El Hajje v Chief Executive Officer of Customs
[2007] VSCA 168
•27 August 2007
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No 6669 of 2000
| NAZIH EL HAJJE |
| v |
| CHIEF EXECUTIVE OFFICER OF CUSTOMS |
---
JUDGES: | ASHLEY and KELLAM JJA and WHELAN AJA | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 August 2007 | |
DATE OF JUDGMENT: | 27 August 2007 | |
MEDIUM NEUTRAL CITATION: | [2007] VSCA 168 | |
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Customs and Excise – Offences – Proceedings alleging breach of s 117(1), Excise Act 1901 (Cth) – Whether offence established to criminal standard of proof having regard to averments and other evidence at trial.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr D B Baker | Michael J Gleeson & Associates Pty Ltd |
| For the Respondent | Mr G H Livermore | Australian Government Solicitor |
ASHLEY JA:
In the early hours of Sunday 21 February the appellant was driving a truck rented in the name of another man when intercepted by police at Broadford. Inside the truck was a very substantial quantity of tobacco, and other items. The appellant was then, by his admission, in the course of making a journey from Melbourne to Sydney.
The respondent, the Chief Executive Officer of Customs (conveniently, “Customs” or “the respondent”), brought a proceeding against the appellant. Customs alleged, in short, that the appellant had by his conduct contravened s 117(1) of the Excise Act 1901 (Cth) (“the Act”) which read, at the relevant time:
“Unlawful possession of excisable goods
(1)No person other than a manufacturer shall, except by authority, have in his possession custody or control any manufactured or partly manufactured excisable goods upon which Excise duty has not been paid, and no person other than a manufacturer, producer or dealer shall except by authority keep or store any proclaimed material.”
Customs sought a declaration that the appellant had committed two offences under that section. One related to the possession, custody or control (conveniently, “possession”) of “manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco, upon which excise duty had not been paid.” The other related to the storage of proclaimed material, namely a quantity of leaf tobacco.
The respondent also sought, inter alia, “convictions in respect of each declaration”, and “an order imposing a penalty in respect of each conviction upon the defendant pursuant to the provisions of [the Act]”.
The appellant filed a defence in which he admitted, inter alia, that at material times he neither held nor had been issued with “a licence to manufacture excisable goods or products, such as cut tobacco”, and that at no time, shortly put, had he paid excise on the allegedly excisable goods. Concerning a number of the other facts alleged, by the respondent, the appellant pleaded that “he [did] not know and [could] not admit” the allegation made; whilst other matters still he denied, or did not admit.
In response to a request for further and better particulars of defence the appellant alleged, in substance, that –
· His trip to Sydney had been for the collection of a quantity of a Lebanese delicacy.
· Another Lebanese man had asked him to transport a quantity of tobacco to Sydney, for a fee of $600.
· Upon his agreement to do so, he and four other men, including the man who had made the request, had loaded tobacco onto the truck.
· He had not been told, expressly or implicitly, by the man who had made the request that by agreeing to it he was committing a breach of the Act or committing any act contrary to law.
· He accordingly believed that he “was acting lawfully at all times in carrying the tobacco”.
The Trial and Appeals
The matter came for on trial in circumstances summarised by this Court when the matter was earlier before it.[1] In short, at trial, the appellant appeared unrepresented. He complained to this Court about the refusal of the trial judge to grant him an adjournment. That complaint was rejected.[2] Nothing more need be said about it.
[1][2003] VSCA 217, [6]-[7].
[2]Ibid [11]-[14].
At trial, Customs relied upon viva voce and documentary evidence, and also upon matters pleaded in the statement of claim – the last-mentioned in reliance upon the averment provisions of the Act. At relevant times, those provisions read as follows:
“Averment of prosecution sufficient
(1)In any Excise prosecution the averment of the prosecutor or plaintiff contained in the information, complaint, declaration or claim shall be prima facie evidence of the matter or matters averred.
(2)This section shall apply to any matter so averred although:
(a)evidence in support or rebuttal of the matter averred or of any other matter is given by witnesses; or
(b)the matter averred is a mixed question of law and fact but in that case the averment shall be prima facie evidence of the fact only.
(3)Any evidence given by witnesses in support or rebuttal of a matter so averred shall be considered on its merits and the credibility and probative value of such evidence shall be neither increased nor diminished by reason of this section.
