El Hajje v Chief Executive Officer of Customs

[2003] VSCA 217

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 6669 of 2000

NAZIH EL HAJJE

v.

CHIEF EXECUTIVE OFFICER OF CUSTOMS

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JUDGES:	PHILLIPS, BATT and BUCHANAN, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	22 October 2003
DATE OF JUDGMENT:	17 December 2003
MEDIUM NEUTRAL CITATION:	[2003] VSCA 217

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Customs and Excise – Claim for penalties – Possession alleged of manufactured excisable goods – Failure to prove cut tobacco was manufactured tobacco – Averment – Matter averred a question of law – Excise Act 1901 (Cth) ss.117, 129, 144; Excise Tariff Act 1921 (Cth) ss.4, 68.

Practice and Procedure – Unrepresented litigant – Refusal of adjournment.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr D.B. Baker	Michael J. Gleeson & Associates Pty
For the Respondent	Mr G. Livermore	Australian Government Solicitor

PHILLIPS, J.A.:

1. I agree with Buchanan, J.A.

BATT, J.A.:

1. I agree with Buchanan, J.A.

BUCHANAN, J.A.:

1. On 20 February 2000, the appellant and a friend attended at the premises of Delta Truck Hire where the appellant’s friend hired a truck.  The appellant later said that he intended to drive to Sydney to pick up a quantity of the Lebanese delicacy molichia.  Another friend, Mustapha Mahmoud, had learned of the appellant’s plan, and asked to be advised when it was to be carried out.  The appellant drove the truck to his house in Fawkner.  Mahmoud arrived and drove off in the truck, returning later with the truck loaded with tobacco, which he asked the appellant to take to Sydney and deliver to a person whose telephone number was given to the appellant, for a reward of $500.

1. Later that night, the appellant drove the truck along the Hume Highway, leaving the highway at Broadford in order to avoid a weighing station.  Near Broadford he was intercepted by the police, who searched the truck and found 72 bags of cut tobacco weighing 691.48 kilograms and 15 bales of tobacco leaf.

1. On 30 August 2000, the respondent launched an action in the Supreme Court against the appellant claiming penalties under the Excise Act 1901 (“the Act”) and a declaration that the tobacco be or had been forfeited to the Crown. The action was based upon an alleged breach of s.117 of the Act. The section provided:

“(1)No person other than a manufacturer shall, except by authority, have in his possession custody or control any manufactured or partly manufactured excisable goods upon which Excise duty

has not been paid, and no person other than a manufacturer, producer, or dealer shall except by authority keep or store any proclaimed material.

(2)A person who contravenes subsection (1) is guilty of an offence punishable upon conviction as provided by section 129.”

The maximum penalty prescribed by s.129 was a fine not exceeding five times the amount of the unpaid duty. The minimum penalty was a fine not less than twice the amount of the unpaid duty. Section 4 of the Act provided that “excisable goods” meant goods in respect of which excise duty was imposed by Parliament and included goods the subject of an excise tariff. Manufactured tobacco was a product on which excise duty was imposed by s.5 of the Excise Tariff Act 1921 and the Schedule to the Act. Section 4 of the Act also provided that “’manufacture’ includes all processes in the manufacture of excisable goods” and that “’proclaimed material’ means tobacco leaf …”. Tobacco leaf stripped from the plant and cured was not taken to be manufactured tobacco. Section 68 of the Act provided:

“68.No person shall be deemed to manufacture merely because he cures tobacco leaf as stripped from the plant so as to convert it into leaf tobacco.”

1. After service of the writ, an appearance was entered on behalf of the appellant by a firm of solicitors who advised those acting for the respondent that their instructions were to admit the contraventions alleged in the statement of claim.  On that basis the matter was fixed for a short trial to be held on 19 September 2001.  A few weeks before the trial the appellant changed his solicitors.  The new solicitors said that the proceeding would be opposed and the defence was that the appellant had no belief that his possession of the tobacco was illegal.  The trial date was vacated and a new trial date was fixed for 18 July 2002.  An application was made to the trial judge on 18 July 2002 by the solicitors acting for the appellant for an order granting them leave to file a notice of ceasing to act for the appellant.  The trial judge refused the application.

