Chief Executive Officer of the Australian Customs Service v Karam
[2009] NSWSC 1223
•6 November 2009
CITATION: Chief Executive Officer of the Australian Customs Service v Karam [2009] NSWSC 1223 HEARING DATE(S): 2-11 November 2009
JUDGMENT DATE :
6 November 2009JURISDICTION: Common Law JUDGMENT OF: McCallum J DECISION: That the evidence set out in the plaintiff's Amended Notice pursuant to s 98(1) be admitted. LEGISLATION CITED: Criminal Code (Cth)
Customs Act 1901 (Cth)
Evidence Act 1995CATEGORY: Procedural and other rulings CASES CITED: Ainsworth v Burden [2005] NSWCA 174
AW v R [2009] NSWCCA 1
Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49
(2003) 216 CLR 161
Galvin v The Queen [2006] NSWCCA 66
(2006) 161 A Crim R 449
Parker v Comptroller-General of Customs [2007] NSWCA 348
R v Dann [2000] NSWCCA 185
R v Sing (2002) 54 NSWLR 31PARTIES: Chief Executive Officer of the Australian Customs Service (Plaintiff)
Ronnie Charles Karam (1st Defendant)
Dory Karam (2nd Defendant)FILE NUMBER(S): SC 20234/08 COUNSEL: Mr L P Robberds QC (Plaintiff)
Mr M Gollan (1st Defendant)
Mr G Beauchamp (2nd Defendant)SOLICITORS: Australian Government Solicitor (Plaintiff)
Galloways Solicitors (1st & 2nd Defendants)
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
McCALLUM J
6 NOVEMBER 2009
JUDGMENT20234/08 CHIEF EXECUTIVE OFFICER OF THE AUSTRALIAN CUSTOMS SERVICE v RONNIE CHARLES KARAM & ANOR
1 HER HONOUR: These are proceedings under Part XIV of the Customs Act 1901 (Cth) for the recovery of penalties for offences under that Act. The proceedings fall within the definition of “Customs prosecutions” (s 244 of the Act) and are brought by the Chief Executive Officer of the Australian Customs Service, as allowed by s 245 of the Act. The defendants are two brothers, Mr Ronnie Karam and Mr Dory Karam. They deny commission of the offences charged against them.
2 The hearing of the proceedings commenced before me on 2 November 2009. On the third day of the hearing, the plaintiff sought to adduce evidence of the kind referred to in s 98 of the Evidence Act 1995 (coincidence evidence). The evidence was objected to by each of the defendants. This is my ruling on that objection, following a voir dire heard intermittently during the hearing of the substantive proceedings.
3 The argument on the voir dire proceeded on the premise that, in determining whether the evidence is admissible, the provisions of the New South Wales Evidence Act 1995 applicable to “criminal proceedings” (within the meaning of that Act) are to be applied. However, that premise is wrong. The decision of the High Court in Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd [2003] HCA 49; (2003) 216 CLR 161 holds that, although the standard of proof in Customs prosecutions is the criminal standard of proof beyond reasonable doubt, the effect of s 247 of the Customs Act is that questions of admissibility of evidence in such proceedings are governed, at least in the circumstances of the present case, by the provisions of the Evidence Act that would be applied in a civil case in this State: at [40] per Gummow J, Kirby J agreeing at [92]; at [146]-[148] per Hayne J, Gleeson CJ and McHugh and Kirby JJ agreeing.
4 Section 247 provides:
- Every Customs prosecution in a court referred to in subsection 245(1) may be commenced prosecuted and proceeded with in accordance with any rules of practice (if any) established by the Court for Crown suits in revenue matters or in accordance with the usual practice and procedure of the Court in civil cases or in accordance with the directions of the Court or a Judge.
5 There being no rules of practice for Crown suits in revenue matters in this Court, the usual practice and procedure of the Court in civil cases applies. As noted by Hayne J in Labrador Liquor at [147], it is not to the point to consider whether the proceedings ought be classified as criminal proceedings for the purposes of the Evidence Act of this State.
6 Accordingly, it is not necessary to consider the matters raised in argument pertaining to the application of sections 101 and 137 of the Evidence Act.