(4) Subsection (1) shall not apply to:
(a) an averment of the intent of the defendant; or
(b) proceedings for an indictable offence or an offence directly punishable by imprisonment.
(5)This section shall not lessen or affect any onus of proof otherwise falling on the defendant.”
The matters averred, and the form of the averment, so far as it referred to the alleged cut tobacco, were respectively as follows:
“2.At all material times the Defendant neither held nor had he been issued with:
(a)a licence to manufacture excisable goods or products, such as cut tobacco (known as an Excise Manufacturer’s Licence); or
(b)a licence to store excisable goods or products (known as a Warehouse Licence)
under the Excise Act 1901.”
3.At no time was an entry ever lodged with Customs by the Defendant or under his name on which excise duty had been paid for goods entered for home consumption under Item 6 B of the Schedule to the Excise Tariff Act 1921.
The cut tobacco
4.On 21 February 2000 in Sugarloaf Creek Road, Broadford in the State of Victoria, near its intersection with Glenaroua Road, the Defendant had in his possession, custody or control manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco weighing 691.48 kilograms (“the cut tobacco”)
Particulars
(a)The cut tobacco was located in the van of an Isuzu truck(registered number PXL 280) then being driven by the Defendant along Sugarloaf Creek Road, Broadford in the said State, near its intersection with Glenaroua Road.
(b)The cut tobacco was wrapped in 72 plastic bags, each bag containing a number of smaller plastic bags, each of which contained approximately 500 grams of cut tobacco.
(c)None of the plastic bags bore any markings or labels.
(d)The aggregate weight of the cut tobacco was 691.48 kg.
5.The cut tobacco is and was at all material times goods manufactured or partly manufactured by a person not licensed as a manufacturer of tobacco products under the Excise Act 1901.
6.No excise duty had been paid on the cut tobacco by the Defendant or by anyone else.
7.At no time did the Defendant have any permission or authority to have the cut tobacco in his possession, custody or control.
8.On and at all material times prior to 21 February 2000 the Defendant was aware and knew that excise duty was payable on:
(a)cut tobacco; and
(b)tobacco of the kind referred to in paragraph 4.
…
11. The amount of excise duty payable on the cut tobacco was $165,567.97.
PARTICULARS
691.48 kg of cut tobacco x $239.44 per kg = $165,567.97
…
19. In the premises:
(a)on 21 February 2000 at Broadford in the said State the Defendant did contrary to subsection 117(1) of the Excise Act 1901 have in his possession, custody or control manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco, upon which excise duty had not been paid;
…
20.To the extent permitted by law the Plaintiff avers the matters set out in paragraphs 2 to 8, inclusive, paragraphs 11 and 12 and paragraphs 14 to 19, inclusive.”
The relevant viva voce evidence consisted of parts of the evidence given by Anthony Brobbel, Robert Saville (doubtfully), Stephen Smith, and the appellant. Messrs Brobbel and Saville were excise officers and Sergeant Smith was the apprehending police officer. Relevant documentary evidence consisted of photographs of the tobacco, and a record of interview conducted between Sergeant Smith and the appellant on 21 February 2000. Later, I must refer to the evidence.
Before doing so, however, and so that my use of the adjective “relevant” can be understood, I need to refer to the course of the proceeding through trial and appeal.
The learned trial judge found that Customs had made out its case that the appellant, at the time of his apprehension, had in his possession, custody or control manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco. That was the first of the two breaches of s 117(1) of the Act alleged by Customs. But his Honour also found that Customs had not proved its case that the appellant had kept or stored proclaimed material, namely a quantity of leaf tobacco, at the time and place of his apprehension.
The appellant appealed against the conviction which followed upon the findings made against him. In this Court argument centred upon his Honour’s conclusion that the appellant had been in possession of “manufactured or partly manufactured excisable goods, namely a quantity of cut tobacco”. Buchanan JA, with whom Phillips and Batt JJA agreed, was of opinion that the viva voce evidence did not provide a sufficient basis for a conclusion that, to the required criminal standard, the appellant had been in possession of (partly) manufactured excisable goods. He further concluded that the averment “stated no facts other than the ultimate fact in issue, the factum probandum”. This was “not properly the subject matter of averment”. “The facts that constituted manufacture were not averred”. The averment “omitted to state any facts that showed that the tobacco in the possession of the appellant was cut in a manner that converted tobacco into manufactured or partly manufactured goods”.[3] It followed, his Honour concluded, that the appeal should be allowed.