1. As the solicitors had not been paid by the appellant, they took no part in the conduct of the trial, leaving the applicant to represent himself.  The appellant sought an adjournment, saying that he lacked sufficient legal skill and facility with the English language to conduct his defence.  The appellant requested an adjournment of two months to enable him to raise the funds to obtain legal representation.  The application for an adjournment was refused by the trial judge and the case proceeded.

1. Evidence was led on behalf of the respondent from members of the police force who intercepted the appellant’s truck.  The police officers described the tobacco found in the truck.  Evidence was also led from investigators employed by the Australian Taxation Office and the Australian Customs Office of an interview with the appellant, the weight of the cut tobacco and the calculation of the duty payable in respect of the tobacco.  An employee of Delta Truck Hire gave evidence of the hire of the truck. 

1. After the close of the respondent’s case the appellant gave evidence.  He said that he had no money to pay his lawyers.  Mahmoud Mustapha loaded the truck with tobacco.  The appellant avoided the weighbridge because he did not have a licence to drive a truck.  When he was intercepted by the police he rang Mustapha, who threatened that if he opened his mouth he would kill him.  Mustapha had told him that someone would meet him in Sydney and the appellant was to give that person the tobacco.  His reward was to be a payment of $500.  The appellant said that he knew that he was not allowed to carry tobacco, and knew that Mustapha did not have a licence.[1]  His load contained leaf tobacco and cut tobacco.

   [1]The applicant’s knowledge that his actions were illegal was not in issue on the appeal.

1. The trial judge found that the appellant had committed an offence under s.117 of the Act in that he was in possession of manufactured or partly manufactured excisable goods on which the excise duty had not been paid. The trial judge said that he was not satisfied that the appellant was guilty of the offence of keeping or storing tobacco leaf. His Honour made declarations as to the contravention and that the tobacco be condemned as forfeit to the Crown, recorded a conviction, imposed a fine of $331,135.94 and ordered that the appellant pay the respondent’s costs.

1. There were two principal issues in the appeal:  whether the appellant was denied natural justice by the refusal of his application for an adjournment and whether the trial judge was entitled to find that the cut tobacco found in the appellant’s truck constituted manufactured or partly manufactured excisable goods.

1. In refusing the appellant’s application for an adjournment the trial judge placed weight upon the manner in which the appellant had defended the proceeding and his view that the appellant had attempted to delay the trial.  He said of the application by the solicitors for leave to file a notice of ceasing to act:

“When the application came on for hearing before me as trial judge on 18 July 2002 I refused it.  I did so for a number of reasons.  There was no fresh solicitor ready to take over the conduct of the defendant’s case and no firm prospect that any funds would be available to enable this to be done.  The proceeding has been on foot since late 2000 and the defendant has already on one occasion had a trial date vacated.  The trial directions given by the Master have been largely ignored by the defendant.  It seemed to me that this was a tactical ploy of the defendant intended to put off the trial in circumstances where the defence, as disclosed, did not seem to have much prospect of success.”

He then said of the application for an adjournment:

“I refused this adjournment for much the same reasons.”

1. As Mason, C.J. and McHugh, J. acknowledged in Dietrich v. R.[2] in the context of a criminal trial, whether an adjournment is to be granted to an unrepresented accused to enable him to obtain representation calls for the exercise of a discretion having regard to the circumstances of the case.  Their Honours said:

“A trial judge faced with an application for an adjournment or a stay by an unrepresented accused is therefore not bound to accede to the application in order that representation can be secured;  a fortiori, the judge is not required to appoint counsel.  The decision whether to grant an adjournment or a stay is to be made in the exercise of the trial judge’s discretion, by asking whether the trial is likely to be unfair if the accused is forced on unrepresented.”

