay amounting to an abuse of process. The court intervened in relation to some of the charges which had been brought against the defendants to ensure that the identified abuse of process did not result in a miscarriage of justice.

31 In Commonwealth Service Delivery Agency v Bourke (1999) 75 SASR 299 the relevant forms which had been lodged by the defendant by which application for benefits made had been destroyed pursuant to the Archives Act. It was held by Wicks J that by reason of the destruction of those forms the defendant had been denied the opportunity of providing the only evidence which had the potential to support his defence to the court. It was held that he was accordingly denied the opportunity to cast doubt upon the inferences which were otherwise available and which could lead to his conviction and a permanent stay was appropriate.

32 It is plain from the cases that there will be occasions where critical evidence has been lost or destroyed through the actions of the Prosecutor in circumstances which amount to an abuse of process. In these cases, if the difficulty cannot be rectified at the trial, it will be appropriate for the court to grant a permanent stay. The clearest case will be that in which the very thing alleged to have been the subject of the proceedings has been lost so that the defendant is unable to carry out tests on it or point to elements of it which may exculpate or provide assistance in pursuing a defence.

33 In the present case, as I have indicated, the defendants submit that the evidence which they say has been lost would have been admissible pursuant to s 72 of the Evidence Act. It is said that evidence of private conversations which took place at the time of the execution of the search warrant would be admissible as evidence of the state of mind of the defendants at that time. I have considerable reservations whether that submission reflects a correct understanding of s 72. At the time when the conversations occurred the offence, if committed, was already complete and whether private conversations denying complicity in the charges can be admitted to assist a defendant in those circumstances seems to me to be a matter of some difficulty.

34 Although the plaintiff has prepared a transcript of the relevant conversations, my understanding at present is that if any of the conversation is to be tendered at all it would only be that which contains admissions against the defendant's interests. Of course material of that nature, if it can be properly identified in the conversations, would be admissible notwithstanding the hearsay rule. However, the plaintiffs of course are unable to tender the private conversations, they did not understand them, and would not have sought to tender them in any event.

35 It is submitted by the defendants, however, that the forthcoming trial will miscarry unless the defendants have the opportunity to tender evidence of the private conversations which were apparently recorded but lost. The evidentiary purpose is to provide the court with knowledge of what was said in those private conversations, it being submitted that the evidence, if admitted, would demonstrate that the defendants privately protested their innocence at a time when they were being effectively challenged in relation to their involvement in the admitted breach of the Customs Act by whoever was responsible for the importation of the cigarettes.

36 If such evidence is admissible (and that has not been argued) I am not presently persuaded that the destruction of the tapes is an abuse such as would disable the defendants effectively from presenting their case at trial. As the affidavit from Mr Pham makes plain, he does have a significant recollection of the conversation which occurred on this day extending to details of conversations which he had with his mother and father in which he says they protested their innocence.

37 Accordingly, the opportunity for the defendants to bring evidence of the alleged conversations has not been lost. This motion has properly been brought before the proposed trial which is fixed for May. However, if the evidence will be tendered at the trial and admitted has not yet been determined. It may be, for example, that none of the alleged conversations, if tendered by the plaintiff, (and that is by no means certain), will be admitted. The relevant warning may not have been given. The course which the defendants take at the trial will also require consideration.

38 These proceedings contained in the statement of claim do not necessarily follow a conventional form of a criminal prosecution. However, merely because the tape of the conversation has been lost the opportunity for the defendants to bring evidence of statements, which they made when the search warrant was executed, if those statements be admissible, has not been lost. It is that feature which distinguishes this case from the cases to which I have referred where the court has intervened to grant a stay when the very matter the subject of the dispute has been destroyed denying the defendants the opportunity of effectively mounting a case or testing the allegations brought by the plaintiff.

39 Accordingly, for those reasons I am satisfied that I should order the motion be dismissed.

40 BROMLEY: I seek the costs of the motion.

41 ROBINSON: This motion came out of the conduct of the Commonwealth. It is coming out of the conduct of the Commonwealth. The Commonwealth should not be surprised that this motion ought be brought in, if not a voir dire, a motion. In my submission the most appropriate order would be costs in the cause.

42 HIS HONOUR: The plaintiff seeks costs of this motion. The defendants submit that I should submit it to be costs in the cause. In support of that submission it is said that it has been the actions of the Commonwealth in destroying the tapes which was the spark for the motion. It is further submitted that the bringing of the motion in those circumstances should be no surprise to the plaintiff and it would be unfair, accordingly, for the defendants to suffer the costs of the bringing of that motion without the fate of the overall proceedings being determined.

43 For the reasons I have already indicated I am satisfied that the motion fails. In my opinion the motion was so lacking in merit that in this case I should order the defendants to pay the plaintiff's costs.

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