[3][2003] VSCA 217, [21].
Customs appealed, by leave, to the High Court. There it was held that an averment might extend to any fact in issue, including a so-called ultimate fact, concerning the latter of which it was observed in the joint judgment[4] that –
“ … there is no textual footing in the Act for drawing some distinction between the ultimate fact in issue and other facts or evidence.”[5]
[4]Of McHugh, Gummow, Hayne and Heydon JJ.
[5](2005) 224 CLR 159, 173, [35]; see also 174, [38].
Their Honours pointed out that seldom will there be a “single determinative issue of fact” in excise prosecutions. So,
“(i)n the present case, demonstrating a contravention of s117 required proof that: (a) the respondent had certain goods in his possession, custody or control; (b) the respondent was not a manufacturer; (c) the respondent had no authority to have the goods in his possession, custody or control; (d) the goods were manufactured or partly manufactured; and (e) the goods were of a kind chargeable with excise.”[6]
[6]Ibid 173, [36].
Addressing the averment in this case, their Honours said this:
“ . . . para 4 of the amended statement of claim alleged (and it was averred) that the respondent had in his possession, custody or control ‘manufactured or partly manufactured excisable goods’. The allegation that the goods were ‘excisable’ goods was an allegation of legal conclusion. And, if the allegation that the goods were ‘manufactured or partly manufactured … goods’ was to be understood as no more than an allegation that the goods met the statutory description in s 117 of the Act, that too would be an allegation of law. But read in its context, this part of para 4 of the pleading is to be understood as making allegations of mixed fact and law: that the tobacco had been subjected to one or more manufacturing processes and, for that reason, fell within the reach of s 117. The former is an allegation of fact; the latter may be an allegation of law. Section 144(2)(b) then provided that, to the extent that the allegation averred was one of fact, the allegation was prima facie evidence of that fact.
This in turn leads to a further aspect of the matter foreshadowed in Labrador Liquor. Customs sought the conviction of the respondent. The elements of the offence alleged had therefore to be established beyond reasonable doubt. The averments of fact were prima facie evidence of the facts averred but it remained a matter for the primary judge, and the Court of Appeal on appeal, to say, on the whole of the material that was adduced at trial, whether the facts averred were established to the requisite degree of proof. Because the Court of Appeal in this case reached the conclusion which it did about the effect of the averments, that Court did not consider whether the necessary facts were established to the requisite degree and the respondent’s contentions in that Court, that the primary judge erred in finding that the material in the respondent’s possession, custody or control was manufactured or partly manufactured goods, remained undetermined. It will be necessary to remit the matter to the Court of Appeal for it to consider that question.”[7] (Footnotes omitted)
[7]Ibid, 174-175, [39]-[40].
Thus it was that the Customs’ appeal was allowed and the matter was remitted for further consideration by this Court.
Relevant evidence
Why identify “relevant” evidence? It is because, as was said in the joint judgment, it is for this Court to decide, on the whole of the material adduced at trial, whether the facts averred were established to the requisite degree of proof. The necessary approach had earlier been addressed by Hayne J in Chief Executive officer of Customs v Labrador Liquor Wholesale Pty Ltd and ors.[8] His Honour said this:
“For present purposes, what is important is that although the averment provisions do not place upon the defendant the burden of disproving facts, averments of the Customs will suffice to discharge its onus of proving those facts. It will, in every case, be a matter for the judge to say, on the whole of the material, whether the facts are established to the requisite degree of proof. The judge may, but need not, treat what is properly averred as establishing that degree of proof.