Similarly, in the context of domestic and administrative tribunals, it has been held that legal representation is not an essential element of natural justice in all cases;  rather, the right to be represented is a question for the discretion of the tribunal to be exercised taking into account the nature of the proceeding and the issues with which it is concerned.[3]

[2](1992) 177 C.L.R. 292 at 311.

[3]See Enderby Town Football Club Ltd. v. Football Association Ltd. [1971] Ch. 591; Fraser v. Mudge [1975] 1 W.L.R. 1132; Freedman v. Petty and Greyhound Racing Control Board [1981] V.R. 1001 at 1015; McNab v. Auburn Soccer Sports Club Ltd. [1975] 1 N.S.W.L.R. 54 at 61; Finch v. Goldstein (1981) 36 A.L.R. 287.

1. In the present case, I do not consider that it has been demonstrated that the exercise of the trial judge’s discretion miscarried in that he acted upon a wrong principle, allowed extraneous or irrelevant matters to affect him, mistook the facts or did not take into account some material consideration.  Nor has it been shown that the result to which he came was so unreasonable or unjust that it may be inferred that there was a failure to properly exercise the discretion[4].  Notwithstanding that as a general rule it is in the best interests of a person accused of the commission of a criminal offence and the administration of justice that such a person be represented by a legal practitioner.[5]  I do not think the trial judge erred in refusing to adjourn this proceeding.  The appellant’s past conduct did suggest a tendency to put off the trial.  A particular proceeding to recover penalties under the Excise Act may be complex:  this case was not.  As the course of the trial demonstrated, there were no substantial or complicated issues of fact or law.  Counsel for the appellant could not identify any defence to the claim which was not put forward because the appellant was denied an adjournment.

   [4]House v. R (1936) 55 C.L.R. 499. See McColl v. Lehmann [1987] V.R. 503; R. v. Osborne (2002) 133 A. Crim. R. 519.

   [5]See McInnis v. R. (1979) 143 C.L.R. 575 at 579 per Barwick, C.J.

1. The respondent led very little evidence as to the state of the tobacco found in the appellant’s truck.  Mr Brobbel, an investigator employed by the excise section of the Australian Taxation Office, said that the tobacco found in the appellant’s truck took two forms.  He said he saw:

“… leaf tobacco inside the bales and the other tobacco product was cut or manufactured tobacco which was in the plastic bags.”

Neither Mr Brobbel nor any other witness stated how the tobacco was cut.  No witness stated what constituted steps in the manufacture of tobacco.  The statutory definition of “manufacture” did not supply the omission.

1. Counsel for the respondent mounted an argument that the expression “cut tobacco”, which appeared in regulations made under the Act, but which was not defined either by the Act or the regulations, denoted tobacco manufactured to the point where it was ready to be used by smoking in a pipe or rolled in paper. Section 57 of the Act provided:

“57.Excisable goods of a prescribed kind shall only be removed from a factory in packages of such sizes and marked in such manner as may be prescribed.”

The prescribed kinds of excisable goods listed in Regulation 244 of the Excise Regulations 1925 included “uncut tobacco” and “cut tobacco”. Regulation 40 provided that tobacco or plug or piece tobacco “not being cut tobacco” was to be packed in packages of not less than a certain weight and containing certain particulars. Regulation 41 provided that “small tins or packets of cut tobacco or snuff” may be packed in outer containers each of which contained tobacco of not less than a certain weight. Regulation 42 dealt with the particulars, numbers and marks to be placed by manufacturers on each tin or packet of “cut tobacco”. Regulation 42A provided for the maximum weight of “cut tobacco” packages.