7 For the reasons explained at length in Labrador Liquor, however, the standard of proof remains the criminal standard. The statement of claim in the present case charges that each defendant has committed the offences of smuggling goods under s 233(1)(a) of the Customs Act, importing prohibited goods under s 233(1)(b) of the Act, evading payment of duty under s 234(1)(a) of the Act and making a false statement under s 234(1)(d)(i) of the Act. The relief claimed includes that each defendant be convicted of each of those offences and that each pay a penalty pursuant to the relevant penalty provisions for those offences.
8 Since the proceedings seek the recording of convictions against the defendants, the criminal burden of proof beyond reasonable doubt applies, despite the terms of s 247 of the Customs Act: Labrador Liquor at [135]-[138]; see also at [2] per Gleeson CJ; at [32] per Gummow J; at [90] per Kirby J; cited in Parker v Comptroller-General of Customs [2007] NSWCA 348 at [29].
The Coincidence rule
9 Accordingly, the task on the present application is to determine whether the evidence satisfies the requirements of s 98 of the Evidence Act. There is no dispute that the plaintiff has satisfied the requirement to give reasonable notice of his intention to adduce the evidence, as required by s 98(1)(a) of the Act.
10 The critical question is whether the evidence satisfies the requirement in s 98(1)(b), which is that “the Court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.” In order to assess whether that requirement is met in the present case, it is necessary to consider the evidentiary context in which the evidence is sought to be adduced.
Circumstances in which the evidence is sought to be adduced
11 The prosecution case may be summarised by reference to an agreed statement of facts tendered with the consent of the defendants (exhibit B). As indicated by that document, the defendants accept that, in August 2007, a sea cargo container carrying cigarettes and “unmanufactured (leaf) tobacco” arrived in Sydney from Vietnam under a bill of lading which named “Drovers Footwear Pty Ltd” as consignee. The evidence in the substantive proceedings is capable of establishing that both Mr Ronnie Karam and Mr Dory Karam are involved in the day to day conduct of the business of that company and there does not appear, from the way in which the case has been conducted on their behalf, to be any real dispute about that proposition. The evidence is capable, further, of establishing that, following the arrival of the container in Sydney, both Mr Ronnie Karam and Mr Dory Karam took steps to obtain its release.
12 The critical fact in issue in the proceedings is whether the defendants were aware that the imported container carried cigarettes and tobacco. The container was owned by Malaysia International Shipping Company Berhad (MISC) and was held in Vietnam by that company until its release on 12 July 2007 to the shipper, Jupiter Pacific Forwarding under a “Master Bill of Lading” issued by MISC. In that bill of lading, the contents of the container were described as “880 CTNS 8,800 pairs of different kinds of shoes”.
13 The container was returned to MISC on 13 July 2007 at the port of loading, where it was loaded onto a vessel destined for Singapore. On that date, a “House Bill of Lading” was issued by Jupiter Pacific Co Ltd naming Drovers Footwear as the consignee and describing the goods as “800 CTNS 1x40” HC 8,800 pairs of different kinds of shoes”.
14 After the vessel arrived in Singapore, the container was transhipped to a different vessel which arrived in Port Botany, Sydney on 2 August 2007. The container was transported from the port to a customs examination facility where it was x-rayed and then referred for physical examination. The physical examination revealed 108 brown cardboard boxes at the front of the container, all of which contained shoes. Stacked behind those boxes were 490 unmarked brown cardboard boxes which contained the leaf tobacco, together with 15 boxes marked “Golden Eagle Virginia Filter Deluxe”. Those boxes were found to contain 150,000 cigarette sticks. The weight of the tobacco was 12,250 kilograms.
15 Except as to the offence of importing prohibited goods under s 233(1)(b) of the Customs Act, each of the offences charged has a fault element: s 3.1 of the Criminal Code (Cth). The offence of importing prohibited goods is an offence of strict liability, and accordingly has no fault element. However, the defence of mistake of fact under s 9.2 of the Criminal Code is available in respect of that offence: s 6.1(1)(b). The matters outlined in argument on behalf of the defendants in the present case suggest that it is likely that the defendants will seek to rely upon that defence.
16 In any event, at least so far as the offences having a fault element are concerned, a critical fact in issue in the prosecution case is whether the defendants knew that the container had carried the cigarettes and tobacco into Australia. Whilst there is of course no onus of proof on the defendants to prove any such matter in the proceedings, it has been indicated in statements from the bar table and during the cross-examination of witnesses that the defendants will contend that they have reason to believe that the person responsible for the importation of those items may be a former associate of theirs, Mr Adnan Cheikho.