Is requiring proof beyond reasonable doubt consistent with these averment provisions? If evidence is given in rebuttal of a fact averred, and that fact is an element of a contravention in respect of which conviction is sought, how is the judge to approach the task of deciding whether the Customs has proved that fact beyond reasonable doubt? How can the judge, in those circumstances, ‘feel an actual persuasion’ of the occurrence or existence of that fact? That problem is real but it is not avoided if a civil standard of proof is applied. If that were to be held to be the applicable standard of proof, it would follow from Briginshaw v Briginshaw, and like cases in that line of authority, that proof of an issue to the ‘reasonable satisfaction’ of the tribunal of fact ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ and that the tribunal must feel that ‘actual persuasion’ of which Dixon J spoke in Briginshaw. No matter what standard of proof is adopted, the averment provisions may, in certain circumstances, confront a judge with the difficulty of resolving a competition between the requirement of the averment provisions that, as a matter of law, certain facts may, but need not, be taken to have been established to the requisite standard, and evidence tendered in contradiction of that conclusion. No matter what the standard of proof, the judge can resolve that competition in favour of the party making the averment only if persuaded of the existence or occurrence of the fact averred. The averment provisions, therefore, neither suggest nor require departure from the tentative answer expressed earlier in these reasons that if conviction is sought, proof beyond reasonable doubt of the elements of the relevant offence is necessary. The questions about standard of proof should be answered accordingly. Lest there be some misunderstanding about the effect of the answers that are given, it is as well to make explicit that what must be proved beyond reasonable doubt is the elements of the relevant offence. That should not be understood as denying the application of established principles about such matters as proof by circumstantial evidence or as suggesting that every matter alleged in a particular form of pleading must be established to that standard. It is the elements of the offences that must be established.”[9] (Footnotes omitted)
[8](2003) 216 CLR 161.
[9]Ibid, 207-208, [142]-[145].
I can now focus upon what I described as “relevant” oral and documentary evidence in the present case. It was evidence going to the question whether Customs had proved that the “cut tobacco” which was in the appellant’s possession when he was apprehended was “manufactured or partly manufactured excisable goods.” The other matters for proof identified in the joint judgment, to be clear, had unarguably been established to the requisite degree.
Brobell gave this evidence:
“I saw a large amount of tobacco contained in bales and I also a number of plastic bags inside the truck.”
and
“I inspected the plastic bags and found that they contained tobacco.”
and
“Q: Is it the case that one of the plastic bags appears to have split open causing smaller bags within it to fall loose into the body of the truck? –
A:---That is correct, yes.”
and
“Q: Is it the case that the tobacco was in two forms, the first bale ---?
A:---Yes.
Q:---was baled tobacco that was baled up?
A:---Yes, that was in leaf tobacco inside the bales and the other tobacco product was cut or manufactured tobacco which was in the plastic bags.”
Saville gave this fragment of evidence:
“Q: Were you asked by Investigation Officer Brobbel to calculate excise payable in relation to the tobacco seized on 21 February 2000 in this case?
A:---Yes that’s correct.
Q: So was that in relation to two types of tobacco?
A:---Yes.
Q: Was that cut tobacco and potential excise on leaf tobacco?
A:---That’s correct.
Q: So could you explain to the court why there’s excise on one and potential excise on another?
A:---There’s excise under s.6B of the Excise Tariff Act that relates to the schedule attached to my statement and that’s levied on tobacco and that’s defined as manufactured tobacco. Cut tobacco ready for use.”
Sergeant Smith gave evidence that he found -
“A large quantity of baled tobacco and plastic bags full of tobacco.”
He also said that –
“There was 15 bales of tobacco, from memory, and 72 bags, garbage bags of cut tobacco.”
In cross-examination, the appellant was asked these questions, and gave these answers:
“Q: Did you know some of it was cut tobacco?
A:---Yes.”
and
A:---Yes, and I see when I pulled the tie, I know what I’ve got. I know I got tobacco and I got leaf …”
and
“Q: He didn’t tell you it was cut tobacco?
A:---No.
Q: But you knew?
A:---I see it.”
Turning to relevant documentary evidence, I should mention photographs which showed a garbage bag with many smaller bags inside it; and to these excerpts from the record of interview between Sergeant Smith and the appellant conducted on 21 February 2000:
“SERGEANT SMITH: Now, was it in relation to the tobacco – do you agree the large bales was uncut tobacco?
MR EL HAJJE: Yeah.
SERGEANT SMITH: In the plastic bags there’s smaller plastic bags with cut tobacco in it. Is that right?
MR EL HAJJE: Yeah.”
The legislative scheme in the setting of this proceeding
Before considering the impact of the averment and other relevant evidence, I should refer, though briefly, to a few pertinent aspects of the legislative scheme, as developed by their Honours on the appeal to the High Court in this matter.