1. It may be assumed for the sake of argument that the expression “cut tobacco” in the regulations denoted tobacco which had undergone manufacture into a form in which it could be sold to use as a smoking material.  Mr Brobbel, the only witness to describe the tobacco found in the appellant’s truck as “cut tobacco”, arguably used that term in the same sense, for it might be said that the words “or manufactured” in Mr Brobbel’s expression “cut or manufactured tobacco” are epexegetical of the word “cut”.[6]  The witness did not, however, condescend to describe the form the cut tobacco took.  It could hardly be said that every cut tobacco leaf constituted manufactured or partly manufactured tobacco.  Tobacco leaf might be cut for purposes which have nothing to do with manufacture into a product suitable for consumption.  I do not think that tobacco leaf cut to enable it to fit into bags so that it could be transported could properly be described as manufactured or partly manufactured tobacco.  Mr Brobbel’s evidence amounted to no more than an expression of his opinion that the cut tobacco he saw was manufactured tobacco.  Mr Brobbel was not qualified as an expert.  Although his evidence was given without objection, that is hardly surprising as the appellant was unrepresented.  The respondent was required to prove its case beyond reasonable doubt.[7]  In my view the evidence did not constitute a sufficient basis for the conclusion that the appellant was in possession of manufactured goods.

   [6]Another witness, an excise officer, who calculated the duty payable on the weight of the tobacco supplied to him by another officer, in the course of his evidence described manufactured tobacco as “cut tobacco ready for use.”  The witness did not see the tobacco found in the appellant’s possession, and the customs officer who weighed it was not called to give evidence.

   [7]Chief Executive Office of Customers v. Labrador Liquor Wholesale Pty. Ltd. [2003] HCA 49; (2003) 77 A.L.J.R. 1629.

1. The respondent relied upon the averments contained in its statement of claim.  Among the matters averred were that “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 of that allegation included the statement that the cut tobacco was in a truck driven by the appellant.  It was also averred in the statement of claim that “The cut tobacco is and was at all material times goods manufactured or partly manufactured …”. 

1. Section 144 of the Act provided:

“(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.”

1. The averment relied upon by the respondent was a statement that the goods in the possession of the appellant fell within a statutory description.  In Hayes v. Federal Commissioner of Taxation[8] Fullagar, J. said:

   [8](1956) 96 C.L.R. 47 at 51.

“Where the factum probandum involves a term used in a statute, the question whether the accepted facta probantia establish that factum probandum will generally – so far as I can see, always – be a question of law.”

In Collector of Customs v. Pozzolanic Enterprises Pty. Ltd.[9] the Full Federal Court identified five general propositions relating to the distinction between questions of fact and questions of law.  The fifth proposition was:

“The question whether facts fully found fall within the provision of a statutory enactment properly construed is generally a question of law.”

The Court qualified the fifth proposition, saying that when a statute used words according to their ordinary meaning and it was reasonably open to hold that the facts of the case fell within those words, the question as to whether they did or did not was one of fact.[10]

[9](1993) 43 F.C.R. 280 at 287.

[10]See also Collector of Customs v. Agfa-Gevaert Ltd. (1996) 186 C.L.R. 389 at 394-7.

1. In the present case, the facts that constituted manufacture were not averred.  The averment stated no facts other than the ultimate fact in issue, the factum probandum.  In my view, in this case that was not properly the subject matter of an averment.  The position would have been different if the matter averred had been a statement that it is a process in the manufacture of tobacco that tobacco leaf be cut in a particular manner and that tobacco leaf cut in that manner was in the possession of the appellant.  The averment, however, did not take that form. It was a statement that the appellant had cut tobacco in his possession and cut tobacco constituted manufactured goods.  As I have said, tobacco can be cut otherwise than in the process of the manufacture of goods.  The averment implied that particular circumstances existed and fell within the statutory description of manufactured or partly manufactured excisable goods.  The existence of those circumstances involved questions of fact[11], but the circumstances 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 the tobacco into manufactured or partly manufactured goods.

   [11]See S. v. Crimes Compensation Tribunal [1998] 1 V.R. 83 at 89 per Phillips, J.A.

1. Accordingly, I am of the opinion that there was not sufficient evidence to enable the trial judge to find that the appellant was in possession of manufactured or partly manufactured excisable goods, and thus an offence against s.117 of the Act was not established.

1. I would allow the appeal, set aside the orders made by the trial judge and in lieu thereof give judgment for the appellant.

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