Coincidence evidence sought to be adduced
17 The evidence sought to be adduced as coincidence evidence consists of four emails relating to an earlier importation of a sea container in May 2007. Mr Robberds, who appears for the plaintiff, contends that the emails establish an earlier importation of a sea container by the defendants which contained shoes and cigarettes. However, it is doubtful whether, taken alone, the emails establish that fact.
18 The emails were tendered on the voir dire in a number of forms. All four emails were recovered from a laptop computer which was in the possession of Mr Adnan Cheikho when he arrived at Sydney International Airport on 10 October 2007. Three of the same emails were also extracted from a computer seized during the execution of a search warrant at an office alleged to be the business premises of the second defendant, Mr Dory Karam.
19 Taking the emails in the order in which they were apparently sent, the first is from Ms Lien at FDI to “Adnan” at FDI dated 27 May 2007 under the subject “Ciragget cont”. Other evidence in the proceedings suggests that FDI is a company that carries on the business of forwarding freight. The email is in the following terms:
“Dear Adnan,
I sent a message to Dory to check about this cont at SYD but he has yet reply to my message ..
I would like you to double check with them whether they receive it or not …thank you
Who will pay to FDI for the following charges:
Rgds/Lien”-trucking holding fee (05 days): VND 1,000,000 = USD93.75
-Cont demurrage: USD490.00
-Purchase of shoe from DM to put into this cont: VND4,320,000 = USD270.00
20 The second email, also from Ms Lien, is dated 31 May 2007. It is addressed to both of the defendants and copied to “Adnan” at FDI. It carries the subject “Re: Ciragget cont”, suggesting that it may have been created by forwarding the first email. The second email is in the following terms:
“Dear Ronnie & Dory,
Rgds/Lien”About the charges of the cigaretta cont..….please pay it back to us.
-trucking holding fee (05 days): VND 1,000,000 = USD93.75
-Cont demurrage: USD490.00
-Purchase of shoe from DM to put into this cont: VND4,320,000 = USD270.00
21 The third email in the string is a reply to the second email, apparently sent by Mr Ronnie Karam (the first defendant) and copied to Mr Dory Karam (the second defendant). It is in the following terms:
- “this shipment has nothing to do with me you better check your information corretly (sic) and please do not email me about this situation phone is better, I am just helping people out”
22 The fourth email is from Ms Lien to “Adnan” forwarding the string consisting of the first, second and third emails. There is no separate text in that email.
23 The separate versions of the emails sought to be tendered from the sources identified above are capable of establishing that:
(a) Mr Adnan Cheikho of FDI in Vietnam received an email from Ms Lien, also of FDI in Vietnam, with an inquiry as to who would pay FDI for certain charges. A few days later, Mr Cheikho also received a copy of Ms Lien’s email to both defendants seeking payment of those charges, which were identified to relate to a “cigaretta cont”;
(b) Mr Ronnie Karam received Ms Lien’s request for payment and responded to it;
(d) Mr Adnan Cheikho received, from Ms Lien, a copy of Mr Ronnie Karam’s reply.(c) Mr Dory Karam received the reply sent by Mr Ronnie Karam, which included the first two emails as part of the string of emails;
24 Mr Robberds submitted that the emails support clear inferences that a container imported into Australia in May 2007 contained cigarettes and shoes; that Ronnie Karam knew that fact and knew that the cigarettes had been imported illegally and that Ronnie Karam did not want any further written communication about the illegal importation but was prepared to discuss it over the telephone with Ms Lien.
25 As to Mr Dory Karam, Mr Robberds submitted that the emails show that the container imported in May 2007 contained shoes and illegally imported cigarettes. Mr Robberds further submitted that the four emails alone show that “both defendants by 31 May 2007 had a connection with that container and that they knew that it illegally imported cigarettes into Australia”.
26 In the voir dire hearing, the plaintiff also adduced evidence establishing that the only containers imported into Australia in May 2007 under the names of Drovers, Ronnie Karam, Dory Karam or Adnan Cheikho were two containers consigned to Drovers Footwear which were imported by sea from Vietnam and as to which the relevant customs declaration described the contents as “Bart casual kids shoes” and “leather shoes”. That additional evidence was said to sustain the inferences contended for.