First, duties of excise are imposed in accordance with the Schedule to the Excise Tariff Act 1921 upon various categories of goods – most commonly goods dutiable in Australia and manufactured or produced in Australia after the times or dates when such duties are deemed to have been imposed.[10]
[10]Section 5(1)(a).
Second, where a section of another Act amends the Schedule then, absent contrary intention, that section imposes duties of excise in accordance with the Schedule as so amended; those duties applying, in some circumstances, to goods manufactured or produced in Australia before the date of commencement of the amendment.
Third, by the Excise Tariff Amendment Act (No 1), No 68/2000 (Cth) relevant amendments were made in the Schedule. That Act received Royal Assent on 22 June 2000; but the amended Schedule was effective as of 1 November 1999. By that Schedule a definition of tobacco was inserted. Thus:
“tobacco means tobacco leaf subjected to any process other than cutting the leaf as stripped from the plant.”
Also by that amended Schedule the former item 6 was repealed, and a new item was substituted. The old item 6 was as follows:
“Tobacco (except tobacco delivered under item 8 or item 9A of this Schedule).”
The substituted item 6 read this way:
“Tobacco (other that tobacco delivered under item 9A of the Schedule)
A.in stick form not exceeding in weight 0.8 grams per stick actual tobacco content.
B. other.”
Different rates of excise duty were fixed for sub-items A and B.
Fourth, the joint reasons in the High Court reflected the relevance of the substituted Schedule. For their Honours said this:
“ . . . the fact that tobacco leaf might be cut for purposes other than manufacture into a product suitable for consumption is beside the point. What was averred in this case was that the respondent had possession, custody or control of manufactured or partly manufactured goods of a kind described as ‘cut tobacco’: a term not found in the Act or the Tariff Act. The relevant excisable goods were ‘tobacco’ as that term was defined in the Schedule to the Tariff Act: ‘tobacco leaf subjected to any process other than curing the leaf as stripped from the plant’ (emphasis added). What are manufactured or partly manufactured goods must be understood in the light of that definition.”[11] (Footnote omitted)
[11](2005) 22 CLR 154, 165, 169-170, [24]. See also 165, [11], [12].
Fifth, it was in light of the definition of tobacco inserted into the Schedule, and the substituted item 6, that their Honours observed that:
“ . . . references to ‘cut tobacco’ found in the reasons of the courts below (and no doubt adopted from the pleadings and argument in the dase) are references that obscure some aspects of the relevant legislative provisions.”[12]
So, it was, as their Honours said, that –
“ … the central feature of the definition of the relevant excisable good was that the tobacco leaf had been subjected to any process other than cutting the leaf as stripped.”[13]
[12]Ibid, 164, [8].
[13]Ibid, 165, [12].
Sixth, as I have already noted, their Honours said, referring to paragraph 4 of the amended statement of claim, that it was alleged (and averred) that the appellant had in his possession, custody or control “manufactured or partly manufactured excisable goods”, and that this was to be understood as making allegations of mixed law and fact – the factual allegation being that “the tobacco had been subjected to one or more manufacturing processes.”[14] So to read paragraph 4 did not necessarily require, bearing in mind the definition of the excisable good, that regard be had to the description of the tobacco as “cut tobacco”. But an allegation of fact was made (and averred), necessary or not, that the tobacco had been subjected to a particular process – that is, transforming it into cut tobacco. It expanded the bare allegation, in substance, that the tobacco had been subjected to one or more manufacturing processes. This was a matter addressed in the joint judgment in the passage which I cited at [29].
[14]Ibid, 174, [39].
It follows from the joint judgment that the matters averred by Customs stood as prima facie evidence, inter alia, of the facts that the appellant had in his possession custody or control at the critical time “manufactured or partly manufactured excisable goods” – tobacco which had been subjected to one or more manufacturing processes. Indeed, I should say that the matters pleaded and averred identified a particular manufacturing process – that is, converting tobacco leaf into cut tobacco.[15]
[15]This is a well-recognised aspect of the manufacture of tobacco. Common ground to that effect is mentioned in Commissioner of Taxation v Esho [2004] NSWSC 473 [3], and DPP (Cth) v Hussein (2003) 8 VR 92, 93 [2] (Buchanan JA). But so to say is not to provide the answer to the present appeal.
Argument; and resolution of the appeal
Before this Court, on the remitter, counsel for the appellant submitted that the learned trial judge had erred in saying that “(t)he basic facts were not in dispute”, insofar as he attached that description to the (alleged) facts that “(t)he cut tobacco portion of the goods was manufactured excisable goods.” Counsel submitted that no relevant admissions had been made by his client’s defence, or at trial. The error, counsel contended, meant that his Honour did not investigate whether it had been proved beyond reasonable doubt that the tobacco found in the truck included cut tobacco, and whether it had been proved that the cutting of the tobacco was a manufacturing process.[16] He contrasted what he said was the want of evidence in the present case with evidence led in other cases to show that some step had been taken with respect to goods which was a step in a process of manufacture. Evidence of that kind had been given, counsel submitted, in each of Adams v Rau and Anor,[17] Commonwealth v Genex Corporation Pty Ltd,[18] Federal Commissioner of Taxation v Jack Zinader Pty Ltd,[19] and MP Metals Pty Ltd v Commissioner for Taxation[20] Here, by contrast, no evidence had been led as to how the tobacco leaf had been cut, for what purpose it had been cut, or what use it was fit for. In short, there had been no evidence that the tobacco had been subjected to a process along the way to manufacture.
[16]Concerning the nature of excise, counsel referred to Bolton and Anor v Madsen (1962) 110 CLR 264, 271 and to Ha and Anor v State of NSW and Ors (1997) 189 CLR 465.
[17](1931) 46 CLR 572.
[18](1992) 176 CLR 277.
[19](1949) 78 CLR 336.
[20](1968) 117 CLR 631.
In my opinion the learned judge was not wrong to say that the basic facts, including the alleged facts to which appellant’s counsel directed attention, were “not in dispute.” But even if his Honour did err in that respect, I consider that the facts alleged and averred, taken in combination with all the other evidence, amply justified a conclusion - which I consider he reached - that a contravention of s 117(1) had been sufficiently proved with respect to the cut tobacco. Further still, if for some reason his Honour’s finding was impugned, in my opinion it should certainly be made by this Court.
As to the first of those conclusions, it seems to me that his Honour was addressing the substance of the matter. It is true, as counsel submitted, that the appellant not having admitted the critical allegations made by paragraph 4 of the statement of claim, he was to be taken to have denied those allegations; and that the appellant’s pleas to paragraphs 10 and 11 of the statement of claim that he “[did] not know and cannot admit’ those paragraphs should equally be taken to constitute a denial of the matters there alleged. But in the face of the matters alleged and averred,[21] supported to some extent by the evidence of Brobbel and the documentary evidence, the appellant offered nothing at trial. Whilst his counsel submitted that the appellant did not cross-examine because of his lack of English – a matter asserted by the appellant at trial - it is the fact that he did not cross-examine. Moreover, the burden of his evidence was simply he did not know he was doing anything wrong in conveying the tobacco - in both its forms - from Melbourne to Sydney. He did not say that one form of tobacco was not cut tobacco. Indeed, he admitted it; and it was the cut tobacco which was alleged to be the manufactured or partly manufactured excisable goods.
[21]Particular (b) to paragraph 4 of the amended statement of claim added some detail to the allegation that the intercepted load included cut tobacco. That there was cut tobacco in many, many lots, each weighing approximately 500 grams, contraindicated, I should say, any suggestion that the tobacco had been cut for ease of transport. It strongly suggested a step on the path of manufacture. But although the averment arguably extended to matters particularised – the Court heard no argument on the point - I have not relied upon any such matters in deciding this appeal.
The learned judge described the appellant’s case as being that “while he knew he was carrying tobacco, he did not know that he was contravening the Act, or that it was unlawful for him to be doing what he did”. That, in my opinion, accurately summarized the position.
But then his Honour said this:
“The evidence shows without any doubt and, a fortiori, on the balance of probabilities, that, when intercepted, the cut tobacco as manufactured goods was in his possession.”[22]
[22][2002] VSC 286, [9].
The passage just cited shows, in my opinion, notwithstanding that he had described the critical basic fact as not being in dispute, that his Honour recognised the burden of proof which Customs bore; and that he made a finding concerning that matter to the criminal standard.[23]
[23]“Without any doubt” surely surpasses “beyond reasonable doubt”.