27 As already noted, I doubt whether the emails establish that the container imported in May 2007 in fact contained shoes and illegally imported cigarettes. In my view, however, they are capable of supporting an inference that the defendants had made a request to FDI as freight forwarder to arrange for the importation from Vietnam to Australia of a container carrying shoes and cigarettes. That may not be the only inference available to be drawn from the emails, but it is certainly one.
28 The emails indicate that, so far as Ms Lien of FDI in Vietnam was concerned, FDI was entitled to recover from the defendants charges it had paid (or perhaps incurred) in respect of an importation into Sydney of cargo apparently described, or thought by Ms Lien to be described, as a cigarette container. The charges included “Purchase of shoe from DM to put into this cont”.
29 There are strong similarities between the circumstances of the demand made by FDI and the circumstances of the importation the subject of the present proceedings. Both involve the importation by sea cargo from Vietnam to Sydney of containers carrying both cigarettes and shoes. In each case, there is a suggestion that the primary cargo was cigarettes (and tobacco in the case of the second importation) and that the shoes were placed in the container as a front. Whether that suggestion may be elevated to an inference established to the necessary standard is a question for another day. In each case, the relevant freight forwarder sought payment for fees associated with the consignment from the defendants, and communicated with them as to the arrival of the container.
30 The test under s 98 of the Evidence Act looks to the degree of impact the evidence could rationally have on the probability of the existence of a fact in issue. While there is arguably no need to depart from the statutory test (whether I think the evidence has “significant probative value”), the question has otherwise been expressed as being whether the evidence is “meaningful in the context of the issues at trial”, or “important in establishing the facts in issue”: AW v R [2009] NSWCCA 1 at [47] per Bell JA (as her Honour briefly was), Latham and Fullerton JJ agreeing.
31 As already noted, a fact in issue in the present case, indeed the critical fact in issue, is whether the defendants had the necessary intention or knowledge as to the importation of cigarettes and tobacco in August 2007, so as to satisfy the fault elements of the offences in accordance with s 5.1 of the Criminal Code. If it is established that the August container was consigned and delivered to a company in which they were involved, and that they each personally took steps to secure its release from Customs, questions of fact as to their knowledge or intention will entail a close assessment of the probability of their being ignorant of its contents.
32 I think their knowledge or intention as to similar events concerning the apparent or proposed importation in May 2007 of a container said to contain cigarettes has significant probative value in that context. On that basis, I am satisfied that the evidence is admissible.
33 It was submitted on behalf of the defendants that I should nonetheless exercise my discretion under s 135 of the Evidence Act to exclude the evidence on the basis that its probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the defendants. The prejudice identified by the defendants was the fact that Ms Lien is not available to be cross-examined as to the source of her apparent belief that the defendants were responsible for the fees demanded. It appears to be accepted that that is prejudice of the kind properly to be taken into account for the purpose of s 137 of the Act: R v Dann [2000] NSWCCA 185 at [37] per Heydon JA (Spigelman CJ and James J agreeing); R v Sing (2002) 54 NSWLR 31 at [35] per Hodgson JA (Levine and Howie JJ agreeing); Galvin v The Queen [2006] NSWCCA 66; (2006) 161 A Crim R 449 at [28] per Howie J (McClellan CJ at CL and Latham J agreeing). I can see no reason why such considerations might not properly be taken into account in the exercise of the Court’s discretion under s 135: Ainsworth v Burden [2005] NSWCA 174 at [99] per Hunt AJA (Handley and McColl JJA agreeing).
34 On balance, however, I do not think that the probative value of the evidence is substantially outweighed by any prejudice to the defendants occasioned by their inability to cross-examine Ms Lien. It was stated by counsel on behalf of the defendants that attempts had been made to secure Ms Lien’s attendance, but an opportunity to lead evidence on that issue was declined. I do not think there is any great prejudice in her being unavailable.
35 Further, since I am the trier of fact in these proceedings, I do not think there is prejudice of the kind that arises where there is a jury, and there is a risk that the evidence will be misused in some unfair way. Any such risk could be met by my appropriately directing myself in respect of the weight and proper use of the evidence. Accordingly, I do not propose to exercise my discretion to exclude the evidence.
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