It might be said, however, that in making the particular finding his Honour was distracted from a full examination of relevant material because he (wrongly) took the critical basic facts to be “not in dispute”. So, it might be argued, his Honour’s conclusion should be regarded as suspect.
To my mind, an argument along those lines would lack substance. But in any event it appears to me that the material, considered overall, made out Customs’ case to the requisite degree.
First, the matters alleged and averred established prima facie evidence of the facts which were required to make out a breach of s 117(1).
Second, the submission for the appellant that the viva voce and documentary evidence did not even establish that there was cut tobacco in the truck lacked force. The point which counsel sought to make was that what was alleged could be the cut tobacco was contained in smaller bags within larger bags; but that no witness had said that he had looked within one of the smaller bags, thus seeing the cut tobacco. The intractable difficulty with the submission is that Brobbel and Sergeant Smith gave evidence which at least implied that they had seen the contents of one or more of the smaller bags; and that the appellant admitted in evidence and in his record of interview that he had been transporting cut tobacco. I have already set out relevant parts of the evidence.
Third, it is the fact that no viva voce evidence was given to elucidate the manner in which, and size into which, the tobacco had been cut; nor whether such cutting was a recognised or usual step in the manufacture of tobacco. It is also true that, in a number of legislative contexts, evidence has been given with respect to what has been involved in the alleged manufacture of goods in particular cases. But none of that is to say, in a case in which Customs alleged and averred the critical facts, where nothing in the evidence detracted from those facts, and where no issue was raised that the tobacco had been subjected to other than a manufacturing process, that a Court should not have been persuaded of the relevant facts, and of the statutory contravention, to the relevant degree. Such a state of persuasion could be reached though steadily bearing in mind the principle that the burden of proof rested throughout on Customs, and that whether the burden was satisfied did not depend upon whether the appellant did or did not give or adduce evidence in contradiction of the matters alleged and averred.
Penalty
When the matter was before the High Court, counsel then appearing for Customs specifically drew the Court’s attention to what was considered to have been an error by the learned trial judge in imposing penalty.
By the Excise Amendment (Compliance Improvement) Act No 115, 2000 (Cth) a new s 117 of the Act was substituted, and s 129 of the Act was repealed. Section 129 had prescribed the penalty regime applicable to offences under the repealed s 117(1).
The substituted s 117(1) created two offences, each of which had its own prescribed (maximum) penalty. One of the offences – set out by s 117(2) – is similar in language, if not necessarily in content, with the repealed s 117(1). The maximum penalty for that offence is prescribed to be 100 penalty units – in money, $11,000.
The concession made by Customs was that the new (maximum) penalty fixed by s 117(2) applied. This was said to be the consequence of the operation of s 4F(2) of the Crimes Act 1914 (Cth), which provides:
“Where a provision of a law of the Commonwealth reduces the penalty or maximum penalty for an offence, the penalty or maximum penalty as reduced extends to offences committed before the commencement of that provision, but the reduction does not affect any penalty imposed before that commencement.”
Noting that there had been no appeal against sentence, McHugh, Gummow, Hayne and Heydon JJ said, in their joint judgment that it would be necessary for application to be made in this Court to enlarge the grounds of appeal to raise this question. Their Honours continued –
“The parties being agreed that the sentence passed by the primary judge should be quashed, it will, of course, be a matter for that Court, if the appeal to that Court otherwise fails, whether it fixes the penalty itself or remits the matter for consideration of that aspect of the matter by a single judge of the Supreme Court.”
Before us, counsel for the appellant sought leave to amend the grounds of appeal to add the following grounds:
“5.That His Honour was wrong in imposing a penalty of twice the amount of excise payable on the goods found in the possession of the appellant.
6.That the penalty imposed by His Honour was without jurisdiction and in excess of the penalty allowed by s.17 (sic) of the Excise Act 1921 (Cth).”
The Court granted leave to amend, despite Customs having foreshadowed that it wished to withdraw the concession which it had earlier made. We then took up with counsel for Customs the question whether in the particular circumstances, notwithstanding a decision of the Queensland Court of Appeal which was apparently in point, and favourable to the Customs’ position, it was proper – or at least desirable – that Customs not hold itself bound to its concession.
In the event, counsel obtained instructions from Customs to hold itself bound, notwithstanding what it contended was the fact that the concession had been wrongly made. Counsel informed the Court that this position was adopted in light of Customs’ intention of being a model litigant, and considering the nature of the particular proceeding and the circumstance that the concession had been made and then repeated in the High Court.
In my opinion, Customs deserves praise for the position which it adopted. That is more so because, had the contrary position been taken, I think it likely that the penalty which the learned trial judge imposed should have been sustained. Quite apart from the fact that this Court should follow it unless convinced that the interpretation adopted was plainly wrong, I respectfully consider – subject to the qualification that we heard no argument directed to the point – that the situation was correctly described by Keane JA of the Queensland Court of Appeal in Federal Commissioner of Taxation v Price,[24] when his Honour said:
[24][2006] QCA 108, [79]-[83].
“[79] As to whether s 4F of the Crimes Act excluded the operation of s 8(d) of the Acts Interpretation Act, in the High Court in CEO of Customs v El Hajje, the majority judgment records a concession on the part of the Customs that s 4F(2) of the Crimes Act, in conjunction with the amendments to the Act by the Excise Amendment (Compliance Improvement) Act, operates to reduce the penalty that could otherwise be lawfully imposed pursuant to s 129 of the Act. The respondent here argues that this concession was wrongly made.
[80] The respondent's argument is that s 4F of the Crimes Act applies only on the occasion when a Commonwealth Act reduces the penalty component of an offence provision, which may include the removal of a penalty; but in this case the amending legislation repealed the offence provisions and substituted different provisions. As Whealy J said in R v Ronen & Ors, s 4F(2) of the Crimes Act ‘is concerned with the reduction of the maximum penalty for an offence contained within the legislation rather than with the situation arising following the repeal of legislation’.
[81] The respondent's submission must be accepted. The situation wrought by the amendments to the Act is not sensibly described as effecting a reduction of penalty for offences which remain on the statute books. There has been a repeal of those offences and the replacement of those provisions by offences with different elements.
[82] The provisions which were substituted for the repealed provisions create a different range of offences constituted by different elements. Each new proscription contains its own penalty provision which specifies only a maximum penalty. That means that, contrary to the appellant's further contention, it is not possible to apply the new penalty provisions to offences involving different elements committed before the new provisions took effect.
[83] In my view, s 4F(2) of the Crimes Act has no relevant operation. Rather, the case is governed by s 8(d) of the Acts Interpretation Act.” (Footnotes omitted).
Neither counsel addressed us as to what penalty should be imposed on the assumption, given the concession made, that the Court would allow the appeal against penalty. This was despite the fact that, after counsel for Customs had indicated that his client would hold itself bound to the concession, the Court specifically invited counsel for the appellant to make submissions as to the appropriate penalty. Nor did either counsel submit that penalty should not be fixed by this Court. Against that background, I consider that the Court should allow the appeal so far as it relates to penalty, and that it should fix a penalty of $8,000. A fine of that magnitude, in the artificial circumstances which the Court is considering, appears to me to reflect an appropriate balance of relevant sentencing considerations.
KELLAM JA:
I have had the opportunity to read the draft judgment of Ashley JA. As stated by him, paragraph 4 of the amended statement of claim averred facts which establish a prima facie breach of s 117(1) of the Excise Act 1901(Cth). I agree with Ashley JA that in circumstances where the critical facts were averred, and where nothing in the evidence detracted from those facts, and where no suggestion was made that the cut tobacco had been subjected to other than a manufacturing process, the learned trial judge was entitled to be satisfied that there was no doubt that when he was intercepted, the appellant was in possession of manufactured goods.
As to the question of penalty I agree with Ashley JA, for the reasons stated by him, that had the matter been argued fully, it is highly probable that the penalty which the trial judge imposed would have been sustained. In this regard I agree with Ashley JA that the course taken by the respondent in holding itself bound by the concession made previously to the High Court in this proceeding, is commendable. The course taken by the respondent before us is fully compliant with the obligations of the Commonwealth and its agencies to act as a model litigant pursuant to the Legal Service Directions of the Commonwealth Attorney-General.
WHELAN AJA:
I agree that this appeal should be disposed of in the manner proposed by Ashley JA for the reasons he has given.
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